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2016 DIGILAW 916 (ORI)

Magnum Sea Foods Limited v. State of Odisha

2016-10-06

B.R.SARANGI, VINEET SARAN

body2016
JUDGMENT : B.R. SARANGI, J. Both the above noted writ petitions, having been filed by two different companies claiming similar relief, have been heard together and are being disposed of by this common judgment. 2. Magnum Sea Foods Limited (petitioner no.1 in WP(C) No.7645 of 2016) is a company engaged in the business of fishing, processing and supply/export of sea food products. It is also engaged in aquaculture and distribution of imported shrimp feed, including feed financing to the farmers. Petitioner no.2 is its Director. The petitioners seek to assail the decisions taken for allotment of Pre-Processing Unit at Dhamra Port, Bhadrak, Orissa vide letters of the Director of Fisheries, Odisha dated 03.10.2015 and 18.12.2015 in Annexures-2 and 3 respectively and consequential execution of Memorandum of Understanding (MoU) and agreement in Annexure-4 dated 08.01.2016 and handing over the said Pre-Processing Unit in favour of opposite partyno.4, the Sea Food Exporters Association of India (SEAI) vide letter dated 28.03.2016 (Annexure-8) and further seek for direction to go for a fresh tender/competitive bid for allotment of nine Pre-Processing Units. M/s Papermoon Implex Pvt. Ltd. has filed W.P.(C) No. 7801 of 2016 seeking to set aside the allotment/settlement of nine Pre-Processing Centres/Facilities at Dhamara Port in favour of opposite party no.4 as well as consequential handing over of Pre- Processing Centres vide letter dated 28.03.2016 (Annexure-3) and also the Memorandum of Understanding dated 08.01.2016 (Annexure-4). The petitioner also claims for settlement/allotment of the above nine Pre-Processing Centres/Facilities by following suitable competitive bidding process. 3. The factual matrix of the case in hand is that Dhamra Port is a major fishing centre surrounded with large number of aquaculture projects. Sea Food Exporters Association of India, a company licensed under Section 25 of the Companies Act, 1956 bearing registration no.2301 of 1970 having its registered office at Kochi, Kerala is a non-profit oriented voluntary association constituted among the Seafood Exporters of India with an object which includes the development of the Seafood Industry in India. It has a membership of 343 exporters over the country and has 33 members in Odisha. The association does not have any share capital and the finance for the activities of the association is augmented through the contribution from members contributions and donations. Apart from Odisha, other regional offices of the association are located at Gujurat, Maharastra, Goa, Karnataka, Kerala, Tamilnadu, Andhra Pradesh and West Bengal. 4. The association does not have any share capital and the finance for the activities of the association is augmented through the contribution from members contributions and donations. Apart from Odisha, other regional offices of the association are located at Gujurat, Maharastra, Goa, Karnataka, Kerala, Tamilnadu, Andhra Pradesh and West Bengal. 4. Opposite party no.4, the association has been playing a very constructive role in advising the State Government in terms of policy decision and implementation for the seafood export sector. The nature of seafood, i.e., fish and shrimp is highly perishable and after procuring them from the sea, they require immediate pre-processing to prevent waste and damage, and increase their sustenance for the purpose of export to far off countries. The pre-processing activity covers cleaning, weighment of raw shrimp and fishes, be-heading, peeling, ice-storing and packing for dispatch to processing and freezing units. These sea food items were subjected to high transaction costs on account of non-availability of pre- processing facilities in landing centres (where the fish and shrimp are unloaded after procuring them from sea) as well as wastage and export reject due to lack of proper icing, and decomposition on account of transportation time. Fishermen, shrimp farmers as well as exporters were compelled to bear these losses, as there was no pre-processing centre in landing centres in the State of Odisha and all the pre-processing was carried out in processing plants of exporters mostly located in Bhubaneswar, Khurda and centres at Digha Port in the State of West Bengal, which is about 60 kilometers from the Dhamara Port. With the objective of increase of exports by reduction of waste, transaction cost, better hygienic products and generate rural employment, opposite party no.4 vide its letter dated 22.01.2010 made a detailed proposal before the Government of Odisha for construction of a common pre-processing centre at Dhamara Port with undertaking that it shall manage the same and allot the units to its exporter members for effective operation and the same would be a great help to the exporters of the State of Odisha. 5. In the year 2011, the Government of Odisha granted administrative approval for constructing the preprocessing centre at an estimated cost of Rs.4.70 crores with the aid received from the Central Government through its scheme ‘Assistance to State for Developing Exports Infrastructure’ (ASIDE). 5. In the year 2011, the Government of Odisha granted administrative approval for constructing the preprocessing centre at an estimated cost of Rs.4.70 crores with the aid received from the Central Government through its scheme ‘Assistance to State for Developing Exports Infrastructure’ (ASIDE). This scheme of the Central Government was launched with the objective to involve the States in the export effort by providing assistance to the State Governments for creating appropriate infrastructure for the development and growth of exports, as because the States do not perceive direct gain from the growth in exports for the State. The aid received under ASIDE is not a loan but a grant. After creating the infrastructure/core house, the association and exporters shall have to upgrade them and install all facilities required for operation of the units. 