Adani Ports And Special Economic ... vs Deendayal Port Trust (Formerly ...
2022 Latest Caselaw 3974 Guj

     C/SCA/20161/2021                         CAV ORDER DATED: 05/04/2022




            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

            R/SPECIAL CIVIL APPLICATION NO. 20161 of 2021
                                 With
     CIVIL APPLICATION (FOR VACATING INTERIM RELIEF) NO. 1 of 2022
                              In
        R/SPECIAL CIVIL APPLICATION NO. 20161 of 2021
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ADANI PORTS AND SPECIAL ECONOMIC ZONE LIMITED Versus DEENDAYAL PORT TRUST (FORMERLY KNOWN AS KANDLA PORT TRUST) ============================================= Appearance:

MR MIHIR THAKORE SR. ADVOCATE with SANDEEP SINGHI & MR SHAMIK BHATT for SINGHI & CO(2725) for the Petitioner(s) No. 1,2 MR MIHIR JOSHI SR ADVOCATE with AISHVARYA(8018) for the

=============================================

CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMAR and HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI

Date : 05/04/2022

CAV ORDER

(PER : HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI)

1. By way of present petition under Article 226 of the

Constitution of India, petitioners have prayed for quashing and

for setting aside the decision of respondent Deen Dayal Port

Trust (hereinafter referred to as "Port Trust" for sake of brevity)

dated 24.12.2021, conveyed to petitioners vide communication

letter No. MS/WK/4030-V-PPP (PT.1)/GIM-546 (Annexure-A ).

2. By the aforesaid decision, the respondent Port Trust

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

authority has disqualified the petitioner No.1 from participating

as bidder in the second stage of bidding process for

development of Mechanized Fertilizer and other Clean Cargo

Handling Facilities at Berth No.14 on Design, Build, Operate

and Transfer Basis (hereinafter referred to as 'the said Project').

3. The main ground amongst others on which the decision is

assailed in the present proceedings is that respondent has not

assigned any reason for disqualifying the petitioner No.1 and as

such, the impugned decision is illegal, arbitrary, unfair, violative

of principles of natural justice and violative of Articles 14 and

19(1)(g) of the Constitution of India.

The averments made in the Special Civil Application by the

writ petitioners are as under:

4. Petitioner No.1 is Adani Ports and Special Economic Zone

Limited, a company incorporated under the provisions of the

Companies Act, 2013 and is the largest commercial port

operator in India and has presence across 13 domestic ports in

seven maritime States of Gujarat, Maharashtra, Goa, Kerala,

Andhra Pradesh, Tamil Nadu and Odisha. Petitioner No.2 is a

shareholder of petitioner No.1 and is a citizen of India, hence

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

has got fundamental rights enshrined under the Constitution of

India.

5. The respondent is a Port Trust (previously known as

''Kandla Port Trust') and is a Board within the meaning of

Section 2(b) of the Major Port Trusts Act, 1963. The Board of

Trustees of the respondent has been constituted by the Central

Government as per the provisions of the said Statute and as

such, is a 'State' within the ambit of Article 12 of the

Constitution of India.

6. In July 2021, the respondent issued a notice inviting

tender for the said project and by way of a Request for

Qualification (in short, 'RFQ'), applications were invited from

interested parties in order to pre-qualify the competent

applicants who can subsequently bid for the said project.

Request for Proposal ('RFP') documents to be made available

only to pre-qualified applicants and as such, according to the

petitioner, the tender process initiated by the respondent is in

two stages, namely:

(a)Qualifications stage (RFQ Stage) and

(b)Bidding stage (RFP Stage).

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Pursuant to the said process, steps are prescribed as under:-

(a) Queries to be raised on or before 25.8.2021,

(b) Pre-application Conference held on 1.9.2021, and

(c) Response to the queries given by the respondent on

4.9.2021.

7. Petitioner No.1 submitted its application for pre-

qualification on 13.9.2021 as per the requirement of RFQ. The

same was within the last date prescribed under RFQ for pre-

qualification, which was 14.9.2021. The said application was

accompanied by all necessary particulars/documents. The

respondent addressed a letter to the petitioner No.1 informing

that it was in the process of evaluating the petitioner No.1's

application, some particulars/ clarifications as required, are

requested to be submitted vide letter dated 8.10.2021 and

simultaneously, the respondent instructed the petitioner No.1 to

submit such clarification on or before 16.10.2021 at 5.00 p.m.

Pursuant to the said letter, petitioner No.1 provided

clarifications on each and every issue and submitted proper

clarification vide letter dated 14.10.2021.

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

8. It is the say of the petitioners that during this time,

petitioner No.1 also participated in pre-qualification process for

three other projects, namely;

(a) Development of Western Dock on BOT basis to handle cape size vessels at Paradip Port;

(b) Conversion of 9th Berth as Container Terminal through Public Private Partnership DBFOT basis at V.O. Chidambaranar Port (formerly known as 'Tuticorin Port') and

(c) Upgradation Operation, Maintenance and Transfer of Jahawarlal Nehru Port Container Terminal (JNPCT) through Public Private Partnership (PPP).

9. According to the petitioners, the terms of respective RFQ

of the aforesaid three other projects are similar to the one

invited for "Port Trust". In fact, the criteria for meeting the

required technical capacity and financial capacity under the

aforesaid three other projects, is much higher than the said

project (present one). Petitioner No.1 has been adjudged as pre-

qualified in all of the aforesaid three other projects, recently, i.e.

on 8.12.2021, 15.12.2021 and 24.12.2021 respectively. Copies

of such letters of the respective Port Trusts have been furnished

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

as Annexure-I, Annexure-J and Annexure-K respectively. To the

utter surprise of petitioner No.1, without assigning any reason,

a decision was communicated on 24.12.2021, declaring

petitioners as disqualified for which no reasons are assigned.

10. It is the case of the petitioners that petitioner No.1 has

neither made any misrepresentation, material in nature nor

failed to provide any supplemental information as demanded

within the specified time nor failed to meet with any of the pre-

qualification conditions under RFQ. Despite applications, the

respondent has disqualified the petitioner No.1 from

participating in RFQ stage arbitrarily and in contravention of

the terms of the RFQ. It is the say of the petitioners that

following the steps of 'Announcement of Pre-qualification', the

RPF stage has commenced and the pre-qualified applicants are

being offered to purchase the RFP documents and the said pre-

qualified applicants are also being granted an opportunity to

undertake site visit.

11. Immediate next step in the RFP stage would be raising of

queries and a pre-bid meeting. RFQ does not disclose the time

lines of steps in RFP stage. However, timelines are expected to

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

be short especially in view of the respondent's statement in

RFQ, which reads as under:-

"The authority is likely to provide a comparatively short time span for submission of the bid for the project. The applicants are therefore, advised to visit the site and familiarize themselves with the project."

