JUDGMENT : VINEET KOTHARI, J. 1. This Letters Patent Appeal has been filed by Central Warehousing Corporation (CWC), (a Government of India Undertaking) against the Development Commissioner, APSEZ and the Private Respondent, Adani Ports and Special Economic Zone Limited (APSEZL), aggrieved by the Order of learned Single Judge dated 10.1.2017 in Special Civil Application No.184 of 2017 filed by CWC challenging the communication dated 5.1.2017 of the Private Respondent, APSEZL addressed to the Appellant – CWC. Since the learned Single Judge did not grant any Interim Relief to the Appellant – CWC, hence the present Letters Patent Appeal was filed by CWC, on 11.1.2017. 2. The present Appeal was filed by the Appellant in this Court on 11.1.2017 and on 11.1.2017 itself a Coordinate Bench of this Court passed an Interim Order in favour of the Appellant- CWC permitting the Appellant-Corporation to carry on its business activity of the storing and transportation of the commodities in and from the Warehouse situated within the Special Economic Zone (SEZ) developed by Private Respondent No.2 - GAPL (APSEZL). The said Interim Order was extended from time to time. 3. On 12.1.2021, the learned Counsels submitted before the Court that the parties are trying to settle the dispute out of Court and to finalise the same, some time may be granted. Accordingly, time prayed for was allowed and the hearing was adjourned. On 28.1.2021, this Court passed a detailed order impressing upon the parties to not to delay the settlement process or else the matter may be argued on merits. The said Interim Order dated 28.1.2021 is quoted herein below: “1. The present appeal arises out of an order passed by the learned Single Judge whereby, the learned Single Judge has only issued Notice in Special Civil Application No.184 of 2017 filed by the appellant – Central Warehousing Corporation and did not grant any interim relief to the appellant – Central Warehousing Corporation. 2. The controversy in brief is that a plot of land was originally allotted to the appellant – Central Warehousing Corporation, which land was included in the area of land allotted to respondent No.2 as a Special Economic Zone to be developed by them. A dispute arose on that and therefore, the petition appears to have been filed by the appellant – Central Warehousing Corporation. 3. A dispute arose on that and therefore, the petition appears to have been filed by the appellant – Central Warehousing Corporation. 3. In the present Letters Patent Appeal, the coordinate Bench of this Court on 11.01.2017 passed an interim order noticing the day-to-day difficulties for the warehouses of the appellant – Central Warehousing Corporation and permitted them to carry on their storing activities in the Special Economic Zone area. Again on 26.04.2019, upon the statement made by the learned counsel for respondent No.2, the said interim order was continued. Both the orders are quoted below for ready reference; Order dated 11.01.2017 : “1. NOTICE returnable on 23rd January 2017. 2. This Letters Patent Appeal under Clause-15 of the Letters Patent is preferred against the order dated 10.1.2017 passed by the learned single Judge in Special Civil Application No. 184 of 2017, whereby the learned single Judge has not granted interim relief pending the hearing and final disposal of the writ-petition. 3. In the writ-petition filed by the appellant herein, challenge is to the validity of communication dated 5.1.2017 issued by the Chief Operating Officer of the 2nd respondent. By the aforesaid communication, the 2nd respondent conveyed to the appellant- Corporation that it will not permit to continue the warehousing activity being carried out by the Corporation and further it will not issue gate passes for transportation and storage of food grains to and from the warehouse. In the communication sent by the 2nd respondent, reference is made to Rule 11(5) and Rule 11(7) of the SEZ Rules. It is the case of the appellant that extent of 34 acres of land was leased by 2nd respondent. Even before the notification was issued under the provisions of the SEZ Act, lease was granted in the year 2004 and the appellant-Corporation has put up construction in the year 2005 and since then they are using the warehouse for storing of food grains etc. 4. In the communication dated 5th January 2007, reference is made to Rule 11(5) and Rule 11(7) of the SEZ Rules, applicability or otherwise of the said Rules is a matter which is required to be considered in the petition pending before the learned single Judge. 4. In the communication dated 5th January 2007, reference is made to Rule 11(5) and Rule 11(7) of the SEZ Rules, applicability or otherwise of the said Rules is a matter which is required to be considered in the petition pending before the learned single Judge. As it is the case of the appellant that since 2005, the appellant- Corporation is using the leased area after making constructions for storage and for transportation of food grains, if abruptly they are stopped from using the same, public interest will suffer. In view of the same, by way of ad-interim relief, the respondents are directed to allow the appellant- Corporation to carry out the activity of storing and transportation of their commodities in and from the warehouse. The respondents are further directed to issue necessary gate passes for transportation till the next date of hearing. 5. Direct service today permitted. ” Order dated 26.04.2019: “1. Heard learned advocate for the parties. 2. On behalf of respondent No.2, following statement is made: “Respondent No.2 undertakes to see that equivalent plot of land outside the limit of SEZ would be found out whereupon similar size of go-down will be constructed at the cost of respondent No.2 within a period of twelve (12) months from today, whereupon the appellant should shift its area of activities outside Mundra Port and Special Economic Zone and deliver the peaceful possession of the plot of land free from any encumbrances along with structure standing thereon to respondent No.1. Till then, the appellant will be permitted to carry on its activities as per the terms and conditions of the agreement dated 2.6.2004 and the applicable laws.” 3. Learned advocate appearing for the appellant is to seek appropriate instructions in this regard on, or before 01.05.2019. Registry to list this matter along with Special Civil Application No.5816 of 2017. S.O to 01.05.2019. ” 4. The appellant – Central Warehousing Corporation has filed affidavit on 13.06.2019 signed by Mr. Vishnuvardhan M., working as Regional Manager of the appellant – Central Warehousing Corporation. Paragraph-6 of the Affidavit is quoted below for ready reference; “6. I say that the proposal submitted by Adani Port Special Economic Zone was included as an agenda item for discussion in the meeting of the Board of Directors of the