HIGH COURT OF ORISSA : CUTTACK W.P.(C.) NOS. 3323 & 17028 OF 2011 ------------------------- In the matter of applications under Articles 226 and 227 of the Constitution of India. ----------- IN W.P.(c) No. 3323 OF 2011 Keonjhar Nava Nirman Parishad ………. Petitioner. -Versus- Union of India & 3 Others. ….…… Opposite parties. IN W.P.(c) No. 17028 OF 2011 M/s. Subarnarekha Port Pvt. Ltd. & 2 Ors. ……. Petitioners. -Versus- Union of India & 2 Others. ….…… Opposite parties. For petitioner (s): M/s. Narsingh Mishra, R.K. Pradhan, S.N. Panda, B.K. Baral. (in W.P.(C) No. 3323 of 2011) Mr. Sanjay Sen, Sr. Adv, M/s. S. Ratho, D. Mishra, J. Dash, & M.K. Das. (In W.P.(C) No. 17028 of 2011) For Opp. Parties : Mr. Parag Tripathi, Addl. Solicitor General Mr. Sakti Dhar Das, Asst. Solicitor General. (for Union of India in both the writ petitions) Mr. Ashok Mohanty, Advocate General. (for O.P. No.2 -State of Orissa in both writ petitions) Mr. S.K. Kapur, Sr. Advocate, M/s. S.K. Sarangi, B. Behera, J. Acharya & A.K. Jena. (for O.P.No.3 in both writ petitions) M/s. A.K. Parija, S.P. Sarangi, B.C. Mohanty, D.K. Das, P.K. Dash, & R.K. Tripathy. (for intervenor-O.P.No.4 in W.P.(C) 3323/2011) ------------------ P R E S E N T: THE HONOURABLE CHIEF JUSTICE MR. V.GOPALA GOWDA, AND THE HONOURABLE MR. JUSTICE B.N. MAHAPATRA ------------------------------------------------------------------------------ Date of Judgment : 25 -11-2011 ------------------------------------------------------------------------------ V. GOPALA GOWDA,C.J. The first writ petition (W.P.(c) No. 3323 of 2011) has been filed as a Public Interest Litigation by the petitioner- organization, which is claiming to be a registered organization and is engaged in taking up various common problems of the people for seeking redressal thereof. The second writ petition (W.P.(C) No. 17028 of 2011) has been filed by the petitioners M/s Subarnarekha Port Pvt. Ltd. and two other associate companies which are companies incorporated under the Companies Act, 1956 and engaged by the Government of Orissa for development of the Subarnarekha Port project vide MOU executed on 11.01.2008 and which have made substantial investments in the development of the Subarnarekha Port and therefore, they are severely affected and prejudiced by the illegal and arbitrary action on the part of the opposite parties. 2. Both the writ petitions have been filed questioning the correctness of the Notification No. 2609(E) dated 22.10.2010 issued by the Central Government in exercise of power under Section 5 of the Indian Ports Act, 1908 and Section 2 (q) of the Major Port Trust Act, 1963 and Notification No. Adm/01250/VI dated 10.11.2010 issued by the Kolkata Port Trust (hereinafter called the ‘KOPT’) in exercise of power conferred by Section 132(2) of the Major Port Trusts Act, 1963 and contending that altering the limits of the Port of Kolkata to the - 2 - detriment of the interest of the people of Orissa as well as Orissa State and therefore the impugned notifications are perverse, malafide, vitiated with arbitrariness and suffer from violation of Articles 14 and 245 of the Constitution of India as well as federalism and the principle of separation of powers which are the basic structure of the constitution. 3. The grievance of the petitioner in first writ petition is that as a result of the said notifications the extension of Kolkata Port limits will not only jeopardize the development of ports in Orissa coast and severely limits the maritime activities in the State but also have serious ramification for the coastal environment. It will also deprive the livelihood of lakhs of people of Orissa State. 4. The grievance of the petitioners in the second writ petition is that the Central Government by the impugned notification dated 22.10.2010 has altered/extended southwards port area limits of the Kolkata Port Trust (hereinafter called the “KOPT”) as a result of which 200 kilometers south of Haldia into the Bay of Bengal covering around 28,646 Sq. kilometers has been included in the navigable limits of the KOPT and as a result the area of several Minor Ports in north Orissa including the Port area limits of Subarnarekha Port which is being developed by the petitioner under an agreement dated 11.01.2008 executed with the Government of Orissa stands encroached upon by the KOPT. Apart from that the impugned notifications infringed upon the sovereignty of the State of Orissa over its coastal water and is also directly and substantially in conflict with a subsisting notification dated - 3 - 1.12.2009 issued by the Government of Orissa under Section 5 of the Indian Ports Act, 1908. 