Laxmi Steel Corporation, Sole Proprietor Dilip Kantilal Shah v. Gujarat Maritime Board
2010-09-23
K.M.THAKER, SUDHANSU JYOTI MUKHOPADHAYA
body2010
DigiLaw.ai
Judgment S.J. Mukhopadhaya, CJ.—In all these cases, as a common question is involved against the common respondents, they were heard together and disposed of by this common judgment. 2. The writ petitions were preferred by the appellant-petitioners for a direction to the respondent-Gujarat Maritime Board to renew their respective permissions for utilization of plots as were earlier allotted in their favour and for other consequential and allied reliefs. 3. The brief facts of the case are as follows :— The Gujarat Maritime Board, in exercise of powers conferred by Sections 37, 38, 39, 41 and 110 of the Gujarat Maritime Board Act, 1981 issued ‘The Gujarat Maritime Board (Conditions and Procedures for Granting Permission for Utilizing Shipbreaking Plots) Regulations, 1994’ [‘the 1994 Regulations’ for short] as published in the Extra Ordinary, Gujarat Government Gazette on 19.7.1994. The eligibility criteria, disqualifications, prescription of fees for application, premium, security deposit, etc. were mentioned therein. The appellant-petitioners and others pursuant to the 1994 Regulations applied, deposited the requisite amount and were allotted respective plots in the auctions took place between June, 1994 and December, 1994 and some auctions as taken place in the year 1997. The details of rate of premium, premium received, status of defaulters, etc., are as shown hereunder :— 1st Auction June 1994 (NRI) Plot No. Name of Plot holder Rate of Premium Remarks Premium received (Rs.) V-1 M/s Priya Blue Industries. 2855/- Full Working (Tr.) Pvt. Ltd V-2 M/s Trambak Ship Breaking 2866/- Full Working (Tr.) V-3 M/s Anik Ship Breaking Pvt. Ltd. 2853/- Full Defaulter V-4 M/s Crosslink Ship Breaking. 2851/- Full Working (Tr.) Pvt. Ltd V-5 M/s Udyani Ship Breaking 2851/- Full Defaulter Pvt. Ltd. 2nd Auction 27/12/1994 (SC/ST) Plot No. Name of Plot holder Rate of Premium Remarks Premium received (Rs.) 143 M/s Kodiyar Rajpara Vankar 2800/- 1/4 Defaulter Utpadakoni Sahakari Mandali 144 M/s Jagadiya Polimers Pvt. Ltd. 2730/- Full 145 M/s Deep Shipbreaking 2711/- Full Defaulter Sahakari Mandali 146 M/s TK Maru Iron & Steel 2703/- 1/2 Defaulter 147 M/s Samrat Ship Breaking Co.
2701/- 1/2 Defaulter 148 M/s Devkrupta Ship Breaking 2701/- Full Defaulter 149 M/s Premjibhai & Sons 2700/- Full Defaulter 89 M/s Bano Ship Breaking 2750/- 3/4 Defaulter 90 M/s Chaudhari Ship Breaking 2750/- Full Defaulter 98 M/s Sitaram Corporation 2800/- 1/2 Defaulter 3rd Auction 30/12/1994 (General) Plot No. Name of Plot holder Rate of Premium Remarks Premium received (Rs.) 150 M/s Siraj Enterprise 12000/- Full Working (possession given 5/2001) 151 M/s Sotariya Brothers 14200/- Nil Defaulter 152 M/s Virat Ship Breaker 14200/- 3/4 153 M/s Bahubali Steel Enterpise 14600/- 2/4 Defaulter 154 M/s Swastik Enterprise 14600/- 2/4 Defaulter 155 M/s Nimbark Jems 14500/- Nil Defaulter 156. M/s Vidhyaram Steel Rolling 14000/- Nil Defaulter Mills 157 M/s Uttarpradesh Ship Breakers 14000/- Nil Defaulter 158 M/s Kiran Ship Breakers 13400/- Full Working (Tr.) 159 M/s Tagif Ship Breakers 