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2016 DIGILAW 1591 (GUJ)

Suryanagari Hi-Tech Textile Park Limited v. Union of India

2016-08-02

A.S.SUPEHIA, M.R.SHAH

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JUDGMENT : M.R. Shah, J. 1. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for appropriate writ, direction and order commanding/directing the respondent No. 2 herein - Kandla Port Trust to allot to the petitioner plot No. 16 situated between Village Padana and Village Chirai for production of salt on 30 years lease on as is where is basis and to complete all formalities in connection with the same. That the petitioner has also prayed for appropriate writ, direction and order quashing and setting aside the resolution No. 348 passed by the Board of the Kandla Port Trust in its meeting held on 17.03.2015. It is also further prayed for appropriate writ, direction and order commanding respondent No. 2 - Kandla Port Trust and its officers to not take any steps towards holding any auction with respect to plot No. 16 situated between Village Padana and Village Chirai or towards allotting the same to any other person. 2. It is the case of the petitioner that in 2010, the Ministry of Shipping, Government of India came out with the land, Land Policy for Major Ports, 2010. That in the month of June, 2011, the Kandla Port Trust issued a notice inviting E tender cum E auction for the allotment of plots between Village Padana and Village Chirai for production of salt on 30 years lease on as is where is basis. That the tender was for 10 plots admeasuring 100 acres each and 5 plots admeasuring 50 acres each. On 15.07.2011, the pre bid meeting was held. That he petitioner submitted necessary documents for participating in E Auction. That the petitioner participating in the online auction held on 30.1.2012 and 31.1.2012. It is the case on behalf of the petitioner that with its bid of Rs. 3,11,868/- for the total premium per acre being the highest, the petitioner was the highest bidder for plot Nos. 16 in the auction. That the total premium for 100 acres comes to Rs. 3,11,86,800/-. It is the case on behalf of the petitioner that in meeting held on 07.02.2012, the tender committee recorded the names of entries that were the highest bidders and this included the petitioner. 16 in the auction. That the total premium for 100 acres comes to Rs. 3,11,86,800/-. It is the case on behalf of the petitioner that in meeting held on 07.02.2012, the tender committee recorded the names of entries that were the highest bidders and this included the petitioner. According to the petitioner, in the meeting it was resolved to recommended the allotment of plots to highest bidder as mentioned in the list for a period of 30 years subject to the approval of the Board and subsequent approval of competent authority. It is the case of the petitioner that in the meeting held on 6.3.2012, the Board of Kandla Port Trust passed the Board Resolution No. 350 and resolved to approve allotment of plot No. 16 to the petitioner on 30 years lease basis. It is the case on behalf of the petitioner that thereafter and despite the above position, on the basis of the instruction from the Ministry of Shipping vide letter dated 08.08.2011 that the cases of leasing of port land may be kept in abeyance till a final view is taken on the proposed police for transfer and alienation of government land and that the matter had been submitted to the Government of India for necessary approval. It is the case on behalf of the petitioner that therefore, the further process of concluding contract/entities of contract, with respect to plot No. 16 was not completed, which according to the petitioner was just a formula. 2.1. It appears that thereafter in about January 2014, the Ministry of Shipping, Government of India come out with a new land Policy Guidelines for Major Ports, 2014. It is the case on behalf of the petitioner that thereafter petitioner made several representations requesting another lease contract in favour of the petitioner with respect to plot No. 16, however nothing was done thereafter on the basis of subsequent land policy and the instruction given by the Central Government not to finalize the earlier E tender. 2.2. It is the case on behalf of the petitioner that thereafter petitioner made several representations requesting another lease contract in favour of the petitioner with respect to plot No. 16, however nothing was done thereafter on the basis of subsequent land policy and the instruction given by the Central Government not to finalize the earlier E tender. 2.2. It is the case on behalf of the petitioner that as no action has been taken, the petitioner filed RTI Application dated 26.08.2015 for seeking information about the tender from KPT and upon information being provided by KPT to the petitioner, the petitioner has learnt that the Board of KPT has vide Resolution No. 348 passed in its meeting held on 17.3.2015 resolved to discharge the tenders and re-invite the same as per the provisions of the Land Policy, 2014. 2.3. Being aggrieved and dissatisfied with the inaction of the respondent Nos. 2 to 4 in not allotting the plot to the petitioner and in not completing the formalities that were required to be completed for allotting the plot to the petitioner and by its action of passing a resolution discharging the tenders, the petitioner has preferred present Special Civil Application under Article 226 of the Constitution of India. 3. Shri Salil Thakore, learned advocate has appeared for the petitioner and Shri P.K. Jani, learned Senior Advocate has appeared with Shri Dhaval D. Vyas, learned advocate for the respondent No. 2- KPT. Shri Devang Vyas, learned Assistant Solicitor General of India has appeared on behalf of the respondent No. 1- Union of India. 