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of <h1>High Court upholds 'Two-Terminal-per-Operator Cap' policy, ruling against private port monopoly.</h1> <h3>PSA Sical Terminals Limited Versus Union of India rep. by its Secretary (Ministry of Shipping), Tuticorin Port Trust rep. by its Chairman, Tuticorin</h3> The High Court upheld the validity of the 'Two-Terminal-per-Operator Cap' policy over contractual clauses, ruling in favor of the government's decision to ... - Issues Involved:1. Territorial Jurisdiction2. Applicability of the 'Two-Terminal-per-Operator Cap' Policy3. Validity of Policy Decisions versus Contractual Clauses4. Judicial Review of Policy DecisionsIssue-wise Detailed Analysis:1. Territorial Jurisdiction:The respondents contended that the Writ Petition lacked territorial jurisdiction as all relevant events occurred in Tuticorin. However, the court held that under Article 226(2) of the Constitution, the High Court has jurisdiction if any part of the cause of action arises within its territory. Since the petitioner's registered office is in Chennai and the policy decision affected its business there, the court found that part of the cause of action arose within its jurisdiction, making the Writ Petition maintainable.2. Applicability of the 'Two-Terminal-per-Operator Cap' Policy:The petitioner argued that Clause 2.3 of the Licence Agreement allowed them to participate in subsequent bids. However, the court noted that Clause 14 of the Licence Agreement, which deals with 'Change in Law,' overrides Clause 2.3. The court emphasized that the Licence Agreement is subject to any new law or policy enacted after the agreement date. The 'Two-Terminal-per-Operator Cap' policy, introduced to prevent private monopoly, was a valid change in law. Hence, the petitioner's right under Clause 2.3 was nullified by this policy.3. Validity of Policy Decisions versus Contractual Clauses:The court highlighted that policy decisions taken by the government in public interest cannot be overridden by contractual clauses. The policy to prevent private monopoly in the port sector was upheld by the Bombay High Court and the Supreme Court, making it binding. The court noted that the petitioner did not challenge the policy itself, which had attained finality. Therefore, the policy decision to debar the petitioner from participating in the bid was valid and binding, despite the provisions of the Licence Agreement.4. Judicial Review of Policy Decisions:The court reiterated that it is not within the judiciary's purview to interfere with policy decisions unless they are arbitrary or capricious. The decision to implement the 'Two-Terminal-per-Operator Cap' was taken to foster competition and prevent monopoly, which is a reasonable and valid public policy. The court cited various Supreme Court judgments emphasizing that courts should not interfere with economic policy decisions unless there is a clear illegality. The court concluded that the policy decision was neither arbitrary nor capricious and thus could not be subjected to judicial review.Conclusion:The court dismissed the Writ Petition, affirming the validity of the 'Two-Terminal-per-Operator Cap' policy and its applicability over the contractual clauses in the Licence Agreement. The court upheld the government's policy decision as a legitimate exercise of its authority to prevent private monopoly and promote competition in the port sector.
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