TaxTMI 
TaxTMI 
2014 (4) TMI 1211
X X X X Extracts X X X X
X X X X Extracts X X X X
.... purpose of enabling the allottees thereof to put up the construction of liquid storage tanks. For this purpose the Kandla Port Trust issued notice inviting tenders dated 12.3.2005. The annual rent in respect of these plots was fixed at a nominal rate of Re. 1/- per plot. However, the bidders were required to submit the price bid in the form of premium in respect of the concerned plots for which they intended to bid. The basic value of this premium was fixed at Rs. 612/- per sq. mtr. The bids were to accompany the earnest money deposit of Rs. 3 lakhs per plot. As per the prescribed procedure in such matters, the Port Trust held pre-bid meeting on 21.4.2005 wherein the terms of NIT of the bidders were explained and querries answered. The bidders were also informed that since these plots fall under Coastal Regulatory Zone (CRZ), requisite permission from the competent authority under CRZ was required which would be obtained by the Kandla Port Trust. However, at the same time it was also made clear that any specific clearance like safety, pollution control etc. was to be obtained by the individual lessee (s). This was also reiterated vide communication dated 25.5.2005. In this letter ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the High Court of Gujarat. One such Writ Petition being Special Civil Application No. 286 of 2011 filed by M/s. Nikhil Adhesives Ltd. was dismissed by the High Court vide detailed reasoned judgment dated 4.2.2011. Another SCA NO. 1328 of 2011 filed by IMC Limited was also dismissed by detailed reasoned order on 7.2.2011. When the petition of the appellant herein i.e. SCA No. 1877 of 2011 came up before the same Bench of the High Court on 10.2.2011, following the decision in the said two Writ Petitions the Court dismissed the petition of the appellant as well with one paragraph order, which reads as follows:- "Identical petitions for the same purpose and with the same prayer being Special Civil Application Nos. 286 of 2011 and 1328 of 2011 have been decided by this Court by CAV judgment dated 4.2.2011 and order dated 7.2.2011 respectively. Since no new issue is raised and the factual matrix admittedly remains the same, present petition is summarily dismissed for the reasons discussed in detail in CAV judgment dated 4.2.2011 in Special Civil Application No. 286 of 2011." 7. Appellant has challenged the aforesaid order in the present appeal. 8. We may also record at this ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for handling all hazardous and non- hazardous and also informing that additional CRZ clearance if required for installation, safety, pollution control etc. had to be obtained by the said petitioner, from time to time at its cost. This letter also mentioned that payment will be made by the said petitioner after obtaining CRZ clearance for the individual premises allotted to it or within 3 months of issuance of allotment letter whichever was earlier. In the opinion of the High Court it did not result in any concluded contract. In the process, the High Court also noted that after the issuance of LOI on 12.1.2006 till the passing of Resolution No. 108 dated 22.11.2010, no effective steps were taken by the said petitioner despite the fact that it was informed by the Port Trust on 15.2.2006 that the work of preparation of EIA studies in respect to allotment of 17 plots for construction of Liquid Storage Tanks for obtaining CRZ clearance from the Government of India, Ministry of Environment has already been entrusted to M/s. NIOT, Chennai along with other project works and the said institute had already completed site survey work for the purpose. The petitioner was also informed that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rt noted that the original tender premium in the year 2005 was fixed on Rs. 612/- per sq. mtr. whereas fresh tender premium, after the cancellation of the earlier tender process was fixed at Rs. 8358 per sq. mtrs. 13. In so far as argument of promissory estoppel is concerned the same was rejected on the ground that the LOI did not amount to any promise. Further, the petitioner had paid only Rs. 3 lakhs by way of earnest money as against the total premium amount which was 23.74 crores and was to be paid only after receipt of the said CRZ clearance, which amount was never paid. 14. The reading of the judgment in IMC Limited case would reveal that the Counsel for the petitioner in that case had argued that their case was distinguishable from the case of Nikhil Adhesives Limited on facts. Endeavour was made to demonstrate that in so far as the petitioner in IMC is concerned, it had supplied all the requisite details promptly and because of this reason the Port Trust had not issued any letters to them alleging default on their part in furnishing the details. Therefore, it could not be held responsible for delaying the tender process. It was, thus, argued that there was a concluded....