S. D. SHAH, J. ( 1 ) GUJARAT is the principal Maritime state in India. The Gujarat ports play major role in the economic development of the State and due to their favourable location, they serve a vast hinterland over northern and Central India. It has a long coastline of 1600 km. which is almost 1/3 of coastline of India. The State has 40 ports, one of them being Kandla which is a major port and 11 of them are classified as intermediate ports and 28 are classified as minor ports. This petition is concerned with the port of PIPAVAV which comes under the category of All weather Intermediate Ports capable of providing direct berthing facilities for ocean going vessels. The port is in the close proximity of Shiyal and Savai Bet. This port has practically no siltation and therefore it is a naturally sheltered deep water and the tranquilt port and therefore capable of providing direct berthing for ocean going vessels. It is noticed that the Kandla port which is the actual major port is handling large volume of cargo traffic and has reached saturation point as ships have to que and the waiting period is long. The existing ports in gujarat and Bombay are heavily overloaded and some of them are not even equipped with modern facilities to handle the large amount of traffic which is increasing day-by-day. There is, therefore, a lot of congestion in the ports and immense delays in cargo handling. Consequently, the development of coastline by developing the ports into modern ports capable of handling the ever increasing traffic is the need of the day and on this count there appears to be concurrence of opinion amongst the parties in this Court. ( 2 ) PIPAVAV port for its better location and absence of siltation is a contributor to the folklore of Saurashtra. Pipavav has excellent naturally sheltered deep waters suitable for the development of a modern state of the Art Sea Port. It has all potentialities of being developed into a full-fledged all weather port. The fact that pipavav could be developed into full-fledged all weather port also does not appear to be seriously in dispute before me. Pipavav has excellent naturally sheltered deep waters suitable for the development of a modern state of the Art Sea Port. It has all potentialities of being developed into a full-fledged all weather port. The fact that pipavav could be developed into full-fledged all weather port also does not appear to be seriously in dispute before me. ( 3 ) THE questions posed in this petition filed by a private individual as a public interest litigation, namely, are: (I) Whether an agreement to develop a port can be entered into or contract of development of port can be entrusted to one selected private party without following the procedure of issuing advertisement and inviting offers from all the eligible contenders so as to exclude large number of eligible parties from consideration while contracting for the state largesse thereby denying the opportunity of at least being considered for entrustment of such largesse to all eligible candidates ? (II) Whether the privatisation of ports by permitting development of port by private parties is permissible in view of the provisions of Gujarat Maritime Board act, 1981 read with Indian Ports Act, and whether such privatisation of ports would run counter to the provisions of gujarat Maritime Board Act (hereinafter referred to as "g. M. B. Act") ? ( 4 ) BEFORE I proceed to deal with the aforesaid two questions which are raised for my consideration in this petition, it must be stated that this petition is decided at the admission stage only. Wide publicity was given to the lodging of this petition in this Court and hence the State of gujarat, Gujarat Maritime Board and Sea- king Engineers Ltd. have appeared and filed their detailed affidavits-in-reply and i have heard the learned Counsels appearing for all the parties at length. Therefore, though the petition is not formally admitted, after full-fledged hearing and after taking into consideration all the submissions made by the parties at length this petition is decided by this order. Factual Matrix: (I) For appreciating in proper perspective the aforesaid questions it would be necessary to set out hereunder the relevant facts: (a) The State Legislature has enacted the Gujarat Maritime Board Act, 1981 to make provision for the constitution of maritime Board for minor ports in the state of Gujarat and to vest the administrative control and management of such ports in the Board. Accordingly, the Statutory Board known as "gujarat maritime Board" is established under section 3 (1) of the said Act having a corporate personality, perpetual succession and a common seal with power to hold and dispose of property, both movable and immovable. The said Board does not have funds to discharge many of its statutory obligations. The said Board has under its control 11 intermediate ports and Pipavav is one of such ports under its control. (b) Because of inadequate financial resources it has not been possible for the Board to spare sufficient funds to develop Pipavav port and other intermidiate Ports. The Board has been allocated only Rs. 65 crores for 39 ports- which is not adequate to provide for all the necessary facilities for coping with the traffic at other ports under the GMB. Therefore the Board cannot spare any additional financial resources to develop the Pipavav port on large scale. (c) As stated hereinabove, the Pipavav port has wide potentialities and if developed, it can turn out to be a very successful Intermediate Port with facilities for mechanical cargo handling and modern ship berthing. (d) The Gujarat Maritime Board has taken up the development of Pipavav port, in view of Cargo traffic potential, however, in view of the cost constraints and the slow pace of development the pipavav Port could not be developed as fast as possible and therefore, the question of developing ports through private capital or enterprise was under consideration. (e) The Asian Development Bank and planning Commission, Govt. of India, had undertaken Ports and Shipping Sector study in India and had submitted its report deals with Port Organisation and administration. In para 2. 1. 1. 6 of the said report under caption "private Capital in port Development" it has been stated that the use of Private Capital in port schemes has been negligible. The State has very limited financial resources for development of Ports and it was not possible for the State to spare sizeable amount and capital investment for the development of ports. Various reports undertaken by different committees had suggested development of minor ports and particularly a report under the chairmanship of then M. P. Shri H. M. Trivedi had recommended development of Pipavav port as All Weather Port in june 1973. Various reports undertaken by different committees had suggested development of minor ports and particularly a report under the chairmanship of then M. P. Shri H. M. Trivedi had recommended development of Pipavav port as All Weather Port in june 1973. The said Committee has observed that the State Government would strongly urge the Centre to include the project of development of Pipavav as a Centrally sponsored scheme. The development of Port by private parties was also recommended by the said committee, albeit, with respect to other ports. It is thus clear that on account of paucity of funds nothing concrete would materialise despite recommendation of the Committee as back as 1973 and the report of 9th May 1989. (f) It should be noted that the Honble chief Minister of Gujarat also holds portfolio of Minor Ports and he made a public announcement in his speech at sanand for special incentives to the entrepreneurs to invest their capital for the development of ports in the State either in private or joint sector. He had stated that there are 42 ports in the State which are ideal for the movement of medium size ships and that their development could boost up the international trade and help ease the congestion in the Bombay port. The said announcement made by the Chief minister came to be published in the financial Express, dated 20th October 1991. It is the say of the respondents that the Chief Minister had then taken a policy decision to develop minor ports incluiding Pipavav port as a Joint Sector partnership Project. (g) Within no time from the said public announcement which appeared in financial Express, the fourth respondent-Sea-King Engineers Ltd. came forward with a proposal for port development at Pipavav, Bedi, Sikka and okha. The time-lag between the submission of proposal and the announcement made by the Chief minister is unduly very short. (h) Immediately, thereafter, the fourth respondent submitted a detailed proposal for port development at Pipavav on 22nd november 1991. (i) On receipt of said proposal the Chief minister forwarded the said proposal to the Chairman of GMB for scrutinising the same and thereafter to discuss with him. It should be noted that along with the said proposal the fourth respondent had also submitted a draft MOU (Memo of Understanding ). (i) On receipt of said proposal the Chief minister forwarded the said proposal to the Chairman of GMB for scrutinising the same and thereafter to discuss with him. It should be noted that along with the said proposal the fourth respondent had also submitted a draft MOU (Memo of Understanding ). (j) On 9th December 1991 the GMB passed resolution and submitted the proposal for approval of the Government vide letter, dated 12th December 1991. In the said resolution the GMB pointed out that the equity capital of the Board should not be less than 2656. The Board has also taken into consideration that the joint Sector Partnership Project should be on the same line as the Joint Sector project entered into by Gujarat Industrial investment Corporation. (k) On 28th January 1992 a meeting was held in the Chamber of the Honble chief Minister with the representatives of fourth respondent and the Secretary, roads and Buildings as well as the chairman of GMB and its Chief Executive and Vice-chairman. It should be noted that the proposal of the fourth respondent was that the share capital of GMB should be reduced to 11% from that of 26%. (l) In the said meeting the Chief minister did not agree to the proposal of the fourth respondent to the share capital of GMB to be reduced to 11% and he asked the fourth respondent to accept the suggestion of the GMB for 26% equity shares. The Government by its letter, dated 7th February 1992 made the position very clear that the Memo of Understanding should be on the same lines as made by the GIIC in Joint Sector partnership Project. (m) On that very day the Special officer, Ports, also requested the Chief executive Officer of the Board to examine as to whether the fourth respondent would be competent enough to raise requisite funds and for that purpose opinion of the GIIC was sought (n) It should be stated that the initial opinion of the GIIC was not favourable to the fourth respondent and the chairman and M. D. of GIIC has given the opinion in highest confidence based on limited information and very quick survey due to time constraint. As per the said opinion on an average the Group can invest in an year minimum to an extent of Rs. 2 crores to 2. As per the said opinion on an average the Group can invest in an year minimum to an extent of Rs. 2 crores to 2. 