12. RFP Schedule generally observed by the authorities

provides a period of around 15 days only to raise queries and as

such, unless the decision is immediately stayed or the bidding

process of the respondent is immediately stayed, petitioner No.1

would be deprived of proper opportunity to participate in the

further bidding process in spite of meeting with the requirement

of pre-qualifications. Thus, feeling aggrieved by the said

impugned decision dated 24.12.2021, the petitioners have

approached this Court by way of present petition under Article

226 of the Constitution of India.

13. Upon initial hearing of the petitioners, the Coordinate

Bench was pleased to pass the following order on 28.12.2021:-

1. We have heard Mr. Mihir Thakor, the learned senior counsel appearing for Singhi and Company for the writ applicants.

2. It appears from the materials on record that the writ applicant No.1 herein is a Company incorporated under the provisions of Companies Act, 2013. The writ

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

applicant No.1 claims to be one of the largest Commercial ports operators in India. The writ applicant No.2 appears to be one of the shareholders of the applicant No.1 Company. The respondent is a Port Trust and is a "Board" within the meaning of Section 2(b) of the Major Port Trusts Act, 1963.

3. The respondent issued a notice inviting tender for the "Development of Mechanized Fertilizer and other clean cargo handling facilities at the Berth No.14 on Design, Build Operate and Transfer basis".

4. The writ Applicant No.1 Company submitted its pre- qualification application pursuant to the tender notice issued by the respondents referred to above.

5. The writ applicant No.1 received a communication in writing dated 23.12.2021 informing that the respondent has thought fit to dis-qualify the writ applicant No.1 Company from participating as a bidder in the second stage of the bidding process in accordance with the provisions of the RFQ.

6. The writ applicant No.1 Company has no idea as to what has gone wrong and why the respondent has thought fit to dis-qualify the Company.

7. Let NOTICE be issued to the respondent returnable on 25th January, 2022. Subject to the final out-come of the present writ application, the respondent shall permit the writ applicant No.1 to participate in the RFP stage of the tender process. Direct service is permitted.

14. By virtue of the said order and subject to the final outcome

of the present writ application, the respondent was directed to

permit the writ applicant No.1 to participate in RFP stage of

tender process and this is more so in view of the fact which is

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

mentioned in para 6 of the aforesaid order.

15. The petition was then adjourned from time to time and in

view of the interim relief having been granted, the respondent,

i.e. Port Trust, has filed an application under Article 226(3) of

the Constitution of India for vacating of ex-parte ad-interim

order dated 28.12.2021. On 15.2.2021, application was listed for

hearing, but for want of time, same could not be heard and as

such, was re-listed on 22.2.2022 and interim relief granted

earlier is continued.

16. Since hearing of the Civil Application for vacating interim

relief stated to consume almost similar time, which may take

place for hearing of the main matter, learned counsels

appearing on both the sides have requested the Court to take up

the main matter itself along with this Civil Application for

hearing. Hence, we have considered their request and heard

learned senior counsel Mr. Mihir Thakore who has represented

the petitioner Nos.1 and 2, assisted by Singhi & Company,

whereas Shri Mihir Joshi, learned senior counsel assisted by Ms.

Aishwarya for the respondent Deendayal Port Trust who have

addressed their arguments.

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

17. Mr. Mihir Thakore, learned senior counsel appearing for

the petitioners has submitted that impugned decision is

arbitrary, unfair, without reasons, hence, same deserves to be

quashed and set aside.

18. Mr. Thakore has elaborated his submissions by contending

that respondent has failed to assign any reason whatsoever in

its decision communicated to the petitioner dated 24.12.2021

(Annexure-A) for disqualifying the petitioners from participating

in the second stage of bidding. It is further submitted that

respondent being an instrumentality of State is required to

carry out the tender process in absolutely fair and transparent

manner and its decision should not be arbitrary, discriminatory

or irrational or irrelevant and it is also under an obligation not

only to maintain the greater degree of transparency and fair

dealing, but is also expected to maintain sanctity and

transparency in the bid process.

19. Learned senior counsel Mr. Thakore has submitted that

no-doubt, respondent authority has got power to reject the

tender, yet such power to reject cannot be exercised arbitrarily

and it must depend upon existence of the cogent reasons.

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

20. Public Sector undertakings grow, the stake or public

exchequer also increases justifying larger social audit, judicial

control, review by opening of public gaze and as such, they

should ensure credibility of their action which in turn discipline

public conduct and improves the culture of accountability.

21. Mr. Thakore has further submitted that clause 2.7 of the

RFQ provides the respondent 'right to accept or reject any or all

applications/ bids. While the said clause 2.7 further states that

the respondent may accept or reject any application, without

assigning any reason as per the settled legal position, such

powers can only be exercised within four corners of clause 2.7

and for justifiable grounds.

22. A perusal of clause 2.7 of RFQ makes it clear that the

respondent has right to reject any application, if

(i) the Applicant does not provide within the time specified by the respondent, the supplemental information sought by the respondent, or

(ii) One or more of the pre-qualification conditions have not been met by the applicant; or

(iii) a material misrepresentation is made or uncovered.

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

23. However, clause 2.7 does not empower the respondent to

reject application on the grounds other than which are

mentioned in it and according to Mr. Thakore, learned senior

counsel, petitioner No.1 has not given any such circumstance

which may permit the respondent to resort for such clause

being invoked to disqualify the petitioner.

24. In any case, following the pre-qualification application

dated 13.9.2021, the respondent sought certain clarifications

vide its communication dated 8.10.2021, instructing the

petitioner No.1 to submit such clarification on or before

16.10.2021 at 5.00 p.m. Same was forwarded well in time, vide

letter dated 14.10.2021, and as such also, it cannot be said that

the petitioner No.1 has failed to provide supplemental

information in any way.

25. Learned senior advocate Mr. Thakore has pointed out that

petitioner No.1 has fulfilled all the pre-qualification conditions

as per RFQ and on a similar situation, petitioner No.1 even

fulfilled more stringent criteria in other three projects, namely;

the project floated by Paradip Public Trust, Tuticorin Port, and

Jahawarlal Nehru Port Trust respectively, wherein petitioner

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

No.1 is declared as pre-qualified on 8.12.2021, 15.12.2021 and

24.12.2021 respectively, and as such, when the petitioner is

meeting with the larger qualificatory criteria for the aforesaid

three other projects, is obviously fulfilling pre-qualification

conditions of present project in RFQ and for that, a tabular form

is mentioned in ground (ii) on page 12.

26. Mr. Mihir Thakore, learned senior counsel has reiterated

the grounds urged and has contended that petitioner No.1 has

neither made any material misrepresentation nor given any

incorrect or false information nor has intimated anything which

may permit the respondent to disqualify the petitioner even

under the terms of RFQ, particularly clause 2.7 of the present

project. The clarifications as sought for have already been

furnished vide detailed communication dated 14.10.2021.

27. For substantiating the submissions, learned senior counsel

has drawn the attention of this Court to the terms of RFQ,

reflecting on page 20 onwards and to clarify that respondent

has submitted none of the terms would permit the respondent to

disqualify the petitioner No.1 in the present project.

