TaxTMI 
TaxTMI 
2018 (2) TMI 1953
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....ich the State Government of Gujarat expanded the port limits of Hazira port. It is the case of the Appellants before us that by doing so, the Appellants have been affected because they have spent huge monies on lands reclaimed by them, which would be directly affected by the expansion of the aforesaid port limits. 3. The brief facts necessary for determining the questions that arise in this appeal are as follows. In 1994, the parent company of the Appellants entered into an agreement with the Gujarat Maritime Board (hereinafter referred to as "GMB") for use of a captive jetty in Magdalla port. Pursuant to a Port Policy framed by the Government of Gujarat in 1995, and a Build, Own, Operate and Transfer (BOOT) Policy framed for private sector participation in development of the State's ports in 1997, the GMB issued a Global Notice for Expression of Interest for Development of Green Field Site Port Facilities, inviting bids in the name of Hazira port project. A consortium led by Shell Gas B.V. was selected to develop, operate and maintain certain facilities on leased area in the port on a BOOT basis, together with related LNG facilities. Pursuant to the accept....
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....xamine the aforesaid representation of the Appellants. A similar representation dated 29th May, 2015 was also made by the Appellants to the Chief Principal Secretary of the State. By a detailed letter dated 16th July, 2015, the GMB dismissed all the objections of the Appellants. However, on 26th August, 2015, the State Government requested the GMB to reconsider the issue of extension of port facilities in its forthcoming board meeting, and send its recommendations to the Government in relation thereto. On 28th September, 2015, the GMB passed a resolution in which it recommended the original proposal submitted by HPPL on 21st July, 2014. However, on 5th December, 2015, the Chief Principal Secretary to the Chief Minister circulated a note stating that the number of vessels at the port was expected to increase dramatically from 30-40 to 70-80, and that the port limits need to be extended to accommodate customs formalities, safety etc. In view thereof, it was necessary to make adequate facilities for anchorage of all the said vessels and that, therefore, the GMB's resolution of 19th March, 2015 should be strictly implemented. On 11th December, 2015, the State Government t....
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....Chief Minister, on the basis of which the impugned notification has been issued. 8. On the other hand, Shri Harish Salve, learned senior Counsel appearing on behalf of the State of Gujarat, painstakingly took us through the Port Policy of 1995 and the BOOT Policy of 1997. According to the learned senior Counsel, since 13 berths were to be constructed, out of which 5 berths have already been constructed, a total of 1011 hectares was already allocated for port related activities to HPPL. This would be clear from a reading of the detailed project report (DPR) of 2010, and this being the case, the expansion of port limits by the impugned notification was well within the originally conceived area of 1011 hectares. He referred to and relied upon affidavits submitted by the State Government as well as the GMB before the High Court, to argue that Essar's demands for reclaimed land had nothing to do with the expansion of the limits of Hazira port. They operated in two completely different spheres. He further went on to state that no permission Under Section 35 of the Gujarat Maritime Board Act, 1981 has been given to reclaim any land, which was a condition precedent to Essar's de....
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....in P. Raval broadly supported the contentions of Shri Sibal. 11. Before dealing with the arguments of counsel, it is important to set out some of the important provisions of the relevant Acts before us. Sections 3(9), 4 and 5 of the Indian Ports Act read as under: (9). "Government", as respects major ports, for all purposes, and, as respects other ports for the purposes of making Rules under Clause (p) of Section 6(1) and of the appointment and control of port health officers Under Section 17, means the Central Government, and save as aforesaid, means the State Government. 4. Power to extend or withdraw the Act or certain portions thereof (1) Government may, by notification in the Official Gazette.- (a) extend this Act to any port in which this Act is not inforce or to any part of any navigable river or channel which leads to a port and in which this Act is not in force; (b) specially extend the provisions of Section 31 or Section32 to any port to which they have not been so extended; (c) withdraw this Act or Section 31 or Section 32 from anypart thereof in which it is for the time being in force. (2) A notification ....