13300/- 2/4 Defaulter 160 M/s Italiya Ship Breakers 13600/- NIl Defaulter 161 M/s A.G. Enterprise 14100/- Full Working 162 M/s M.T. Ship Breakers 14900/- Full Working 163 M/s G.S. & Co. 17200/- Nil Defaulter 164 M/s Vishant Re-Rollers & Metal 14100/- Nil Defaulter 165 M/s India Ship Breakers 14000/- Nil Defaulter 166 M/s Malik Enterprise 13300/- Nil Defaulter 167 M/s Garuv Mercantile 13001/- Nil Defaulter * Out of above 18 parties, only 4 parties i.e. Plot No. 150, 158, 161 & 162 have paid the full premium amount. Remaining 14 parties, backed out from business. 4th Auction November 1994 (NRI) Plot No. Name of Plot holder Rate of Premium Remarks Premium received (Rs.) V-6 M/s Pratik Ship Breaking 4410/- Partly Defaulter Pvt. Ltd. V-7 M/s Nayalkaran Investment & 4570/- Full Defaulter Leasing Pvt. Ltd. V-8 M/s Swaminarayan Ship 5200/- Partly Defaulter Breaking Pvt. Ltd. V-9 M/s Maz Marine Pvt. Ltd. 5460/- Partly Defaulter V-10 M/s Ganapatrai Jaygopal 6020/- Full Defaulter * Except Plot V-6, four parties backed out from the business and premium amount refunded as per Court order. In case of Plot V-6 Court case is pending.
In case of Plot V-6 Court case is pending. 5th Auction 1997 (ST) Plot No. Name of Plot holder Rate of Premium Remarks Premium received (Rs.) 102 M/s Rathod Ship Breakers 3051/- 1/4 Defaulter 116 M/s Katara Vikrambhai Laljibhai 3051/- 1/4 Defaulter 129 M/s Darshan Ship Breakers 3051/- 1/4 Defaulter 139 M/s T D D Ship Breakers 3051/- Full Working 156 M/s Tilotamaben B. Vasava 3051/- 1/4 Defaulter 163 M/s Tirupati Weaves Pvt. Ltd. 3051/- Full (but Defaulter Refunded) 166 M/s Jayambe Industries 3051/- Full Defaulter 167 M/s Vijay Industries 3051/- Full Defaulter 168 M/s Konark Industries 3051/- Full Defaulter 169 M/s Dushyant L. Gameti 3051/- Full (but Defaulter Refunded) 155 M/s Ever Success Ship Breakers 3051/- 1/2 Defaulter 151 M/s Victory Ship Breakers 3051/- 1/2 Defaulter 6th Auction 1997 (SC) Plot No. Name of Plot holder Rate of Premium Remarks Premium received (Rs.) 165 M/s Sunil Ship Breakers Pvt. Ltd. 3760/- Full Defaulter On 26.10.2004, another auction took place wherein the rates of premium were fixed, though auction of 12 plots was carried out, none of the applicants was allotted plot, as a comprehensive policy was under consideration. The details of the parties applied are shown hereunder :— 7th Auction 26/10/2004 Plot No. Name of Plot holder Rate of Premium (Rs.) 152 M/s Diamond Mink Blankets Ltd. 2275/- V-9 M/s Jain Marine Services 1351/- V-3 M/s Bansal Inductomelt Pvt. Ltd. 4221/- 169 M/s Bhuval Industries 2100/- 141 M/s Shital Ispat Pvt. Ltd. 2300/- 84-F M/s Mahavir Metal Corporation 3050/- 153 M/s Navyug Ship Breaking Co. 2011/- 150 M/s M. Bashir 2351/- 160 M/s Varum Management Services Pvt. Ltd. 2021/- 163 M/s Bhushboo India Pvt. Ltd. 2051/- 142 M/s Kalpataru Steels Pvt. Ltd. 1350/- V-8 M/s Kiran Ferro Alloys Pvt. Ltd. 1453/- 4. In the year 2006, new Regulations being ‘’The Gujarat Maritime Board (Conditions and Procedures for Granting Permission for Utilizing Ship Recycling Plots) Regulations, 2006' [‘the 2006 Regulations’ for short] were issued by the Gujarat Maritime Board as published in the Extra Ordinary, Gujarat Government Gazette on 4.10.2006.