28. A reference is made to clause 2.2.8 on page 40 and has

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

submitted that none of contingencies attract in the case of the

petitioner No.1 to justify the arbitrary action of disqualifying the

petitioner as is sought to be justified by respondent in its

statement of objections.

29. Our attention is also drawn to Appendix-IX, which relates

to the policy for preventing private sector monopoly in major

ports framed by the Government of India, circulated to

authorities of all Port Trusts and by referring to clause (2) of the

said policy, a contention is raised that same will not be

applicable to the case of the petitioner.

30. Mr. Thakore, learned senior counsel has drawn our

attention to clause (2), which prescribes 'policy' and has

submitted that if there is only one private terminal/ berth

operator in a part of specific Cargo, the operators of that project

or their associates shall not be allowed to bid for next terminal/

berth for handling the same cargo in the same port. While

referring to this, Mr. Thakore has also pointed out sub-clause

(3) and (4), which specify berths and specific cargo. By referring

to this, Mr. Thakore has submitted that this policy will not be

applicable in view of the fact that same will be applicable in

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

case where there is only one private terminal/berth operator.

Whereas, here, according to Mr. Thakore, IFFCO has been

granted Barge JT pursuant upon its application and that too for

captive use and also handling other cargoes. Hence, the policy

clause is not getting violated. Hence, decision to disqualify

petitioner is bad in law.

31. Learned senior counsel Mr. Thakore has further submitted

that in view of the policy, if there is only one private terminal/

berth operator in a Port, for a specific cargo, operator of that

berth or his associates shall not be allowed to bid for the next

terminal/ berth for handling the same cargo in the same port.

Whereas, the specific cargo word defines in (iv) of Clause 2,

means (i) containers, (ii) liquid bulk, (iii) dry bulk, (iv)

multipurpose other general cargo. So, in view of this, it is not

open for the respondent authority to disqualify the petitioner

No.1 as this eventuality is not visible. Since there is another

operator IFFCO already being there.

32. Furthermore, IFFCO is very much operating in the area,

i.e. in the same port at Barge Jetty for dry bulk cargo and as

such, to disqualify the petitioner No.1, in the name of policy

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stated herein-before is nothing but an arbitrary act. It has been

contended that there is a distinction between dry bulk and

bagged cargo. Combination of bagged cargo with break bulk

cargo reflects a multipurpose cargo. Hence, just to eliminate the

petitioner No.1, policy is being erroneously interpreted by Port

Trust.

33. It has been submitted that project is for developing the

mechanized facilities for handling fertilizer and other clean

cargo as the cargoes which are non-polluting in nature, such as

sugar, salt, food-grains, silica sand/ china clay in dry bulk form

and bagged/ jumbo bagged cargo in break bulk form (to be

handled through mechanized way). Considering this project,

according to Mr. Thakore, it contemplates handling of bagged/

jumbo bagged cargo in break bulk form and as such, practically

the project is for handling multipurpose cargo and not merely

dry bulk cargo and hence, by giving such impression, learned

senior advocate has submitted that the policy appears to have

been misinterpreted by the respondent.

34. Learned senior advocate Mr. Thakore has contended that

the respondent claims to have received a letter dated 1.8.20211

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from Vishakhapatnam Port Trust (VPT) allegedly intimating the

respondent that VPT had terminated the concession agreement

entered into with Adani Vizag Coal Terminal Private Limited

('Adani Vizag'), a subsidiary of the petitioner No.1, and as such,

the respondent treated this termination by VPT and on that

basis, resorted to clause 2.2.8 of RFQ and for consequent

disqualification of the petitioner No.1 from the present tender

process.

35. Learned senior advocate Mr. Thakore has submitted that

in fact, had the opportunity been extended to petitioner, this

aspect would have been clarified. The minutes of the meeting of

the tender committee held on 4.12.2021, in which the tender

committee has made a reference to the alleged evaluation and

opinion dated 3.12.2021 for its transaction advisers M/s. iDeck

and then treated this communication dated 1.11.2021 that

contract with Adani Vizag was terminated by VPT for alleged

event of default and that petitioner No.1 had breached clause

2.2.8 of RFQ. In fact, it is not so.

36. While arriving at the conclusion, the tender committee,

though had complete information disclosed in communication

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dated 1.11.2021, it has not taken into consideration the contents

of it in entirety and on close perusal of same, it would disclose,

as to how it was Adani Vizag which had terminated the

concession Agreement with VPT on 21.10.2020 in view of the

occurrence of the force majeure event and termination was not

at the instance of VPT initially and the termination by VPT is

denied; Adani Vizag had initiated arbitration proceedings and it

is only thereafter, on 26.12.2020, VPT terminated its concession

agreement as if the occurrence of default by Adani Vizag. The

said arbitration proceedings are at present pending. This could

have been well examined and deliberated by the Tender

Committee in its meeting and even in decision making process,

had an opportunity been given to the petitioners, these aspects

could have been clarified.

37. Learned senior advocate Mr. Thakore has submitted that

clause contained in RFQ namely clause 2.2.8 which has been

invoked by Port Trust to disqualify petitioner could not have

been resorted to as the eventualities/ conditions and situations

which are mentioned therein were not attracted to facts on hand

by virtue of which, petitioner No.1 could have been declared as

disqualified.

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

38. Be that as it may. Even assuming without admitting that

such a situation as per the say of the respondent had occasioned

in that case, also this very clause 2.2.8 of RFQ is arbitrary, not

on touchstone of Article 14 of the Constitution of India and as

such, same deserves to be quashed and set aside. The

interpretation which is sought to be canvassed by the

respondent on this clause 2.2.8 is in no way possible to be read

and understood in said fashion.

39. Learned senior advocate Mr. Thakore has submitted that

the clauses identical to the aforesaid clause 2.2.8 of RFQ issued

by Paradip Port Trust, Tuticorin Port Trust and Jawaharlal

Nehru Port Trust, wherein petitioner No.1/ its associates have

participated in the process and have been declared as qualified

to bid for the said authorities, in spite of alleged termination by

VPT, which is now sought to be invoked by present Port Trust

against the petitioner and as such, impugned decision is not just

and proper rather invalid. By referring to this, learned senior

counsel Mr. Thakore has submitted that all these things could

have been properly considered if opportunity could have been

extended to by the Committee before impugned decision being

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taken, since action is entailing civil consequences and as such,

principles of natural justice could have been observed by

respondent which is not done. However, it is liable to be set

aside.

40. To strengthen his submission, learned senior counsel has

made a reference to the following decisions:-

(1) In the case of JSW Infrastructure Limited and Another Vs. Kakinada Seaports Limited and Others reported in (2017)4 SCC 170 (para 7 and 12)

(2) In the case of APM Terminals B.V. Vs. Union of India and Another reported in (2011) 6 SCC 756 (Para 36 and 37)

(3) In the case of Atlanta Limited Vs. Union of India and Another reported in 2018 SCC OnLine Delhi 8269 (para 19,20,21, 24, 25 & 26)

41. By referring to Delhi High Court decision, learned senior

advocate Mr. Thakore has submitted that this very same nature

of clause has been the subject matter of scrutiny by Delhi High

Court which has declared the same as bad, arbitrary and

unreasonable to the extent that in the matter of a case falling

under the said clause, it amounts to automatic debarring of a

party from participating in any other tender bid for a period of

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two years thereto, without hearing and as such, considering the

observations which have been made in the relevant paragraphs

of said decision, as indicated by Mr. Thakore, a request is made

to grant the reliefs as prayed for in the petition by declaring the

clause as invalid here also.