Corporation held on 12.06.2019. Vishnuvardhan M., working as Regional Manager of the appellant – Central Warehousing Corporation. Paragraph-6 of the Affidavit is quoted below for ready reference; “6. I say that the proposal submitted by Adani Port Special Economic Zone was included as an agenda item for discussion in the meeting of the Board of Directors of the Corporation held on 12.06.2019. The members of the Board, after due deliberation, have resolved to accept the proposal in principle. The in principle acceptance of the proposal is based on following conditions: (i) M/s. APSEZ may provide a suitable alternate land of the same size as the existing one as selected by CWC outside the SEZ area at Mundra Port. (ii) A godown of 66000 MT (as per existing) may be created by M/s. APSEZ as per the specification of CWC, within the period of twelve (12) months. (iii) M/s. APSEZ shall take the whole covered space so created along with remaining open area at CWC's existing public tariff with 6% annual escalation (compoundable) on dedicated warehousing basis for entire period of lease i.e. till 16.02.2031, underwriting the business and other risks of the Corporation and shall sign an agreement, giving suitable amount of bank guarantee to this effect.” 5. After hearing the learned counsel, we are, prima facie, of the opinion that while the first two decisions taken by the appellant – Central Warehousing Corporation vide para-6 quoted above appear to be fair and reasonable and which are also agreed to by the respondent No.2 represented by Mr. Kamal Trivedi, learned Senior Counsel, the condition No.3, which also takes into account the future workings and escalations of costs etc. of the appellant – Central Warehousing Corporation, does not appear to be fair and may unnecessarily linger on the dispute. 6. Before us also, on the last date, i.e. on 12.01.2021, the learned counsel for the parties submitted that the parties are likely to arrive at a Settlement and that may avoid the need to decide the appeal on merits. 7. After some submissions, Mr. 6. Before us also, on the last date, i.e. on 12.01.2021, the learned counsel for the parties submitted that the parties are likely to arrive at a Settlement and that may avoid the need to decide the appeal on merits. 7. After some submissions, Mr. Maulik Nanavati, learned counsel appearing for the appellant – Central Warehousing Corporation, prays for a short accommodation to take final instructions from the Managing Director of the appellant – Central Warehousing Corporation about the aforesaid condition No.3 and if that can be waived and deleted, the Settlement already arrived at between the parties can be finalised as the agreed Settlement of Dispute between the parties and the appeal can be disposed of in terms of the aforesaid terms. 8. In the interest of justice, we grant said short accommodation to the learned counsel for the appellant – Central Warehousing Corporation to take instructions from the Managing Director of the appellant – Central Warehousing Corporation and revert back to this Court. 9. We make it clear that any further delay in their decision-making will not be allowed and if the said settlement is not agreeable to the appellant – Central Warehousing Corporation, an Affidavit of the Managing Director of the appellant – Central Warehousing Corporation disclosing the reasons for the same may be submitted, on which, appropriate orders may be passed by this Court on next date. 10. Put up on 09.02.2021.” 4. Again on 9.2.2021, the Court granted further time to facilitate the top level management meeting on both sides to explore such possibility of mutual agreement and amicable settlement of the dispute, particularly, with regard to Condition No.3 in the Agreement as quoted in the Order dated 28.1.2021 quoted herein above. On the next date, 18.2.2021, however, it was expressed on behalf of Private Respondent - APSEZL that they cannot provide any Undertaking with regard to Condition No.3 and thus the matter was adjourned to 9.3.2021. On 9.3.2021, both the learned counsel expressed that the settlement has not been possible and accordingly, the learned counsel were requested to address their arguments on merits on the next date of hearing that is on 17.3.2021 at 2:30 p.m. Thereafter the matter was not listed due to restricted working on account of Covid-19 situation and thus the matter was listed for hearing again, today, and the matter was heard at length. 5. 5. Mr.Vikas Singh, learned Senior Counsel assisted by Mr.Prabhas Bajaj with Mr. Maulik Nanavati appearing on behalf of Appellant - CWC, Mr.Devang Vyas, learned counsel appeared for Respondent No.1 and Mr. Kamal Trivedi, learned senior counsel with Mr. Paritosh Gupta appeared on behalf of Respondent No.2. 6. The controversy involved in the present Appeal arises on account of impugned communication dated 5.1.2017 of Private Respondent - APSEZL addressed to Appellant - CWC that in terms of their Sub-lease Agreement dated 2.6.2004 with respect to 34 Acres on which the CWC constructed godown formed part of notified SEZ Area which was developed by APSEZL as Developer in terms of Special Economic Zone Act, 2005 and it was notified as SEZ Area in Gazette by Government of India on 23.6.2006 and as per provisions of SEZ Act and Rules framed there under, particularly, with reference to Rule 11(5) and 11(7) of the SEZ Rules, the Developer APSEZL was not allowed to lease land in SEZ to CWC unless they hold a valid Letter of Approval (LOA) issued by the Development Commissioner (DC) as a SEZ Unit for carrying out authorized activities and since the CWC has failed to obtain the required LOA from the DC, they do not have a legal right to occupy and continue their business activity in the godown on the 34 Acres of land given on sub-lease by the APSEZL to them under the earlier Agreement dated 2.6.2004. Therefore, the said communication asked the Appellant - CWC to either; (a) obtain LOA from the DC as a SEZ Unit in compliance with the provisions of SEZ Act or Rules; or (b) obtain specific permission from DC to carry out the activities of warehousing etc. in the said premise in SEZ by waiving the requirement of being approved as a Unit. 7. Feeling aggrieved by the said Communication of the Private Respondent - APSEZL, the CWC approached the learned Single Judge by way of aforesaid Writ Petition (Special Civil Application No.184 of 2017) on which the aforesaid Order dated 10.1.2017 was passed by learned Single Judge only issuing Notice to the Respondents and not granting any Interim Relief to the Appellant - CWC. 8. Mr. 8. Mr. Vikas Singh, learned Senior Counsel appearing on behalf of the Appellant - CWC submitted that under the Agreement dated 2.6.2004, the Lessor - M/s. Gujarat Adani Port Limited (GAPL) (later on name changed to APSEZL upon the respondent declared as Developer of SEZ in 2006), the Appellant - CWC was given lease of 34 Acres of land by Respondent – GAPL (APSEZL) for a period of 30 years on which it developed the warehousing facility and such business has been carried out for all these years since 2005 and now after the SEZ Area was notified in favour of Respondent No.2 - APSEZL in 2006 lateron therefore, the Appellant -CWC could not have been asked to restrict or close its business activities even though it did not acquire the approval as SEZ Unit from the concerned Development Commissioner. 