THE HONOURABLE SRI JUSTICE A.GOPAL REDDY and THE HONOURABLE SRI JUSTICE N.RAVI SHANKAR W.A.No.1882 of 2002 Date of judgment: 17-06-2011 Between: 1. The Board of Trustees, Visakhapatnam Port Trust, Visakhapatnam and another ..appellants and 1. Hindustan Lever Ltd. and another ..Respondents The Court made the following Judgment: THE HONOURABLE SRI JUSTICE A.GOPAL REDDY and THE HONOURABLE SRI JUSTICE N.RAVI SHANKAR W.A.No.1882 of 2002 Order: (Per Honourable Sri Justice A.Gopal Reddy) This writ appeal under clause 15 of the Letters Patent is directed against the order of the learned single Judge dated 16-07-2002 in allowing W.P.No.12174 of 1990 and setting aside the revised bills Nos.TM/FH/GB/1 to 4 dated 09-05-1990 fixing the rent for providing storage place in its storage sheds by the first writ appellant which is the Board of Trustees, Visakhapatnam Port Trust. The second appellant is the Traffic Manager in the said Port Trust. For convenience we shall refer to the parties as they are arrayed in the writ petition. 2. The 1st petitioner—M/s.Hindustan Lever Limited with which M/s.Tata Oil Mills Company Limited was merged, which was carrying on business in deep sea fishing operations and operating their trawlers from the fishing harbour of Visakhapatnam Port entered into licence agreements with the first respondent—Port Trust which is a statutory body constituted under the Major Port Trusts Act, 1963 (for short “the Act”) for storage facilities. The Port Trust allowed the storage sheds to be used for the purposes specified under the Act, viz., for leasing of the sheds to owners of goods imported or intended for export or to steamer agents and others and also provides for the service of the storage of goods. The Port Trust allowed the petitioners to use the storage sheds in the Auction Hall Bays Nos.I and II at fishing harbour (East) (for short “Eastern Shed”) on a licence subject to the terms and conditions mentioned in the agreement entered into between petitioner No.1 and Port Trust from time to time for the fees payable at the current rates in force from time to time by letter dated 17-09-1979. The Port Trust by another letter dated 10-04-1982 allowed the petitioners to use the storage shed in Auction Hall Bays Nos.I and II fishing harbour (West) (for short “Western Shed”) on licence subject to the terms and conditions mentioned in the agreement. The agreements of licence for both the sheds were entered into for a period of one year initially and renewed from time to time. The respondent—Port Trust permitted the petitioners to use two sheds between 1983 and 1989 covered by two sets of independent licence agreements for each of the sheds called as “Eastern” and “Western sheds” for various periods; Shed No.I from 16-05-1983 to 28-06-1988 and Shed No.II from 16-05-1983 to 28-06-1988. The list of such licence agreements signed by the parties on 20-06-1988 for a period of one year from 09-05-1988 to 08-05-1989 for the Eastern Shed and from 06-05-1988 to 05-05-1989 for the Western Shed which expired on expiry of one year on 08- 05-1989 and 05-05-1989, respectively. Further the period of renewal usually was for one year. There is no dispute with regard to entering into agreements and their renewal from time to time between the parties. The agreements of licence entered between the parties provide for payment of licence fee. Clause (3) is identical in all the agreements and it reads thus: “The fee shall be payable at the rate in force from time to time and shall be paid in quarterly instalments for annual licence in advance to the Chief Accountant, Visakhapatnam Port, or such other person whom the Licensor shall nominate in this behalf, on or before noon of the third day of the month in which the quarterly payment falls due.” 3. In the licence agreements as per the schedule of current rates at the time of granting licence, rent was fixed at Rs.768/- per month or part thereof vide Authority Chapter V of Visakhapatnam Port Trust scale of rates, 1985 Edition. 