6. After joint meeting of opposite party no.4 with the State Government officials, it was approved that a common preprocessing centre would be constructed, accommodating nine units. The centre would have a common ice plant for manufacture of ice, a common chilled room for storage of fish and shrimp, a common ice store room, a common effluent treatment plant and a common laboratory for inspection and quality checking purposes. The member exporters were to use the common facilities in their best interest and in the interest of the association with a spirit of cooperation. The common facilities were to be managed by the opposite partyno.4. The opposite party no.4 was to distribute the nine units amongst its member exporters, who were then to operate the same using the common facilities. The entire common pre-processing unit was designed and conceived in such a manner so as to be handed over to the opposite party no.4, the association and not to an individual person for operation. Opposite party no.4 was to enforce code of conduct, discipline among the member units by imposing a code of discipline, maintain cleanliness and hygiene and maintain common areas and facilities in the centre. Such activities and common area management would not have been possible if the nine units had been given to nine individual exporters, and not to the opposite party no.4 association, as the performance of the pre-processing centre depends upon coordinated use of the common facilities. There is no statutory or constitutional mandate upon the State to handover the common pre-processing centre to a private entrepreneur through auction/ tender process. There is no statutory or constitutional mandate upon the State to handover the common pre-processing centre to a private entrepreneur through auction/ tender process. The whole idea of constructing the common pre-processing centre was not revenue maximization, but was on developmental consideration of the seafood farming community and of the exporters. The monthly rent payable by the nine units would be paid to the management society of Dhamara fishing harbor and not to the State Government. The work of preprocessing is a seasonal one extending from April to October and rest of the time, there was negligible business. 7. Petitioner no.1 of W.P.(C) No.7645 of 2016 and its sister company, i.e., Magnum Estate Pvt. Ltd. were the members of the opposite party no.4 association. The Chairman of the 8 petitioner no.1 company was also the President of the opposite party no.4 association for the period 2006-08. Thereafter, he was not elected for the second term, for which he filed a suit against opposite party no.4 before the Civil Court, Bhubaneswar and tried to stop the functioning of the association, but the suit was ultimately dismissed. Due to non- payment of subscription fee, the membership of the petitioner was terminated on 01.03.2012. In order to materialize the same, a decision was taken at the Government level pursuant to the letter dated 03.10.2015 and 18.12.2015 expressing willingness to enter into the MoU with opposite party no.4 to run the pre-processing unit at Dhamara fishing harbour. Consequentially, the MoU was executed on 08.01.2016 between the Government and opposite party no.4 and, thereafter, nine members of pre-processing units have been handed over to nine exporters as indicated in Annexure-8 dated 28.03.2016. Against non-allotment of the pre processing unit in favour of the petitioners, they have approached this Court by filing the present writ petitions. 8. Mr. S. Nanda, learned counsel for the petitioners in W.P.(C) No. 7645 of 2016 strenuously urged that instead of executing the MoU with opposite party no.4, the State authority should have gone for a tender/bidding so as to show fairness in allotment of the processing unit. By executing the MoU with opposite party no.4 for a period of fifteen years, other similarly situated exporters have been deprived of enjoying the facilities for the purpose for which this processing units have been established. By executing the MoU with opposite party no.4 for a period of fifteen years, other similarly situated exporters have been deprived of enjoying the facilities for the purpose for which this processing units have been established. Further, the MoU has been signed at a very low rate of about rupees one lakh per month for all nine units for two years, as compared to what is being provided to others including the petitioner company in fishing harbour premises. It is further contended that allotment of pre processing unit in favour of opposite party no.4, excluding its non-members, amounts to denial of opportunity. Therefore, he seeks for cancellation of the same and prays for fresh tender to fetch higher price for State Exchequer. It is further contended that in the guise of SEAI, the members have formed a cartel to get allotment from opposite party no.2 with exceptionally low monthly rental of rupees one lakh for nine units without considering the fact that even an ordinary shed/unit, without basic facility, is being given at a rent of Rs.6.50 per sq. ft. to various exporters in the same locality. Thereby, the action of the authority creates monopoly for 15 years extinguishing/eliminating fair competition. The allotment of preprocessing unit in favour of opposite party no.4 for a period of fifteen years is contrary to the principle of level playing field and violates Article 14 of the Constitution of India. It is stated that greater revenue can be generated for the State Exchequer, if the allotments are made through open tender/competitive bidding which will fetch higher price per unit for each individual preprocessing unit. It is further contended that distribution of largesse like allotment of land, grant of quota, permit licence etc. by State and its agencies/instrumentalities should be just, non-arbitrary and transparent and which does not discriminate between similarly placed private parties. It is stated that non-issuance of tender is opposed to public policy and against the provisions contained under Section 23 of the Contract Act, 1872. He, thus, prays for quashing of the orders impugned in the writ petitions. by State and its agencies/instrumentalities should be just, non-arbitrary and transparent and which does not discriminate between similarly placed private parties. It is stated that non-issuance of tender is opposed to public policy and against the provisions contained under Section 23 of the Contract Act, 1872. He, thus, prays for quashing of the orders impugned in the writ petitions. To substantiate his contention, he has relied upon the judgments in Centre for PIL v. Union of India, (2012) 3 SCC 1 , Ramana Dayaram Shetty v. International Airport Authority and others, AIR 1979 SC 1628 , Natural Resources Allocation in RE, Special Reference No.1 of 2012, (2012) 10 SCC 1 , Jaipur Development Authority and others v. Vijay Kumar Data and another, (2011) 12 SCC 94 , City Industrial Development v. Platinum Entertainment and others, AIR 2015 SC 340 , M/s B.M.P. & Sons Pvt. Limited v. State of Odisha and others, 2016 (II) OLR 313, ABL International Ltd. and another v. Export Credit Guarantee Corporation of India Ltd. and others, (2004) 3 SCC 553 , Rajani Bala Das v. Regional Transport Authority, Cuttack and others, 2002 (II) OLR 614 . 9. Mr. M.B. Rao, learned counsel appearing for the petitioner in W.P.(C) No.7801 of 2016, though adopted the argument advanced by Mr. S. Nanda, learned counsel for the petitioner in W.P.(C) No.7645 of 2016, urged that the allotment of pre-processing unit in favour of opposite parties no.5 to 12 through opposite party no.4 has been made in discriminatory and nontransparent manner by the State authorities and, as such, is violative of Article 14 of the Constitution of India. This is a clear case that the State has failed to provide the requisite standard or norm for selecting the beneficiaries. It is further contended that the State owes obligation to provide a ‘level playing field’ and such ‘level playing field’ can only be provided by embodying the principles of non-discrimination in the process of selection. The same having not been exercised, the action of the authorities is illegal, arbitrary and unreasonable. 