9. The learned Counsel further pointed out that under Clause 4.3.2 and 5.3 of the said Agreement dated 2.6.2004, the Appellant - CWC had even right to create further encumbrance or sub-lease in favour of a third party and therefore, without terminating the lease in favour of the Appellant - CWC, the Respondent - APSEZL cannot put any kind of restriction on the warehousing activity of the Appellant – CWC, which is a Central Government Undertaking. He further submitted that another parcel of 40 Acres of land on which the Appellant - CWC has developed other SEZ conditions compliant Container Freight Stations (CFS), there is no dispute and the Respondent - APSEZL has allowed those business activities on 40 Acres of land but for the present 34 Acres of land or premises of godown, the Respondent is prohibiting the business activities of the Appellant - CWC and, therefore, the Appellant - CWC was constrained to file the present Writ Petition against the said Communication dated 5.1.2017 and in the absence of any Interim Order granted by the learned Single Judge, it had to file the Present Letters Patent Appeal under Clause 15 of the Letters Patent which is maintainable and the Co-ordinate Bench of this Court rightly granted the Interim Relief vide Order dated 11.1.2017, which deserves to be confirmed and the matter may be sent back to the learned Single Judge for decision on merits in accordance with law. 10. 10. The learned counsel for the Appellant – CWCm Mr.Vikas Singh further submitted that the Respondent - APSEZL had approached the Appellant - CWC vide its Communication dated 26.3.2007 with the proposal that since they want to dedicate the said current CWC Area of 34 Acres to Liquid Cargo Business, they would make alternative arrangements for CWC and, therefore, proposed an equivalent plot in Bharat Zone Area outside this SEZ Area and even offered to construct the warehousing facility at their own cost for the Appellant - CWC on such alternative plot outside the SEZ Area for them so that CWC could shift from the SEZ Area. He also submitted that such a proposal was given by APSEZL because it did not disclose the encumbrance by way of sublease in favour of CWC under Agreement dated 2.6.2004 and obtained the Declaration as ‘Developer’ under SEZ Act from the Court in 2006. He further drew the attention of the Court towards another letter dated 9.3.2017 of the Respondent - APSEZL, in which, three proposals were given to the Appellant - CWC for shifting to another warehousing facility to be constructed by Respondent - APSEZL outside the SEZ Area. The said three proposals from letter dated 9.3.2017 are quoted below for ready reference. “* APSEZ to offer alternative location in Non-SEZ area of Mundra Industrial Estate of the same size i.e. approx.34 acres. * APSEZ will construct the warehouse as per the existing dimensions of the existing warehouse after discussing the same with you. * To give comfort to CWC, APSEZ is willing to underwrite the revenue risk for CWC by taking the warehouse at new location on rent as per your published tariff for the balance period of lease.” 11. However, on 10.6.2019, the Respondent - APSEZL gave another letter in continuation of the aforesaid letter dated 9.3.2019 explaining the third proposal as aforesaid in the letter dated 9.3.20219 in the following manner. “The Managing Director, Central Warehousing Corporation, 4/1 Siri Institutional Area, Hauz Khas, New Delhi-110 016. June 10, 2019 Kind Attn: Sh. Arun Kumar Shrivastava Sub: Alternate location for CWC Warehouse at Mundra Reference: 1. Our letter dated March 9, 2019 2. CWC reply no.CWC-CD/V – Mundra Port/2001-02/1848 dated April 4, 2019 [Not on Record] 3. “The Managing Director, Central Warehousing Corporation, 4/1 Siri Institutional Area, Hauz Khas, New Delhi-110 016. June 10, 2019 Kind Attn: Sh. Arun Kumar Shrivastava Sub: Alternate location for CWC Warehouse at Mundra Reference: 1. Our letter dated March 9, 2019 2. CWC reply no.CWC-CD/V – Mundra Port/2001-02/1848 dated April 4, 2019 [Not on Record] 3. Subsequent meetings with Director (M&CP), CWC Dear Sir, This has reference to our letter dated March 9, 2019 and your reply dated April 4, 2019, subsequently our teams have been working together for last 3 months in order to arrive at a mutually beneficial solution. With reference to our letter dated March 9, 2019 wherein, along with offering an alternate location for relocation of your existing facility we had suggested to underwrite the revenue risk for CWC for the warehouse at new location on rent. We would like to clarify that such underwriting of revenue risk should be done based on Market rates which can be mutually worked out as the existing published tariff is too high when compared to the market rates of similar type of warehouses. Further as discussed during the meeting with your Director (M&CP), CWC we would like to work out a One Time Settlement (OTS), which we believe would be the most efficient and quick resolution of this issue and we are awaiting your proposal and response in this regard. We solicit your kind intervention in the matter for an early conclusion and await your confirmation on the above. Thanking you, Yours faithfully, For Adani Ports and Special Economic Zone Limited sd/- Karan Adani Chief Executive Officer” 12. Mr.Vikas Singh, learned counsel therefore submitted that the Board of Directors of the Appellant - CWC considered the said proposal of the Respondent APSEZL dated 9.3.2019 and agreed in principle to the said proposals in its Board meeting dated 12.6.2019 [Not placed on Record]. This fact is stated in the Affidavit dated 13.6.2019 of Mr.Vishnuvardhan M, Regional Manager of the Appellant-CWC working in the Regional Office of Gujarat Region vide paragraphs 5 and 6 of the said Affidavit which are quoted below for ready reference. “5. This fact is stated in the Affidavit dated 13.6.2019 of Mr.Vishnuvardhan M, Regional Manager of the Appellant-CWC working in the Regional Office of Gujarat Region vide paragraphs 5 and 6 of the said Affidavit which are quoted below for ready reference. “5. I say that prior to the statement being made by the Adani Port Special Economic Zone in the pending court proceedings, as recorded in the order dated 26.4.2019, the Chairman of Adani Port Special Economic Zone held a personal meeting with the Managing Director of the Corporation and subsequent to the meeting sent a letter containing similar proposal. A copy of the said letter is annexed herewith and marked as Annexure AA-1. 