TaxTMI 
TaxTMI 
2009 (5) TMI 860
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....to the concession agreement to be entered into between the Government of Pondicherry and the respondent No. 11 with its consortium/partner M/s. Om Metals Limited and with their affiliates for the development of the Pondicherry Port and all related and ancillary/other activities and (3) direction dated January 24, 2006, issued by the Director of Ports, Government of Pondicherry, Port Department, to the officers concerned, to prepare a list of all the existing moveable/immoveable assets of the Pondicherry Port for handing over to the respondent No. 11 by January 30, 2006, consequent upon the decision taken by the Government of Pondicherry for the development of Pondicherry Port on BOT basis, are rejected. 3. Appeal arising from Special Leave Petition (C) No. 6977 of 2007 is also directed against judgment dated August 10, 2006, mentioned above, rendered in Writ Petition No. 12337 of 2006, by which two prayers made by the appellant to quash (1) the approval dated January 21, 2006 accorded by the Lt. Governor of Pondicherry to the detailed project report dated November 16, 2005, submitted by the respondent No. 11 and its partner M/s. Om Metals Limited, for the development of Pondiche....
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....ted its project report in May, 1982. On the basis of the reports, the Ministry of Shipping and Transportation (Ports Wing), Government of India approved the project for the creation of certain facilities at the Pondicherry Port and sanctioned the cost of the project by letter dated June 26, 1984. The Government of Pondicherry entered into an agreement with M/s. Consulting Engineering Services (India) Private Limited on January 22, 1985 for development of the facilities in terms of the approval and sanction granted by the Government of India. During the construction of the facilities, there was a proposal to create additional development facilities for Commercial-cum-Fishing Vessels. The creation of these additional facilities was discussed in a meeting held on March 22, 1989 pursuant to which the Director (Ports), Port Department, Government of Pondicherry vide letter dated March 23, 1989 informed the Development Commissioner, Government of Pondicherry that creation of such additional facilities would require a feasibility report. In the said letter it was also stated that since the Port Department lacked competent personnel in this regard, the same should be got prepared by a b....
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....ization. In terms of the said meeting M/s.RITES India Limited, through a letter dated March 12, 1996, submitted a `Terms of Reference' for offering consultancy assignment for privatization of aforementioned ports. The total consultancy fee for the assignments was initially put as Rs.30 lakhs, which was reduced to Rs.20 lakhs as the proposal for consultancy was subsequently limited to the Pondicherry Port only. The Joint Secretary, Ministry of Surface Transport, Government of India, vide letter dated March 22, 1996 informed the Chief Secretary, Pondicherry Administration about the need to expand the existing capacity of the Pondicherry Port to meet the growth requirement of traffic handled by various major ports. In the said letter it was mentioned that a decision was taken to invite capital participation by private sector and from non-maritime land-locked states. In response to the said letter the Director of Ports, Government of Pondicherry addressed a letter dated April 18, 1996 enclosing therein the material for inviting capital participation by the private sector and non- maritime land-locked states. One company, i.e., Megah Venture Lines (M) SDN BHD vide letter dated March ....
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....l for pre-qualifications bids in order to ascertain the technical capacity and financial soundness of the entrepreneurs. The minutes also indicated that a decision was taken that in order to invite the best parties, the Government of Pondicherry should grant concessions at par with other maritime States. On November 4, 1997 a meeting was held between the officials of the Government of Pondicherry including the then Lt. Governor and the Group General Manager of M/s. RITES India Limited. At the said meeting the officials of M/s. RITES India Limited gave a detailed presentation relating to various aspects of competitive bidding process. At the said meeting a decision was taken to adopt a transparent open competitive bidding procedure in preference to the MOU Route. The minutes of the said meeting also reflected that a decision relating to the appointment of M/s. RITES India Limited as a consultant for this purpose was also taken. The minutes further recorded that the Pondicherry Port was a minor Port and, therefore, the provisions of Major Ports Trust Act were not applicable. The draft minutes were, thereafter, approved and signed by the officials of the Government of Pondicherry. ....