4. Shri Salil Thakore, learned advocate for the petitioner has made following submissions:- "4.1. The Board of KPT having resolved to approve allotment of salt manufacturing plots to higher bidders on 30 years lease basis, the resolution has to be mandatorily implemented by KPT and there exists absolutely no reason to not implement the same. KPT ought to have immediately allotted the plots to the successful tenderer in compliance with the decision of the Board of KPT taken on 6.3.2012 and which has been referred to in letter dated 19.12.2012 sent by the Chairman of KPT. KPT ought to have immediately allotted the plots to the successful tenderer in compliance with the decision of the Board of KPT taken on 6.3.2012 and which has been referred to in letter dated 19.12.2012 sent by the Chairman of KPT. Considering that the present case is not one for a lease exceeding thirty years, there is no question of taking the approval of the Central Government and the action of the Board of submitting the same for approval of the Central Government is bad in law as no such approval is contemplated under law and the Central Government has no role to play in the matter. Once the Board has passed a resolution approving allotment of plots to the highest tenderers on lease basis which is for a period not exceeding 30 years, the same has to be implemented and the allotments have to be made. In light of this, the action of KPT of not having made the allotments and not having completed the formalities for the same is illegal and KPT ought to be have allotted the plot to the petitioner. 4.2. Without prejudice to the petitioner's contention that the plot has to be allotted to the petitioner as the Board has already resolved to do so and the Board's resolution has to be implemented by KPT, it is submitted that it is entitled to be allotted the plot also under the principles of legitimate expectation and promissory estoppel. It is submitted that more than three years have passed since the time of the auction where the petitioner became the successful tenderer at the auction. It is submitted that the petitioner has invested huge amount towards the EMD in 2011, made arrangements for payment of premium and has done financial and other planning for developing the land and for producing salt. It is submitted that the petitioner has been waiting to be allotted the plot in question since more than three years and has taken steps on the basis of the actions taken by the authorities which have given it reasons to believe that the plot will be allotted to it. It is submitted that the petitioner has been waiting since years with a legitimate expectation that the plot will be allotted to it. It is submitted that the petitioner has been waiting since years with a legitimate expectation that the plot will be allotted to it. The petitioner has a legitimate expectation to be allotted the plot in question and is entitled to be allotted the plot in question and is entitled to be allotted the plot in question in spite of which the petitioner has not been allotted to the plot. The principles of legitimate expectation and promissory estoppel are applicable in the present case. 4.3. It is submitted that the actions of the authorities are extremely arbitrary. It is submitted that every action of the State or a Government body has to answer the test of reasonableness. It is submitted that there is nothing like absolute discretion in this country. There exists absolutely no reason to not allot the plot to the petitioner when it is the highest bidder. It is arbitrary to not allot the plot to a party is qualified in every respect and has given the highest bid. It is submitted that while KPT could have never rejected the petitioner's bid the fact that KPT has not rejected the petitioner's bid in all these years indicates that there is no reason to not allot the plot to the petitioner. It is submitted that KPT's inaction is based on no reason at all and is therefore, totally arbitrary and unreasonable. Without prejudice to the submissions that in light of the fact that the present case is one of lease for a period not exceeding 30 years in view of which the Central Government approval or permission is not contemplated under law, the petitioner states that even assuming for the sake of argument that any approval or direction of the Central Government is required to be taken whilst denying the same, the non grant of the same would be totally unreasonable and arbitrary for the same reasons as the inaction of KPT is arbitrary and unreasonable. The action of the authorities of inviting tenders and doing an auction and then not taking steps to complete the process are not only arbitrary but also result in a situation where tenders issued by the Government loss their reliability and credibility which is something that must avoid. 4.4. The action of the authorities of inviting tenders and doing an auction and then not taking steps to complete the process are not only arbitrary but also result in a situation where tenders issued by the Government loss their reliability and credibility which is something that must avoid. 4.4. It is submitted that the authorities have failed to appreciate that the inaction of the authorities and inordinate delay caused by the same has not only affected the revenue earning of the Board but has also affected the production of salt. The authorities have failed to appreciate that if the allotments are made, the same will result in increasing salt production and salt export and also result in increasing foreign exchange earnings. The authorities have also failed to appreciate that because of salt production going down, salt prices have gone up and that if allotments are made, salt production will go up and salt prices will come down. It needs to be noted that the plots in question are plots for production of salt and the authorities must endeavour to ensure that the price of salt which is most basis requirement of all people is kept as low as possible. It is submitted that in this respect, a plot of land for the production of salt cannot be equated with one for the production of something else like industrial goods, etc. The authorities have also failed to appreciate that the allotment would result in increasing employment opportunities. It is submitted that attitude of the authority as revealed in one of the minutes shows the gross level of arbitrariness on its part considering that it wants to keep parties who have offered to pay the highest price on hold until the time that it gets a higher price. 