42. Though learned senior advocate Mr. Thakore has tendered

few more decisions, but after referring to the above three

decisions, he has submitted categorically that since those

decisions are of general proposition, he is not pressing the same

any further and has reiterated that the petition be allowed.

43. Per contra, learned senior advocate Mr. Mihir Joshi has

submitted that respondent Deendayal Port Trust is a major Port

Trust, set up and established by virtue of the provisions

contained under the Major port Trust Act, 1963, which was

formerly known as 'Kandla Port Trust.

43.1. It is submitted that tender was floated by virtue of the

tender notice, in which stages have been stipulated and the

work for which the applications were invited from interested

parties is in the form of Global Invitation for qualification for

'Development of Mechanized Fertilizer and Other Clean Cargo

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

Handling Facilities at Berth No.14 on DBOT basis under PPP

mode' for a concession period of 30 years. For this purpose,

qualificatory criteria have been framed on the basis of the

Central Government's direction and for giving brief idea about

this tender, Mr. Joshi has briefly given a bird's eye view to the

few documents. By referring to page 29, it has been contended

that while Kandla Port already handles fertilizers and

multipurpose clean cargo to a substantial extent, off-late

Mundra Port located very close to Kandla has developed

capabilities to handle fertilizer imports with better facilities by

way of mechanization of bulk imports, bagging and evacuation

and as such, Deendayal Port is also willing to develop full scale

mechanized handling facility at Kandla Port for handling of

import fertilizer (Urea, MOP, DAP) and other clean cargo viz.

food grains, sugar, salt, etc. inside the port premises for the

objectives which are mentioned in the policy.

43.2. Learned senior advocate Mr. Joshi has given a brief idea

of proposed project by making reference to RFQ clauses and has

submitted that this proposed project is a huge project and

estimated cost of it is approximately Rs.300.28 crores. A brief

description of bidding process is also mentioned by drawing the

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attention to clause 1.2.1, then 2.2.8 and has submitted that the

petitioner is at a qualificatory stage. The process of bid is also

referred to and evaluation process is also referred to by virtue

of clause 2.20.1, Qualification and Bidding, reference is also

given by referring to clauses 2.21, 2.26 etc. from page 53

onwards and he has submitted that pre-qualification and

notification chapter is contained in clause 2.21 (on page 53),

which indicates that after the evaluation of applications and

receipt of security clearance, the authority would announce a

list of pre-qualified and shortlisted applicants (bidders) who will

be eligible for participation in the bid stage.

43.3. At the same time, the authority would notify the other

applicants that they have not been pre-qualified and shortlisted.

The authority will not entertain any query or clarification from

applicants who fail to qualify. Mr. Joshi has submitted that we

are at this stage.

43.4. It has been submitted that the RFQ and the policy is

framed with a view to prevent monopoly of private sector in the

major ports and this has been done in view of the letter dated

2.8.2010 issued by the Ministry of Shipping - Government of

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India, which has issued the policy guidelines (at Appendix-IX), to

be observed by all major ports while awarding projects to

private parties through Public Private Partnership (PPP) route

so as to avoid private sector monopoly in the Major Ports.

43.5. The aforesaid policy or any other applicable policy shall

apply mutatis mutandis to the bidding process and the authority

shall be entitled to disqualify any bidder in accordance with the

aforesaid policy.

43.6 At this juncture, learned senior advocate Mr. Joshi has

specifically drawn the attention to the guidelines of the Ministry

of Finance dated 18.5.2009 in the form of Office Memorandum,

which relates to revised RFQ for pre-qualification of bidders for

PPP projects and he has drawn the attention of this Court to the

similar clause, namely 2.2.8 (page 342), prescribed in a model

RFQ format for qualification for PPP project published by the

Government of India and he has submitted that on the very

same line, as per the model clauses, this clause of current

policy, i.e. clause 2.2.8 of RFQ is also prescribed to which the

petitioner is already aware about the same even while taking

first step in participation.

C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022

43.7. Learned senior advocate Mr. Joshi has also submitted that

there are no allegations of either malafides or favourtism of any

nature. It is only the interpretation which is sought to be

canvassed and is made the subject matter of challenge in this

petition.

43.8. Learned senior advocate Mr. Joshi has submitted that a

decision has been taken on due deliberation and with proper

justification which can be seen from the detailed minutes of the

tender committee meeting held on 4.12.2021 for ascertaining

provisional qualification of respective applicants (page 325).

43.9. He woulds submit specific discussions took place with

regard to the case of petitioner No.1, and he draws our attention

to the proceedings of said meeting reflecting on page 326 and

has briefly submitted that it was apprised to the Committee that

the applicant M/s. APSEZL is already handling dry bulk cargo at

Tuna-tekra which includes fertilizer as well and other clean

cargo, namely salt, sugar, clay, food-grains, such as barley,

soyabean, lentils, etc. as per the traffic record and as such, the

facts and figures based on monopoly policy, the applicant was

found not eligible to participate further in the bid with respect to

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berth No.14.

43.10. It has also been mentioned in its decision making

process that in a similar case of preventing monopoly at DPT in

RFQ bidding stage for the project of 'Developing Dry Bulk

Terminal of Tekra Tuna at Port of Kandla on BOT basis', the

selected bidder for PPP project of berth No.16 was also

debarred from bidding the project as clarified by Ministry of

Shipping to the Department of Economic Affairs dated

21.1.2011.

43.11. It has further been considered that similarly, in the

instant case, subject project is for handling of dry bulk cargo at

berth No.14 and the selected bidder for PPP project of Tuna-

tekra, i.e. petitioner No.1 is to be debarred from participation

and it was further noticed from the communication of M/s.

AMPTPL dated 25.10.2021, it is understood that the applicant

has not paid even royalty on storage charges since beginning of

the project, i.e. from 6.6.2014 till 31.3.2019 and had invoked the

arbitration proceedings against SPV M/s. AMPTPL for non-

payment of royalty on storage charges and as such, in the

discussion which took place, the tender committee took a

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conscious decision that the petitioner No.1 is not qualified.

43.12. He would contend from the aforesaid minutes, it is quite

visible that the impartial decision is taken in public interest to

maintain object of policy and to avoid monopoly, which cannot

be said to be an arbitrary nor irrational.