4. The 1st petitioner—Company by its letter dated 05-05-1989 applied for renewal of licence for a period of one year each. The Port Trust vide its letter dated 29-05- 1989 renewed the licence in favour of the 1st petitioner— Company from 23-05-1989 for Eastern and Western sheds informing that since the renewal application was received by the 1st respondent on 23-05-1989, the writ petitioner’s (Port Trust) occupation of the sheds was treated as unauthorized till 22-05-1989 and penal charges will be debited to the 1st petitioner’s deposit account. The Port Trust renewed the licence in favour of the 1st petitioner on 22-05-1989 but no formal agreement was entered. By further letters dated 23-11-1989 and 18- 05-1989 the Port Trust renewed the licence from 23-11- 1989 to 22-05-1990 and 23-05-1990 to 22-11-1990 respectively in case of both sheds and for the period between 05-05-1989 and 22-05-1990 the Port Trust charged the licence fee by rising bills at Rs.768/- per month as per the bills dated 21-06-1989 and 07-12-1989 in respect of Eastern shed and bills dated 21-06-1989 and 07-12-1989 in respect of Western Shed. Further, the petitioners were informed that the licence fees for the storage sheds in Auction Halls I and II (East and West) were fixed at Rs.2,915/- and Rs.2,930/- with 20% departmental charges for the period from 01-04-1983 to 31-03-1988 by enclosing the revised bills dated 09-05- 1990 demanding to pay a sum of Rs.4,32,000/- towards the arrears of rent with retrospective effect from 01-04- 1983 to 22-05-1990. The other details are not necessary. Questioning the said bills the present writ petition is filed contending that the 1st petitioner protested the revision of rates through its letter dated 16-05-1990 which was replied by the Port Trust inviting the petitioners’ attention to para-3 of the agreement informing that the charges were levied provisionally from 01-04-1983 onwards and were finalized and accordingly revised bills were issued. 5. The contention of the first petitioner company is that the impugned revised bills issued by the Port Trust are illegal and arbitrary. It further contended that as per Sections 48 and 49 of the Act, the Port Trust has to render the services and that the scale of rates as sanctioned by the Central Government under the provisions of Section 52 of the Act become effective on publication in the official gazette. It further pleaded that since the scales of rates have already been gazetted according to which the original rents were levied, the Port Trust is precluded from charging anything beyond such rates/fees and the action of the Port Trust authorities is ultra vires and that enhancing the licence fee with retrospective effect is contrary to the agreement, unauthorized and illegal. 6. Opposing the writ petition the Port Trust filed a counter inter alia contending that the relationship between the writ petitioners and the Port Trust is purely contractual in nature and writ petition as such to enforce or cancel the agreement cannot be entertained and the rates as provided under the Act can be varied from time to time as per para-3 of the agreement itself. Sections 48 and 49 of the Act have nothing to do for fixing licence fee for rooms/sheds. In the present case Collector fixed the land value under Fundamental Rules and until the value is fixed, the Port Trust collected the provisional licence fee since 01-04-1983 onwards. The Port Trust further pleaded that it fixed the fee under FR 45(B) and after the revenue authorities raised the land value, it issued notice to the petitioners to pay the balance fee. Every application for renewal of licence has to be submitted before expiry of licence period and the petitioners have followed the same upto 1988 and they are aware that they have to make the application before 15-05-1989 and they did not choose to do so, but submitted the renewal letter on 23-05-1989. After the expiry of licence if any licensee is in possession of the sheds, it attracts penal rent and accordingly penal rent has also been charged from 09-05-1989 to 22-05-1989 which has been paid by the petitioners. On such payment licence was renewed for six months only from 23-05-1989 to 22-11-1989 and the petitioners have paid the provisional bills. The Port Trust then stated that on 09-05-1990 it has sent letters/revised bills requesting the petitioners to pay the revised bills from 01-04-1983 to 31-03-1988 which have been fixed at Rs.4,82,064/-. The scales of rates are not applicable to the petitioners’ case and fee fixed under F.R. 45(B) comparing to market rates are applicable. The respondents followed RDO’s quinquennial rates. The Port Trust pleaded that there is no arbitrariness as pleaded by the petitioners and that it is competent for it as per para-3 of the licence agreements to fix the rates/rents finally. It then stated that the petitioners sent a representation to the Chairman on 09- 07-1990 which is pending for consideration and therefore the present writ petition which is filed when the representation is pending cannot be entertained and pleaded for its dismissal. 7. The learned single Judge by the impugned order allowed the writ petition setting aside the demand notice. Hence the present writ appeal. 