10. Mr. B. Bhuyan, learned Additional Government Advocate appearing for the State opposite parties no.1 and 2 contended that the writ petitions are not maintainable and suffer from delay and laches. In the year 2010, pursuant to preprocessing unit project, the proposal for common pre-processing centre at Dhamara was initiated. 10. Mr. B. Bhuyan, learned Additional Government Advocate appearing for the State opposite parties no.1 and 2 contended that the writ petitions are not maintainable and suffer from delay and laches. In the year 2010, pursuant to preprocessing unit project, the proposal for common pre-processing centre at Dhamara was initiated. At the time of proposal, all the Sea Food Exporters of Odisha were the members of opposite party no.4. Therefore, the Government took a decision that after development of the pre-processing unit, the same shall be given to opposite party no.4-Association for its use. The day to day management would be done by the Association with certain terms and conditions. Accordingly, an agreement was executed and after completion of the construction of pre-processing unit, a committee was constituted at the Directorate level for the purpose of leasing out the pre-processing unit and for fixing modalities of the lease. In the committee meeting dated 13.11.2015, it was decided that the pre-processing unit will be leased out in the Odisha region for the best use of it by its members which was duly approved and, consequentially, the MoU and agreement was executed on 08.01.2016. The pre-processing unit has 9 number of Export Enclosures, but it could not be leased out for nine separate Sea Food Exporters as the same had some common utility units like Ice Unit, General Laboratory, Post Harvest Laboratory, Water Treatment Plant, Ice Store, Chilled room etc. Since there were 32 members, opposite party no.4 conducted lottery for distribution of 9 Export Enclosures. Consequentially, opposite parties no.1 and 2 have not committed any error so as to warrant interference of this Court in exercise of its extra-ordinary jurisdiction. 11. Mr. Mohit Aggarwal, learned counsel appearing for opposite party no.4 justified the action taken by the authorities in allotting the pre-processing unit in favour of opposite party no.4 stating that in such allotment no illegality or irregularity has been committed by the authorities. It is further stated that the proposal of Commissioner-cum-Secretary, Fisheries and Animal Resources Development Department (FARD) recommending the lease allotment on monthly rental of Rs.1.00 lakh (which was subject to revision after two years), as beneficial for farmers, fishermen, the Dhamra Management society and the exporters, was also approved by the Chief Secretary, Odisha and the Cabinet Minister, FARD, Odisha. It is further stated that the proposal of Commissioner-cum-Secretary, Fisheries and Animal Resources Development Department (FARD) recommending the lease allotment on monthly rental of Rs.1.00 lakh (which was subject to revision after two years), as beneficial for farmers, fishermen, the Dhamra Management society and the exporters, was also approved by the Chief Secretary, Odisha and the Cabinet Minister, FARD, Odisha. Opposite party no.4-Association has been playing a very constructive role for implementation in the seafood export sector with the objective to increase exports by reduction of waste, transaction costs, better hygienic products and generate rural employment. The entire common pre-processing unit was designed and conceived in such a manner so as to be handed over to opposite party no.4-Association and not to any individual or 9 different individuals for operation. Opposite party no.4 was to ensure discipline among the members to maintain cleanliness and hygiene and maintain common areas and facilities in the centre. The plan, on the basis of which the pre-processing unit was constructed, could not be utilized individually or separately. The whole idea of constructing the common pre-processing centre was not revenue maximization, but was on developmental consideration of the seafood farming community and of the sea food exporters. The Chairman of the petitioner no.1-company was also the President of opposite party no.4-Association for the period 2006- 2008. As he was not elected for the second term, he filed a suit against opposite party no.4 before the Civil Court, Bhubaneswar and tried to stop functioning of the Association, but could not succeed. Thereafter, petitioner no.1 and its sister company, i.e., Mangum Estates Pvt. Ltd. did not pay subscription of opposite party no.4-Association and due to non-payment of subscription, membership of petitioner no.1 and its sister company was terminated on 01.03.2012. As per clause-8 of the Memorandum of Understanding, opposite party no.4 was to sublease units to its members only. Therefore, petitioner no.1, being not the member of opposite party no.4, was not entitled to any settlement in its favour. W.P.(C) No.7645 of 2016 has been filed only to feed fat personal vengeance of petitioner no.1 against opposite party no.4. The unit has been established by the State Government from the funds received from Central Government through its scheme ‘Assistance to State for Developing Export Infrastructure’ (ASIDE) by way of grant/aid but not as a loan. W.P.(C) No.7645 of 2016 has been filed only to feed fat personal vengeance of petitioner no.1 against opposite party no.4. The unit has been established by the State Government from the funds received from Central Government through its scheme ‘Assistance to State for Developing Export Infrastructure’ (ASIDE) by way of grant/aid but not as a loan. It is further urged that petitioner no.1 was the owner of a pre-processing unit, which was established at Balasore, but the said unit has been closed as petitioner no.1 failed to manage the same. Consequentially, petitioner no.1 has filed the present writ petition with oblique motive to cause difficulties so that this unit also remain closed. To substantiate his contentions, he has relied upon R.D. Setty v. International Air Port, AIR 1979 SC 1628 and Natural Resources Allocation in RE, Special Reference No.1 of 2012, (2012) 10 SCC 1 . 12. Mr. P.R. Sutar, learned counsel appearing for the private opposite parties, who are the beneficiaries under the MoU executed between the State opposite party and opposite party no.4, also supported the contentions raised by learned Additional Government Advocate as well as Mr. M. Aggarwal, learned counsel for opposite party no.4. He stated that since by establishing a processing unit at a centralized place 9 exporters at a time would be benefited, question of any auction or bidding of such unit for allocation individually would not be viable and the construction having been made with the proper advice of opposite party no.4, on the funds received from the Central Government and more particularly, this being not to maximize revenue, the allotment in favour of opposite party no.4 is wholly and fully justified. Therefore, this Court should not interfere with the same by exercising extraordinary jurisdiction. 