5 crores without constraining or impairing the existing operation. This report of the Chairman and the M. D. of GIIC is the main foundation for submission made by the petitioner. (o) Immediately thereafter the Project manager (Finance) of GIIC has issued an addendum which reads as under: "further to the report forwarded by shri P. G. Ramrakhiani, IAS, Chairman and the Managing Director of GIIC Ltd. , shri Nikhil Gandhi, Promoter of the project informed that as against the observations made by the Corporation that Bankers would manitain a margin of 50% against debtors and 30% against stock in case of Inter Gold (India) Limited, they have informed that the margin which is required to be maintained by them in reality is 0% against export packing credit and 10 % against the stock. Accordingly, if we take the calculations, the Company will be able to draw a further sum of Rs. 1. 0 crore depending on the margin available from time to time, out of Inter Gold (India) Ltd. which can also he invested in the proposed project. The above facts could not be mentioned in the initial report since Shri Nikhil Gandhi himself was not aware of the margin maintained by his bankers against the stocks, etc. as mentioned above and that he has given A suitable confirmation by way of undertaking in this regard to us today. Hence, this addendum to the report may please also be considered. Taking the above into consideration the total investable surplus per year can be considered in the order of Rs. 3. 5 crores, which may be suitable for the project which is proposed by them. " (p) Based on said addendum the MOU was executed on 7th February 1992. The said MOU is in substance an agreement between GMB on one hand and Sea-King engineers Ltd. on the other hand to jointly develop the Pipavav port as an intermediate Port in joint sector. It is inter alia agreed that a separate company will be incorporated for the implementation of the project in joint sector after, in principle, approval by the government of Gujarat is accorded. The proposed name of the new company shall be "gujarat - PIVAVAV PORTS limited. It is inter alia agreed that a separate company will be incorporated for the implementation of the project in joint sector after, in principle, approval by the government of Gujarat is accorded. The proposed name of the new company shall be "gujarat - PIVAVAV PORTS limited. The important terms and conditions of the said MOU, inter alia, provide that the fourth respondent shall have 25% shares, the GMB shall have 26% shares and the balance 49% of shares shall be raised by public issue out of total equity outlay. It was also stipulated that the GMB shall sell its stares to the tune of 15%, [i. e. balance of 11 % to be kept with the (GMB)] to Sea-King Engineers ltd after three years at a price formula fixed up in agreement after the commencement of port operation. Various other terms and conditions being not relevant for the purpose of this petition are not reproduced in this order. (q) It should be stated that the aforesaid mou is the subject-matter of challenge in this petition. (r) It will not be out of place to mention that to aforesaid MOU executed on 7th february 1992 the Government has granted approval. It is the case of the government that the fourth respondent is engaged in the manufacturing activities of ship building and various critical equipments and spare-parts, catering in a large way to the Indian Navy/coast guard and to various Indian Shipyards. The Government has also noted that Joint sector Partnership Project is always based on mutual trust and confidence and after examining the investment capacity, the experience, top executives available to the company and other material the government has decided to give approval to the proposal of fourth respondent for development of Pipavav Project in Joint sector. The approval of the Government as noted by the Chief Minister is to be found in the following words: approval subject to "a" on page 11/n as follows: "however, since CMB, which is a government of Gujarat undertaking, is entering into a joint venture arrangement with Sea-King Enineers, it would be necessary for GMB to satisfy itself that m/s Sea-King Engineering Co. are capable of bringing their equity contribution of about Rs. 21 crores and of raising 49% of the Project cost, i. e. about Rs. 42 crores from the market/financial institutions. This is the practice normally adopted by Gujarat industrial Investment Corporation. are capable of bringing their equity contribution of about Rs. 21 crores and of raising 49% of the Project cost, i. e. about Rs. 42 crores from the market/financial institutions. This is the practice normally adopted by Gujarat industrial Investment Corporation. " (s) From the aforesaid gist of MOU it becomes clear that the sharing of GMB shall be 26% whereas that of the fourth respondent shall be 25% and the balance is by public subscription of shares. In fact, this is the standard pattern adopted by the GIIC in all Joint Sector Partnership enterprises. (t) It shall have to be mentioned that the terms of said MOU are not finally accepted by the GMB and the Maritime board has passed resolution in its meeting dated 9th December 1991 granting approval in principle to a project of developing Pipavav Port through a public limited company in association with respondent No. 4. At Resolution No. 607 it is resolved that in Clause 3 of MOU in second paragraph instead of word "shall" the word "may" shall be substituted and subject to such modification the draft of MOU was approved. Said second para of Clause 3 of MOU reads as under: "gmb shall sell its shares to the tune of 15% (i. e. balance of 11% to be kept with them) to SKEN after three years at a price formula fixed up in agreement after commencement of Port operation. " (u) In the aforesaid clause the word "shall" is to be substituted by the word "may". Locus standi of the Petitioner: (i) This petition is filed by one mahendra B. Shah, who incidentally happens to be a member of a political party which is a party other than the party ruling in the State at present. " (u) In the aforesaid clause the word "shall" is to be substituted by the word "may". Locus standi of the Petitioner: (i) This petition is filed by one mahendra B. Shah, who incidentally happens to be a member of a political party which is a party other than the party ruling in the State at present. Since in the affidavit-in-reply filed by the GMB - the respondent No. 2 an objection is taken to the effect that the petition is not a bona fide petition and is filed for political purposes and since it is also alleged that the petitioner is an elected corporator of BJP and he has filed the petition at the instance of one Vikramsinh kachhar who happens to be one of the members of GMB it shall here to be seen as to whether the petitioner can be said to have locus standi to file this petition praying for appropriate writ from this court for quashing and setting aside the memorandum of Understanding (MOU) entered into between the State of Gujarat, i. e. the Secretary, Roads and Buildings and sea-King Engineers Ltd-the respondent no. 4 herein. The Ld. Addl. AG has also incidentally, not as a main plank of his submission, argued that the petitioner is merely a stooge or instrument in the hands of said Vikramsinh Kachhar and that this petition is actuated for some political purposes and is not a public interest litigation in the real sense of the term. (ii) It is true that in the cause title of the original petition name of some other person was stated as petitioner which is scored out and it is also true that in the last page of the petition wherein the affidavit is typed, the name of some other person was stated as the petitioner which came to be scored out and the name of the petitioner came to be introduced. It is very difficult to ascertain with certainty as to whose name was written as the petitioner initially. However, from the averments made in the memo of petition it becomes clear that the reference is only to the present petitioner and not to anyone else. It is very difficult to ascertain with certainty as to whose name was written as the petitioner initially. However, from the averments made in the memo of petition it becomes clear that the reference is only to the present petitioner and not to anyone else. The petitioner is described as a corporation of Ahmedabad Municipal corporation, and therefore, no adverse inference can be drawn from the fact that the name of someone else was typed in the index page of the petition as well as in the last page containing affidavit of the petitioner. (iii) The second serious challenge to the locus standi of the petitioner is grounded on the fact that the petitioner belongs to Bharatiya Janta Party and that he has filed the petition for political purposes. In my opinion, such a petition involving substantial challenges to the executive action of the respondents cannot be thrown out on the ground that the petitioner has no direct or substantial interest in the transaction in question. (iv) The justification for insisting that the petitioner must have some standing to the case is that it enables the court to prevent abuse of judicial process by "busybodies, craks and other mischief- makers" as described by LORD scarman. The traditional rule of standing has been that a writ petition can ordinarily be moved only by "an aggrieved