6. I say that the proposal submitted by Adani Port Special Economic Zone was included as an agenda item for discussion in the meeting of the Board of Directors of the Corporation held on 12.6.2019. The members of the board, after due deliberation, have resolved to accept the proposal in principle. The in-principle acceptance of the proposal is based on following conditions: (i) M/s. APSEZ may provide a suitable alternative land of the same size as the existing one as selected by CWC outside the SEZ area at Mundra Port. (ii) A godown of 66000 MT (as per existing) may be created by M/s. APSEZ as per the specification of CWC, within the period of twelve (12) months. (iii) M/s. APSEZ shall take the whole covered space so created along with remaining open area at CWC’s existing public tariff with 6% annual escalation (compoundable) on dedicated warehousing basis for entire period of lease i.e. till 16.2.2031, underwriting the business and other risks of the Corporation and shall sign an agreement, giving suitable amount of bank guarantee to this effect.” 13. Mr. Vikas Singh, learned senior counsel therefore, submitted that without complying with all the three proposals including underwriting the loss of profit to the Appellant - CWC on the basis of public tariff by APSEZL with 6% annual escalation till the period of lease upto 16.2.2031, are complied with by APSEZL, the Appellant - CWC cannot be closed down or ousted from the said SEZ Area and the Respondent - APSEZL cannot be permitted to back out from its own proposals. 14. 14. Per contra, Mr.Kamal Trivedi, learned Senior Counsel appearing on behalf of the Private Respondent APSEZL vehemently urged that SEZ Act, 2005 is a special law and the said Act has been enacted by the Parliament to provide for Establishment, Development and Management of the Special Economic Zones for the promotion of exports and the matters connected therewith. He submitted that the Respondent -APSEZL has been notified to be ‘Developer’ as defined in Section 2(g) of the said Act and it was notified on 23.6.2006 and since the Appellant - CWC has continuously refused to abide by the conditions imposed by the said special Law and Rules framed thereunder to fall within the description of ‘SEZ Unit’ as defined in Section 2 (zc) and has refused to either obtain the approval from the competent Board of Approval as “Co-Developer” or as a “SEZ Unit” defined in the provisions, it intends to continue its warehousing facility at the same place, even as a Non-SEZ law Compliant Unit. 15. Mr. Trivedi submitted that the said Act under Section 51 of the Act provides for overriding effect and notwithstanding anything inconsistent contained in other law or even any instrument like the sub-lease Agreement dated 2.6.2004 the provisions of the said Act and Rules framed thereunder, namely, SEZ Rules, 2006 will prevail and the Appellant cannot claim any immunity from such compliance with this law therefore, the Respondent is entitled to even cancel its lease and prohibit its unauthorized activities as warehousing godown on said 34 Acres of land in notified SEZ Area. 16. Mr. Kamal Trivedi, learned senior counsel further submitted that though APSEZL was under no legal obligation or any contractual obligation, the Respondent offered to undertake the construction of an alternative warehousing facility outside the SEZ Area for Appellant – CWC, on same size plot of land procured at its own cost, taking a fair and benevolent view so that APSEZL could to carry out its SEZ development activities in a lawful and appropriate manner in accordance provisions of the said Act and Rules. It offered to construct such alternative facility for the Appellant - CWC outside the said SEZ Area at a place chosen and selected by CWC only and despite agreeing to the same, the Appellant - CWC is now trying to unnecessarily impose upon the Respondent - APSEZL the Condition/Proposal No.3 which CWC has enlarged beyond comprehension in its Affidavit dated 13.6.2019 quoted above. 17. He submitted that the Proposal No.3 for construction of same size of warehouse outside the SEZ area on land provided by APSEZL in terms in the letter dated 9.3.2019 of APSEZL namely, “ to give comfort to CWC, APSEZL is willing to underwrite the revenue risk for CWC by taking the Warehouse at new location on rent as per public tariff for the balance period of lease” the said terms were immediately explained and clarified in the next letter of Respondent - APSEZL vide letter dated 10.6.2019 Annexure R-2 that, “we would like to clarify that such underwriting of revenue risk should be done based of market rate which can be mutually worked out as the existing published tariff is too high when compared to the market rate of its similar types of ware houses”. Mr. Trivedi therefore, submitted that there was no justification for the Appellant - CWC to ignore this letter dated 10.6.2019 of the Respondent and purportedly pass a Board Resolution on 12.6.2019 accepting the previous proposal in toto of all three proposals vide letter dated 9.3.2019 and even further expanding the said Proposal No.3 beyond any comprehension and reasonable proportions and insisting on underwriting by the Respondent - APSEZL to compensate the Appellant - CWC on the basis of published tariff with 6% annual escalation (compoundable) on dedicated warehousing basis for entire period of lease till 16.2.2031 and even furnish a Bank Guarantee for the same. He urged that even the letter dated 9.3.2019 gave assurance to cover revenue risk of CWC only if a Warehouse at new location was arranged on rent to facilitate immediate shifting out of CWC and not if a newly constructed Warehouse was being given to them. He urged that even the letter dated 9.3.2019 gave assurance to cover revenue risk of CWC only if a Warehouse at new location was arranged on rent to facilitate immediate shifting out of CWC and not if a newly constructed Warehouse was being given to them. He submitted that no such Undertaking as now claimed by CWC was ever assured or given by the Respondent but the Appellant - CWC is taking undue advantage and is harassing the Respondent APSEZL contrary to the letter and spirit of the Act and Rules by playing a Big Brother role. He submitted that first two proposals are however still agreed between both the parties and the dispute revolves around only the third proposal which Appellant – CWC is imposing on APSEZL in its own manner. 