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....rnment of Pondicherry that the advertisement seeking interest of the parties for development of Pondicherry Port through private investment had appeared in the Daily Hindustan Times on March 16, 2000 and the same advertisement would appear in editions of the Economic Times, Times of India (Bombay edition), Hindu (Chennai and Delhi editions) and Statesman (Calcutta edition) between 17th to 21st March, 2000. By this advertisement, the Government of Pondicherry sought involvement of the private sector in the development and operation of the Pondicherry Port on BOST basis from reputed and financially sound Indian and/or international parties. The last date for submissions of proposal for pre-qualification of the above project was May 20, 2000. However, the General Manager (Ports) of M/s. RITES India Limited by his letter dated May 9, 2000 sought permission from the Government of Pondicherry for extension of last date by one month, i.e., June 20, 2000, which was approved on May 19, 2000. The General Manager (Ports) of M/s. RITES India Limited by his letter dated June 29, 2000 informed the Principal Secretary (Power), Government of Pondicherry about the developments of private investment....
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....ion to (a) final confirmation of short listing of consortium of M/s. Durgeshwari Shipping Agency Pvt. Ltd. and (b) allowing time up to November 15, 2000 for the parties mentioned at serial numbers 1 and 2 for submitting proof in respect of conditions mentioned by them. The Government of Pondicherry by its communication dated October 8, 2000 informed M/s. RITES India Limited that a decision in this regard would be made after hearing the representations of the consortium parties in the pre bid meeting to be held on October 12, 2000. A pre bid meeting for the development and operation of Pondicherry Port on the basis of the clarifications sought by the short listed parties was held in Delhi on October 13, 2000. This meeting was to clarify all the doubts of the parties in relation to the project prior to the submission of a detailed proposal. The meeting was attended by the Principal Secretary (Power and Ports), Government of Pondicherry, and only three parties/ consortiums, i.e., (i) M/s. Ashok Leyland of India, (ii) M/s. Seaways Shipping Limited of India and (iii) M/s. Durgeshwari Shipping Agency Pvt. Ltd. After the said pre bid meeting, only two parties/consortiums submitted their d....
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....line of Pondicherry Power Corporation be established and a proposal be made to the Planning Commission for the purpose of grant of funds to undertake the development of the Pondicherry Port. This is how the first attempt made by the State Government to develop the Port failed. Again on February 6, 2003, a meeting was held in the Chamber of the then Chief Minister of Pondicherry regarding the development of Pondicherry Port. The meeting was attended by the Chief Secretary, Secretary (Port), the Director (Port) and a private party. In the said meeting it was decided that an "Expression of Interest " calling for private investment be floated. The Chief Secretary, in his notings dated February 27, 2003, proposed various steps to be undertaken for the development of the Port. One of the steps proposed by him was to immediately issue an Expression of Interest from private parties. He also recommended that the Director (Port) should propose the constitution of a committee of officials to look into the entire gamut of the privatization process as was done in relation to the power sector. The recommendations of the Chief Secretary were approved by the then Chief Minister of Pondicherry on M....
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....op a minor port like Pondicherry port was required and that the guidelines issued by the Government of India on private sector participation in the Port sector were applicable only to major ports. The Chief Secretary further noted that he had also asked the Assistant Liaison Commissioner, Government of Pondicherry in New Delhi to meet personally the officials of the Ministry of Shipping and report. The Assistant Liaison Commissioner, Government of Pondicherry in New Delhi by his Inter Departmental Report dated June 25, 2003, informed that the management and development of ports was a State subject and, therefore, no clearance from the Central Government was required. Therefore, the Chief Secretary recommended that further steps for privatization of the Port be taken. One of the steps recommended by him was to re-engage M/s. RITES India Limited as a Consultant to the entire process. The then Minister of Ports by his notings dated July 18, 2003 accepted the proposals of the Chief Secretary but noted that instead of engaging M/s. RITES India Limited straightaway, it would be appropriate to issue notice inviting firms or consultants in general. This proposal was approved by the then Ch....
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.... Ports on April 5, 2004. A Letter of Intent dated April 30, 2004 was issued to M/s. Larsen and Toubro, Chennai. The said company did not respond to the issuance of Letter of Intent. In such circumstances, the second attempt for getting private investments for development of Pondicherry Port also resulted into a failure. Sometimes in September 2004, the Chief Secretary, Government of Pondicherry had a meeting with the officials of Ministry of Shipping, Government of India, relating to the development of Pondicherry Port. In the said meeting the Joint Secretary, Ministry of Shipping had informed that it would be possible to provide an amount of Rs.20 lakhs for the purpose of preparing a Feasibility Study Report and the rest of the expenditure should be born by the State Government. The Chief Secretary, Government of Pondicherry by his letter dated September 6, 2004 requested the Secretary, Ministry of Shipping, Government of India to provide an amount of Rs.50 lakhs for the purpose of making the Feasibility Study Report. A copy of the letter was sent to the Director of Ports with a request to issue a press release in the newspapers calling proposals from the interested parties for....