person". This principle is based on well-known maxim of UBI Jus IBI remedium. Ordinarily only a person whose own right is in jeopardy is entitled to seek a remedy. The first proposition, therefore, is that only he can take recourse to the writ jurisdiction whose own legal rights are directly or substantially injured. In this sense of term, perhaps, the present petitioner cannot find himself. Second class of cases are those when a person suffers along with other members of public by administrative action. But he cannot challenge the action in question unless he can show some special injury to himself over and above what others have suffered. The present is not the case of this type. The third class of cases are those where a person challenging the administrative action is a total stranger, a person described by courts earlier as "meddlesome interloper". But he cannot challenge the action in question unless he can show some special injury to himself over and above what others have suffered. The present is not the case of this type. The third class of cases are those where a person challenging the administrative action is a total stranger, a person described by courts earlier as "meddlesome interloper". However, over and above the aforesaid three classes of cases, in the course of time the courts have tried to come out of extreme rigidity of traditional law by permitting at times even a stranger to invoke courts jurisdiction. The modern approach is that where an application is made by a person having particular grievance of his own, the remedy lies ex debito justiae. However, when a stranger applies for it, the remedy is purely discretionary. The law is very succinctly stated by the supreme Court in the case of J. M. Desai v. Roshan Kumar, AIR 1976 SC 578 . The present-day trend is not to decide the standing of petitioner by traditional restrictive approach and as observed by andhra Pradesh High Court in the case of Warangal Chamber of Commerce v. Director of Marketing, AIR 1975 A. P. page, 245, the approach of the court on locus standi must be dominantly ameliorative and not merely apocalyptic and to serve the philosophy and principles underlying Article 226 of the Constitution of India. When legislative and administrative actions impinge on the rights of people and in the society in which there is massive state intervention, the attempt of the court should be to liberalise law of standing to meet the new situation. The reasons for favouring liberalisation of this approach of law are very pithily stated by Justice Krishna Iyer in the case of Fertiliser Corporation Kamgar Union v. Union of India reported in AIR 1981 sc 344 in the following words: "1. When corruption permeates the entire fabric of government, the state power may be "exercised on grounds unrelated to its nominal purposes". In such a climate civil remedies for administrative wrongdoing depend upon the action of individual citizens. 2. Social justice warrants liberal judicial review of administrative action until other control arrangements are made. 3. Restrictive rules of standing are antithesis to a healthy system of administrative law. In such a climate civil remedies for administrative wrongdoing depend upon the action of individual citizens. 2. Social justice warrants liberal judicial review of administrative action until other control arrangements are made. 3. Restrictive rules of standing are antithesis to a healthy system of administrative law. If a plaintiff with a good case is turned away merely because he is not sufficiently affected personally, that means that some government agency is left free to violate the law, and that is contrary to the public interest. 4. In india, freedom suffer from atrophy and "activism is essential for participative public justice" and, therefore, public-minded citizens must be given opportunities to rely on legal process and not be repelled by narrow pedantic concept of locus standi. " (v) Keeping the aforesaid position of law in mind, I am of the opinion that a public-minded citizen must be given opportunity to rely on legal process. Even if the person is not sufficiently affected personally he has right to knock the doors of the court if he can satisfy the court that the State action or executive action of the Government is likely to violate the law or is contrary to the public interest or is contrary to well established principles of law. Such a person cannot be repelled by narrow pedantic concept of locus standi nor can- he be branded as a stooge of another especially when the challenge posed by him to the government action is not false, frivolous, baseless and vexatious. In my opinion in cases like the present the approach adopted by the House of Lords in the case of IRC v. National Federation of self-employed reported in 1982 0 AC 617 shall have to be adopted. House of Lords held that the requirement of locus standi is to be determined by examination of merits of the case and Dr. M. A. Fazal in his book Judicial Control of administrative Action recommends the solution to merge the issue of locus standi with the merits of the case. On this approach, if on merits the case is proper for judicial review the court would accept the standing of the applicant. I think, if the application is not meritorious the applicant would be deemed not to have standing in the case. On this approach, if on merits the case is proper for judicial review the court would accept the standing of the applicant. I think, if the application is not meritorious the applicant would be deemed not to have standing in the case. The very approach is applied by the Supreme Court in the case of S. P. Gupta v. President of India ( AIR 1982 SC 149 ) with one rider that the court would look into the motives of the petitioner to see if it was a bona fide or for personal gains or out of political motives. Therefore, in my opinion, if on merits it is found that the petitioner was justified in approaching this Court for judicial review of administrative action he will not be denied the locus standi if it is found that he was acting bona fide. In my opinion simply because the petitioner happens to be a Corporator belonging to a political party which is the party not in power, it cannot be legitimately inferred that he has filed the petition out of political motives. He has not sought any relief personally to himself nor has he advanced or put forward the claim of any other individual. He has simply challenged the action as arbitrary, unreasonable, irrational and discriminatory and violative of Article 14 of the Constitution of India based on various pronouncements of the Supreme court. I am, therefore, of the opinion that the petition at the instance of this petitioner is maintainable and he has sufficient standing to challenge the action of the respondents and he cannot be denied at least the right of judicial scrutiny of the action which he has brought to the notice of the court. ( 5 ) THE aforesaid is the factual canvas within the parameters of which the questions raised hereinabove are to be examined and answered. Re-Submission No. 1: ( 6 ) MR. ( 5 ) THE aforesaid is the factual canvas within the parameters of which the questions raised hereinabove are to be examined and answered. Re-Submission No. 1: ( 6 ) MR. S. B. Vakil submitted that the entire transaction starting from a casual, off the cuff statement made by the honourable Chief Minister at a public function followed by the tentative and final proposals of 4th respondent culminating into execution of MOU between Gujarat Maritime Board on one hand and the fourth respondent on the other hand within a short span of 2/3 months without inviting any other party except the fourth respondent to assess the competitive fitness and creditability of fourth respondent in comparison with candidates, suffers from the vice of exercise of discretionary power arbitrarily, capriciously, whimsically, discriminately and unreasonably so as to violate Article 14 of the Constitution of india and also smacks of "something rotten in the State of Denmark" calling for immediate interference of this Court. ( 7 ) THIS submission of Mr. S. B. Vakil has two prongs of attack. One legal attack as the power is exercised arbitrarily, capriciously, unreasonably so as to violate article 14 of the Constitution of India and second factual attack to submit that the entire transaction is shrouded by suspicious circumstances which taken cummulatively establish that the transaction lacked in good faith and was an instance of colourable exercise of power in a view to obliging the fourth respondent. ( 8 ) IN the first aspect of his submission, mr. S. B. Vakil has heavily relied upon the decision of the Supreme Court in the case of Ramana Dayaram Shetty v. The international Airport Authority of India reported in AIR 1979 SC 1628 and has submitted that the Government today in a welfare State is the regulator and dispensor of special services and provider of large number of benefits including top contracts, licences, mineral rights, etc. Thus, largesse of the Government are to be distributed and the Govt. cannot act like a private owner of the property. The contract to develop minor port is a substantial contract which could not be given to any individual without following due process of law. With the passage of time, the courts have forged procedural safeguards by finding, structuring and taking Government discretion in the matter of grant of such largesse. cannot act like a private owner of the property. The contract to develop minor port is a substantial contract which could not be given to any individual without following due process of law. With the passage of time, the courts have forged procedural safeguards by finding, structuring and taking Government discretion in the matter of grant of such largesse. The discretion of the Government cannot be unlimited and the Government cannot give or withhold largesse in its arbitrary discretion or at its sweet-will. The government action must be based on standards which are not arbitrary or unauthorised. The Government cannot be permitted to say that it will depart or enter into private contracts by issuing quotas or licences only in favour of those having grey hair or belonging to particular political party or professing particular religious faith. Based on this line of reasoning Mr. S. B. Vakil submitted that it was not open to the respondents