13. On the facts pleaded above, the moot question that falls for consideration is, whether the decision taken by the State authorities in allotment of Pre-Processing Unit at Dhamara in Bhadrak district under ASIDE scheme and execution of MoU in favour of opposite party no.4 is justified or not. 14. Admittedly, opposite party no.4 is an association of exporters having its head office at Kochi, Kerala. For Odisha region, it proposed to have a fish processing unit at Dhamara for exporting of sea products in hygienic manner. 14. Admittedly, opposite party no.4 is an association of exporters having its head office at Kochi, Kerala. For Odisha region, it proposed to have a fish processing unit at Dhamara for exporting of sea products in hygienic manner. For that, opposite party no.4 gave a proposal and the same was taken into consideration by the State Government on the basis of the funds received from the Central Government. Accordingly, the pre-processing unit was established at Dhamara having multi-facilities available in one place. Opposite party no.4 also submitted its proposal for a common pre-processing centre at Dhamara on 22.01.2010 in Annexure-A/5 and also provided cost for the land requirement for the project at 2.5 acres as per the construction requirement place and submitted the project report for financial lay out and drawings. Consequentially, the unit was set up and opposite party no.4 was called upon to express his willingness. In response to same, opposite party no.4 expressed its willingness and executed MoU and the members of opposite party no.4 had been utilizing the said pre processing unit. Therefore, the claim made by the petitioners that the pre-processing unit should be put to auction/bid to show fairness on the part of the State authorities is not justified, because, initially petitioner no.1 in W.P.(C) No.7645 of 2016 was a member of the association, even who was the Chairman of petitioner no.1 was the President of opposite party no.4 for the year 2006-2008, but subsequently, he has been dismissed from the membership of the association and just to cause harassment to opposite party no.4, this writ petition has been filed at his behest. Even a non-member of opposite party no.4 association has filed W.P.(C) NO.7801 of 2016 claiming similar benefits, on the plea that opposite party no.4 association is proceeding with an ulterior motive not to allow the other exporters to use the facilities available in pre-processing unit constructed at Dhamara in the district of Bhadrak. 15. It is urged that the State Government had not taken any final decision to allow the 9 units to opposite party no.4, but had even contemplated inviting tender to finalize the allotment of, as would be revealed from letter dated 03.10.2015. 15. It is urged that the State Government had not taken any final decision to allow the 9 units to opposite party no.4, but had even contemplated inviting tender to finalize the allotment of, as would be revealed from letter dated 03.10.2015. Realizing the difficulties to give the pre-processing unit at Dhamara on tender, subsequently, the authorities have changed the same stating that the pre-processing unit at Dhamra is one unit having consolidated facilities with 9 outlets as 9 exporters can utilize the same at a time and the said individual outlet cannot be utilized individually by any of the independent exporter. As it is a chained process of different stages, if one outlet would be put to auction/tender or bidding for some reason or other, if the said outlet will not function, then it will not be possible on the part of other outlets to function. In any case, for greater interest of the exporters, if the pre-processing unit having 9 outlets have been allotted in favour of opposite party no.4, which can be utilized by its members, no illegality or irregularity can be said to have been committed by opposite party- State authorities. The petitioners have misinterpreted the fact that the pre-processing unit has got 9 separate units, but this fact is not correct. It is one single unit having 9 outlets as per plan enclosed to the counter affidavit filed by opposite party no.4 as Annexure- B/4. 16. Reliance has been placed by the petitioners on City Industrial Development (supra) wherein the apex Court has considered that all plots allotted to one person in different capacities and by considering individual applications held that the allotment so made smacks of arbitrariness as the rule permits consideration of individual application, their publicity should be given before making allotment and consequentially held that cancellation of allotments is proper. The factual matrix of the said case is not applicable to the present context because of the fact that it is the opposite party no.4 at whose instance pre-processing unit was established and after establishment of such unit if the authorities entered into MoU and allowed it to operate the same with the terms and conditions stipulated therein, that cannot be said to be arbitrary and unreasonable exercise of powers by the State authorities. 17. 17. In B.M.P. & Sons Pvt. Limited (supra), which has also been relied upon by the petitioners, this Court has categorically dealt with the situation and scope of the Court to interfere with the decision making process in exercise of jurisdiction of Article 226 of the Constitution of India under judicial review. If the decision making process is bad, arbitrary and unreasonable exercise of power, in that case, the Court has got jurisdiction to interfere with such decision making process. But, this ratio is not applicable to the present context, in view of the reasons as discussed above. If the proposal was initiated by opposite party no.4 in the year 2010 and on that basis the steps were taken and the pre- processing unit was established, in that case, the petitioners could not have challenged the same in the year 2016 by filing the present writ petition. More particularly, the action of the petitioners suffers from the principle of delay and laches. Once the decision has been taken on the basis of proposal given by opposite party no.4 and subsequently, realizing that the said unit is viable one, which caters to the needs of the members of opposite party no.4, the petitioners who are the non-members, cannot claim that the said unit should be put to auction or bid, as the case may be, so that they can bid and get the benefit. The argument is very fallacious one, inasmuch as it cannot be construed that any arbitrary and unreasonable power has been exercised by the State authorities. 