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Tender Committee had recommended the cases for allotment of plots. In so far as the appellant is concerned in respect of all the three plots bearing No. 14, 15 and 17, LOI was issued after the Board agreed to accept the recommendations of the Tender Committee in its meeting held on 8.12.2005. However, in the LOI it was made clear that formal letter of allotment will be issued after receiving the CRZ clearance in general and if any further CRZ clearance was required for installation, safety, pollution etc. the same was to be obtained by the appellant. The Port Trust applied to the Ministry of Environment, Government of India for such permission. However, for one reason or the other, this permission/ clearance was not forthcoming. Even when Ghandhidham Chamber of Commerce and Industry wrote to the Port Trust, on behalf of these allottees who were issued LOI's and were waiting for formal letter of allotment, in reply the Port Trust had requested the said Chamber of Commerce and Industry to also use its good offices with the Ministry of Environment and Forests for early clearance of CRZ permission. It is a matter of record that for more than 5 years the clearance had not been grant....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the right of the person, who has earned the right to the public property in a public auction, is to be preferred over the right of the public in ensuring that valuable public assets were not disposed of except for a fair price and in a fair and transparent manner. Whether this court should, in judicial review, sit in judgment over the decision of a public body which is of the view that it need not go further ahead with the tender process. It is true if such a decision is taken without any reasons to support it or mere ipsi dixit it would be arbitrary. In this case there are reasons. The High Court analysed the reasons and has taken the view that those reasons are valid. In our view in matters particularly to the disposal of valuable assets by the State when the State seeks to explore the possibility of getting higher price. 19. The guiding principles in such cases can be noted from the judgments discussed hereinafter. In Meerut Development Authority v. Assn. of Management Studies; (2009) 6 SCC 171, the decision related to disposal of public property by an instrumentality of the State. In the said context, the Court inter alia held as follows: "26. A tender is an offer. It ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rder to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the state. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tneder is always available to the Government. But the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, bu the decision making process itself. The duty of the court is to confine itself to the question of legality. Its concern should be: (i) Whether a decision making authority exceeded its powers? (ii) Committed an error of law, (iii) Committe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tween different classes. On this basis in R.V. Barnet London Borough Council, ex. P. Johnson 35 (1989) 88 LGR 73 the condition imposed by a local authority prohibiting participation by those affiliated with political parties at events to be held in the authority's parks was struck down." 21. In Tejas Constructions and Infrastructure (P) Ltd. v. Municipal Council, Sendhwa & Anr.; 2012 (6) SCC 464, the Court was dealing with the case of challenge to the awarding of contract to the 2nd respondent in the writ petition on the ground that he had not complied with eligibility requirements in NIT. Paragraph 17 of that case reads as follows: "In Raunaq International Ltd. v. IV.R. Construction Ltd. (1999) 1 SCC 492, this Court reiterated the principle governing the process of judicial review and held that the writ court would not be justified in interfering with commercial transaction in which the State is one of the parties to the same except where there is substantial public interest involved and in cases where the transaction is mala fide." 22. In so far as argument of malafides is concerned, apart from bald averment, there are no pleadings and there is not even a suggestion ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cus shifts to the exercise of power by the authority, that is, whether the order of cancellation dated 24.4.2004 passed by the Secretary (Sugar), was arbitrary or unreasonable. The issue whether there was a concluded contract and breach thereof becomes secondary. In exercising writ jurisdiction, if the High Court found that the exercise of power in passing an order of cancellation was not arbitrary and unreasonable, it should normally desist from giving any finding on disputed or complicated questions of fact as to whether there was a contract, and relegate the petitioner to the remedy of a civil suit. Even in cases where the High Court finds that there is a valid contract, if the impugned administrative action by which the contract is cancelled, is not unreasonable or arbitrary, it should still refuse to interfere with the same, leaving the aggrieved party to work out his remedies in a civil court. In other words, when there is a contractual dispute with a public law element, and a party chooses the public law remedy by way of a writ petition instead of a private law remedy of a suit, he will not get a full fledged adjudication of his contractual rights, but only a judicial review....