43.12. It has further been contended by Shri Joshi, learned

Senior Advocate that in this tender process a specific power is

available with the authority to discard any claim if found to be

not eligible and in view of said specific clause, petitioner is

found to be not eligible or qualified and, a decision is taken as

such. In this process of contractual issue, no interference be

made especially when no mala fides are alleged. If any

interpretation to the policy clause to be assigned, as contended

by the petitioner, the same tantamounts to be altering the

conditions and the terms of the tender agreement which is not

to be undertaken generally in exercise of extra ordinary

jurisdiction. For the purpose of substantiating this submission,

Shri Joshi, learned Senior Advocate has drawn the attention of

this Court to clause 2.21 reflecting on page 53 of the petition

compilation and has submitted that after Scrutiny Clearance,

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the authority will announce the list of pre-qualified and

shortlisted bidders those who are eligible for participating in

further stage of bid and at the same time, the authority would

notify the other applicants that they have not been pre-qualified

or shortlisted and the authority will not entertain any query or

clarification from the applicants who failed to qualify and as

such, in the process of this exercise, the petitioner has been

found not pre-qualified and the decision taken is well within the

scope of the authority. That being the situation, no case is made

out by the petitioner which may call for any interference. Mr.

Joshi, learned Senior Advocate with emphasis submitted that

there are total 18 Berths in the respondent - Port where 'Dry

Bulk' is being handled and 14 out of such 18 are being handled

by the respondent - Port and remaining 4 by a Special Purpose

Company namely, Adani Kandla Bulk Terminal Private Limited

(AKBTL) at Tuna-Tekra, Kutch. AKBTL (a 100% owned

subsidiary of petitioner no. 1) is a special purpose company

formed by petitioner no. 1 and is the only private terminal

operating, handling Dry Bulk in the Port and PPP operator of

the proposed 14th berth i.e. present project, will also be

handling the same dry-bulk cargo i.e., fertilizer and other clear

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cargo such as salt, sugar an food-grains clay etc. It is because of

this special project being the next terminal/berth for handing

the same cargo in the same Port, petitioner no. 1 has incurred

disqualification from participation as Bidder in the second stage

of the Bidding process.

43.13. At this stage, to stave off the contention raised by the

petitioner about IFFCO, Mr. Joshi, learned Senior Advocate has

contended that IFFCO is having its own Barge Jetty, and it

cannot be equated with the present process of tender and by

virtue of Concession Agreement dated 17.02.2011 entered into

with IFFCO for setting up of Barge Jetty under the captive use

policy of Government of India and the said permission is under

the policy framed by the Government of India and since Barge

Jetty accompanied with Oil Jetty No.5 for captive use only, it

cannot be said that there is one another private person/ entity

operating and as such, the policy may not apply to the

petitioner. In fact, the said IFFCO is operating from Barge Jetty

only for its own production and thereto, not on the basis of any

Public Private partnership route. Mr. Joshi, learned Senior

Advocate has submitted that since IFFCO is handling the

activity for captive use only, hence, it is not open for the

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petitioner to equate its case with IFFCO to contend that in view

of the existence of IFFCO, the policy will not apply to the

petitioner.

43.14. Mr. Joshi, learned Senior Advocate has submitted that

project basically is for development of next berth as

contemplated and based upon Anti-Monopoly Policy and as

such, clauses relevant contained in such policy are kept in mind

closely by the authority to disqualify the petitioner. The said act

cannot be said to be arbitrary, irrational or violative of the

Constitution of India in any case, on the contrary keeping in

mind the object envisaged under the policy, a decision is taken

against the petitioner and as such, hardly any case is made out

for judicial review.

43.15. Mr. Joshi, learned Senior Advocate has submitted that

even if assuming the stand of the petitioner then their

endeavour is to interpret the policy and not the tender the

documents, and once having participated in the bidding process,

in connection with this very policy which they were aware

about, the petitioner cannot assail the said process simply

because it could not find place in further stage of the process.

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Looking to the submission of the petitioner, it clearly transpires

that an attempt is made to interpret the tender documents

clauses since they are relying upon the definition of "Other

Clean Cargo" from Draft Concession Agreement and also

seeking interpretation of clause 2.2.8 as mentioned in RFQ. That

being so, the stand taken by the petitioner is not entertainable.

So long as the decision making process is clearly in consonance

with the terms of the policy and there are no mala fides

attributed, there is hardly any scope for interference in such

kind of contractual decisions. Hence, he contends no

interference is called for. It has also been contended that

respondent - Trust being an authority which has floated the

tender is the best decision maker as to how the tender

documents and the terms thereof have to be interpreted and

even if two interpretations are possible, then according to Mr.

Joshi learned Senior Advocate, the interpretation canvassed by

the respondent - Trust must be accepted and for that purpose,

Mr. Joshi, learned Senior Advocate has placed reliance upon few

decisions which are referred to hereunder :-

(1) In the case of Agmatel India Pvt. Ltd. v. Resoursys Telecom & Ors., reported in (2022) SCC Online SC 113 (Paragraphs 38 and 39).

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(2) In the case of Uflex Limited v. Government of Tamil Nadu & Ors., reported in (2022) 1 SCC 165 (Paragraphs 1 to 7).

(3) In the case of Michigan Rubber (India) Limited v. State of Karnataka & Ors., reported in (2012) 8SCC 216 (Paragraphs 12, 13, 19 to 23).

(4) In the case of National High Speed Rail Corporation Limited v. Montecarlo Limited & Anr., reported in 2022 SCC Online SC 111 (Paragraphs 71 to 79).

After referring to the aforesaid decisions, Mr. Joshi,

learned Senior Advocate has reiterated the prayer for

dismissal of the petition/application.

43.16. So far as compliance of the principles of natural justice

is concerned, Mr. Joshi, learned Advocate has submitted that as

such, said principle may not always be available especially when

the issue relates to contractual matters. Here, in the instant

case, when there is a specific power available to disqualify the

person if found not within the realm of policy, then simply

because hearing is not provided or reasons are not supplied at

length, the same may not be a ground for setting aside the

decision. Here, in this case, further, it has been pointed out that

right from the beginning petitioner is aware about the clauses

since it has participated in the tender process and after due

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deliberations and after scrutiny it has been found by Port Trust

that petitioner is not qualified. Keeping in view the object or the

policy, a decision is communicated and as such, it is not the

case that without applying any mind in complete violation of the

principles of natural justice, a decision is taken. That being so,

according to Mr. Joshi, learned Senior Advocate, no contentions

are appealable which may warrant this Court to exercise judicial

review administrative action of Port Trust. To reiterate and

assist the Court, written submissions have also been placed on

record by both the sides and have summed up their

submissions.

44. In re-joinder, Mr. Thakore, learned Senior Advocate has

reiterated his plea about interpretation of clauses contained in

policy and of 'Issue of Acceptance of IFFCO and based his

submission on definition of 'Dry Bulk Cargo' and the definition

of 'specific cargo' as defined under clause 2 and has also

submitted that apparently the policy term taken in aid reflecting

on page 98 is erroneously applied to disqualify the petitioner.

Hence, impugned decision taken is absolutely arbitrary,

irrational deserves to be quashed. No further submissions have

been made.