18. Reliance has also been placed by the petitioners on ABL International Limited (supra) wherein it has been held that due to availability of alternative remedy/arbitration clause to the parties under the contract, there is bar under Section 14 of the Specific Relief Act. But, this question does not arise in the case in hand, in view of the fact that the entire process has been initiated by opposite party no.4, but when it has come to be established, the present claim made in the writ petition cannot sustain in the eye of law. 19. After the allotment was made in favour of opposite party no.4, lottery was made amongst the members of opposite party no.4-association so as to utilize the facilities of 9 outlets of the unit. 19. After the allotment was made in favour of opposite party no.4, lottery was made amongst the members of opposite party no.4-association so as to utilize the facilities of 9 outlets of the unit. It is urged that the principle decided in Rajani Bala Das (supra) that selection by way of lottery system is impermissible, is not applicable to the present case. Once the unit has been allotted in favour of opposite party no.4, the modus operandi left to it to allocate the 9 outlets in favour of its members on the basis of existing methodology amongst all the members. If the members have adopted the methodology of lottery system to utilize the outlets of pre-processing unit, in that case the ratio decided in Rajani Bala Das (supra) cannot come to the help of the petitioners. 20. Relying the ratio decided by the apex Court, the contention raised is that when the Government deals with different establishment in entering into the contract or issuance of licence, it should not act arbitrarily. In the instant case, arbitrariness and violation of Article 14 of the Constitution of India is not correct, in view of the fact that if on the basis of proposal given by opposite party no.4 the pre-processing units have been established and ultimately by virtue of MoU executed between the parties, the same has come up for operation, in that case it cannot be construed that either the unit has been utilized arbitrarily or unreasonably, rather on the basis of agreement executed between the parties, the same has been materialized. 21. Reliance has been placed by the petitioners on the decision in Jaipur Development Authority (supra) stating that the Directorate of Fisheries did not have any jurisdiction, power or authority to execute MoU with opposite party no.4 and execution of such MoU is suggestive of cloaking discrimination and against the public interest. Such contention of learned counsel for the petitioners is also not justified in view of the reasons assigned in the foregoing paragraphs. It is urged that even if the policy decision has been taken to establish a pre-processing unit, that should be done as per Rules of Business in Article 126 of the Constitution and, therefore, the MoU executed by the Directorate of Fisheries is contrary to Article 166(1), in view of the ratio decided in the aforementioned case. It is urged that even if the policy decision has been taken to establish a pre-processing unit, that should be done as per Rules of Business in Article 126 of the Constitution and, therefore, the MoU executed by the Directorate of Fisheries is contrary to Article 166(1), in view of the ratio decided in the aforementioned case. There is no question of any policy decision for establishment of pre-processing unit at Dhamra, rather on the basis of the facts plead, it is noticed that on the basis of proposal submitted by opposite party no.4, the opposite party- State had taken a decision to implement the same, with reasons as discussed above. In that view of the matter, execution of MoU by the Directorate of Fisheries with opposite party no.4 for implementation of the proposal cannot be said to be an arbitrary or unreasonable exercise of power so as to warrant interference of this Court at this stage. 22. In Akhil Bhartiya Upbhokta Congress (supra), the apex Court held that the State and/ or its agencies/instrumentalities cannot give largesse to any person according to the sweet will and whims of the political entities and/or officers of the State. Every action/decision of the State and/or its agencies/instrumentalities to give largesse or confer benefit must be founded on a sound, transparent, discernible and well defined policy, which shall be made known to the public by publication in the Official Gazettee and other recognized modes of publicity and such policy must be implemented/executed by adopting a non-discriminatory or non23 arbitrary method, irrespective of the class or category of person proposed to be benefitted by the policy. The distribution of largesse, like allotment of land, grant of quota, permit licence etc. by the State and its agencies/instrumentalities should always be done in a fair and equitable manner and the element of favouritism or nepotism shall not influence the exercise of discretion, if any, conferred upon the particular functionary or officer of the State. The principle laid down by the apex Court in the aforementioned case, there is no dispute on the basis of the facts of the case in which it has been rendered. But, the present case is totally different than that of the facts of the case of Akhil Bhartiya Upbhokta Congress (supra). Consequentially, the said judgment may not have application to the present context. 23. But, the present case is totally different than that of the facts of the case of Akhil Bhartiya Upbhokta Congress (supra). Consequentially, the said judgment may not have application to the present context. 23. In Variety Entertainment (Pvt.) Ltd. (supra), as has been relied upon by the petitioners, the apex Court considering the persons involved in cable network business, held that the mode of transmission made electric force by one cable operator produced monopoly, therefore, the apex Court interfered with such action of the authority. But, the ratio of this case is not applicable to the present context. Once the proposal has been given by opposite party no.4 and the same has been acted upon and, consequentially, MoU has been executed between the parties, it cannot be construed that the illegality or irregularity has been committed by arbitrary exercise of power by the authority, which violates Article 14 of the Constitution of India. Rather, considering different angles, if on the basis of the proposal submitted by opposite party no.4, the State authority has acted upon the same to facilitate the said opposite party to fulfill the aims and objectives of the pre-processing unit and MoU has been executed, in that case it cannot be construed that the action of the authority is arbitrary or unreasonable and contrary to the provisions of law. 24. Admittedly, the State has no pre-processing centre prior to the present one. Therefore, a common preprocessing centre project was required to increase exports of fish by reduction of waste, transaction costs, better hygienic products and generate rural employment. Considering the proposal given by opposite party no.4, the State Government proposed to construct the pre-processing unit and accordingly the pre-processing unit was established with nine separate outlets. But, the common facilities are to be used by the members in a disciplinary manner under the supervision of opposite party no.4-association. The common set up for common equipment, such benefit is being extended. The State Government approved such project report on 08.03.2010 and decided to construct and hand over the project to the opposite party no.4.