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....a person (1) A concession agreement for undertaking a project may be entered into with a person who is selected through a competitive public bidding as provided in Section 9 or by inviting comparative bids as provided in Section 10 or by direct negotiation as provided in Section 10A. (2) The matters relating to competitive bidding, inviting comparativebids and direct negotiation shall be such as may be prescribed. Section 9-Selection of person by competitive public bidding On the acceptance of the recommendation of the Board made Under Sub-section (2) of Section 5, the State Government, the Government agency or, as the case may be, the specified Government agency shall select a developer for the project through competitive public bidding in the manner as may be prescribed. Section 10-Inviting comparative bids. (1) Where a proposal for undertaking a project and a proposed concession agreement prepared by a person are submitted to the State Government, the Government agency or a specified Government agency, it may, (a) consider the proposal and the proposed concession agreement from all aspects (including technical and fi....
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....the proposal and the concession agreement submitted by the earlier proposer shall be the property of the State Government, the Government agency or, as the case may be, the specified Government agency. (b) The cost of preparation of the proposal and the concession agreement shall be determined in such manner as may be prescribed. 12. It is also necessary to set out some parts of the Port Policy of 1995 and the BOOT Policy of 1997. Gujarat Port Policy Gujarat envisages an integrated port development strategy, consisting of creation of port facilities, industrialisation and development of infrastructure facilities like roads and railways in the hinterland. It is estimated that around 3 billion dollars (Rs. 10,000 crores) would be required to create new port facilities along with necessary infrastructure in the coming 5 years. In view of the fact that ships of large sizes are used in the transportation, for the economies of scale in international trade, ports would be developed with direct berthing facilities and speedy mechanical handling facilities, so as to reduce waiting period of the ships and saving in the cargo expenses. To expedite creation of por....
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....port and its assets will get transferred to Gujarat Maritime Board and they will examine to give it further on lease basis to the same promoter. The terms and conditions will be finalised at that time. The general guidelines for investment analysis and capital recovery for the port projects to determine BOMT period will be announced within 2 months. CAPTIVE JETTIES FOR INDUSTRIES To ensure that the new port projects are financially viable, permissions for captive jetties would be given only in exceptional cases, looking to the quantum of investment and the need for specialised facilities. All industrial units would be encouraged to make use of new port facilities being set up. To take care of the increasing traffic until the completion of the new port projects, it is decided to make use of the existing captive jetties already constructed or under construction, for which the permission has already been given, to be utilized for specific commercial cargos with the prior approval of the Gujarat Maritime Board. (1) This facility would be available for a reasonable period till newports become operative. GMB will review the policy taking into account t....
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.... will be common user channel and will be allowed to be used by all other users. Essar shall not be entitled to recover any charges from other users, if they use the new channel. 7 . The ownership of reclaimed land shall vest with the Government of Gujarat/Gujarat Maritime Board. 8 Essar shall not claim for reimbursement of any expenditure incurred for this reclamation. 10. Essar has to reclaim 319.86 hectares area of inter tidal/mud flats except 67 hectares allotted to M/s. HPPL and the portion of area in front of 67 hectares towards sea. 14. Vide their letter dated 29th August, 2007, the Appellants demanded that 1100 meters, in addition to the 550 meters waterfront that was applied for earlier, be given. The Appellants also sought permission for allotment of 252 hectares of land to be reclaimed as back-up area. By their letter dated 1st October, 2012, the GMB granted in-principle approval for allotment of 1100 meters waterfront to the Appellants. 15. By their letter dated 15th October, 2008, the Appellants asked the GMB to allow them to dredge the channel from 8 meters depth to 10 meters depth to accommodate capesize vessels of 105,000 DWT. Since m....
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.... 35(1), to remove the illegal erection. The wide language of Section 35(1) cannot be whittled down by Section 35(2) in the manner argued by Shri Joshi, as the GMB may or may not utilise the discretionary power granted to it Under Section 35(2). The plain language of Section 35(1) cannot be curtailed by reading by inference, into Sub-section (2), the fact that the GMB may, by notice, require a person to remove an erection, only when it has been made without previous permission, so as to create a private asset in the hands of a private person. The wide language of Section 35(1) makes it clear that any reclamation within the limits of the GMB cannot be carried out except with the previous permission in writing of the GMB. It is clear, therefore, that dredging to a depth of below 8 meters and reclamation of any area to the south of the mangroves was done by the Appellants in the teeth of Section 35(1) of the Gujarat Maritime Board Act. 17. Mr. Sibal laid great stress on the letter dated 15th November, 2012 to show that, in point of fact, what the Appellants were really angling for was to conduct commercial operations beyond the captive requirements of the Essar Steel plant at Hazira....