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DISCUSSION AND FINDINGS OF COURT :

45. Having heard the learned advocates appearing for the

parties and having gone through the record on hand, we have

noticed that respondent Port Trust has invited a tender which is

a global invitation for development of Mechanized Fertilizer and

other Clean Cargo Handling Facilities at Berth No.14 on Design

Build, Operate and Transfer (DBOT basis for July 2021). This

notice inviting tender appears to have been published, pursuant

to which, the petitioner along with several others have applied.

Rational of the project is to undertake development of

Mechanized Fertilizer and other Clean Cargo Handling

Facilities for a period of 30 years and this is in view of the fact

that Kandla already handles fertilizer and multipurpose clean

cargo to a substantial extent of off-late and Mundra Port located

very close to Kandla has developed capabilities to handle

fertilizer imports with better facilities by way of mechanization

of bulk imports, bagging and evacuation and as such Deendayal

Port i.e. respondent at Kandla is also willing to develop full-scale

mechanized handling facility at Kandla Port for handling import

of fertilizer (urea, MOP DAP) and other clean cargo namely

food-grains, sugar, salt, etc. inside the port premises and project

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involves installation of shipside fertilizer handling equipment

system (Ship unloader) along with necessary hopper, conveyor

for shifting of fertilizer and other clean cargo.

46. It is also noticed that complete mechanized handling

facility from ship unloading to storage and wagon loading

facility would be constructed by BOT operator at a estimated

cost of approximately Rs.300.28 crores and as such, it is a

sizable amount of contract which is being considered in

response to the tender notice issued by respondent Deendayal

Port Trust.

47. Respondent Deendayal Port Trust (formerly known as

Kandla Port Trust) is a Board/ Trust within the meaning of

Section 2(b) of the Major Port Trusts Act, 1963 and the Board of

Trustees of the respondent has been constituted by Central

Government as per the provisions of the said Statute, hence

akin to a 'State' within meaning of Article 12 of the Constitution

of India and this authority has floated afore-mentioned tender.

48. Challenge in the present proceedings is the brief order/

communication dated 23.12.2021 whereby the petitioner though

was qualified in the first stage has been declared as disqualified

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for participation as bidder in the second stage of bidding

process as per the provisions of RFQ (Request for Qualification).

This communication impugned in the petition is reflecting no

reason nor reflecting as to why the petitioner is said to have

been disqualified for participation in the second stage and as

such, petition when was brought before the Court, on first

hearing, vide order date 28.12.2021, Coordinate Bench was

pleased to call upon the respondent by way of issuing notice

since petitioner No.1 company had no idea as to what has gone

wrong and why the respondent thought it fit to disqualify the

company and while issuing notice, subject to final outcome of

present writ application, it was ordered that respondent should

permit the writ applicant No.1 to participate in RFP stage of the

tender process and it is in this response, after completion of the

pleadings, the petition came to be heard as per the requests of

both learned counsels appearing for respective sides along with

the Civil Application for vacating interim relief.

49. Having further heard learned advocates at length on

various issues, but before dealing with those submissions, we

are of the opinion that no-doubt, Court's scope of interference

under Article 226 is circumscribed on few issues only. Judicial

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interference not possible to be avoided by the respondent under

the garb of contractual dispute and as such, being conscious of

the scope of judicial review and keeping in mind the salutary

principles propounded by catena of decisions, we first

undertake an exercise of testing the decision in the context of

touchstone of Article 14 of the Constitution of India and well

recognized principles of natural justice.

50. Hon'ble the Apex Court has time and again propounded

that traditional limitations have been vanishing and the sphere

of judicial scrutiny is being expanded since the State entity too

is becoming fast pervasive as the State has descended into

commercial field and giant public sector undertakings have

grown up, the stake of public exchequer is also justifying larger

social audit, judicial contract and review by opening to the

public gaze and these aspects necessitate recording of reasons

for executive actions including cases of rejection of highest

offers and looking for reasons in support of such action provides

an opportunity for an objective review in appropriate cases both

by administrative superior and by the judicial process. Keeping

these observations, which are already made in the decision

reported in (1990)3 SCC 280, precisely the observation

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contained in paragraph 10, which has dealt with necessity of

judicial review, even in respect of commercial transaction

undertaken by the State.

51. We are also conscious about the fact that the

Government or instrumentality of it must have freedom of

contract and a fair-play in the joints is a necessary concomitant

for an administrative body functioning in an administrative

sphere or quasi-administrative sphere. However, the decision

must not only be tested by application of Wednesbury principle

of reasonableness, but must be free from arbitrariness, not

affected by bias or actuated by mala-fides. We are also of the

opinion on the basis of the catena of decisions that natural

Justice is an important aspect while reviewing administrative

orders and natural justice is a sworn enemy of intolerant

authority. Any attempt by any authority to circumvent the

requirement providing effective hearing before reaching a

conclusion, is not just and proper and it is a settled position of

law that validity of action must be judged by reasons so

mentioned in the decision impugned and it cannot be

supplemented by fresh reasons in the form of an affidavit or

otherwise.

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52. Now, keeping the aforesaid analysis in mind, a perusal of

the impugned order dated 23.12.2021 would disclose,

apparently no reasons at all are assigned and it cannot stand on

the touchstone of afore-mentioned principles enunciated by

catena of decisions. It may be that the respondent authority is

discharging its contractual functioning while dealing with bid

process and has power to reject the bid. However, respondent

being an instrumentality under Article 12 cannot act in such a

cavalier manner by virtue of which, even Courts are not in a

position to unfold the decision making process as to whether it

is just, reasonable or on the touchstone of Article 14 of the

Constitution of India. Hence, apparently, the impugned order/

communication is a complete unreasoned order and we reiterate

that the reasons being now a part and parcel of principles of

natural justice must be reflected in the decision making process.

53. We are conscious about the right of the respondent

authority to reject or disqualify any party from bidding process

but such right is always coupled with a conscious duty to act

reasonably and in consonance with well-established principles

of law. The necessity of compliance of principles of natural

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nature is expedient particularly in view of peculiar background

of this case, since at a second stage of bid process

disqualification has been inflicted on petitioner, without any

reasons being reflecting in the impugned decision.

54. Here, respondent authority has made an attempt to justify

its brief impugned communication for disqualifying the

petitioner from second stage of bid process by indicating few

clauses contained in RFQ that too by filing an affidavit and

thereby attempt is made to justify the disqualification of

petitioner by supplementing the reasons which are absolutely

not reflecting in the impugned communication and as such, we

are of the opinion that impugned communication is per-se not

only un-reasoned but violates principles of natural justice and

not satisfying the test of Article 14 of the Constitution of India.

55. On the issue of efficacy of reasons, time and again,

Hon'ble the Apex Court has with emphasis propounded that

even in respect of exercise of administrative and executive

function, the authority is expected to assign some proper

reasons. Significance of such issue is clearly spelt out in

paragraph 25 of the decision in the case of Nareshbhai

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Bhagubhai and others Vs. Union of India and others,

reported in (2019)15 SCC 1, which analysis of Hon'ble Apex

Court we deem it proper to reproduce hereunder :-

"25. In Kranti Associates (P) Ltd. v. Masood Ahmed Khan,8 this Court held that:

12. The necessity of giving reason by a body or authority in support of its decision came up for consideration before this Court in several cases. Initially this Court recognised a sort of demarcation between administrative orders and quasi−judicial orders but with the passage of time the distinction between the two got blurred and thinned out and virtually reached a vanishing point in the judgment of this Court in A.K. Kraipak v. Union of India.