In the year 2006, new Regulations being ‘’The Gujarat Maritime Board (Conditions and Procedures for Granting Permission for Utilizing Ship Recycling Plots) Regulations, 2006' [‘the 2006 Regulations’ for short] were issued by the Gujarat Maritime Board as published in the Extra Ordinary, Gujarat Government Gazette on 4.10.2006. Under Regulation 4(a) of the 2006 Regulations, while all the parties who have been utilizing ship recycling plots under the Gujarat Maritime Board Regulations, 1994, as on the appointed day (i.e. 4.10.2006) were entitled to get the permission under the new Regulations subject to fulfillment of the terms and conditions mentioned in the new Regulations and the Schedules thereto, under Clause (a)(i) of the Regulation 4, it was stipulated that the permission granted under Sub-rule (a) is subject to the payments towards various charges of the Gujarat Maritime Board upto date on the appointed day and No Due Certificate is issued by the Maritime Board. Under Regulation 5, the following stipulation was made :— “5. The permission for utilizing ship recycling plots to be granted under these Regulations shall be valid for a period of 5 years with a provision for renewal for further period of 10 years subject to fulfillment of all terms and conditions stated in these Regulations and schedules hereto from the date of issue of permission letters, subject to the condition that upon expiry of the aforesaid period of five years, or upon the expiry of shorter period as may be determined in accordance with these Regulations, the permission shall come to an end without any further action by the Board. No party, which is granted permission under these regulations, shall have any right, title or interest to or in the plot, nor shall any party, which is granted such permission, be deemed to be in possession or occupation of the plot.
No party, which is granted permission under these regulations, shall have any right, title or interest to or in the plot, nor shall any party, which is granted such permission, be deemed to be in possession or occupation of the plot. However, if a party desires to have renewal of the permission for utilization of plots for a further period, the renewal may be granted by the Chief Executive Officer subject to the conditions as may be prescribed at the relevant time with prior sanction of the State Government and further subject to the condition that the party shall pay the charges, as may be determined at that time.” Under Regulation 6 (Eligibility Criteria), it was stipulated that an application in the prescribed proforma as per Schedule-V must be submitted along with required documents within the stipulated time limit. In Schedule-I to the 2006 Regulations, under Clause 1(i), it was stipulated that the amount of application money shall be Rs. 5 lacs per permission in respect of the plot on which the permission is granted and the said amount will be treated as amount towards security deposit. Under Clause 4 of Schedule-I to the 2006 Regulations, over and above the payment of development charges, it was stipulated that the party which is granted the permission for utilizing a plot for ship recycling shall pay the plot rent at the rate of Rs. 600/- per 10 sq. mtrs. or part thereof per annum. In case if the plot rent as aforesaid is not paid within the stipulated time, the permission holder shall have to pay penalty at the rate of prevailing Prime Lending Rate alongwith penal interest calculated at the rate of 4% per annum. The time limit was prescribed under Clause 3 of Schedule-II to the 2006 Regulations wherein 30 days’ time was allowed from the appointed date, as is evident from Clause 3 and quoted hereunder :— “3. A party which is utilizing a plot for ship recycling on the appointed date shall also be required to submit the application in the prescribed form within 30 days from the appointed date.