to pick and choose the respondent No. 4 only from the entire world for the project of development of Pipavav port without even inviting large number of eligible candidates and without considering their eligibility, financial strength and expertise for such a project. In his submission, issuance of public advertisement inviting offers for such a project of development of Intermediate port is the only permissible method which can withstand the litmus test of reasonableness and rationality so as to exclude arbitrariness and charge of picking and choosing a favourite. Though no person has right to enter into contract with the Government and though the Government like any other private individual has the absolute right to enter into contract with anyone it pleases, the Government is not like a private individual who can pick and choose a person with whom it will deal but the Government is still a Government when it enters into a contract or when it has to administer the largesse it cannot without adequate reason exclude any person from dealing with it or take away the largesse arbitrary. The democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. The democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. He, therefore, submitted that when the government is dealing with the public especially while entering into contracts or distributing its largesse the government cannot act arbitrarily at its sweet-will and it cannot deal with a person it pleases in the manner it likes but its action must be in conformity with the standards and norms which are not arbitrary and irrational or irrelevant. The power of the Government in such transactions must be confined and structured by standard, relevant and non-discriminatory standards or norms. He, therefore, submits that in the present transaction the Government has for no justifiable reason given a go-bye to the normal procedure of issuing public advertisement and inviting public offers from eligible candidates for the contract of development of Pipavav port and thereby while selecting the fourth respondent it has adopted practice of picking and choosing its favourite and thus it has acted arbitrarily, capriciously, whimsically and discriminately. In his submission, the respondents are not in a position to show that the departure made by them from ordinary practice as not arbitrary and that it as based on some valid principle which was not irrational, unreasonable or discriminatory. Mr. Vakil also referred to and relied upon the decision of the Supreme Court in the case of Kasturilal v. J and K reported in AIR 1980 SC 1992 as well as its subsequent decision in the case of Ram and Shyam v. State of Haryana reported in 1985 (3) scc 267 . ( 9 ) AT the first blush the submission of Mr. Vakil appears to be quite convincing and attractive. However, closure scrutiny of the said submission in the light of recent decisions of the supreme Court would reveal that such an absolute proposition as canvassed by mr. Vakil cannot be accepted. The first traditional view which found favour with the courts in India was to concede to the Government an extremely broad discretion to choose the party with whom it wanted to enter into contractual relationship on the ground that the government enjoyed the same freedom in the matter of contract as was enjoyed by private parties. There was reluctance on the part of the court to interfere with the Govt. s discretion to award contracts. There was reluctance on the part of the court to interfere with the Govt. s discretion to award contracts. This initial orthodox proposition is to be found duly reflected in the case of C. K. Achutan v. Kerala reported in AIR 1959 SC 490 . In the said case the court found that it was perfectly open to the Government, even as it is to a private party, to choose a person to their liking to fulfil contracts which they wish to be performed and that when one person was preferred to another the excluded person cannot claim protection under Article 14 because the choice of a person to fultil a particular contract must be left to the Government. At that time there was in the field a lone dissent of Justice K. K. Mathew as a judge of Kerala High Court where in a dissenting opinion he observed as under:"a democratic Government cannot lay down arbitrary and capricious standards for the choice of persons with whom it will deal". Subsequently, it came to be accepted that the State cannot act arbitrarily in selecting persons with whom it enters into contracts. It was in the case of ramana v. A. I. Authority (supra) that it came to be accepted that the government today has immense capacity to confer economic benefits on the people. Therefore, it is necessary to develop some norms to regulate Government discretion because basically the Government exercises administrative power when it enters into a contract. A person has at least right to be treated in a fair and non-discriminatory manner while dealing with the Government. In Ramana v. A. I. Authority (supra) the law pithily stated by Justice P. N. Bhagwati (as he then was) in the following words:"it must, therefore, be taken to be the law that where the Government is dealing with the public whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, the Government cannot act arbitrarily at its sweet-will, and like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power or discretion of the government in the matter of grant of largesse including award of jobs, contracts, quotas, licences, etc. The power or discretion of the government in the matter of grant of largesse including award of jobs, contracts, quotas, licences, etc. must be confined and structured by rational, relevant and non-discriminatory standard or norm in any particular case or cases, the action of the Govt. would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory. The court also considered the observation of Justice Hidayatulla in C. K. Achutan (supra) and held that the court never intended to lay down any absolute proposition permitting the State to act arbitrarily in the matter of entering into contract with third parties. Similarly in the case of Kasturilal v. J and K (supra) the same view was reiterated and Justice p. N. Bhagwati observed as under:"every activity of the Government has a public element in it and it must therefore be informed with reason and guided by public interest. Every action taken by the govt. must be in public interest. The govt. cannot act arbitrarily and without reason and if it does, its action would be liable to be invalidated. "however, close reference to the decisions of the Supreme Court in ramana as well Kasturilal cases would reveal that no absolute proposition as canvassed by Mr. Vakil is ever laid down by the Supreme Court. In Ramana (supra) case the court has observed as under:"it is true that there was no statutory or administrative rule requiring the first respondent to give a contract only by inviting tenders and hence the first respondent was entitled to reject all the tenders and subject to the constitutional norm laid down in Article 14 negotiate directly for entering into contract. "it is, therefore, clear that there is no rule of universal acceptance that the government cannot enter into contract with any party without issuing public advertisement and inviting public offers. Though normally and ordinarilly in the matter of entrustment of contract the government with a view to avoiding charge of arbitrariness and unreasonableness should resort to invitation to public by public advertisement but that cannot be taken to be an absolute rule. The aforesaid proposition is also partially accepted if reference is made to the case of Kasturilal (supra ). Though normally and ordinarilly in the matter of entrustment of contract the government with a view to avoiding charge of arbitrariness and unreasonableness should resort to invitation to public by public advertisement but that cannot be taken to be an absolute rule. The aforesaid proposition is also partially accepted if reference is made to the case of Kasturilal (supra ). Justice bhagwati (as he then was) elaborately examined the position of law and found that when the Govt. awards a contract or distribute its property or largesse its action is liable to be tested for its validity on the touch-stone of reasonableness and public interest and if it fails to satisfy either test it would be unconstitutional and invalid. Having so stated the broad principles, the court observed in Para 14 of its judgment as under: "where any governmental action fails to satisfy the test of reasonableness and public interest discussed above and is found to be wanting in the quality of reasonableness or lacking in the element of public interest it would be liable to be struck down as invalid. It must follow as a necessary corollary from this proposition that the Govt. cannot act in a manner which would benefit a private party at the cost of the State; such an action would be both unreasonable and contrary to public interest. The Govt. , therefore, cannot for example give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so. Such considerations may be that some Directive Principle is sought to be advanced or implemented or that the contract or property is given not with a view to earning revenue but for the purpose of carrying out a welfare scheme for the benefit of particular group of section of people deserving it or that the person who has offered a higher consideration is not otherwise fit to be given the contract or the property. We have referred to these considerations only illustratively for there may be an infinite variety of considerations which may have to be taken into account by the Govt. We have referred to these considerations only illustratively for there may be an infinite variety of considerations which may have to be taken into account by the Govt. in formulating its policies and it is on a total evaluation of various considerations which have weighed with the government in taking a particular action that the court would have to decide whether the action of the government is reasonable and in the public interest. But one basic principle which must guide the court in arriving at its determination on this question is that there is always a presumption that the governmental action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest. The burden is a heavy one and it has to be discharged to the satisfaction of the court by proper and adequate material. The court cannot lightly assume that the action taken by the Govt. is unreasonable or without public interest because, as we said above, there are a large number of policy considerations which must necessarily weigh with the Government in taking action and therefore the court would not strike down governmental action as invalid on this ground, unless it is clearly satisfied that the action is unreasonable or not in public interest. ( 10 ) FROM the aforesaid observations it becomes clear that number of considerations shall have to be taken into account by the Govt. in formulating its policies and it is on total evaluation of various considerations which have weighed with the Govt. in taking a particular action that the court would have to decide whether the action of the Govt. is reasonable and in public interest. Therefore, if method of inviting applications from the public at large for entrustment of specialised contract requiring specialisation or expertise is not found suitable by the Govt. its action cannot be necessarily invalidated. 