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....n was taken to issue an advertisement in various newspapers in this regard. Accordingly, an advertisement was published in various newspapers. In terms of the said advertisement the consultants, interested in undertaking a Feasibility Study for the Pondicherry Port Development, were required to submit their Expression of Interest to the Director of Ports within 21 days from the date of publication of the advertisement. In pursuance of the advertisement, firms/companies had responded and submitted their Expression of Interest. Out of these 33 firms/companies, 27 firms/companies had responded within the time limit specified in the advertisement. One of such consortium (i.e. MOH Group) submitted their Expression of Interest vide letter dated November 21, 2004. The Director of Ports in his proposal dated November 24, 2004 recommended that the remaining six firms/companies, which had not responded within the time stipulated in the advertisement, should also be considered for the purpose of obtaining a Feasibility Study Report to ensure maximum benefit from the advertisement. The Director of Ports also recommended that the Port Privatisation Committee, including the Member co-opted from ....
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....als by courier. STUP Consultants P. Ltd. vide its e-mail dated December 6, 2004 informed the Director of Ports that it be allowed to make the presentation on December 9, 2004. Mac Knight Infrastructure P. Ltd., by its e-mail dated December 6, 2004, informed the Director of Ports that due to prior and conflicting commitments, its official would not be able to appear and requested for an alternative date. The Director and Chief Operating Officer, DS Constructions vide letter dated December 7, 2004 informed the Director of Ports that officials of the Company wanted to make presentation on development and construction of the Pondicherry Port. The Vice President of SPML through its e-mail dated December 7, 2004, informed the Director of Ports that they were going to develop and operate the ports and would like to work more as an operator and a developer. By the said e-mail the said company requested for an opportunity to enable it to make a presentation. On December 7, 2004 and December 8, 2004 various firms/companies made presentations before the Committee. The parties, who made their presentations, were as under:- 1. Hauer Associates, Chennai, made the presentation on December 7, 2....
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....ember 17, 2004 before the Committee: - 1. Consulting Engineering Services, New Delhi 2. Beckett Rankine, Mumbai 3. STUP Consultants, Mumbai 4. L & T Ramboll, Chennai. The minutes of the meetings dated December 7, 2004, December 8, 2004 and December 17, 2004 indicate the nature of presentations, made by various parties. The presentations included modes of development, etc. The minutes of the meetings show that the Chief Secretary/ Secretary (Port), Government of Pondicherry while going through the presentations of every party had asked them whether they would be able to develop the Pondicherry Port and would able to bring in investors for the purpose of developing the Port. The minutes further reflect that certain parties, like Hauer Associates, Haskoning India Private Limitd, CRISIL Infrastructure Advisory, Consulting Engineering Services India Limited, Beckett Rankine Partnership, informed the Committee that they might be able to get a private investor only at a later stage or after seeking certain clarifications. These firms/companies were, however, not willing to develop and operate the Pondicherry Port. The minutes also reflected that only two companies, i.e., M/....
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....r Secretary (Port) about the future course of action to be adopted. The Under Secretary (Port) in his note dated January 19, 2005 recounted the facts and circumstances in which the Letters of Intent were issued as well as the conduct of the parties. The file was thereafter submitted to the Secretary (Port)/Chief Secretary for necessary orders. The Chief Secretary, who was also Chairman of the Port Privatisation Committee, by his note dated January 19, 2005, noticed that the Port Privatisation Committee in its meeting had short listed two parties and recommended that the Government should consider short-listing M/s. Larsen and Toubro, Chennai as the third party. It was mentioned in the note that this was subject to the approval of the Government. He also recommended that the legal position with regard to the first two parties, who had desired to prepare Feasibility Report, should be examined and thereafter the project should be allotted. An Inter Departmental Note dated January 20, 2005 was prepared. In the said note the Under Secretary (Ports) referred to the notings made by the Chief Secretary on January 19, 2005 and directed the Director of Ports to send a proposal to the Law Dep....
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.... The noting of the Executive Engineer, Directorate of Ports, Government of Pondicherry dated February 2, 2005 indicate that after the meeting, the Chief Secretary directed that a list of all the firms, which had expressed their interest to develop the Port through Private Investment, be forwarded to him. In terms of the said direction the Director of Ports by his letter dated February 3, 2005 gave the list of 11 firms and companies, which had expressed desire to develop the Port through Private Investment. It was also mentioned therein that out of 11 firms/companies, seven firms/companies had already made their presentation before the Port Privatisation Committee on different dates. The note was examined by various Government officials and it was decided that the remaining four firms/corporations should be again invited for making a presentation before the Committee. The Director of Ports through e-mails dated February 25, 2005 invited above mentioned four firms/companies to make their presentations on March 11, 2005. The firms/companies were (1) Subhash Projects and Marketing Limited, New Delhi, (2) Marshall Power & Telecom (I) Ltd., Bangalore, (3) Digital Hub SDN BHD, Malaysia an....