A party which is utilizing a plot for ship recycling on the appointed date shall also be required to submit the application in the prescribed form within 30 days from the appointed date. If any party which is eligible to obtain such permission as mentioned in Regulation 4(a) or 4(b) fails to submit such application within the above stipulated time limit, it shall be treated that the party is not interested in getting such permission and such plot shall be made available for granting permission to the other eligible applicant.” 5. Some of the relevant provisions of the 2006 Regulations were amended by the Gujarat Maritime Board, published in the Gazette on 23.6.2008. Therein, Clause (3) of Schedule II was amended as follows :— “The first line of the Clause i.e. ‘A party which is utilizing a plot for ship recycling on the appointed date shall also be required to submit an application in the prescribed form within 30 days from the appointed date’ is substituted by following line : “A party which is utilizing a plot for ship recycling on the appointed date and has not applied for renewal till this date shall be required to submit an application for Renewal in the prescribed form (Schedule-VI of Regulation-2006) within ‘30’ (Thirty) days from the date of publication of this Notification (exclusive of the day of Notification)”. Thereby, pursuant to 2008 amendment of Regulations, the parties who are utilizing a plot for ship recycling on the appointed date and has not applied renewal till 23.6.2008, the extension was granted to them for renewal in the prescribed form (Schedule-VI of the 2006 Regulations) within 30 days i.e. 23.7.2008. 6. Appellant-Laxmi Steel Corporation of LPA No. 521 of 2010 was initially allotted plot No. 118 at Alang Sosiya Shipbreaking yard in the year 1994. The appellant was in possession of the same till 2008. It did not choose to pay the renewal amount of Rs. 5 lacs as per the 2006 Regulations even till 23.7.2008. Therefore, the Gujarat Maritime Board took over the plot on 24.7.2008. The only plea that was taken by the appellant was that there being a provision for penal interest under the 2006 Regulations and as the appellant now showed the willingness to deposit the entire amount at one time, its case should be considered for renewal of the license. 7.
Therefore, the Gujarat Maritime Board took over the plot on 24.7.2008. The only plea that was taken by the appellant was that there being a provision for penal interest under the 2006 Regulations and as the appellant now showed the willingness to deposit the entire amount at one time, its case should be considered for renewal of the license. 7. Appellant-Alang Ship Breakers Ltd. of LPA No. 547 of 2010 was allotted plot No. 48 at Alang Ship Breaking Yard in the year 1984 and remained in possession of the said plot till 11.9.2008. This appellant also failed to pay a sum of Rs. 5 lacs for renewal purpose required to be paid before 23.7.2008 and having failed, the possession of its plot No. 48 was taken over by the Maritime Board on 12.9.2008. Similar plea has been taken that the appellant is ready to pay the entire amount with penal interest. 8. Appellant-Jay Bajrangbali Ship Breaking Industries of LPA No. 310 of 2010 was allotted plot No. 70 at Alang Ship Breaking Yard by agreement dated 19.4.2004. The plot was handed over to it on 14.10.2004. Pursuant to the 2006 Regulations, this appellant was also required to pay Rs. 5 lacs alongwith the application for renewal. The Maritime Board asked the appellant to pay service tax of previous lessee to the tune of Rs. 2,76,773/- as it was opposed by the appellant on the ground that it was not liable to pay the service tax. This appellant also failed to pay the amount of Rs. 5 lacs by 23.7.2008. Much later, it deposited some amount on 28.11.2008. The Maritime Board by communication dated 23.3.2009 intimated the appellant that it is not only liable to pay Rs. 5 lacs, that apart, a sum of Rs. 48,29,474/- was due. According to the counsel for the appellant, the appellant had shown its willingness to deposit the whole amount to claim possession which has already been taken over by the Maritime Board, but it was refused by the Maritime Board on 1.4.2009 which was challenged before the learned Single Judge. 9. Appellant-GS Ship Breaking Corporation of LPA No. 311 of 2010 was allotted plot No. 90 at Ship Breaking Yard at Alang on 24.9.2003. The possession of the same was handed over to the appellant on the same day for a period upto 31.8.2005.