10 (a) In the facts of the case of kasturilal (supra) before the Supreme court by the impugned order tapping as given to the respondent No. 2 but the court found that it was not a tapping contract simpliciter. its action cannot be necessarily invalidated. 10 (a) In the facts of the case of kasturilal (supra) before the Supreme court by the impugned order tapping as given to the respondent No. 2 but the court found that it was not a tapping contract simpliciter. The second respondent wanted to set up factory within the State and it was for the purpose of ensuring supply of such raw material, namely, Resin that the impugned order was passed giving tapping contract to the second respondent. By the impugned order raw material was allocated to the second respondent for running the factory and there was obligation on the part of second respondent to set up a factory within the State. By giving aforesaid contract to the second respondent the advantage to the State was that the new factory for manufacturing Resin, terpentine Oil and other derivatives would come within its territories offering some job opportunities to the people of the Stale, increasing their prosperity and augmenting the State revenues. When confronted with the identical challenge that no advertisement was issued by the state Government inviting tenders for award of contract for tapping in respect of the blazes, the court observed that the predominant purpose of transaction was to ensure setting up of factory by the second respondent as part of process of industrialisation of the State. The court, however, found that if the State were giving tapping contract simpliciter it would have to auction or invite tenders for securing the highest price, but where state was allocating resources such as water, power, raw material, etc. for the purpose of encouraging setting up of industries within the State there was no obligation on the part of Stale to advertise and tell the people that it wants a particular industry to be set up within the State and invite those inlerested to come up with proposals for the purpose. for the purpose of encouraging setting up of industries within the State there was no obligation on the part of Stale to advertise and tell the people that it wants a particular industry to be set up within the State and invite those inlerested to come up with proposals for the purpose. The court having so found observed as under:"the State may choose to do, if it thinks fit and in a given situation, it may even turn out to be advanlageous for the State to do so, but if any private parly comes before the Stale and offers lo set up an industry the Slale would not be committing breach of any conslilulional or legal obligations if il negotiates with such parly and agrees to provide resources and other facilities for the purpose of selling up of industry. The stale is not obliged lo lell such parly: please wait, I will first advertise, see any other offers are forthcoming, and then after considering all the offers, decide whelher I should let you set up industry it would be most unrealistic lo insisl on such procedure particularly in an area like J and K which on accounl of historical; political and olher reasons, is nol yet industrially developed and where entrepreneurs have lo be offered attractive terms in order lo persuade them to set up an induslry. The Stale must be free in such a case lo negotiate with a private entrepreneur with a view to inducing him to sel up an induslry wilhin the state and if the Stale enters into a contract wilh such entrepreneur for providing resources and other facilities for setting up an industry, the contract cannot be assailed as invalid as long as the Slate had acted bona fide, reasonably and in public interest. "it, therefore, becomes abundantly clear lhal though ordinarily and normally issuing of a public advertisement and inviting competitive claimanls for entering into contract with the Govt. is a desirable procedure, it is not required to be followed in each and every case and State would not be committing breach of any constilulional or legal obligations if il enters inlo contract with the private entrepreneur for taking up a special task if il is eslablished that the Slale has acted bona fide, reasonably and in public interest. is a desirable procedure, it is not required to be followed in each and every case and State would not be committing breach of any constilulional or legal obligations if il enters inlo contract with the private entrepreneur for taking up a special task if il is eslablished that the Slale has acted bona fide, reasonably and in public interest. ( 11 ) IN the case of Sachidanand Pandey v. State of West Bengal reported in (1987) 2 SCC 285 AIR 1987 SC 1109 , Justice o. Chinnappa Reddy after considering all the previous decisions of the Supreme court on the subjecl observed as under:"on a consideration of the relevant cases cited at the bar the following propositions may be taken as well as eslablished: State-owned or public-owned properly is nol lo be dealt wilh al the absolute discretion of the executive. Certain precepls and principles have to be observed. Public interest is the paramount consideration. One of the methods of securing the public interest, when it is considered necessary to dispose of a properly, is to sell the property by public auction or by inviting tenders. Though that il is the ordinary rule, it is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule but then the reasons for the departure must be rational and should not be suggestive of discrimination. Appearance of public justice is as important as doing justice. Nothing should be done which gives an appearance of bias, jobbery or nepotism. "from the aforesaid observations- it becomes clear that when the Govt. decides to dispose of its property, method of public auction or inviting tenders is one of the methods of securing public interest. However, it is the normal ordinary rule but it is not an invariable rule. There may be compelling reasons necessitating departure from the rule and if said reasons are rational and reasonable and not suggesting any discrimination or picking and choosing of private individuals, the court would not invalidate the transaction. Justice Khalid in his supplementing opinion also found that the transaction with which the Supreme Court was dealing was one which cannot be concluded by public auction. It was not a case of sale of Govt. property, and therefore public auction was necessarily to be ruled out. In the case before the supreme Court decision was taken by the Govt. Justice Khalid in his supplementing opinion also found that the transaction with which the Supreme Court was dealing was one which cannot be concluded by public auction. It was not a case of sale of Govt. property, and therefore public auction was necessarily to be ruled out. In the case before the supreme Court decision was taken by the Govt. granting permission to the Taj group of Hotels to construct Five Star hotel in the vicinity of Zoological garden. No procedure of inviting offers from the public was followed and the challenge to said Govt. action was negatived by the court by making observations quoted hereinabove. 11 (a) From the aforesaid observations of the Supreme Court in the aforesaid case it becomes clear that in the field of entrustment of contract or distribution of largesse the Govt. cannot act arbitrarily, unreasonably or contrary to public interest. Ordinarily therefore issuance of public advertisement or invitation to the public at large to participate in the tender enquiry or to offer their competitive bids is the ideal method which would exclude the charge of picking and choosing or discrimination and which would be consistent with public interest. However, the aforesaid method of selecting the recipients of largesse or parties for entrustment of contract is not the only method or is not the invariable rule. There may be other considerations which render it reasonable and in public interest to adopt other methods of distribution of largesse or entrustment of contract. Firstly, there might be considerations of implementation of some directive Principles of State policy where the object of the Govt. is not to earn revenue but is to carry out the welfare scheme for the benefit of a group or section of people deserving it. Secondly, the distribution of largesse or entrustment of contract was urgently required to be done and the process of issuing public advertisement and inviting offers and processing such offers would not be consistent with the emergency of the project. Thirdly, special expertise, technical or scientific know-how and experience spread over a period of time are the need of the project which can be had by referring to or inviting parties having reputation for such technical or scientific know-how and inviting offers from public at large therefore becomes redundant or meaningless. Thirdly, special expertise, technical or scientific know-how and experience spread over a period of time are the need of the project which can be had by referring to or inviting parties having reputation for such technical or scientific know-how and inviting offers from public at large therefore becomes redundant or meaningless. Fourthly, the policy