47. Summarising the above discussion, this Court holds:

(a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.

(b) A quasi−judicial authority must record reasons in support of its conclusions.

(c) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.

(d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi−judicial or even administrative power.

(e) Reasons reassure that discretion has been exercised by the decision−maker on relevant grounds and by disregarding extraneous considerations.

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(f) Reasons have virtually become as indispensable a component of a decision−making process as observing principles of natural justice by judicial, quasi−judicial and even by administrative bodies.

(g) Reasons facilitate the process of judicial review by superior courts.

(h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the lifeblood of judicial decision−making justifying the principle that reason is the soul of justice.

(i) Judicial or even quasi−judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system.

(j) Insistence on reason is a requirement for both judicial accountability and transparency.

(k) If a judge or a quasi−judicial authority is not candid enough about his/her decision−making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.

(l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or rubber−stamp reasons is not to be equated with a valid decision−making process.

(m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision−making not only makes

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the judges and decision−makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor [(1987) 100 Harvard Law Review 731−37] .)

(n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision−making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain [(1994) 19 EHRR 553] EHRR, at 562 para 29 and Anya v. University of Oxford [2001 EWCA Civ 405 (CA)] , wherein the Court referred to Article 6 of the European Convention of Human Rights which requires, adequate and intelligent reasons must be given for judicial decisions.

(o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of due process. (emphasis supplied)

In paragraph 26 of the above said decision, it has been

propounded that it is the settled legal law that a valid order

must be a reasoned order which is duly communicated to the

parties. The file noting contained in an internal office file or in

the report submitted by the competent authority would not

constitute a valid order in the eye of law and as such, from the

aforesaid observations of Hon'ble Apex Court if we see the

present order under challenge, it reflects no reasons and as

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such, this decision making process and communication therein

is ill founded in view of the aforesaid observations. Hence, we

deem it proper to consider this issue while arriving at ultimate

conclusion in the present order.

56. While arriving at this conclusion we are supported by

authoritative pronouncement of Hon'ble the Apex Court

reported in the case of Vice Chairman & Managing Director,

City and Industrial Development Corporation of

Maharashtra Ltd. And Another Vs. Shishir Realty Private

Limited and others reported in 2021 SCC OnLine SC-1141

and in addition to the other decisions which are cited before us

and since this decision is last in line, we deem it proper to quote

few observations hereunder:-

30. This court in the case of M/s Star Enterprises v. City and Industrial Development Corporation of Maharashtra Ltd., (1990) 3 SCC 280 reiterated the aforesaid concerns and stated the necessity of judicial review even with respect to the commercial transactions undertaken by the State. This court held as follows:

"10. In recent times, judicial review of administrative action has become expansive and is becoming wider day by day. The traditional limitations have been Municipal Corporation, Ujjain v. BVG India Ltd., (2018) 5 SCC 462 vanishing and the sphere of judicial scrutiny is being expanded. State activity too is becoming fast pervasive. As the State has descended

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into the commercial field and giant public sector undertakings have grown up, the stake of the public exchequer is also large justifying larger social audit, judicial control and review by opening of the public gaze; these necessitate recording of reasons for executive actions including cases of rejection of highest offers. That very often involves large stakes and availability of reasons for actions on the record assures credibility to the action; disciplines public conduct and improves the culture of accountability. Looking for reasons in support of such action provides an opportunity for an objective review in appropriate cases both by the administrative superior and by the judicial process."

(emphasis supplied)

40. Natural justice is an important aspect while reviewing the administrative orders. Providing effective natural justice to affected parties, before a decision is taken, it is necessary to maintain rule of law. Natural justice is the sworn enemy of intolerant authority. Any attempt by authority to circumvent the requirement of providing effective hearing before reaching a conclusion, cannot pass the muster. Coming to the facts herein, the post−decisional hearing given to the respondent−lessee is reduced to a lip−service, which cannot be upheld in the eyes of law.

41. As a first step of judicial review, we need to note that when statutory functionaries such as CIDCO render an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of an affidavit or otherwise. 3 To this extent, we agree with the submission of Dr. Abhishek Manu Singhvi, that the scope of this Court is limited. Hence, we will only consider the impugned order of CIDCO dated 16.03.2011 and the reasoning supplied therein.

47. In our considered opinion, the aforesaid paragraph does not indicate sufficient reasons. There is no reason provided as to what provision of law such bids violate.

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Further, there is no concrete allegation or adjudication on the suggested cartelization. There is no reasoning considered as to why such a practice was harmful to public interest. We may note that such considerations are important elements of party autonomy and commercial freedoms while framing the contract, which is not within the purview of judicial review. As there is no such law or contract provision which bars such conduct, the considerations undertaken by the order of CIDCO are extraneous and the same cannot be accepted.

72. Before we state the conclusions, this Court would like to reiterate certain well−established tenets of law pertaining to Government contracts. When we speak of Government contracts, constitutional factors are also in play. Governmental bodies being public authorities are expected to uphold fairness, equality and rule of law even while dealing with contractual matters. It is a settled principle that right to equality under Article 14 abhors arbitrariness. Public authorities have to ensure that no bias, favouritism or arbitrariness are shown during the bidding process. A transparent bidding process is much favoured by this Court to ensure that constitutional requirements are satisfied.

74. The constitutional guarantee against arbitrariness as provided under Article 14, demands the State to act in a fair and reasonable manner unless public interest demands otherwise. However, the degree of compromise of any private legitimate interest must correspond proportionately to the public interest, so claimed.

75. At this juncture, it is pertinent to remember that, by merely using grounds of public interest or loss to the treasury, the successor public authority cannot undo the work undertaken by the previous authority. Such a claim must be proven using material facts, evidence and figures. If it were otherwise, then there will remain no sanctity in the words and undertaking of the Government. Businessmen will be hesitant to enter

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Government contract or make any investment in furtherance of the same. Such a practice is counter−productive to the economy and the business environment in general.

From the aforesaid observations, we are satisfied that the

impugned decision/ communication is not possible to be

sustained in the eye of law on account of lack of reasons

and in conflict with the principles of natural justice.

57. Yet another decision rendered by the Hon'ble Apex Court,

which we think it proper would be relevant for the purposes of

considering the facts on hand would in the matter of D.N.