18. Mr. Kamal Trivedi emphatically submitted that the letter dated 5.1.2017 only asked the Appellant to obtain Letter of Approval (LOA) from Development Commissioner as a SEZ Unit and nothing prevented CWC from doing so or in the alternative even to seek a waiver of such requirements from the Development Commissioner, but instead of becoming a law compliant, the Appellant, a Government of India Undertaking has chosen to involve not only the Respondent - APSEZL in this litigation but even its own Parent viz. the Central Government itself by way of filing another connected Special Civil Application No.5816 of 2017 seeking a delineation or exclusion of said 34 Acres from the SEZ Area notified already in 2006 in favour of the Respondent - APSEZL, for which, the Ministry of Commerce in its joint meeting of the parties had already decided on 10.5.2010 that it was not possible to do so. This would be clear from communication dated 19.5.2010 of the Ministry of Commerce, Government of India, New Delhi, addressed to Appellant - CWC which is quoted below for ready reference. “GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY, OFFICE OF THE DEVELOPMENT COMMISSIONER, 4TH FLOOR, “C” WING, PORT USER’S BUILDING, MUNDRA PORT AND SPECIAL ECONOMIC ZONE, MUNDRA, (KUTCH)-370 421. No.MPSEZ/03/IUA/2008-09 19.05.2010 To, M/s. Central Warehousing Corporation, Mundra. Gentlemen, Sub: Regularization of activities of CFS in the Mundra Port & SEZ-reg. This is in reference to the Show Cause Notice No.MPSEZ/03/IUA/2008-09 dated 19.09.2008 issued to you by this office and your reply dated 17.10.2008. The Mundra Port & SEZ was notified on 23.06.2006. No.MPSEZ/03/IUA/2008-09 19.05.2010 To, M/s. Central Warehousing Corporation, Mundra. Gentlemen, Sub: Regularization of activities of CFS in the Mundra Port & SEZ-reg. This is in reference to the Show Cause Notice No.MPSEZ/03/IUA/2008-09 dated 19.09.2008 issued to you by this office and your reply dated 17.10.2008. The Mundra Port & SEZ was notified on 23.06.2006. It was therefore mandatory on your part to seek compliance with the provisions of SEZ Act & Rule immediately thereafter. It is an admitted fact that you have taken no action in that regard till today. Hence the activities being carried out by you within the MPSEZ are unauthorized and with out proper legal sanction. Moreover as per section 53 of SEZ Act, SEZ is outside the Customs territory of India for the purpose of authorized operations. Hence no operations can be conducted in SEZ without the permission of Unit Approval Committee or the Board of Approval. This issue has been discussed by the Department of Commerce with the Department of Revenue in the meeting held on 10.05.2010, and it has been decided by DOC that no CFS other than approved by the competent authority should be allowed to continue in SEZ and that the unauthorized CFSs do not function without proper approval. In view of the above and taking into account the interest of trade, one last opportunity is hereby given to you for regularizing your operations within MPSEZ. Accordingly, you are hereby directed to enter into a co-developer agreement with MPSEZ Ltd. i.e. the developer and thereafter to apply to the Board of Approval for approval and regularization of your operations in MPSEZ before 28.05.2010. It is also to inform you that the SCN issued to you in the subject issue will be withdrawn on receipt of your application. Further, if you do not intend to comply with the directions of DOC, you are directed to appear for personal hearing at 14.30 hrs on 28.05.2010 before the Development Commissioner, Mundra Port & SEZ at the above office address. Yours faithfully, sd/- (B.Pattanaik) Joint Development Commissioner Mundra Port & SEZ, Mundra.” 19. Mr. Trivedi, learned senior counsel also drew our attention to the Minutes of the Meeting held under the Chairmanship of Mr. Alok Vardhan Chaturvedi, Additional Secretary, Department of Commerce on the issue of request of CWC for delineation dated 17.1.2017 which minutes are also quoted below for ready reference. Mr. Trivedi, learned senior counsel also drew our attention to the Minutes of the Meeting held under the Chairmanship of Mr. Alok Vardhan Chaturvedi, Additional Secretary, Department of Commerce on the issue of request of CWC for delineation dated 17.1.2017 which minutes are also quoted below for ready reference. “Minutes of meeting held on 17th January, 2017 at 04.00 PM in Room No.141, Udyog Bhavan, New Delhi under the Chairmanship of Sh. Alok Vardhan Chaturvedi, Additional Secretary, Department of Commerce on the issue request of Central Warehousing Corporation (CWC) for delineation of land occupied by it in APSEZ. List of participants is at Annexure-I 2. Explaining the background, DC, APSEZ informed that in Dec 2002, CWC had entered into MoU with APSEZ for two plots in the SEZ measuring 40 acres and 34 acres. Lease agreement for the plot for 34 acres, which is now in dispute, was signed in June 2004. CWC took possession of the same but did not get the agreement registered with the Revenue authorities. He informed that subsequently, on 23.06.2006, Mundra SEZL, now APSEZL, was notified which included the 34 acres with CWC. CWC constructed its warehouse on the piece of land. In September, 2008, DC, APSEZ issued notice to CWC for non-compliance of provisions of SEZ Act and Rules and requested APSEZL to initiate action to exclude the plots with CWC from SEZ limits. CWC, on 14.10.2008, requested APSEZ Ltd. to initiate action to exclude its both plots from the SEZ limits. Although EGoM, in Oct 2008, had decided to delineate pre-existing structures in the port area built prior to the notification of 23.06.2006, the plot with CWC were not delineated as perhaps the CWC godown had come up after 23.06.2006. He mentioned that CWC is carrying out container stuffing in its godown which was against the provision of SEZ Act and Rules. The developer, on 19.03.2015, asked CWC to discontinue all activities from the godown. Thereafter, on 10.4.2015, CWC approached DoC for delineating the warehouse from the SEZ. In Oct 2015, the developer offered an alternative site to CWC, which was rejected by CWC. It was also stated that on 05.01.2017, the developer wrote to CWC to stop its operation and that CWC obtained a stay against this letter from the Hon’ble High Court of Gujarat. 3. In Oct 2015, the developer offered an alternative site to CWC, which was rejected by CWC. It was also stated that on 05.01.2017, the developer wrote to CWC to stop its operation and that CWC obtained a stay against this letter from the Hon’ble High Court of Gujarat. 