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....e letter dated March 7, 2005 informed the Director of Ports that it would make a presentation on March 11, 2005. The following statement indicates that on March 11, 2005 following firms/companies had made presentations before the Port Privatisation Committee: - S. No. Date of e-mail sent Name of the Firm/ Company/Authority Proposed date of Presentation presentation given and date 01. 2.12.2004 Sree Eikon Construction 06.12.2004 08.12.2004 17.12.2004 NO 02. 2.12.2004 National Institute of Oceonography, Goa 06.12.2004 08.12.2004 17.12.2004 NO 03. 2.12.2004 National Institute of Port Management, Chennai 06.12.2004 08.12.2004 YES 08.12.2004 04 2.12.2004 STUP Consultants (P) Ltd., Mumbai 06.12.2004 08.12.2004 YES 17.12.2004 05. 2.12.2004 A.F. Ferguson & Co., Chennai 06.12.2004 08.12.2004 YES 08.12.2004 06. 2.12.2004 Hauer Associates, Chennai 06.12.2004 08.12.2004 YES 07.12.2004 07. 2.12.2004 Subhash Projects & Marketing Ltd., New Delhi 06.12.2004 08.12.2004 17.12.2004 11.3.2005 YES 11.03.2005 ....
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....04 and March 11, 2005 show that the advertisement dated October 18, 2004 was only for the purpose of conducting the Feasibility Study. The minutes further indicate that certain other firms had also come forward with offers for the development of the Port. The minutes of the meetings clearly show that after discussions and on the basis of the presentations four firms were short listed in the following preferences: - 1. M/s. Subhash Projects and Marketing Limited 2. M/s. D.S. Constructions 3. M/s. Apollo Infrastructure Projects Finance Company Limited 4. M/s. Larsen and Toubro, Chennai The Committee, therefore, recommended that the Letter of Intent be issued to M/s. SPML. The Committee also felt that the development of Pondicherry Port was of considerable importance and, therefore, the company rightly recommended to the Government that Government should appoint the National Institute of Port Management, Chennai (NIPM) as a Consultant to the Government of Pondicherry for the eventual development of the Port. The Under Secretary (Ports), Government of Pondicherry issued a Letter of Intent dated June 3, 2005 in favour of M/s. SPML. It was stated in the said letter that....
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....g was held on November 12, 2005. In the said meeting officials of M/s. SPML, the officials of M/s. NIPM and the officials of the Government of Pondicherry were present and the minutes were drawn and noted. In pursuance thereof NIPM submitted its final report on December 1, 2005. The issues raised by all the parties concerned were resolved and, therefore, the Second Revised Detailed Project Report was accepted by the Government as Approved Detailed Project Report. The Government of Pondicherry thereafter constituted a Committee to draft the Concession Agreement to be entered into between the Government of Pondicherry and M/s. SPML. The Committee examined various model Concession Agreement of various States and more specifically of Gujarat State. The said Concession Agreement was thereafter drafted on the basis of the Approved Detailed Project Report. The said draft agreement was examined and approved by various departments of the Government of Pondicherry. The draft agreement was placed before the Council of Ministers for its approval. The Council of Ministers in a meeting dated January 20, 2006 approved the same and resolved that the existing Port Land of 153 acres be handed over f....
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....ng the selection of the respondent No. 11 as Developer of Pondicherry Port, should not be considered by this Court at all and this Court should confine itself to examination of environmental impact that the project may have, which was emphasized before the High Court; (2) the appellants had no locus standi to file the writ petition challenging the Award of Contract for the development of the Pondicherry Port to the respondent No. 11, which is purely commercial in nature; and (3) the list of events and dates submitted by the appellants is not only misleading but a calculated attempt made by the appellants to prejudice the Court by suppressing and omitting to make reference to relevant materials and events and, therefore, the appeals should be dismissed. 12. Dealing with the first preliminary objection, raised on behalf of the respondents, this Court finds that in paragraph 19 of the impugned judgment the High Court has observed as under: - "19. It is at this juncture, the learned counsel for the petitioners fairly conceded that his clients' concern was more on the environmental impact that the project may have and he was not canvassing the ....