4.5. Shri Salil Thakore, learned advocate for the petitioner has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Food Corporation of India v. M/s. Kamdhenu Cattle Feed Industries reported in (1993) 1 SCC 71 in support of his submission with respect to legitimate expectation." Making above submission, it is requested to allow the present petition. 5. Present petition is vehemently opposed by Shri P.K. Jani, learned Senior Advocate with Shri Dhaval Vyas, learned advocate for the respondent No. 2 and Shri Devang Vyas, learned Assistant Solicitor General of India appearing on behalf of the Union of India. 5.1. 5. Present petition is vehemently opposed by Shri P.K. Jani, learned Senior Advocate with Shri Dhaval Vyas, learned advocate for the respondent No. 2 and Shri Devang Vyas, learned Assistant Solicitor General of India appearing on behalf of the Union of India. 5.1. Learned counsel for the KPT has relied upon the affidavit in reply filed on behalf of the KPT, more particularly, the circumstances which lead to the forming new Land Policy by the Central Government and the reasons why at the relevant time the execution of the contract/lease contract was kept in abeyance. 5.2. Shri P.K. Jani, learned Counsel appearing on behalf of the KPT has submitted that as such issue involved in the petition is squarely covered against the petitioner by the decision of the Hon'ble Supreme Court in the case of Rishi Kiran Logistics Pvt. Ltd. v. Board of Truestee of Kandla Port Trust reported in AIR 2014 SC 3358 , by which, the Hon'ble Supreme Court has confirmed the earlier judgment of this Court in the case of Nikhil Adhesives Limited Through Dharmeshbhai Dhirajbhai Pandya v. Kandla Port Trust reported in 2011 (2) GLH 283 . 5.3. It is vehemently submitted by Shri P.K. Jani, learned Counsel for the KPT that similar submissions were made before the Division Bench of this Court in the case of Nihil Adhesives Limited (supra) with respect to the allotment of plot for manufacturing of salt by the very KPT and same have been negatived by the Division Bench of this Court. 5.4. It is submitted by Shri Jani, learned counsel for the KPT that in the similar set of facts and circumstances, in the case of Rishi Kiran Logistics Pvt. Ltd. (supra), the Hon'ble Supreme Court has observed and held that cancellation of Tender process is not arbitrary and the doctrine of promissory estoppel is not attracted. It is further held that writ jurisdiction cannot be invoked in case of contractual disputes but when public law element is involved writ jurisdiction may be invoked. It is further observed and held that when letter of intent shows intention to enter contract, contract has not resulted and therefore, order canceling tender not improper. Making above submission and relying upon the above decisions, it is requested to dismiss the present Special Civil Application. 6. Heard the learned advocates for the respective parties at length. It is further observed and held that when letter of intent shows intention to enter contract, contract has not resulted and therefore, order canceling tender not improper. Making above submission and relying upon the above decisions, it is requested to dismiss the present Special Civil Application. 6. Heard the learned advocates for the respective parties at length. At the outset, it is required to be noted that at the relevant time when E tenders were issued and E auction was done and when the petitioner made its offered, thereafter the contract was not executed, pursuant to the decision of the Central Government to keep the allotment of the lands in the Kandla Port Trust and/or Major Port Trust in abeyance as the Central Government was contemplating to have new land allotment policy. The circumstances which lead such decision has been elaborately considered and stated in the affidavit in reply filed on behalf of the KPT. 6.1. It is the case on behalf of the petitioner that at the relevant time petitioner was found to be highest offerer and only formal letter of intent was required to be issued, thereafter not to issue letter of intent and/or not to execute contract in favour of the petitioner, which was just formality is arbitrary and subsequent action of the KPT to go for fresh E tender/E auction is also arbitrary and illegal. It is the case on behalf of the petitioner that on the ground of doctrine of promissory estoppel or legitimate expectation, the petitioner is entitled to the relief sought. The aforesaid issue is now not res-integra in view of the recent decision of the Hon'ble Supreme Court in the case of Rishi Kiran Logistics Pvt. Ltd. (supra) by which the Hon'ble Supreme Court has confirmed the decision of the Division Bench of this Court in the case of Nikhil Adhesives Limited (supra) by which, the Division Bench has negatived the same/similar contentions made by the highest bidder who was issued the letter of intent but contract was not executed. The Division Bench of this Court in the case of Nikhil Adhesives Limited (supra) in para 20 to 22 has observed as under: "20. The respondent is well within its rights to take such a decision in the year 2010 keeping in mind the larger public interest. The figures itself would indicate that the original tender premium was of Rs. The Division Bench of this Court in the case of Nikhil