3. The representatives from CWC informed that they have entered into the agreement with APSEZL in 2004 for a period of 30 years. APSEZL had not informed CWC that the land in question was included in the proposed SEZ which was notified in June, 2006. It was also stated that since CWC had made investment of Rs.60 Crores in construction of the warehouse, the CWC had advised it that it should not move out without proper arrangement. It was also stated that presently MMTC was storing 26,000 tonnes of imported pulses as buffer stock for the GoI. Since APSEZL had arbitrarily stopped this storage and therefore CWC had to approach Hon’ble High Court for stay. CWC representatives therefore reiterated that since they are having an agreement of 30 years lease from APSEZ, they are a Central Government PSU, they have already invested more than Rs.60 cr. in warehouse and they are operating peacefully, they should be allowed to do business from the warehouse within the SEZ. 4. The representatives of APSEZL informed that as per the agreement entered with the CWC, 30 years agreement had to be registered within four months without penalty and within 8 months with penalty. CWC had not taken any action for getting the agreement registered within the said period and therefore the agreement had become null and void. It was stated that APSEZ was willing to give alternative plot to CWC for creating a new warehouse and also that it had explored the possibility of delineation and de-notification of the area in possession with CWC. However, the same was not feasible. 5. It was made clear that there was no possibility of any delineation as there was no provision in the SEZ Act or SEZ Rules fro such delineation. However, the same was not feasible. 5. It was made clear that there was no possibility of any delineation as there was no provision in the SEZ Act or SEZ Rules fro such delineation. It was, therefore, advised representatives of CWC to amicably sort out the issue with APSEZL by either becoming a SEZ Unit in the SEZ or become a co-developer in the SEZ after ascertaining the provisions and requirements under SEZ Unit Act, 2005 and SEZ Rules, 2006, If required, the matter may be put up before the BoA for its consideration. 6. The meeting ending with vote of thanks to the chair.” 20. Mr. Trivedi, learned senior counsel therefore, submitted that these Minutes dated 17.1.2017 of Ministry have also been challenged by the Appellant - CWC in separate Special Civil Application No.5816 of 2017 against the Union of India and the Respondent -APSEZL. 21. Mr. Kamal Trivedi, drew the attention of the Court towards the SEZ Rules, 2006 particularly, Rule 7 which requires Details to be furnished for issuing of Notification for declaration of an area as Special Economic Zone which inter alia requires a Developer to give a declaration that the said area is free from all encumbrances and also Rule 18 which requires consideration of proposals for units in a Special Economic Zone and their requirements to fulfill certain conditions including proposals to meet positive net foreign exchange earning etc. On the basis of this Mr.Kamal Trivedi, countered the arguments of learned Counsel for the Appellant - CWC that the Developer had not disclosed the fact of lease in favour of CWC which existed from a prior point of time under the Agreement dated 2.6.2004 to the Central Government and obtained the declaration in 2006 of entire SEZ Area. Mr. On the basis of this Mr.Kamal Trivedi, countered the arguments of learned Counsel for the Appellant - CWC that the Developer had not disclosed the fact of lease in favour of CWC which existed from a prior point of time under the Agreement dated 2.6.2004 to the Central Government and obtained the declaration in 2006 of entire SEZ Area. Mr. Trivedi urged that there was no such concealment or non-disclosure on the part of the Respondent and a much larger area of total about 5,947.20 Acres of the land was notified to be SEZ to be developed by the Respondent - APSEZL on the basis of the Concession Agreement dated 17.2.2001 by Gujarat Maritime Board constituted under the Gujarat Maritime Board Act, 1981 in favour of Gujarat Adani Port Limited (GAPL) out of which 34 Acres in question were sub-leased by the Respondent in favour of Appellant - CWC which the provisions of special law requires to be used only for the approved units or approved Developer and Co-Developers. 22. Mr. Trivedi, learned senior counsel therefore, submitted that the sub-lease in favour of Appellant - CWC even stood superseded by virtue of Section 51 of SEZ Act, 2005 and Appellant cannot claim any right to continue on the said land and godown/warehouse premises without complying with the provisions of the said SEZ Act and Rules. The Appellant cannot seek specific performance of sub-lease Agreement dated 2.6.2004 by way of this Writ Petition against the letter and spirit of SEZ law. He also submitted that against the letter of a Private Respondent- APSEZL dated 5.1.2017, even a Writ Petition under Article 226 would not lie, as the Respondent is not a ‘State’ within the meaning of Article 12 of the Constitution of India. He urged that scope of Letters Patent Appeal under Clause 15 of Letters Patent is much wider and even the Writ Petition filed by the petitioner should be dismissed being misconceived. He also submitted that the Respondent-Company is still willing to abide by the first two proposal given to construct warehouse on the same size at the alternative plot selected by the Appellant - CWC at its own cost, outside the SEZ Area and the Appellant should be directed to shift out of that area without insisting upon the underwriting of business losses vide Condition No.3 insisted by the Appellant which is highly unreasonable and illegal. 23. 23. We have heard learned counsel at length and given out thoughtful consideration to the rival submissions. 24. We are little surprised and also pained at the reticent attitude of the Appellant - CWC, a Central Government Undertaking to have an insistent and persistent approach to remain non-compliant with law and trying to exert pressure on the private Respondent because of its own status. We fail to understand how a body corporate of the stature of CWC can have any ‘Ego’ which is a vice of a human being and a juristic person, of course managed by human beings, can definitely have a better democratic and consensual decision making process at its top level. The CWC in the present case, is not only in this spree of litigation against the private Respondent - APSEZL but also against its own parent, namely, the Central Government challenging its action of not agreeing with the CWC to exclude its existing area of Warehouse from the SEZ Area, which was allotted to the private Respondent - APSEZL and is being developed by them in accordance with the provisions of SEZ Act, 2005 and Rules made thereunder just because under a sub-lease given by APSEZL to CWC, it had already constructed a Warehouse there, before a much larger area of more than 5000 Acres including that warehouse area of 34 Acres was declared as a SEZ area under the special and overriding law. 25. We find considerable force in the submission made by Mr. Kamal Trivedi, learned Senior Counsel for the Private Respondent that even though the Respondent No.3 APSEZL was not under any kind of legal obligation or contractual obligation, it made an offer to Appellant – CWC to construct at the cost of APSEZL an equal size Warehouse, outside the SEZ Area for