9. Appellant-GS Ship Breaking Corporation of LPA No. 311 of 2010 was allotted plot No. 90 at Ship Breaking Yard at Alang on 24.9.2003. The possession of the same was handed over to the appellant on the same day for a period upto 31.8.2005. Pursuant to the 2006 Regulations, the appellant was to deposit a sum of Rs. 5 lacs as also the outstanding amount, but failed to pay such amount to secure renewal of the plot. It was intimated on 15.5.2006 that an amount of Rs. 11,36,000/- was due and the amount was not paid. The appellant also failed to deposit a sum of Rs. 5 lacs by 23.7.2008 and after much delay, deposited Rs. 5 lacs on 7.12.2008 and the only ground taken for not paying the amount was that the Director of the appellant was not well, but it appears that, inspite of the reminders, it has not deposited the amount in time. It is only on 16.1.2009, the appellant intimated that the plot holders of SC/ST category were praying for waiver and the appellant now being able to manage finance, was ready to make payment. By that time the outstanding due was Rs. 34,88,047/-, but the respondents refused to renew the license. 10. Appellant-Zoom Trade & Realty Ltd. of LPA No. 548 of 2010 was allotted plot No. 166-M of Ship Breaking Yard at Sosiya in the year 2002 by the Maritime Board. It remained in possession of the said plot till July, 2008. Pursuant to 2006 Regulations, this appellant having also failed to deposit a sum of Rs. 5 lacs for renewal, the plot was taken over by the Maritime Board on 24.7.2008. Similar plea has been taken by the appellant that it is ready to pay the penal interest with the entire outstanding dues. From the record, it appears that there are huge dues of the appellant against the respondent-Board which come to around Rs. 3,66,65,783/- as on 7.1.2010. 11. So far as appellant-Sunil Steel Corporation of LPA No. 522 of 2010 is concerned, it was allotted plot No. 118 of Ship Breaking Yard at Sosiya-Alang in the year 1994. It also failed to pay the renewal amount of Rs. 5 lacs and other dues till 23.7.2008. Therefore, the possession of the plot was taken over by the Maritime Board on 24.7.2008. It appears that a sum of Rs.
It also failed to pay the renewal amount of Rs. 5 lacs and other dues till 23.7.2008. Therefore, the possession of the plot was taken over by the Maritime Board on 24.7.2008. It appears that a sum of Rs. 48,89,413/- is due from this appellant as in January, 2010. The only plea taken by the appellant is that as the ship breaking industry was facing severe crisis, the appellant could not pay the sum of Rs. 5 lacs for renewal or the outstanding amount. 12. Plot No. 44 of Ship Breaking Yard at Sosiya - Alang was allotted in favour of appellant-AG Scrap Corporation of LPA No. 523 of 2010 in the year 1982. It remained in possession till 19.7.2004, but it having not paid the renewal fee and the outstanding dues, the application for renewal was rejected on 4.10.2000 and later on the possession of the plot was taken over by the Maritime Board on 20.7.2004. It has also not deposited any amount pursuant to the 2006 Regulations and it appears that a sum of Rs. 40,59,113/- was due as in August, 2002. 13. From the facts as noticed in respect of all the cases, it will be evident that most of the appellant-petitioners failed to pay the outstanding dues including the rate of premium, service charge and all of them failed to deposit a sum of Rs. 5 lacs for renewal. The 2006 Regulations was issued on 4.10.2006 and within 30 days, i.e. within 4.11.2006, they were supposed to deposit the premium. They failed to deposit the said amount for more than 1? years. Thereafter by 2008 amendment, the time was extended till 23.7.2008 to deposit the amount, but the same was also not deposited within the time. In many cases, outstanding dues having not paid and pursuant to the earlier Regulations, the amount for renewal having not paid, their agreements were cancelled. No ground is shown to challenge the propriety of the orders of cancellation passed in each case except for one or other reasons that there is financial crunch or illness, one or the other appellant could not deposit the same. The Learned Counsel appearing on behalf of the appellants requested the Court to direct the authorities to accept the amount with penal interest, etc. as per the scheme.