decision is taken to have the recipient of a largesse from amongst a particular class inasmuch as the project or contract or services to be offered are maintained for that class alone and the persons well-versed in the said field can only be had from that class alone. Fifthly, there may be compelling reasons necessitating departure from the rule of public auction or public advertisement and when such reasons for the departure are rational and or suggestive of no discrimination. A variety of considerations may operate in the minds of the authorities taking the decision and if considerations which have weighed with the authority are reasonable and in public interest it would be open to the Govt. to formulate its policies based on an infinite variety of considerations and there might be number of contingencies that the usual and normal method of issuing public advertisement and inviting offers from the public at large may be dispensed with. An exhaustive enumeration of such considerations is well-nigh impossible but it can be said that it is ultimate policy decision of the govt. which is required to be weighed in the Golden Scale and if such policy decision is found to be reasonable, rational and not opposed to public policy and not suggestive of any discrimination, transaction shall have to be upheld. ( 12 ) FROM the aforesaid observations, it becomes clear that the issuance of public advertisement and inviting people at large to offer their prices or to apply for entrustment of contract is not a absolute or an invariable rule. It is the say of the respondent-State in its affidavit that the joint Sector Partnership project is always based on mutual trust and confidence and after examining the investment capacity, experience, top executives available with the fourth respondent and other material the Govt. has decided to give approval to the proposal of the fourth respondent for development of Pipavav project in joint sector. has decided to give approval to the proposal of the fourth respondent for development of Pipavav project in joint sector. It is also pointed out that the GIIC also follows the same pattern of equity capital of 26% with the GMB, 25 % to the proposed party, 49% shares to be offered to the public. That is the standard pattern adopted by the GIIC in all Joint Sector Partnership enterprises. The very pattern is to be followed in the present case also and since the transaction is one which is based on confidence and mutual trust, inviting applications from public at large was not consistent with the attainment of the object. In fact, in joint sector partnership project an advertisement is never resorted to or rarely resorted to. This position is clear from the affidavit-in-reply filed by a. F. Vyas, Chief Executive Officer of the GMB and by H. P. Jamdar, Secretary, roads and Buildings, Sachivalaya, gandhinagar. ( 13 ) FROM the aforesaid position and submissions of law, it becomes clear that on the one hand there is urgent need for development of Intermediate Ports on the coast of Gujarat with tremendous increase in traffic while on the other hand there is question of paucity of funds with gmb as made clear in its affidavit-in-reply that it has no sufficient funds even to maintain 39 ports under its control and therefore development of such ports is out of question. Secondly, the Asian Development Bank and planning Commission in its study on ports and Shipping Sector has examined the possibility of the use of private capital in port schemes and has accepted that at various ports private agencies are undertaking various activities. It is also accepted that the State has very limited financial resources for development of ports and that it would not be possible for the State to spare sizeable amount of capital investment for the development of ports. Thirdly, the report submitted under the Chairmanship of the then member of Parliament Mr. H. M. Trivedi has also recommended development of pipavav port as All Weather Port as back as June 1973. Fourthly, it is an accepted position that despite need to develop pipavav port which accepted as back as 1973 no steps whatsoever were taken or could be taken by the GMB or by the state Govt. due to paucity of funds. H. M. Trivedi has also recommended development of pipavav port as All Weather Port as back as June 1973. Fourthly, it is an accepted position that despite need to develop pipavav port which accepted as back as 1973 no steps whatsoever were taken or could be taken by the GMB or by the state Govt. due to paucity of funds. It was under these circumstances that a policy decision was taken by the Chief minister to provide incentives to the private entrepreneurs who come forward to invest their amounts for development of Intermediate Port so that the port could be developed and at the same time the gmb could maintain and retain its control. It is in these circumstances, that it shall have to be decided as to whether the action of the Govt. in not inviting offers from public by issuing public advertisement can be said to be vitiated as arbitrary or discriminatory so as to violate Article 14 of the Constitution of india. In my opinion, from the nature of public interest involved and the need to develop the port, and from the nature of transaction which the GIIC enters into and FROM THE FACT THAT THE transaction ENTERED INTO BY the gmb with the fourth respondent is on the same pattern it would not be proper for this court to hold that the transaction is irrational, unreasonable or mala fide. It does not smack of want of good faith. It is permissible transaction entered into with a view to achieve the public interest and the same cannot be voided as violative of Article 14 of the constitution of India. ( 14 ) THE need of the transaction or privatisation of Ports is accepted by the committee as back as 1973 and in the recent past in 1989 also. In the recent issue of Business Today under the heading "port Trust and Private Players" the author stated the need of privatisation of Port Trust in India. She has found that plauged by cash crunch and low profits ports are inviting the private sector to bail them out. The case for privatisation rests on two arguments, i. e. (i) the cash crunch and (ii) low profits. By the end of VIIIth Plan 1996-97 the major Indian ports are expected to handle 212. 68 million tonnes of cargo, an increase of 44% compared to the earlier Plan. The case for privatisation rests on two arguments, i. e. (i) the cash crunch and (ii) low profits. By the end of VIIIth Plan 1996-97 the major Indian ports are expected to handle 212. 68 million tonnes of cargo, an increase of 44% compared to the earlier Plan. Capacity has to be increased by 37% to handle the additional traffic. About Rs. 4800 crores is needed to modernise the Port industries. Outlay for the VIIIth Plan is less than of the amount. The operating capacity of the ports is not just enough to meet the shortfall. The aforesaid situation detailed by the writer is fully incorporated in the affidavit-in-reply filed by the GMB when it has stated that the privatisation of Port is the need of the state and because of paucity of funds, unless ports are privatised and private entrepreneurs are invited to invest funds, the tremendous traffic of cargo increasing day-by-day by rapid speed cannot be met with. It is under these circumstances that the policy decision is required to be taken and is taken by the Chief Minister holding portfolio of Ports to usher in privatisation of important ports by calling upon proper expert agencies to undertake the task. In fact, a public statement is made in a public meeting which is made known to the Business World at least by its publication in the Financial Express and that publication in my opinion would be sufficient to invite any alert private entrepreneur to come forward. Even if that publication is not treated as an advertisement on my findings recorded hereinabove I am of the opinion that the facts and circumstances of the case narrated hereinabove justify the government in accepting the proposal of the fourth respondent. ( 15 ) ON the factual front, Mr. Vakil with vehemence and sarcasm submitted that the contents of pleas outlined hereinabove starting from the announcement by the chief Minister in public meeting on 20-10-1991 suggest that the Government through the Chief Minister was paving way for the fourth respondent so that he can come forward and can be obliged by the Govt. Vakil with vehemence and sarcasm submitted that the contents of pleas outlined hereinabove starting from the announcement by the chief Minister in public meeting on 20-10-1991 suggest that the Government through the Chief Minister was paving way for the fourth respondent so that he can come forward and can be obliged by the Govt. In his submission just within a week from the public speech which is not published in any newspaper having wider circulation a proposal is received from the fourth respondent giving number of details and on said proposal the Chief minister acts and refers the matter to gmb and other bodies. He submits that within no time the GMB passed resolution and GIIC on absolute insufficient information and in insufficient time obliged the fourth respondent by initial adverse but subsequently favourable report. The subsequent addendum is not signed by the Chairman and MD of GIIC and therefore he submits thai by private negotiations and pre-determination the government has proceeded to finalise the transaction. In his submission there was no need for such an unholy haste because despite need for privatisation of ports felt as back as 1973 or 1989 no step was taken and if an urgent step is required to be taken the unholy haste shown by the Govt. do create doubts about its bona fides. About the report received from GIIC he has submitted that it is a manoeuvred report from the Corporation and even initial report has not favoured the fourth respondent. The report suggests that it is not based on full study and analysis. The report is based on limited information given to GIIC and is based on a very quick survey due to time constraint and even such a report is not favourable to fourth respondent. The addendum to the report is, in his submission, a manoeuvred one solely with a view to oblige the fourth respondent. ( 16 ) IN my opinion the aforesaid factual attack to the transaction is not wellfounded. Looking to the need of