-association for use of its members. Thereby a common pre-processing centre was allotted to opposite party no.4-association in a transparent manner. 25. In the project report of the year 2010, the reasons were indicated for allocation of unit in favour of opposite party no.4. Thereby a common pre-processing centre was allotted to opposite party no.4-association in a transparent manner. 25. In the project report of the year 2010, the reasons were indicated for allocation of unit in favour of opposite party no.4. The petitioner no.1, though was a member of opposite party no.4-association since 2004, its membership was terminated on 01.03.2012 for non-payment of dues. By the time the project was sanctioned in favour of opposite party no.4 in the year 2010, petitioner no.1 was its member and there was no exporter at such point of time. Apart from the same, the rent has been fixed in a transparent manner to the extent that a meeting was held on 13.11.2015 under the chairmanship of the Director of Fisheries, Odisha and other Government officials with the opposite party no.4-association regarding scheme to hand over the common preprocessing centre and amount of lease was finalized. Nothing has been placed on record to demonstrate the fact as to how the decision making process in fixation of rent is arbitrary or capricious. But, it is a case where the petitioners, out of vengeance against opposite party no.4, have filed the writ petition with an ulterior motive. 26. The entire argument of learned counsel for the petitioners is that the common pre-processing unit has been given to opposite party no.4 without calling for any tender, but nothing has been placed on record to indicate how it is unreasonable or contrary to the provisions of law and violative of Article 14 of the Constitution of India. Rather, on perusal of records it is found that the petitioners have not approached this Court with a clean hand, inasmuch as, they have suppressed material facts regarding its membership and termination from the association. Though in the rejoinder affidavit to the counter affidavit of the State Government in paragraph-10 (Page-148) the petitioners contended that petitioner no.1 had withdrawn its membership, but from the affidavit filed on 18.09.2016 placing the minutes of meeting, it is apparent that a decision was taken terminating its membership. The petitioners filed objection to it by stating that membership of petitioner no.1 was automatically ceased due to non-payment of subscription fee in view of the Clause-15 of Articles of the Association of opposite party no.4. The petitioners filed objection to it by stating that membership of petitioner no.1 was automatically ceased due to non-payment of subscription fee in view of the Clause-15 of Articles of the Association of opposite party no.4. The sister company of petitioner no.1, M/s Magnum Estate Pvt. Ltd. had availed subsidy and set up a common pre-processing unit at Balasore in the year 2008, but in the year 2014 it left the same by applying for deregistration by putting in dark the livelihood of the fishermen and seafood farmers dependent on it. Since this Court is exercising the jurisdiction under Article 226 of the Constitution India, in view of the conduct of the petitioners, they cannot invoke the equity jurisdiction of this Court. Accordingly, the claim made in the writ petitions cannot sustain in the eye of law. 27. In Natural Resources Allocation, in RE, Special Reference No.1 of 2012, the apex Court formulated mainly two questions, which states as follows:- Question 1. Whether the only permissible method for disposal of all natural resources across all sectors and in all circumstances is by the conduct of auctions? Question 2. Whether a broad proposition of law that only the route of auctions can be resorted to for disposal of natural resources does not run contrary to several judgments of the Supreme Court including those of the larger Benches? While answering the same, the apex Court held in paragraphs-108, 109, 112 and 122 as follows: “108. Such being the constitutional intent and effect of Article 14, the question arises — Can auction as a method of disposal of natural resources be declared a constitutional mandate under Article 14 of the Constitution of India? We would unhesitatingly answer it in the negative since any other answer would be completely contrary to the scheme of Article 14. Firstly, Article 14 may imply positive and negative rights for an individual, but with respect to the State, it is only couched in negative terms: like an admonition against the State which prohibits the State from taking up actions that may be arbitrary, unreasonable, capricious or discriminatory. Article 14, therefore, is an injunction to the State against taking certain type of actions rather than commanding it to take particular steps. Reading the mandate of auction into its scheme would thus, be completely contrary to the intent of the article apparent from its plain language. 109. Article 14, therefore, is an injunction to the State against taking certain type of actions rather than commanding it to take particular steps. Reading the mandate of auction into its scheme would thus, be completely contrary to the intent of the article apparent from its plain language. 109. Secondly, a constitutional mandate is an absolute principle that has to be applied in all situations; it cannot be applied in some and not tested in others. The absolute principle is then applied on a case-by-case basis to see which actions fulfil the requirements of the constitutional principle and which do not. xxx xxx xxx xxx xxx 112. Equality, therefore, cannot be limited to mean only auction, without testing it in every scenario. In State of W.B. v. Anwar Ali Sarkar, this Court, quoting from Kotch v. River Port Pilot Commissioners, had held that: (Anwar Ali Sarkar case, AIR p. 80, para 10) “10. … ‘The constitutional command for a State to afford equal protection of the laws sets a goal not attainable by the invention and application of a precise formula. This Court has never attempted that impossible task.’” One cannot test the validity of a law with reference to the essential elements of ideal democracy, actually incorporated in the Constitution. (See Indira Nehru Gandhi v. Raj Narain.) The courts are not at liberty to declare a statute void, because in their opinion it is opposed to the spirit of the Constitution. The courts cannot declare a limitation or constitutional requirement under the notion of having discovered some ideal norm. Further, a constitutional principle must not be limited to a precise formula but ought to be an abstract principle applied to precise situations. The repercussion of holding auction as a constitutional mandate would be the voiding of every