X X X X Extracts X X X X
X X X X Extracts X X X X
....akhs by way of earnest money the appellants did not incur any other expenses or suffered any liabilities or took any steps to implement the project of construction and maintenance of the tanks. The High Court has, therefore, rightly remarked that even if it is assumed that issuance of LOI tantamounted to a promise given by the Port Trust, the appellants did not alter its position to its prejudice pursuant thereto to such an extent which could inspire the court to take the decision that holding the promisor to its representation is necessary to do justice between the parties. 26. In MP Mathur & Ors. v. OIC & Ors.; 2006 (13) SCC 706 it is held that once the public interest is accepted as the superior equity which can override individual equity, the principle would be applicable. If there is a supervening public equity, the Government would be allowed to change its stand and has the power to withdraw from representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons on account of such withdrawal. Merely because the resolution was announced for a particular period, it did not mean that the Government could not amend....
X X X X Extracts X X X X
X X X X Extracts X X X X
....supply of the entire quantity of 85,000 quintals of molasses to it. By an interim order, the High Court directed the State Government to decide the respondent's claim after hearing the respondent. Pending such decision, the High Court permitted the respondent to lift up to 20,000 quintals of molasses. After hearing the respondent, the Secretary (Sugar) held that there was no valid contract for supply of molasses to the first respondent and that, therefore, the allotment letter issued by the ACC was without any authority. Consequently he cancelled the same. Aggrieved by the interim order of the High Court to supply 20,000 quintals of molasses to the respondent, the appellants approached the Supreme Court which in turn, set aside that interim order and permitted the respondent to amend the writ petition to challenge the order of the Secretary (Sugar). The respondent amended its writ petition accordingly. During the hearing, certain disputed facts cropped up. The High Court called the managers of two of the sugar mills and put some questions to them and recorded their statements. The High Court reached the conclusion that there was a concluded contract between the five sugar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....c law. In fact, that is not even pleaded or argued. At the same time, whether there was a concluded contract or not is seriously disputed by the respondents and, therefore, in the first instance it was not even necessary for the High Court to go into this issue and could have relegated the appellant to ordinary civil remedy. We are conscious of the position that merely because one of the authorities raises a dispute in regard to the facts, it may not be always necessary to relegate the parties to a suit. This was so stated in ABL International Ltd. & Anr. v. Export Credit Guarantee Corporation of India Ltd. & Ors.; JT 2013 (10) SC 300 in the following manner:- "37. In our opinion, this limited areas of dispute can be settled by looking into the terms of the contract of insurance as well as the export contract, and the same does not require consideration of any oral evidence or any other documentary evidence other than what is already on record. The claim of the contesting parties will stand or fall on the terms of the contracts, interpretation of which, as stated above, does not require any external aid." 32. At the same time, as already noted in Kisan Sahkari (Supra) this co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nr.; AIR 2006 SC 871, would be squarely available in the present case, wherein the court held that a letter of intent merely indicates a parties intention to enter into a contract with the other party in future. A letter of intent is not intended to bind either party ultimately to enter into any contract. It is no doubt true that a letter of intent may be construed as a letter of acceptance if such intention is evident from its terms. It is not uncommon in contracts involving detailed procedure, in order to save time, to issue a letter of intent communicating the acceptance of the offer and asking the contractor to start the work with a stipulation that a detailed contract would be drawn up later. If such a letter is issued to the contractor, though it may be termed as a letter of intent it may amount to acceptance of the offer resulting in a concluded contract between the parties. But the question whether the letter of intent is merely an expression of an intention to place an order in future or whether there is a final acceptance of the offer thereby leading to a contract, is a matter that has to be decided with reference to the terms of the letter. When the LOI is itself hedged ....