Jeevaraj Vs. Chief Secretary, Government of Karnataka

and others reported in (2016) 2 SCC 653, whereunder, while

dealing with the issue related to exercise of discretion in context

of issuance of writ of mandamus, Hon'ble Apex Court has held

that normally Court should enable the authorities to exercise its

discretion independently and impartially. Relevant observations

are reproduced hereunder :-

"41. This Court has repeatedly held that where discretion is required to be exercised by a statutory authority, it must be permitted to do so. It is not for the courts to take over the discretion available to a statutory authority and render a decision. In the present case, the High Court has virtually taken over the function of the BDA by requiring it to take action against

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Sadananda Gowda and Jeevaraj. Clause 10 of the lease-cum-sale agreement gives discretion to the BDA to take action against the lessee in the event of a default in payment of rent or committing breach of the conditions of the lease-cum-sale agreement or the provisions of law.[8] This will, of course, require a notice being given to the alleged defaulter followed by a hearing and then a decision in the matter. By taking over the functions of the BDA in this regard, the High Court has given a complete go-bye to the procedural requirements and has mandated a particular course of action to be taken by the BDA. It is quite possible that if the BDA is allowed to exercise its discretion it may not necessarily direct forfeiture of the lease but that was sought to be pre- empted by the direction given by the High Court which, in our opinion, acted beyond its jurisdiction in this regard.

42. In Mansukhlal Vithaldas Chauhan v. State of Gujarat[9] this Court held that it is primarily the responsibility and duty of a statutory authority to take a decision and it should be enabled to exercise its discretion independently. If the authority does not exercise its mind independently, the decision taken by the statutory authority can be quashed and a direction given to take an independent decision. It was said:

"22. Mandamus which is a discretionary remedy under Article 226 of the Constitution is requested to be issued, inter alia, to compel performance of public duties which may be administrative, ministerial or statutory in nature. Statutory duty may be either directory or mandatory. Statutory duties, if they are intended to be mandatory in character, are indicated by the use of the words shall or must. But this is not conclusive as shall and must have, sometimes, been interpreted as may. What is determinative of the nature of duty, whether it is obligatory, mandatory or directory, is the scheme of the statute in which the duty has been set out. Even if the duty is not set out clearly and specifically in the statute, it may be

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implied as correlative to a right.

From the above said decision as well, we are of the opinion that it is primary responsibility of the statutory authority to take independent decision and thereto as indicated above with the support of proper and cogent reasons.

58. We have heard learned counsels of both the sides on all

other issues. Whether the clause contained in the policy

reflecting on page 98 is tried to be taken in aid while

disqualifying the petitioner is justified or not, we are not finally

opining on this issue about applicability of policy clause, since

the decision per-se violates principles of natural justice and we

are inclined to remit back the controversy to be decided afresh

after affording opportunity to the petitioner. We are also not

expressing our views on any other issues as it may influence the

fresh decision making process.

59. From the other submissions which are made by both the

sides, prima facie, it appears that the decision is taken by the

respondent Port Trust to disqualify with a view to avoid

generation or creation of monopoly of any private terminal /

berth operator in the port. The main object of the policy is to

see that no monopoly over berths of the Port be made by any

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private berth operator and to obviate that apprehension, it

appears that decision is taken, but again said decision does not

reflect any reasons. We in exercise of extraordinary jurisdiction

do not deem it proper to conclude finally and as such, we are

inclined to leave it open to be re-examined by the respondent

authority after due compliance of the principles of natural

justice.

60. During the course of submissions, two issues mainly

remained a center of controversy. (1) that by virtue of clause

2.2.8 reflecting on page 40, which deals with disqualification

issue. Respondent Port Trust has assigned a reason to justify its

action since the petitioner is allegedly not entitled to participate

any further since Adani Vizag Coal Terminal (A 100% subsidiary

of petitioner No.1) has been terminated by Vishakhapatnam

Port Trust due to events of default of concessionaire. As against

this, petitioners' case is that it is not that Vishakhapatnam Port

Trust has terminated first but it is termination by the petitioner

and in turn, VPT has taken a measure of termination but this

controversy is pending before arbitral tribunal and as such,

without entering into such controversy, on breach of clause

2.2.8 of RFQ, we are of the view that reasonable opportunity

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ought to have been given or the decision making process is

followed. The reasons for rejection must have been reflecting in

the final outcome, i.e. impugned communication itself, upon

which, this Court would have had an opportunity to examine the

decision considering the sphere of judicial review. Yet, another

circumstance appears to have been not considered by the

respondent authority is that IFFCO is having Barge JT and stand

of the authority is that IFFCO is only for captive use and it

cannot be placed on the same footing as private terminal/ berth

operator. Hence, petitioner cannot sideline the clause of the

policy which is reflecting on page 98, i.e. clause 2. Now, this

stand countered by the petitioner on the ground that IFFCO is

no-doubt having Barge JT but it also handling multi-purpose

cargoes and therefore, respondent authority cannot justify the

said issue. In fact, according to the petitioner, IFFCO is another

private berth operator for dry bulk cargo in respondent Port and

as such, policy clause cannot be resorted to for disqualifying the

petitioner. Now, these issues which are tried to be canvassed by

the respondent Trust to justify their unilateral unreasoned

decision for arriving at rejection of petitioner's claim to further

participate in the tender or to disqualify has been arrived at

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without even hearing the petitioner. Hence, this Court is of the

considered opinion that the impugned communication

forwarded to petitioner under the aforesaid circumstances since

is not fulfilling the test of arbitrariness, reasonableness nor can

it be said to be on the touchstone of Article 14 of the

Constitution of India and in due compliance of principles of

natural justice. Hence, since we are prima facie satisfied that

impugned decision is not sustainable in the eye of law, on

aforesaid ground alone impugned communication is liable to be

set aside. Hence, we are inclined not to discuss or express our

views on other issues which have been canvassed before us,

since we are inclined to set aside the impugned order or

communication by directing the respondent authority to take a

fresh decision after assigning proper reasons and after

examining the issues at length.

61. Hence, we proceed to pass following order:

ORDER

(1) Impugned decision dated 23/24.12.2021 at Annexure-A is quashed and set aside and we direct the respondent authority to re-examine the issue with regard to qualification or disqualification of the petitioner as a

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bidder in second stage of bidding process as per the provisions of RFQ and shall pass a fresh order in accordance with law after assigning proper reasons and due compliance of principles of natural justice namely after affording petitioner a personal hearing.

(2) We make it clear that we have not expressed any opinion on merits with regard to any of the contentions raised on merit by both the sides. It is open for the respondent authority to independently take a fresh decision in accordance with the terms of policy and in accordance with law within a period SIX WEEKS from date of receipt of the writ of this Court.

(3) Interim protection granted to the petitioner vide order dated 28.12.2021 shall continue to operate till fresh decision is taken by the respondent authority subject to a condition that petitioner shall cooperate with fresh decision making process.

62. It is needless to state that if any adverse order is passed

against the petitioner, it would be open for the petitioner to

challenge the same in the manner known to law.

63. Accordingly, present petition stands DISPOSED OF.

64. No order as to costs.

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65. Since the main petition is disposed, Civil Application No.1

of 2022 stands DISPOSED OF as it would not survive for

consideration.

(ARAVIND KUMAR,CJ)

(ASHUTOSH J. SHASTRI, J)

(OMKAR)/phalguni