action that deviates from it, including social endeavours, welfare schemes and promotional policies, even though CPIL itself has argued against the same, and asked for making auction mandatory only in the alienation of scarce natural resources meant for private and commercial business ventures. It would be odd to derive auction as a constitutional principle only for a limited set of situations from the wide and generic declaration of Article 14. The strength of constitutional adjudication lies in case to case adjudication and therefore auction cannot be elevated to a constitutional mandate. xxx xxx xxx xxx xxx 122. It would be odd to derive auction as a constitutional principle only for a limited set of situations from the wide and generic declaration of Article 14. The strength of constitutional adjudication lies in case to case adjudication and therefore auction cannot be elevated to a constitutional mandate. xxx xxx xxx xxx xxx 122. In Kasturi Lal Lakshmi Reddy v. State of J&K, while comparing the efficacy of auction in promoting a domestic industry, P.N. Bhagwati, J. observed: (SCC p. 20, para 22) “22. … If the State were giving a tapping contract simpliciter there can be no doubt that the State would have to auction or invite tenders for securing the highest price, subject, of course, to any other relevant overriding considerations of public weal or interest, but in a case like this where the State is allocating resources such as water, power, raw materials, etc. for the purpose of encouraging setting up of industries within the State, we do not think the State is bound to advertise and tell the people that it wants a particular industry to be set up within the State and invite those interested to come up with proposals for the purpose. The State may choose to do so, if it thinks fit and in a given situation, it may even turn out to be advantageous for the State to do so, but if any private party comes before the State and offers to set up an industry, the State would not be committing breach of any constitutional or legal obligation if it negotiates with such party and agrees to provide resources and other facilities for the purpose of setting up the industry. The State is not obliged to tell such party: ‘Please wait I will first advertise, see whether any other offers are forthcoming and then after considering all offers, decide whether I should let you set up the industry.’ … The State must be free in such a case to negotiate with a private entrepreneur with a view to inducing him to set up an industry within the State and if the State enters into a contract with such entrepreneur for providing resources and other facilities for setting up an industry, the contract cannot be assailed as invalid so long as the State has acted bona fide, reasonably and in public interest. If the terms and conditions of the contract or the surrounding circumstances show that the State has acted mala fide or out of improper or corrupt motive or in order to promote the private interests of someone at the cost of the State, the court will undoubtedly interfere and strike down State action as arbitrary, unreasonable or contrary to public interest. But so long as the State action is bona fide and reasonable, the court will not interfere merely on the ground that no advertisement was given or publicity made or tenders invited.” The Constitution Bench of the apex Court in the decision, as discussed above, has categorically ruled that there is no mandatory requirement for any tender/auction in allocation of oil resources of the State, rather it does not put any constitutional mandate for the said purpose. Consequentially, the State is free to adopt any suitable method for allocation of such resources. 28. The initiation of project was made in the year 2010 by submitting the proposal by opposite party no.4 to the State Authority and by that time the petitioner no.1 was the member of the association. Therefore, it had all knowledge of approval of such project. Once the project was approved and subsequently the same was allotted in favour of opposite party no.4 by executing the MoU, after long lapse of six years, the petitioners could not have assailed the same by filing the present writ petitions. Further, the delay in approaching the Court has not been explained in proper manner, more particularly, the MoU was entered on 08.01.2016 but the writ petition has been filed on 02.05.2016 after expiry of four months. 29. Reliance has been placed on the judgment of the apex Court in the case of Ramana Dayaram Shetty (supra). In paragraphs- 34 and 35 thereof, the apex Court held as follows:- “34. It is, therefore, obvious that both having regard to the constitutional mandate of Article 14 as also the judicially evolved rule of administrative law, the 1st respondent was not entitled to act arbitrarily in accepting the tender of the 4th respondents, but was bound to conform to the standard or norm laid down in paragraph 1 of the notice inviting tenders which required that only a person running a registered IInd Class hotel or restaurant and having at least 5 years' experience as such should be eligible to tender. It was not the contention of the appellant that this standard or norm prescribed by the 1st respondent was discriminatory having no just or reasonable relation to the object of inviting tenders, namely, to award the contract to a sufficiently experienced person who would be able to run efficiently a IInd class restaurant at the airport. Admittedly the standard or norm was reasonable and non-discriminatory and once such a standard or norm for running a IInd class restaurant should be awarded was laid down, the 1st respondent was not entitled to depart from it and to award the contract to the 4th respondents who did not satisfy the condition of eligibility prescribed by the standard or norm. If there was no acceptable tender from a person who satisfied the condition of eligibility, the 1st respondent could have rejected the tenders and invited fresh tenders on the basis of a less stringent standard or norm, but it could not depart from the standard or norm prescribed by it and arbitrarily accept the tender of the 4th respondents. When the 1st respondents entertained the tender of the 4th respondent even though they did not have 5 years' experience of running a IInd class restaurant or hotel, it denied equality of opportunity to others similarly situate in the matter of tendering for the contract. There might have been many other persons, in fact the appellant himself claimed to be one such person, who did not have 5 years' experience of running a IInd class restaurant, but who were otherwise competent to run such a restaurant and they might also have competed with the 4th respondents for obtaining the contract, but they were precluded from doing so by the condition of eligibility requiring five years' experience. The action of the 1st respondent in accepting the tender of the 4th respondents, even though they did not satisfy the prescribed condition of eligibility, was clearly discriminatory, since it excluded other persons similarly situate from tendering for the contract and it was also arbitrary and without reason. The acceptance of the tender of the 4th respondents was, in the circumstances invalid as being violative of the equality clause of the Constitution as also of the rule of administrative law inhabiting arbitrary action. 