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....hectares out of 195 hectares that is reclaimed by the Appellants is allocated to the Appellants for their own purposes, the balance to be given as and when a jetty of 1100 meters plus 3700 meters of waterfront is constructed. The argument that huge amounts had been spent to reclaim land is wholly fallacious-huge amounts were spent to dredge a canal which was permitted as the Appellants alone were to bear the cost, and as an increased draft would benefit all, as the canal was open to all to use. Therefore, any plea as to a legitimate expectation of reclaimed land being allocated for the Appellants' own use, thanks to large amounts being spent, is contrary to the correspondence by the Appellants themselves. 20. In point of fact, it is important at this stage to advert to the GMB's detailed reply, dated 16th July, 2015, to the State Government, in which it examined the representation made by the Appellants dated 7th April, 2015 and rejected the same. This letter expressly states that it deals with the representation of Essar, with the comments of the GMB on the side of the representation of Essar. The following extracts from the aforesaid letter are of great importance and ....
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..... At this point it is also important to note that the GMB's affidavit filed in the High Court also specifically states that the reclaiming of 334 hectares of land by dredging the channel to 14 meters' depth was never approved by the GMB. Thus, the argument that the area of 170 hectares and 164 hectares of reclaimed land, which the altered limits of the port has been said to impinge upon, has no legs to stand, in view of the fact that no prior permission has been taken Under Section 35 of the Gujarat Maritime Board Act to add reclaimed land to the main land, as has been stated hereinabove. Added to this, the area of 195 hectares that has been reclaimed is allocated to the Appellants for their own use-140 hectares immediately and the balance only after approval and construction of the further elongated jetty. It is clear that even if the Appellants' plea were to be accepted, the alteration of the limits of the port cannot possibly be said to affect the Appellants' rights qua reclaimed land, which has been reclaimed illegally i.e. without prior permission under the Gujarat Maritime Board Act. Thus, the CRZ clearance by the Ministry of Environment and Forests dated 6th ....
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....sed with no order as to costs. ============= Document 1 1. Ownership rights of the Government 2. Rights The Government is vested with sovereign rights as owner, overseer and conservator of the waterfront and licensor to the Contract. Ownership The Ownership rights of the and Developer would include: responsibilities of the Developer The right to mortgage, hypothecate or to execute such covenants as may be required for effectively vesting a charge on the port assets in favour of a lender to the project. The right to sell, convey or transfer to another entity, the right title and interest and concession vested in the Developer, on the request of a lender to the project. subject to contractual documents. The Developer will be selected by the lender in consultation with the GMB, and if necessary, the terms and conditions of the concession Agreement may be renegotiated. new Document 2 6. Expansion of (a) Expansion of facilities facilities Competition between ports and The developers would be encouraged to add capacity over and above the capacity contracted....
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....and Essar was also hectares of reclaimed decided in the meeting land is excluded from the held under the proposed expansion of chairmanship of the port limit. Further, a then Chief Secretary specific condition was in November 2009. mentioned in the NOC of EBTL has developed a GMB that the ownership channel of more than of the reclaimed land 7 km length with shall vest capacity to handle up GMB/GOG. to 11m draft vessel and has plans to take it up to 14m draft and have waterfront of more than 5 km. with Further it is also be noted that NOC granted to EBTL for reclamation is also beneficial to the company. In case of Document 4 3. non-issuance of NOC for dumping the dredged material in the mudflat area (very close to dredged area) the company had to dump the dredged material in the mid sea (very far) which would have been expensive In order to develop The proposal commercial facilities, port development EBTL commercial for of ports submitted a proposal facilities was received. to GMB in 2008 and But, the permission signed MOU with granted to Essar is only ....