the hour and pressing demand for development of Intermediate ports so as to meet with the increasing coastal traffic if the Govt. acts with reasonable despatch its intentions cannot be doubted. In fact recent trend is towards privatisation of ports and consistent with such trend if an initial step in that direction is taken by the Govt. acts with reasonable despatch its intentions cannot be doubted. In fact recent trend is towards privatisation of ports and consistent with such trend if an initial step in that direction is taken by the Govt. it cannot be said that because of unusual reasonable despatch showned by the Government, its action becomes doubtful or is shrouded by suspicion. It is true that because of pressing need of the hour to develop the ports the Govt. has acted not in the same procrastinate manner but has acted expeditiously. Even while so acting the Honourable Minister of Ports has seen to it that the proposal of the fourth respondent is fully examined and the GMB and GIIC are both called upon to submit their opinion. He has not accepted the proposal of the fourth respondent as such, but has referred the proposal to the expert bodies and has also noted that proposal of fourth respondent for reduction of share capital of GMB cannot be accepted. In that view of the matter, simply because the Govt. has acted with expedition it cannot be said that the transaction suffers from the vice of want of good faith or that the transaction is entered into in a colourable exercise of power. Hence, this attack on factual front also fails. Another Approach: ( 17 ) MR. P. M. Raval, Ld. Addl. AG has submitted that the transaction in question is an attempt by the Govt. for developing ports by way of joint sector partnership so as to invite private entrepreneurs to invest private capital in port development. In his submission novel situations and ekigencies demand novel approach and an attempt to try the method appears to be feasible and reasonable. Such decisions, in his submission, are purely policy decisions taken after indepth studies by persons well-versed in that branch and subject and if a decision is taken on "trial and error basis" the court would not exercise its powers to upset such a policy decision. In order to make good this submission he has referred to a passage from H. W. R. Wade on administrative Law which regards as under:"the doctrine that powers must be exercised reasonably has to be reconciled with the no less important doctrine that the court must not usurp the discretion of the public authority which Parliament appointed to take the decision. Within the bounds of legal reasonableness is the area in which the deciding authority has genuinely free discretion. If it passes those bounds, it acts ultra vires. The court must, therefore, resist the temptation to draw the bounds too tightly, merely according to its own opinion. It must strive to apply an objective standard which leaves to the deciding authority the full range of choices which the legislature is presumed to have intended. Decisions which are extravagant or capricious cannot be legitimate. But if the decision is within the confines of reasonableness, it is no part of the courts function to look further into its merits. With the question whether a particular policy is wise or foolish the court is not concerned; it can only interfere if to pursue it is beyond the powers of the authority. "he, therefore submits that the scope of judicial review is confined to finding out the reasonableness of the policy decision and not beyond that. ( 18 ) MR. Raval has referred to and relied upon the decision of the Supreme Court in the case of G. B. Mahajan and Others v. Jalagoon Minicipal Council reported. in (1991) 3 SCC 91 . In the case before the Supreme Court piece of land was received by Jalagaon Municipality by way of gift for use of the Agricultural Produce market Committee. With a view to put the land to a better and more profitable use the Municipality contemplated a project comprising erection of commercial complex. The Municipality pursuaded the market Committee to yield up possession and also entered into agreement with the heirs of the donors to give them 5 shops free of cost in the commercial complex. The project contemplated that "the developer" would execute the entire project on their own costs and make various allotments to the shopkeepers to whom the Municipal Council has given assurance of alternative accommodation. It fixes rates of premia and provide ground + 17 floors of the administrative building free of cost to the Municipality. In consideration of execution of project on his own cost the developer would be entitled to and at liberty to dispose the occupancy rights in respect of the rest of the accommodation in commercial complex and retain the premia paid by the disponees so as to reimburse itself the financial outlays on the project + its profits. In consideration of execution of project on his own cost the developer would be entitled to and at liberty to dispose the occupancy rights in respect of the rest of the accommodation in commercial complex and retain the premia paid by the disponees so as to reimburse itself the financial outlays on the project + its profits. The aforesaid scheme of financing project was not unconventional and was one as a matter of policy open and permissible to governmental authority. However, while rejecting the challenging to said scheme, the Supreme Court made following pertinent observations:"a project, otherwise legal, does not become any the less permissible by reason alone that the local authority, instead of executing the project itself had entered into an agreement for its financing and execution. The criticism of the project being "unconventional" does not add to or advance the legal contention any further. The question is not whether it is unconventional by the standard of the extent practice, but whether there was something in the law rendering it impermissible. There is, no doubt, a degree of public accountability in all governmental enterprises. But the present question is one of the extent and scope of the judicial review over such matters. With the expansion of the States presence in the field of trade, and commerce and of the range of economic and commercial enterprises of the government and its instrumentalities there is an increasing dimension to governmental concern for stimulating efficiency, keeping costs down, improved management methods, prevention of time and cost overruns in projects, balancing of costs against time scales, quality control, cost-benefit riots, etc. In search of these values it might become necessary to adopt appropriate techniques of management of project with concomitant economic expediencies. These are essentially matters of economic policy which lack adjudicative disposition, unless they violate constitutional or legal limits on power or have demonstrable pejorative environmental implications or amount to clear abuse of power. This again is the judicial recognition of administrators right to trial and error, as long as both trial and error are bona fide and within the limits of authority. This again is the judicial recognition of administrators right to trial and error, as long as both trial and error are bona fide and within the limits of authority. " ( 19 ) FROM the aforesaid observations it becomes clear that the Government has right to experiment and the denial of right to experiment may be fraught with serious consequences to the nation and the courts are kept out of lush field of administrative policy except when it will be inconsistent with the express or implied provisions of the Statute. The Supreme Court relied upon the following memorable words of sir Gerard Brennan in his book, Purpose and Scope of Judicial Review. "the courts are kept out of the lush field of administrative policy, except when policy is inconsistent with the express or implied provisions of statute which creates the power to which the policy relates or when a decision made in purported exercise of a power is such that a repository of the power, acting reasonably and in good faith, could not have made it. In the latter case, "something overwhelming" must appear before the court will intervene. That is, and ought to be, a difficult onus for an applicant to discharge. The courts are not very good at formulating or evaluating policy. Sometimes when the courts have intervened on policy grounds, the courts view of the range of policies open under the statute or of what is unreasonably policy has not won public acceptance. On the contrary, curial views of policy have been subjected to stringent criticism. In the word of policies, the courts opinions on policy are naturally less likely to reflect the popular view than the policies of a democratically elected government or of expert administrators. . . . ""the consideration by reference to which the reasonableness of a policy may be determined are rarely judicially manageable. . . . " ( 20 ) IT, therefore, becomes clear that in the field of policy making the intervention of the court should be minimal and they should be beyond the adjudicative disposition unless such policy decisions are found to violate constitutional or legal limits on power or for demonstrable pejorative environmental implications or amount to clear abuse of power. There must be power in the States and the nation to remould through experimentation, our economic practices and institutions to meet changing social and economic needs. There must be power in the States and the nation to remould through experimentation, our economic practices and institutions to meet changing social and economic needs. To stay experimentation in things social and economic is a grave responsibility. The court has power to prevent the experimentation but in the exercise of this high power the court must be on its guard lest it erects its prejudices into legal principles. (See opinion of Justice brandeis in New State Ice Company v. Emest A. Liebmann.) . ( 21 ) CONSISTENT with the aforesaid observations I see considerable force in the submission of Mr. P. M. Raval, Ld. Addl. AG and I am of the opinion that it is not open to this Court to srtike down the said experimentative step when I do not find the exercise undertaken by the state to be unreasonable, arbitrary or grossly opposed to public policy. ( 22 ) MR. Vakil has very strenuously