35. The acceptance of the tender of the 4th respondents was, in the circumstances invalid as being violative of the equality clause of the Constitution as also of the rule of administrative law inhabiting arbitrary action. 35. Now, on this view we should have ordinarily set aside the decision of the 1st respondent accepting the tender of the 4th respondents and the contract resulting from such acceptance but in view of the peculiar facts and circumstances of the present case, we do not think it would be a sound exercise of discretion on our part to upset that decision and void the contract. It does appear from the affidavits filed by the parties that the appellant has no real interest in the result of the litigation, but has been put up by A.S. Irani for depriving the 4th respondents of the benefit of the contract secured by them. We find that number of proceedings have been instituted for this purpose from time to time by A.S. Irani either personally or by instigating others to take such proceedings. The first salvo in the battle against the 4th respondent was fired by K.S. Irani, proprietor of Cafe Excelsior, who filed a suit challenging the decision of the 1st respondent to accept the tender of 4th respondents, but in this suit he failed to obtain an interim injunction and his appeal was dismissed by the High Court on 19th Oct. 1977. It is significant that when the tenders were opened in office of the Airport Director, Cafe Excelsior was represented by A.S. Irani, which shows that either Cafe Excelsior was a nominee of A.S. Irani or in any event K.S. Irani proprietor of Cafe Excelsior, was closely connected with A.S. Irani. Moreover, it is interesting to note that though the tender of the 4th respondents was accepted as far back as 19th April, 1977, K.S. Irani did not adopt any proceedings immediately but filed the suit only after A.S. Irani was informed by the Airport Director on 22nd August 1977 that a final order has been received from the Ministry requiring A. S. Irani to immediately close down his restaurant and snack bars. It is also a circumstance not without significance that A.S. Irani did not immediately take any proceeding for challenging the acceptance of the tender of the 4th respondents, but filed a suit in his own name only after the appeal of K. S. Irani was dismissed by the High Court on 19th October, 1977. These circumstances clearly indicate that the suit was filed by K.S. Irani at the instance of A.S. Irani or in any event in concert with him and when the suit of K.S. Irani failed to achieve the desired result, A.S. Irani stepped into the arena and filed his own suit. This suit was for a mandatory injuction seeking removal of the two snack bars which had in the meantime been put up by the 4th respondents pursuant to the acceptance of their tender by the 1st respondents. But in this proceedings also A.S. Irani failed to obtain an ad interim injuction. It was only after the failure to obtain interim relief in these two proceedings, one by K.S. Irani and the other by A.S. Irani that the appellant filed the present writ petition in the High Court of Bombay challenging the decision of the 1st respondents to accept the tender of the 4th respondents. Now, it appears from the record that the appellant was at the material time conducting a restaurant called Royal Restaurant and Store which was owned in partnership by three persons namely, J.K. Irani, K.M. Irani and G.S. Irani. G.S. Irani is the brother of A.S. Irani and he was managing and looking after the restaurant of A.S. Irani at the airport. It would, therefore, be a fair inference to make that the appellant was well connected with A.S. Irani and from the manner in which proceedings with a view to thwarting the attempt of the 4th respondents to obtain the benefit of their contract, have been adopted one after the other in different names, it does appear that the appellant has filed the writ petition at the instance of the A.S. Irani with a view to helping him to obtain the contract for the restaurant and the snack bars. It is difficult to understand why the appellant should have waited until 8th November, 1977 to file the writ petition when the tender of the 4th respondents was accepted as far back as 19th April, 1977. It is difficult to understand why the appellant should have waited until 8th November, 1977 to file the writ petition when the tender of the 4th respondents was accepted as far back as 19th April, 1977. The explanation given by the appellant is that he was not aware of the acceptance of the tender of the 4th respondents but that is a rather naive explanation which cannot be easily accepted. It is not possible to believe that the appellant who was so well connected with A.S. Irani and G.S. Irani did not know that A.S. Irani had failed to obtain the contract for running the restaurant and the snacks bars and that this contract had been awarded to the 4th respondents as a result of which A. S. Irani was being pressed to close down his restaurant and snack bars. We have grave doubts whether this writ petition was commenced by the appellant bona fide with a view to protecting his own interest. Moreover, the writ petition was filed by the appellant more than five months after the acceptance of the tender of the 4th respondents and during this period, the 4th respondents incurred considerable expenditure aggregating to about Rs.1,25,000/- in making arrangements for putting up the restaurant and the snack bars and in fact setup the snack bars and started running the same. It would now be most iniquitous to set aside the contract of the 4th respondents at the instance of the appellant. The position would have been different if the appellant had filed the writ petition immediately after the acceptance of the tender of the 4th respondents but the appellant allowed a period of over five months to elapse during which the 4th respondents altered their position. We are, therefore, of the view that this is not the fit case in which we should interfere and grant relief to the appellant in the exercise of our discretion under the Article 226 of the constitution.” In view of the law laid down by the apex Court, the writ petitions suffer from delay and laches and, therefore, do not call for any interference by this Court at this stage on this ground also. 30. 30. Taking into consideration the above facts and circumstances, this Court is of the considered view that the allotment of common pre-processing unit at Dhamra Port pursuant to MoU executed by opposite party no.1 in favour of opposite party no.4 cannot be said to be arbitrary and unreasonable exercise of powers. Therefore, we do not find any merit in both the writ petitions, and accordingly the same are dismissed. No order as to cost.