8. Learned counsel for the appellants strenuously contended that when the licence between the writ petitioners and Port Trust is not a statutory contract, writ as such either to enforce the terms of the contract or otherwise cannot be entertained. Once the petitioners admitted that the impugned demand is outside the purview of the Act merely because the rates have been defined including licence fee does not make the licence as statutory contract. He also contends that enhancement of rent for the leased area cannot fall within the purview of Sections 48 and 49 of the Act. As the land belongs to revenue authorities, on fixing the rent by the Collector, the same rent has been charged from the petitioners. Therefore, the same cannot be subject matter of judicial review under Article 226 of the Constitution. 9. On the other hand, learned counsel for the respondents—writ petitioners contended that Port Trust is governed by the Act which is evident from the extracts of gazette notification. He further contended that when the licence agreement provides for collection of licence fee at Rs.768/- per month till 1989 revising the licence fee with retrospective effect on the ground that RDO finalized the licence fee is contrary to the licence agreement. The Board of the Port Trust is empowered to impose and recover rates for the services performed by it at the various scales framed by the Board from time to time. The enhancement of rent with retrospective effect without there being any agreement to the said effect or authorised under the Act is in violation of principles of natural justice and the same is liable to be set aside and therefore the writ petition is maintainable. 10. Before we proceed with the matter, it is expedient to extract the scheme of the Act, which was enacted for the constitution of port authorities for certain major ports in India and to vest the administration, control and management of such ports in such authorities and for matters connected therewith. 11. Section 2(v) defines the word "rate" as including any toll, due, rent, rate, fee or charge leviable under this Act. Chapter II deals with Board of Trustees and Committees thereof. Chapter VI deals with imposition and recovery of rates at ports. Section 48 deals with framing of “scales of rates for services performed by Board or other person authorised under Section 42”. Section 49 deals with framing of scale of rates and statement of conditions for use of property belonging to the Board (Port Trust) which reads as under: (1) The Authority (Tariff Authority) shall, from time to time, also frame a scale of rates on payment of which, and a statement of conditions under which, any property belonging to, or in the possession or occupation of, the Board, or any place within the limits of the port or the port approaches may be used for the purposes specified hereunder:- (a) x x x x x (b) x x x x x (c) x x xx x (d) any other use of any land, building, works, vessels or appliances belonging to or provided by the Board. (2) Different scales and conditions may be framed for different classes of goods and vessels. (3) Notwithstanding anything contained in sub- section (1), the Board may, by auction or by inviting tenders, lease any land or shed belonging to it or in its possession or occupation at a rate higher than that provided under sub-section (1). Section 52 provides prior sanction of Central Government to rates and conditions provided under Chapter VI (Note: Section 52 is shown as repealed by Central Act 15/1997 w.e.f. 09-01-1997). Section 56 authorizes the Board that any charge leviable under chapter VI has been short levied or erroneously refunded, it may issue a notice to the person who is liable to pay such charge or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice. However the Proviso to Section 56(1) says that no such notice shall be issued after the expiry of two years (a) when the charge is short-levied, from the date of the payment of the charge; and (b) where a charge has been erroneously refunded, from the date of the refund. Under Section 56(2) the Board may, after considering the representation, if any, made by the person to whom notice is issued under sub-section (1), determine the amount due from such person and thereupon such person shall pay the amount so determined. Section 57 prohibits the Authority from effecting any lease, sale or alienation of any power vested in it under the Act of levying rates without the sanction of the Central Government. 