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....structions from his client. That on the next date the counsel for the Petitioner informed the Hon'ble Court that his client had instructed him to concede on the issue of the selection of the Developer. However, he pointed out that his client seeks certain safeguards relating to the issue of environmental impact. In this regard, the Petitioner's counsel also handed over a note containing the desired directions from the Hon'ble High Court." Though the appellants were duly served with a copy of the counter affidavit filed by the respondent Nos. 2 to 9, they have failed to traverse the assertions and averments made in paragraphs 5 to 6 of the counter affidavit reproduced above. From the above quoted untraversed paragraphs of the reply affidavit, it is evident that during the course of the arguments and after examining the documents, the High Court had expressed its view that the selection of the Developer was correctly made and, therefore, in those circumstances, the High Court had ascertained from the appellants as to whether they would like to concede on the issue of selection of the Developer and agitate its concern in relation to the environmental impact of the project. The abov....
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.... 13. As far as second preliminary objection regarding locus standi of the appellant to challenge the Award of the Contract for the development of the Pondicherry Port to the respondent No. 11 is concerned, this Court finds that the contract assailed in the writ petitions is purely commercial in nature. Neither the parties, which had participated in the process of selection of the consultant/Developer nor one of those, who had expressed desire to develop the Pondicherry Port but was not selected, has come forward to challenge the selection procedure adopted by the Government of Pondicherry or the selection of the respondent No. 11 as Developer of the Pondicherry Port. The question of locus standi in the matter of awarding the contract has been considered by this Court in BALCO Employees' Union (Regd.) vs. Union of India [(2002) 2 SCC 333]. This Court, after review of law on the point, has made following observations in paragraph 88 of the judgment: - "88. It will be seen that whenever the Court has interfered and given directions while entertaining PIL it has mainly been where there has been an element of violation o....
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....tted by the appellants straightaway refers to the advertisement dated October 18, 2004, published in the Economic Times, but omits to mention that even prior to October 18, 2004, on October 5, 2004 the Apollo Infrastructure Projects Finance Company Limited had a meeting with the Minister of Ports, Government of Pondicherry and had sought time to make a presentation for the development of Pondicherry Port and such an opportunity was given to the said firm. Significant events, which took place during January 12, 2005 to January 20, 2005, are not mentioned in the list of dates at all. To enable the Court to know the factual background, in the absence of records, clause (b) of Rule 4(1) of Order XVI of the Supreme Court Rules, 1960 requires a list of dates in chronological order with relevant material facts or events pertaining to each of the dates to be furnished along with the special leave petition. In practice, the list of dates is prefaced by a brief synopsis of facts to give a complete and coherent picture of the facts but in the instant case this Court finds that in the special leave petitions, the synopsis/list of dates filed suffers from the defect of filing of a list of dates....
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....itted its report in May 1982. The report was approved by the then Government of Pondicherry and therefore an agreement with the said firm was entered into on June 26, 1984 for development of certain facilities. In the year 1989, a proposal was made to create additional development facilities for commercial- cum-fishing vessels. Later on, it was found that M/s Consulting Engineering Services (India) Private Limited had no expertise to develop certain facilities at Pondicherry Port. Therefore, M/s RITES India Limited, a Government of India undertaking, was appointed to conduct a study on the technical feasibility and economic viability of the facilities to be developed. M/s RITES India Limited submitted its Feasibility Study Report. The Techno-Economic Feasibility Report submitted by M/s RITES India Limited pertained to additional facilities. In spite of positive Feasibility Study Report submitted by RITES India Limited, the project could not be carried forward in view of paucity of funds. In 1996, it was suggested by M/s RITES India Limited to adopt Build, Own, Share and Transfer mode of privatisation. The record of the case makes it clear that between 1996 and 2000 various proposal....
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....nt to the entire process. The notings prepared by the Minister of Ports on July 18, 2003 indicate that he accepted the proposals of the Chief Secretary but noted that instead of engaging M/s RITES India Limited straightaway, it would be appropriate to issue a notice inviting firms or Consultants in general. This proposal of Minister of Ports was approved by the Chief Minister. Accordingly, notice inviting firms or Consultants was issued. In all, 13 parties submitted Expression of Interest but only 6 parties made presentation before the Committee on August 20, 2003. Only 2 Consultants namely IPCO-Menang, Singapore and M/s Larsen & Toubro, Chennai had the requisite experience. Therefore, those two firms were short listed. A Letter of Intent was issued in favour of IPCO-Menang, Singapore. The said Consultant was asked to prepare a Detailed Project Report by November 5, 2003. However, the said consultant could not submit Detailed Project Report within stipulated period. Therefore, the Letter of Intent was issued in favour of M/s Larsen & Toubro, Chennai on April 30, 2004. M/s Larsen & Toubro, Chennai, also failed to respond to the Letter of Intent. The events leading to the award of th....