The Learned Counsel appearing on behalf of the appellants requested the Court to direct the authorities to accept the amount with penal interest, etc. as per the scheme. It was agreed to pay all the outstanding dues and suggested that in that case, the Maritime Board may not go for recovery by filing suits. 14. The respondent-Maritime Board has come out with a specific plea to reject the suggestion. It is contended that as per the present decision, it has been decided to enlarge the area of most of the plots and, therefore, new plots will be carved out out of the existing plots. Only after carving out of such new plots, the Maritime Board will go for auction. The Learned Counsel appearing on behalf of the Maritime Board submitted that the appellants are, being defaulters, not eligible to take part in the future auction, but the Maritime Board may agree to allow the appellants to take part in the fresh auction, if they deposit the outstanding dues with penal interest as on date, as is not disputed and suggested by them. The aforesaid suggestion was not accepted by the Learned Counsel for the appellants. 15. In view of the aforesaid fact, as the authorities have failed to reach any settlement and admittedly the appellants aforesaid have filed to deposit the outstanding dues and renewal fees within the time stipulated, the orders of cancellation of their allotment in each case cannot be held to be illegal. The learned Single Judge in their respective cases having refused to entertain the request against such order, no interference is called for in Letters Patent Appeal Nos. 521, 547, 310, 311, 548, 522 and 523 of 2010. 16. So far as appellant-M/s Jain Marine Services of LPA No. 246 of 2010 is concerned, it applied for plot No. 169 pursuant to the advertisement dated 23.9.2004 and inspected the said plot on 26.10.2004, but was not successful for plot No. 169. The Maritime Board authorities asked the appellant to bid for any other plot and, therefore, the appellant had participated for plot No. V-9 at the rate of Rs. 1351/- per sq.mtr. and having declared successful, it deposited a sum of Rs. 5 lacs. After depositing the amount, the appellant started to raise dispute. On 28.10.2004, it intimated the Maritime Board that plot No. V-9 is not of 6000 sq. mtrs., but of 3400 sq.
1351/- per sq.mtr. and having declared successful, it deposited a sum of Rs. 5 lacs. After depositing the amount, the appellant started to raise dispute. On 28.10.2004, it intimated the Maritime Board that plot No. V-9 is not of 6000 sq. mtrs., but of 3400 sq. mtrs. and not suitable for breaching following by a letter written by the appellant on 30.10.2004. According to the appellant, the Gujarat Maritime Board authorities carried out inspection on 29.10.2004 and 2.11.2004 and found the size of the plot smaller than the notified size. The Port Officer, Alang prior to the auction has intimated the Maritime Board that plot No. V-9 is not suitable for breaching. The meetings are stated to have been held. For about two years, no progress having made, in January, 2007, the Maritime Board requested the appellant to re-validate the demand draft, but the appellant instead of re-validating, requested the Maritime Board to allot any other plot. The Board in its turn again requested on 27/28.2.2007 to re-validate the demand draft and intimated that on failure, no plot can be allotted. The request for change of the plot was not accepted as per condition No. 9 of the tender document. The said letter was unsuccessfully challenged by the appellant before the learned Single Judge. 17. It appears that the appellant earlier moved before this Court in Special Civil Application 9840 of 2007 which was sought for and permitted to be withdrawn. Thereafter, the petitioner moved before the authorities who refused to entertain the application. The learned Single Judge having noticed that there was a disputed question of fact relating to size of the plot, refused to entertain the writ petition. Later on, for the very same plot, the appellant has given an undertaking before this Court that it is ready and willing to deposit the total amount towards the premium of the plot as per the advertisement along with interest at the rate of 11.5% per annum. But now more than 5 years have passed and as per the present policy decision, the Maritime Board intends to enlarge the size of the plots, the respondents have refused to accept such amount. In view of such stand taken by the respondents, this Court is not inclined to force the authorities to accept the outstanding dues with interest and to allot such plot after six years of auction.
In view of such stand taken by the respondents, this Court is not inclined to force the authorities to accept the outstanding dues with interest and to allot such plot after six years of auction. No reliefs can be granted to the appellant of Letters Patent Appeal No. 246 of 2010. 18. For the reasons aforesaid, all the appeals fail. They are accordingly dismissed, but in the facts and circumstances of the case, there shall be no order as to costs. P P P P P