12. Therefore, the finding of the learned single Judge that the impugned order does not indicate the source of power under which the claim of enhanced rent is made with retrospective effect is contrary to the provisions and is erroneous, since Section 56 of the Act authorizes the Board to issue notice when it is satisfied that any charge leviable under Chapter VI has been short levied, it can issue notice calling upon them to pay the amount short levied. Section 49 in our opinion empowers the tariff authority to fix the rates from time to time and this provision inter alia deals with fixation of rates for use of the property i.e. any land or buildings belonging to the Board. The present sheds in question given under licence agreements to the writ petitioner fall within this category. What should be noted is that Section 49(1) says that the tariff authority can fix the rates from time to time. This power includes within its sweep even to change the rates by way of increase or decrease even for pending or existing leases or licence agreements if the circumstances so warrant. In fact para-3 of the licence agreements which has already been extracted supra and which says that the “fee shall be payable at the rates in force from time to time” can be treated as sufficient notice to the 1st writ petitioner-company that the rate fixed was not final and was only provisional and the Board has got the power to increase it depending upon the circumstances if they warrant it. It should also be noted that the property of the Visakhapatnam Port Trust is public property and the endeavour of the public authority i.e. Visakhapatnam Port Trust should be to always protect interests of the property. Thus the contention of the petitioners that the Board has no power to revise the rates cannot be accepted. The first appellant’s counsel argued that Sections 48 and 49 of the Act have no application. This argument in our opinion cannot be said to be correct. In fact Section 49 of the Act is the provision which authorizes the port trust authorities to levy and collect rates or rents or licence fee for usage of its properties namely sheds/accommodation. We have already stated supra that the power under Section 49 can also be exercised to revise the rates or licence fee even retrospectively consistent with the terms of the licence agreements. It may be noted that even if a counsel for a party does not rely upon a provision which supports the action taken by it in a given case it shall always be open for the Court to rely upon the same if it supports such action and hence we rely upon the same for the reasons aforesaid. We are therefore unable to agree with the learned Single Judge that the Board has no such power. 13. Thus Section 49 in our opinion permits revision of rates even with retrospective effect. The licence agreements between the writ petitioners and the Board of Trustees of the Visakhapatnam Port Trust is contractual in nature and the rent or rates in view of Section 49 of the Act along with clause (3) of the licence agreement empower the Board to revise the rates even retrospectively and the Board’s action in that behalf cannot in principle be said to be illegal. It may then be noted that in the case on hand notice as such was also issued revising the bills. It is always open for the petitioners to make a representation as contemplated under Section 56 of the Act about the reasonableness of the revision of rates including the bar of limitation prescribed under the Proviso to Section 56(1) of the Act regarding recovery if the said bar is applicable to their case. If petitioners have made any representation the Board is also under obligation to consider the same and determine the amount due to from the petitioner. 14. Admittedly, in the case on hand the 1st petitioner made a representation on 16-05-1990 and also on 09-07-1990 to the Chairman of the respondent—Port Trust. In view of the same, the representation has to be considered in the light of Section 56 of the Act with regard to rates applicable and the dates from which the rates should be enhanced, and only on determination of such amount as per the Act the petitioners can avail the remedies but the writ petition is premature and cannot be entertained at this stage. 15. We accordingly set aside the impugned order passed by the learned single Judge and dismiss the writ petition granting liberty to the petitioners to work out their remedies after the Board determines the matter and takes a decision on the representations of the petitioner in the light of the observations made supra. 16. In the result, Writ Appeal is allowed and Writ Petition is dismissed. There shall be no order as to costs. _________________ A.GOPAL REDDY, J. __________________ N.RAVI SHANKAR,J. 17-06-2011 Murthy/Cvrk