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....t on DBOOT basis. This letter was received by the Committee on December 31, 2004. The IPCO Menang, Singapore and M/s Larsen & Toubro, Chennai, had participated in the Port privatisation process in the year 2003 but had not responded, though they were chosen. However, they had expressed their intent to develop the Pondicherry Port by communications dated December 15, 2004 and December 22, 2004 as mentioned above. In view of these letters, the Director of Ports by his letter dated January 7, 2005 sought a decision from the Under Secretary (Port) regarding the future course of action to be taken in the matter. The Under Secretary (Port) made a noting dated January 19, 2005 recounting the facts and circumstances relating to IPCO Menang, Singapore and M/s Larsen & Toubro, Chennai. The Chief Secretary expressed his view on this noting and recommended that M/s Larsen & Toubro, Chennai, be called as third party in addition to Apollo construction and M/s DS Constructions. The Deputy Secretary (Law) was requested to examine the issue. It was for this reason that the Inter-Departmental Note dated January 21, 2005 was submitted to the Law Department. On January 23, 2005, one Walter-Bau-AG s....
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....e Port and was not interested in acting as a Consultant. Around this time, the Apollo Infrastructure again reiterated its interest in the development of the Port by addressing letter dated February 8, 2005 wherein it was also mentioned that it had tied up with Larsen & Toubro, Ramboll, Chennai. Another firm, LA-V-JAY Associates Pvt. Ltd. by its letter dated February 14, 2005 mentioned that it was part of consortium comprising Royal Haskoning and Ashoka Buildcon. By the said letter, the said firm also expressed its desire to develop the Pondicherry Port. The Director (Ports) referred to the note dated February 3, 2005 and stated that out of the 11 firms/ companies mentioned in the note, 7 firms and companies had already made presentations before the Committee but 4 firms had not made presentation. It is relevant to notice that DS Constructions and Apollo Infrastructure were part of the 7 firms who had already made presentations. In these circumstances, it was decided on February 25, 2005, that the remaining 4 firms namely, the respondent No. 11, Digital Hub, Walter-Bau-AG and Marshall Power should be called for giving presentation before the Committee on March 11, 2005. According....
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....the matter had been considerably delayed and that the Port Privatisation Committee had recommended that a Letter of Intent be issued to SPML. The Chief Secretary sent a note dated May 26, 2005 which was put-up before the Minister of Ports for orders. The Minister of Ports approved the note on June 1, 2005 recommending that suitable clauses be incorporated to bind the party down to ensure that the project did not get delayed. The Chief Minister approved the proposal on June 3, 2005 and thereafter the proposal was approved by the Lieutenant Governor on June 3, 2005. 17. The different documents produced on record of the case read with averments made in counter affidavits clearly show that on the basis of the reports submitted by M/s. Consulting Engineers Services (India) Private Limited, The Ministry of Shipping and Transportation (Ports Wing), Government of India had approved the project for creation of certain facilities at the Pondicherry Port and sanctioned the cost of the project by letter dated June 26, 1984. Further, M/s. RITES India Limited had submitted Techno-Economic Feasibility Study Report on June 10, 1991, pertaining to development of additional facilities to be provi....
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....oubro, Chennai, was issued Letter of Intent, but this firm also did not respond to the said Letter for more than eight months. 18. Under such circumstances, the Government of Pondicherry decided to make one more attempt to attract private investment for development of the Port and call for Expression of Interest for undertaking feasibility studies for development of the port. Accordingly, advertisement dated October 18, 2004 was issued in the leading newspapers, pursuant to which, 27 firms had responded. However, out of 27 firms, only 15 firms had given presentations before the expert committee during December, 2004 in the presence of Minister of Ports. Thereafter, it was decided by the Committee, after having meeting with the then Lt. Governor of Pondicherry, that out of 27 firms which had responded to the advertisement, number of firms who were willing to undertake the feasibility studies should be ascertained. Accordingly such exercise was undertaken by the expert committee and the expert committee found that only 11 firms had shown the willingness to undertake feasibility studies. Seven out of those 11 firms had already made presentations before the Committee and, therefore,....