urged by reference to various provisions of gujarat Maritime Board Act, 1981 (hereinafter to be referred to as the "said act") that under the provisions of the said Act, the transaction of the nature sought to be entered into is not permissible inasmuch as it would amount to abdicating or surrendering the provisions of GMB in favour of third party or private party. He has submitted that u/s. 3 of the said Act the GMB is an established corporate body having perpetual succession and common seal with power. In Chapter IV of the said act provisions are made for transfer of assets and liability of the State Govt. to the Board and transfer of debts, obligations and liabilities. He has referred to Section 23 which provides that the transfer to be followed when immovable property is required to be acquired for the Board by the State Govt. He has referred to powers of the Board as prescribed by Section 25 of the said Act and by reference to various clauses he has submitted that the powers given to the Board are statutory powers and said powers cannot be permitted to be transferred from the Board to any other third party. He has referred to powers of the Board as prescribed by Section 25 of the said Act and by reference to various clauses he has submitted that the powers given to the Board are statutory powers and said powers cannot be permitted to be transferred from the Board to any other third party. He has also invited the attention of the Court to Section 26 of the Act which provides for power of the board to undertake certain works or services on such terms and conditions as may be agreed upon between the Board and the person concerned. By reference to Section 32 of the Act he has submitted that the Board even has power to undertake certain services which are mentioned in Section 32 (1) of the Act but it shall have to be noted that under sub-Sec. (3) of Section 32 the Board may authorise any person to perform any of the services mentioned in sub-Sec. (1) on such terms and conditions as may be agreed upon. It would, therefore, be that performance of services which the Board may undertake can be delegated by the board to other party on terms and conditions to be agreed upon. He has also invited my attention to Section 35 of the said Act which provides that no person shall make, erect or fix within the limits of the Port or Port projects in wharf, dock, quary, stage, jetty, pier, places an encroach, etc. except with the prior permission in writing of the Board. By reference to aforesaid provisions, Mr. Vakil contended that if control of the pipavav port is given over to the fourth respondent intermediate port of Pipavav which is otherwise under the control of the statutory Board namely the GMB shall easily be transferred and shall be under the control of third party thereby leaving no scope for statutory Board to exercise any control over such port. ( 23 ) THIS type of agreement or MOU render the GMB to a nonentity in the submission of Mr. Vakil. In his submission, the activities, functions of the board entrusted to the Board under the provisions of the Act are purely governmental activities and shall be performed by the Board and the Board cannot be permitted to contract out all such powers and functions. ( 24 ) THIS submission of Mr. Vakil is stoutly resisted by Mr. P. M. Raval, Ld. ( 24 ) THIS submission of Mr. Vakil is stoutly resisted by Mr. P. M. Raval, Ld. Addl. AG as well as Mr. Mohit Shah appearing on behalf of GMB. In their submission the functions of the Board and purpose of this establishment are required to be properly appreciated. The gmb is established to vest the administrative control and management of minor ports. Power to appointment of the Board are provided in detail in chapter V of the said Act and on close study of said chapter, in their submission, it becomes clear that certain works and services are to be provided by the Board at the minor ports. These works and services can very well be transferred to any other person by the Board on such terms and conditions as may be agreed upon. Therefore, in their submission, even the said Act contemplates transfer of powers and functions of the Board to third party on terms and conditions to be agreed upon between the Board and the third party. Said transfer of power and functions, in their submission, is not foreign to the Act or is not prohibited by the Act, and therefore, the MOU entered into between the GMB and the fourth respondent cannot be voided. In my opinion, the submission of Ld. Addl. AG and Mr. Shah is wellfounded and I do not see any total prohibition in the act which prohibits the GMB from transferring some or all of its functions to a third party with respect to port on such terms and conditions to be agreed between the parties. True it is, that the total control of the Board cannot be abandoned and therefore if ultimate control is kept with the Board transfer of some of the functions to a third party is not foreign to the provisions of the act. ( 25 ) HOWEVER, in order to see that total control is not surrendered or abdicated by the Board in favour of fourth respondent I called upon both the State govt. and the GMB to make appropriate provision in the agreement to see that the provisions of the said Act as well as the Indian Ports Act are not in anyway violated and that ultimate control of pipavav Port is retained by the GMB. In response to the request of the Court mr. Raval and Mr. and the GMB to make appropriate provision in the agreement to see that the provisions of the said Act as well as the Indian Ports Act are not in anyway violated and that ultimate control of pipavav Port is retained by the GMB. In response to the request of the Court mr. Raval and Mr. Shah appearing on behalf of GMB have given following assurance to the court:"mou executed is to be finally approved by the GMB and the State Govt. and all transactions pursuant to said MOU shall be in accordance and in conformity with the provisions of GMB Act, 1981 and the Rules framed thereunder. " ( 26 ) SECONDLY, apprehension of the petitioner that under second part of clause 3 of MOU the ultimate control shall be passed over to the fourth respondent can also be obviated. It is true that prior to amendment of said sub-para 2 of Cl. 3 of MOU even after the amendment possibility of reduction of share capital of GMB cannot be ruled out and if share capital of GMB is reduced only to 11 % the control of GMB over the Board will be virtually lost. Therefore, i called upon the parties through their respective Counsel to agree to a condition that under no circumstances share capital of GMB shall be reduced below 26% and all the parties have agreed that the share capital of GMB shall be maintained to 26% and it shall not be reduced below 26%. Mr. Raval has rightly pointed out to the court that the MOU shall be subject to final approval of GMB and the State govt. GMB in its resolution has not agreed to term of reduction of their share capital to below 26% and the State Govt. shall see to it that under no circumstances share of GMB is reduced to below 26%. In view of aforesaid assurances given by the Counsel appearing for respondents it is directed that a shareholders agreement shall be executed and therein it shall be stipulated that the share capital of GMB shall not be reduced under any circumstances below 26%. On said assurance given by the learned Counsel appearing for respondents and directions given by this Court this apprehension of the petitioner would not survive and therefore I do not find any substance in this submission also. On said assurance given by the learned Counsel appearing for respondents and directions given by this Court this apprehension of the petitioner would not survive and therefore I do not find any substance in this submission also. ( 27 ) THE petitioner has raised one additional contention in the memo of special C. A. to the effect that the said mou is also violative of the provisions of India Ports Act, more particularly, section 68 (A) and 68 (B) of the said Act. In his submission, in the time of war for making preparations for defence the control of the port should be with the port authorities and it cannot be with the private party. Therefore, such MOU is not permissible. ( 28 ) IN view of the assurance given by ld. Addl. AG to the Court, which is reproduced herein, and in view of his further assurance that such an assurance shall be incorporated in the MOU also, i do not see the said grievance of the petitioner would survive. The assurance given by the Ld. Addl. AG is as under:"notwithstanding anything contained hereinabove, in case of declaration of war with any alien country or in case of national emergency this agreement shall stand suspended immediately on happening of such event. The Joint Sector partnership is nominee and the director on the Board of Company, representing joint Sector Project shall also arrange to hand over the possession of Port and all operational activities of the Port to gmb without any reservation. During such event of war/national emergency the gmb shall have ultimate control over all the matters including management of the company irrespective of its strength on the Board of Directors or its shareholding till such time such eventuality continue to be in force. " ( 29 ) THE aforesaid were the only submission made before me and in view of the fact I do not find any substance in any of the aforesaid submission, and in view of the assurances given to the court and directions issued by the court, no relief as prayed for by the petitioner is required to be granted. Petition, therefore, fails and same is summarily rejected. There shall be no order as to costs. At this stage, Mr. Petition, therefore, fails and same is summarily rejected. There shall be no order as to costs. At this stage, Mr. S. B. Vakil, learned counsel for petitioner requests the court to extend the relief which was granted to the petitioner during the pendency of the petition in view of the statement made by the learned Govt. Pleader which was recorded by the court either by directing govt. Pleader to extend that statement or by granting ad interim relief. Mr. D. K. Trivedi, Ld. GP states that the statement made by him at the Bar shall operate upto 19th June 1992 and therefore virtually the interim relief as per that statement would operate in favour of petitioner till 19th June 1992. Petition dismissed. .