CWC for its warehousing facility which was not permitted within the SEZ Area as per the over riding legal provisions of the SEZ Act 1951 and Rules which has over riding effect as per Section 51 of the SEZ Act. The said offer, according to us was quite generous and made in a Business-like-manner, which could have been or perhaps ought to have been accepted by the Appellant – CWC, but the insistence of CWC on the compliance with the Proposal No.3 i.e. the Respondent No.3 APSEZL to undertake to compensate the CWC for its future business loss, if any, on the basis of its published tariff for warehousing upto 2031, in our opinion was uncalled for it is a kind of uncertain futuristic demand, which may or may not arise at all in fact. The Proposal No.3 in letter dated 9.3.2019 was also conditional and it was given only if new warehouse outside SEZ area was provided by APSEZL to CWC by taking such a warehouse on rent, purportedly to facilitate immediate shifting out of CWC from the existing warehouse within SEZ area. 26. It is true that the Respondent No.3 initially made such an offer in Proposal No.3 to CWC in its letter dated 9.3.2019 but it immediately retracted from the same and modified the said offer vide its letter dated 10.6.2019 to CWC that they cannot compensate on the basis of much higher published tariff of CWC but only on the basis of market tariff. Even that was not accepted by the Appellant- CWC and it expanded the Proposal No.3 of APSEZL in its own manner vide its Affidavit dated 13.6.2019 quoted above i.e. to require APSEZL to give Bank Guarantee for underwriting the business loss of CWC, if any with 6% compounding every year till the full period of its sub-lease upto 16.2.2031. Such a unanimous idea of CWC could not have been thrust upon Respondent – APSEZL, as its proposal on their part and then claim that all the three proposals as contained in letter dated 9.3.2019 were accepted by CWC in its Board Resolution dated 12.6.2019 without taking into account the subsequent letter dated 10.6.2019 of the Respondent – APSEZL and still APSEZL was bound by all the three proposals. There was no consensus ad idem, a sine qua non for a valid contract as far as Proposal No.3 is concerned. However on First and Second Proposal, the parties have such a mutual consensus ad idem and therefore a valid Agreement to that extent can be said to have come into existence between them. 27. There was no consensus ad idem, a sine qua non for a valid contract as far as Proposal No.3 is concerned. However on First and Second Proposal, the parties have such a mutual consensus ad idem and therefore a valid Agreement to that extent can be said to have come into existence between them. 27. A bare perusal of the scheme of SEZ Act, 2005 would indicate that this is an overriding special law to promote exports and to create specially carved out Economic Zones within the country, which can be developed by Developer as defined in the Act and who may be either Central Government, State Government or even a private party having land available with it. Section 53 of the Act provides that the SEZ area will be deemed to be a territory outside the customs territory of India for the purpose of undertaking the authorised operations and such SEZ Area will be deemed to be Ports, Airports, Inland Container Depots, Land Stations, etc. in certain cases. 28. Section 51 of the Act provides that nothing inconsistent in any other law or even in any instrument having effect by virtue of any other law shall override the provisions of this Act. The Board for Approval has been constituted under Chapter III of the said Act to approve the proposals for creating SEZ areas, while a lower authority in the form of Development Commissioner has also been created in Chapter IV of the Act to oversee the operations of each SEZ Area. Section 5 provides for guidelines for notifying SEZ which clearly stipulates that generation of additional economic activity, promotion of exports of goods and services and promotion of investment from domestic and foreign sources etc. as the guidelines for creating certain areas as SEZ areas. The SEZ Rules, 2006 framed under the said Act in line with the spirit of the Act for approval of the Unit in SEZ areas inter alia also contains the guidelines that such Unit will fulfill the requirement of positive Net Foreign Exchange Earning requirement in addition to the prescribed value addition earning requirement in Rule 18. The SEZ Rules, 2006 framed under the said Act in line with the spirit of the Act for approval of the Unit in SEZ areas inter alia also contains the guidelines that such Unit will fulfill the requirement of positive Net Foreign Exchange Earning requirement in addition to the prescribed value addition earning requirement in Rule 18. In the light of a compendious reading of these provisions of Act and Rules and the whole scheme of the Act, it is clear that the insistence of the Respondent – APSEZL on the Appellant – CWC to either comply with the requirement of the Act and Rules and to get its approval as a SEZ unit from the concerned Development Commissioner as its present activities of warehousing were not in tune with the said provisions or to atleast seek a waiver of the same from the Development Commissioner in the impugned communication dated 5.1.2017, prima facie, cannot be said to be any kind of illegal or unreasonable demand against the Appellant – CWC or a breach of the lease conditions of its Sub-Lease Deed dated 2.6.2004 in favour of CWC, which was challenged by the Appellant - CWC in the present Special Civil Application No. 184 of 2017. The aforequoted Minutes of the Meetings held by Ministry of Commerce also supports the case of the Respondent - APSEZL but instead of falling in line to comply with the provisions of the Act and Rules in its letter and spirit, the Appellant - CWC has chosen the war path of litigation against the Union of India as well as the private Respondent, for the reasons best known to it. The other contentions raised on behalf of the Respondent including its preliminary objections may have some force but we are not required to make any comments on the same because we are leaving it open for the learned Single Judge to decide the present Writ Petition as well as the connected Writ Petition against the Union of India. 29. The other contentions raised on behalf of the Respondent including its preliminary objections may have some force but we are not required to make any comments on the same because we are leaving it open for the learned Single Judge to decide the present Writ Petition as well as the connected Writ Petition against the Union of India. 