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....ed to the respondent No. 14 for offering comments/views along with an advance payment of Rs.2 lacs. Thereafter, a number of meetings were held between the officers of respondent No. 11, respondent No. 14 and the officials of Government of Pondicherry to discuss the DPR. During the meetings certain shortcomings in the DPR prepared by the respondent No. 11 were pointed out and, therefore, the respondent No. 11 was called upon to revise the DPR. Accordingly 2nd and final revised DPR was submitted by the respondent No. 11 on November 16, 2005. The 2nd revised DPR was also sent to the respondent No. 14. After assessment, analysis and evaluation of the 2nd revised DPR, the respondent No. 14 gave independent analysis and evaluation of the various aspects of the final DPR. In the independent analysis made by the respondent No. 14 it was stated that though the project was technically viable, it was not financially viable. However the respondent No. 11 and its associates had come forward to undertake the project with their own investment, whereas the Government of Pondicherry was not expecting to invest any money. Further, the Port Development Project is/was to result in direct and indirect ....
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....evelopment of the Port after adopting transparent procedure. The procedure adopted for identifying the respondent No. 11 is crystalline, distinct, forthright, manifest and unambiguous. To say the least the appellants' understanding of the issue is absolutely baseless and not only incorrect but also contrary to the records of the case. The selection of the respondent No. 11 as developer cannot be regarded as capricious, despotic, fanciful or personal as is sought to be made out by the appellants. It is rightly pointed out in the counter reply that the objective of the entire exercise was to get prepared a feasibility study report so that a private investor might not be required to conduct the study prior to deciding whether he would be required to invest or not. It was the understanding of the Government of Pondicherry that in such an event the possibility of attracting private investment in the development of the Port would substantially increase, which cannot be termed as impractical or not warranted in the facts of the case, more particularly, where earlier attempts made since the year 1973 to develop the Port had failed. The Government of Pondicherry could not have risked loosin....
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.... not interfere with an economic decision taken by the State. The court cannot examine the relative merits of different economic policies and cannot strike down the same merely on ground that another policy would have been fairer and better. In a democracy, it is the prerogative of each elected Government to follow its own policy. Often a change in Government may result in the shift in focus or change in economic policies. Any such change may result in adversely affecting some vested interests. Unless any illegality is committed in the execution of the policy or the same is contrary to law or malafide, a decision bringing about change cannot per se be interfered with by the court. It is neither within the domain of the courts nor the scope of judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are the courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical. Wisdom and advisability of economic policy are ordinarily not amenable to judicial review. In matters ....
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....ur for providing resources and other facilities for developing the port, the contract cannot be assailed as invalid because the State has acted bona fide, reasonably and in public interest. The terms and conditions of the contract entered into with the respondent No. 11 as well as the surrounding circumstances show that the State has acted bona fide and not out of improper or corrupt motive or in order to promote the private interest of the respondent No. 11 at the cost of the State. Therefore, it is difficult to interfere and strike down the State action as arbitrary, unreasonable or contrary to public interest. It is true that one of the methods of securing the public interest, when it is considered necessary to dispose of a property, is to sell the property by public auction or by inviting tenders. But as noted earlier, this is not a case of sale of property by the State. Though public auction or inviting of tenders is the ordinary rule in case where the State Government proposes to dispose of a property, it is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule, the reasons indicated in this case for the depar....
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....mstances of this case, that anything obnoxious which requires either public criticism or condemnation by courts of law had taken place. The objective of the Government of Pondicherry to develop the Port was admitted to be fulfilled at the initial stage by short listing a consultant itself. However, the Government did not wish to continue the process of selection of the consultant and risk losing the chance of privatisation of the Port again. As firms/ companies had offered to develop the Port directly, the Government of Pondicherry could not have asked the firms/companies to first participate in the process of selection of a consultant, prepare a project report and require them to participate in the process for selection of the developer all over again. The Government of Pondicherry adopted a pragmatic approach and proceeded to short list the developer directly and in doing so the Government has acted in the best interest of the State to overcome the failed attempts in the past to secure a developer to develop the Pondicherry Port. Under the circumstances, this Court, which is a constitutional Court, is not expected to presume the alleged irregularities, illegalities or unconstitut....