Adhesives Limited (supra) in para 20 to 22 has observed as under: "20. The respondent is well within its rights to take such a decision in the year 2010 keeping in mind the larger public interest. The figures itself would indicate that the original tender premium was of Rs. 612/- per Sq. Mtr. whereas fresh tender premium is Rs. 8358/- per Sq. Mtr. Thus, the premium amount to be received by the respondent Port Trust by issuance of fresh tender would come to more than 10 times than the original premium amount. Moreover, the petitioner had paid only Rs. 3 Lacs by way of earnest money. The total premium amount is of Rs. 23,74,00,442.64 ps. This amount was to be paid by the petitioner only after receipt of the CRZ clearance in general and after issuance of allotment letter, receipt of individual CRZ clearance and on execution of lease document. None of these events took place and hence, it cannot be said that any vested right or interest is created in favour of the petitioner. The judgments relied upon by Mr. Thakore in support of his contentions are not of much assistance to the petitioner. In Gujarat State Financial Corporation v. M/s. Lotus Hotels Private Limited (Supra), not only an agreement was executed, but the respondent on the basis of the said agreement incurred further liabilities to implement and execute the Project. There is nothing on record of the present case to show that except making payment of Rs. 3 Lacs by way of earnest money, the petitioner had incurred any other expenses or suffered liabilities to implement the project of construction and maintenance of the Tank. Even if it is assumed that the issuance of letter dated 12.01.2006 tantamounts to a promise given by the respondent Port Trust, the petitioner has not altered his position to such an extent which inspires the Court to take the decision that holding the promisor to his representation is necessary to do justice between the parties. The equity demands that the respondent Port Trust is allowed to resile looking to the facts and circumstances. Thus, the decision of H.P. & others v. Ganesh Wood Products and others (Supra) helps the respondent rather than it helps the petitioner 21. The equity demands that the respondent Port Trust is allowed to resile looking to the facts and circumstances. Thus, the decision of H.P. & others v. Ganesh Wood Products and others (Supra) helps the respondent rather than it helps the petitioner 21. There is no dispute about the proposition laid down by the Apex Court in Mahabir Auto Stores v. Indian Oil Corporation, AIR 1990 SC 1031 . However, looking to the facts of the present case, it cannot be said that the action of the respondent Port Trust of not issuing allotment letter or of cancelling the tender process fails to satisfy the test of reasonableness. It would neither amount to an arbitrary action nor give rise to any discrimination. The Court does not see any justification in interfering with the said action on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination. 22. The letter of intent issued by the respondent Port Trust on 12.01.2006, at best, can be said to be an agreement to issue the allotment letter and to execute the lease document in favour of the petitioner subject to fulfillment of certain conditions. However, in absence of issuance of allotment letter, the said letter of intent cannot be enforced in the Court of law. The Apex Court in Dresser Rand S.A. v. Bindal Agro Chem Limited and others (Supra) clearly stated that a letter of intent merely indicates a party's intention to enter into a contract with the other party in future. Such a letter of intent is not intended to bind either party ultimately to enter into any contract. Even in Speech & Software Technologies (India) Private Limited v. Neos Interactive Limited (Supra), the Apex Court clearly held that an agreement to enter into an agreement is not enforceable nor does it confer any right upon the parties." 6.2. On an appeal the Hon'ble Supreme Court has observed and held that firstly by way of writ petition under Article 226 of the Constitution of India only public law remedy can be invoked and as far as contractual dispute is concerned that is outside the power of judicial review under Article 226 with the sole exception in those cases where such a contractual dispute has a public law element. In the said decision, the Hon'ble Supreme Court has also negatived the submission made on behalf of the petitioner with respect to doctrine of promissory estoppel or legitimate expectation, which is also submitted on behalf of the petitioner. 6.3. Considering the affidavit in reply filed on behalf of the KPT circumstances which led at the relevant time not to execute the lease deed/entered into contract and subsequent cancelling E Tender/E Auction and thereafter to go for fresh E tender/E auction with respect to all the lands/plots cannot be said to be arbitrary. It appears that on the contrary the said decision has been taken in the Public Interest and by the same, much more, revenue is likely to be fetched. Under the circumstances, neither on the ground of promissory estoppel nor on the ground of legitimate expectation nor on the ground that by submitting highest offer he has acquired right to get plot No. 16 on lease, we are of the opinion that petitioner is not entitled to any relief sought in the present petition. 6.4. Thus, in the facts and circumstances of the case, decision relied upon by the learned advocate for the petitioner in the case of M/s. Kamdhenu Cattle Feed Industries (supra) shall not be applicable to the facts of the case on hand, more particularly, considering the subsequent decision in the case of Rishi Kiran Logistics Pvt. Ltd. (supra). 7. In view of the above and for the reasons stated above, present petition fails and same deserve to be dismissed and is accordingly dismissed. Notice discharged. Petition Dismissed.