29. This Court also allowed both the parties to amicably settle the aspect of Proposal No.3, namely underwriting of future business loss of CWC by APSEZL in the matter and as the Court proceedings would indicate that on quite a few occasions, the matter was adjourned to allow the top level management meetings for both corporate bodies and to arrive at an amicable settlement but unfortunately it could not happen and that is why the present Appeal itself was required to be heard on its own merit. 30. We are therefore of the opinion that both the parties can now start working upon the mutually agreed first two proposals, namely, providing of land of the same size by the Respondent - APSEZL to Appellant – CWC outside the SEZ zone at the cost of APSEZL and to construct a Warehouse of the same size at the cost of APSEZL and provide the same to CWC on mutually agreed terms and conditions, as a valid contract between the two parties on these two proposals can be deemed to have already come into existence vide letter dated 9.3.2019 and follow up letter of APSEZL and CWC Board Resolution dated 12.6.2019. We can even apply the doctrine of separation and enforce the valid Agreement and leave the disputed part of negotiations on Proposal No.3 open for future. 31. As far as the Proposal No.3 for underwriting of future business losses on the basis of published tariff by Respondent - APSEZL to CWC is concerned, that issue can be left open for both the parties, who may try even now to settle the same amicably between themselves or through mediation process while both the Writ Petitions are pending consideration before the learned Single Judge. It would in the fitness of the things and the acrimonious litigation on the said issue should not hinder the development of the SEZ area in accordance with law and to protect the interest of the Appellant- CWC, we may permit the Appellant- CWC to continue its business activity at the same place within SEZ area, where it is presently carrying out its Warehouse activities in terms of the interim order granted by the Coordinate Bench of this Court on 11.1.2017 for some limited period. 32. We may note here again that this Appeal arose out of the non-grant of Interim Relief to Appellant – CWC by the learned Single Judge at the time of admission on 10.1.2017, while the main Writ Petition is still pending for consideration before the learned Single Judge and therefore, we are inclined to pass following directions in the present case, which in our opinion, are expedient on the basis of material on record to balance the equities in terms of the SEZ Act and Rules and to the extent of agreed terms of Agreements and correspondence between the parties, while sending back both the Writ Petitions to the learned Single Judge for deciding the same in accordance with law. 33. 33. After hearing both the sides at length and in the circumstances of the case, we therefore, issue the following directions:- (i) That Appellant – CWC is allowed three months time from today either:- (a) to seek and obtain approval as a SEZ compliant Unit from the competent authority under the SEZ Act in respect of its Warehouse facility situated in 34 acres of land in question within SEZ Area developed by Respondent – APSEZL; or (b) to obtain a waiver of the conditions to comply with the provisions of SEZ Act as a SEZ Unit and the Competent Authority while considering any such application of CWC, if any filed by it, will provide opportunity of hearing to both the parties; (ii) If CWC fails to get such approval as a SEZ compliant Unit or waiver as aforesaid within aforesaid period of three months, the Respondent - APSEZL may acquire the land of the same size of approximately 34 Acres outside SEZ area as already identified and selected by CWC, for the construction of a Warehouse facility for the Appellant – CWC of approximately same size as agreed between the parties under Proposal Nos.1 and 2 in the letter dated 9.3.2019 and affirmed by subsequent correspondence and Board Resolution dated 12.6.2019 of CWC and the Affidavits of the parties filed in this Court. Such acquisition of land and construction of warehouse by the Respondent - APSEZL may be completed within a period of one year after the expiry of aforesaid period of three months in Clause (i) above and same may be offered to CWC to be occupied by the Appellant - CWC on such terms and conditions in consonance with the previous Agreement between the parties vide Lease Agreement dated 2.6.2004 or under such mutually agreed terms as may be agreed afresh between the parties. (iii) Once the completed construction on the land outside the SEZ Area, already identified and selected by CWC, is offered to the Appellant - CWC, the Appellant - CWC shall vacate the existing premises of the warehousing facility on the said 34 acres of land situated within SEZ area within three months of such communication of the Respondent - APSEZL and the Appellant - CWC shall be bound to hand over the peaceful and vacant possession of existing warehousing facility and land of 34 Acres in question to the Respondent - APSEZL within such period of three months of the communication of the Respondent – APSEZL that new warehousing facility on the land situated outside the SEZ area is ready to be taken in possession and occupied by CWC. (iv) If the Appellant – CWC fails to hand over the vacant and peaceful possession to the Respondent, even thereafter, the Respondent – APSEZL shall be free to approach this Court or the concerned Development Commissioner or the learned Single Judge or other authorities of the State for appropriate execution of these directions of this Court. (v) That regarding Proposal No.3 about underwriting of the future business loss of CWC on the basis of published tariffs or market tariffs or otherwise, the parties are left free to make efforts for amicable settlement of this issue between themselves with the help of Development Commissioner or the Mediation process under Section 89 of Civil Procedure Code in the High Court annexed Mediation Centre, where services of Senior Trained Mediators can be made available to the parties at the appropriate point of time. (vi) For the aforesaid period of 18 months of timeline involved in the aforesaid directions namely, three months under Clause (i) and one year or 12 months under Clause (ii) and three months for handing over the vacant possession under Clause (iii) aforesaid, the interim order granted by the coordinate bench of this Court on 11.1.2017 shall continue to operate between both the parties. (vii) That if the extension of the aforesaid time period(s) becomes very necessary for compelling reasons, both the parties shall be at liberty to apply to the learned Single Judge in the pending Writ Petition; being Special Civil Application No.184 of 2017 and the learned Single Judge keeping in view the conduct of the applicant-party may grant such further time as may be considered expedient and necessary by the learned Single Judge. 34. With the aforesaid directions and observations, we dispose of the present Letters Patent Appeal. No order as to costs.