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....-extensive with its legislative powers. Therefore, there is no manner of doubt that the Government of Pondicherry has complete jurisdiction in relation to Pondicherry Port, which is a minor port. The reliance placed upon Section 3(9) of the Indian Ports Act, 1908 read with Section 6(b) of the Pondicherry (Laws) Regulation, 1963 is totally misconceived. Section 3(9) of the said Act provides that the jurisdiction of ports other than major ports vests in the State Government. The learned counsel for the appellants have contended that reference to State Government, appearing in Section 3(9) of the Indian Ports Act, should be construed to be a reference to the Central Government and, therefore, only the Central Government will have jurisdiction over the ports in Pondicherry. Having considered the different provisions of the Constitution and Statutes, referred to by the learned counsel for the appellants, this Court finds that there is fundamental fallacy in the argument and it is that they rely upon Regulation 6(b) only in part. Though the said Regulation provides that reference to the State Government shall be construed as a reference to the Central Government, it also provides that re....
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.... 2006 for Pondicherry], the President shall not make any regulation for the peace, progress and good Government of that Union Territory with effect from the date appointed for the first meeting of the Legislature. Therefore, the Pondicherry Administration Regulation Act, 1963 will have to be regarded as a Transitional Legislation. Moreover, the primary reason for enacting Section 3 of the Pondicherry Administration Regulation Act, 1963 was to extend all the laws enacted by the Union of India under the Union List to the Pondicherry. It is only an Act akin to adaptation Act by which the laws of Union of India were extended to this Union Territory, which was incorporated with India after partition. The extension of laws of Union of India shall only mean that those laws would be applicable as they are applicable to any other State of India. As noticed earlier, the Port in question is admittedly a minor port and, therefore, not covered by the provisions of Indian Major Ports Act, 1908. The extension of law to Indian Major Ports Act, 1908 would only mean that a particular law is prevalent but its applicability would be dependant upon as to whether facts and circumstances warrant its invo....
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....al participation by private sector and from non-maritime land-locked states. Further, by Government Order dated April 30, 2003 the Ministry of Shipping, Government of India, had nominated Mr. P.C. Dhiman as a Member of the Committee. Mr. Dhiman was appointed as a Member of the Committee by the Government of Pondicherry vide Government Order dated August 20, 2003. The first meeting of the Committee was held on June 2, 2003, which was attended by all the members of the Committee. In the said meeting various courses of actions were discussed. One of the issues related to seeking the consent of Government of India for the privatisation of the port. It was also decided to seek the clarifications from the Ministry of Shipping, Government of India, in this regard. The Chief Secretary, Government of Pondicherry in his noting dated June 25, 2003 mentioned that he had discussed the issue with former Secretary, Ministry of Shipping and he had informed the Chief Secretary that no permission was required for a minor port like Pondicherry and that the guidelines issued by the Government of India on private sector participation in the Port sector only applied to major ports. The Chief Secretary f....
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....ce worth the name. 29. The record of the case indicates that concession agreement is already entered into between the Government of Pondicherry on one hand and the 11th and 12th respondents on the other, on January 21, 2006. Those respondents in terms of the concession agreement have incorporated a Special Purpose Vehicle (SPV) company known as Pondicherry Port Limited for implementation of the Port Development Project. An Assignment agreement to this effect in favour of Pondicherry Port Limited is executed by the Respondent Nos. 11 and 12 and confirmed by the Government of Pondicherry. In terms of the Concession agreement, the Government of Pondicherry has entered into Lease and Possession agreement with the Special Purpose Vehicle Company on February 4, 2006. The Lease-hold occupancy is given to the Pondicherry Port Limited subject to obtaining necessary clearance including environmental clearance from the Government of India. There is no manner of doubt that no one can be permitted to carry on construction activity which is prohibited by the CRZ. However, this being a project exceeding Rs.50 crores necessary environmental clearance has to be obtained from the Ministry of Envi....
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....ccepted. It can hardly be disputed by anyone that the main objective of the project is the development of Pondicherry Port. The Government of Pondicherry has not entered into Concession agreement with the Respondent No. 11 to permit the said respondent to run a Real-estate business. While developing the port, it is necessary to provide certain infrastructural facilities for passengers, shipping crew, port staff and other personnel associated with the port, as part of the port development activity. The Respondent No. 11 as developer of the Port has not yet submitted necessary plans for scrutiny of Ministry of Environment and Forest, Government of India, seeking clearance to the project. As and when, the plans are submitted for clearance, the competent authority can always decide upon the desirability of making of constructions which do not fall within the development of port. The ancillary activities to be undertaken while developing a port cannot be stopped by merely naming them as Real-estate business. The affidavit in reply filed on behalf of the Respondent Nos. 11 and 12 before the Madras High Court would indicate that the Government of Pondicherry is not going to make investmen....