5. The case of the petitioner in first writ petition in brief is that the State of Orissa, which is endowed with a vast coastline, was historically renowned for its great ports and maritime activities stretching far offs. History bears ample testimony of the prosperity of the ancient Orissa emanating from predominantly maritime activities and sea trades. The modern State of Orissa, which is one of the poorest States in Indian Union, is also trying to revive and establish new ports to exploit the sea trades for greater economic benefits of its millions of poor. It is stated that apart from its deep sea port at Paradeep, which is a major port, the Government of Orissa has already notified seven non-major ports in northern parts of the State, namely, Dhamra, Chudamani, Chandipur, Inchudi, Subarnarekha mouth, Bichitrapur and Bahabalpur to give a fillip to maritime activities of Orissa coast and to support a vast hinterland containing huge mineral resources and mineral based industries. While the Dhamara port is nearing completion, all other ports are in different stages of development. It is stated that India comprises of 13 major ports and around 176 non-major ports along the coast and islands. The Major Ports are under the Union List (Schedule VII) whereas the other ports are under the Concurrent List (Schedule VII) of the Constitution of India. The 13 major ports are administered by the Central Government under Ministry of Shipping and the remaining other ports which are referred to as non-major ports are administered - 4 - by the nine maritime States and three Union territories within their respective coastlines. The total volume of traffic handled by all the India Ports during 2009-10 was 849.9 million tones. Non-major ports account for around one-third of the total seaborne trade. The growth in cargo handled at Major and Non-major ports in 2009-10 was 5.8% and 35.4% respectively as compared to 2.2% and 3.3% achieved in 2008-09. The phenomenal growth in the cargo handling at non-major ports in the past year shows the importance of non-major ports in the over all economic development. As per current indications, non- major ports will have an edge over major ports due to their growth rates as a number of green field ports are coming up with huge capacities through private sector in non-major ports. The effectiveness of non-major ports in meeting the growing volume of cargo traffic cannot be overemphasized. Recognizing the importance of non-major ports, many maritime states have launched initiatives for their development, through the participation of private sector. This has led to significant growth in the cargo capacity and cargo traffic handled by the non-major ports in the past few years. It is stated that Orissa lags away behind other maritime States in developing other ports (non-major ports) and Orissa’s share in the maritime trade is negligible. While the role of non-major ports in the overall economic development cannot be overstated, there is lot to be done by the State Government and the Central Government to increase Orissa’s share in the maritime activities which would lead to economic development in this under developed State. - 5 - 6. It is submitted by Mr. Narasingh Mishra, learned Senior Counsel for the petitioner that while the country needs more ports for its economic development and the Central Government should extend all help for development of non-major ports exploiting long coast line of the State of Orissa, the Opposite party No.1-Union of India is trying to scuttle such development of non-major ports of Orissa coast in stead through arbitrary extension of Kolkata port limits into Orissa territory. In the maritime agenda 2010-20, the Central Government recognized the need for development of non-major ports in Orissa and it was clearly stipulated in the agenda that the east coast ports are expected to handle over 75% of future imports with the ports in Orissa and Andhra Pradesh accounting for much of the traffic owing to steelmaking capacity being largely located in this region. Therefore, after recognition of such need and future projection, the extension of the jurisdiction of Kolkata Port by the impugned notifications is wholly unjustified as it is a colourable exercise of power and mala fide and illegal being vitiated with arbitrariness and abuse of power by discriminatory action of the opp. Party No.1. It is submitted that as per the report published in the ‘New Indian Express’ dated 01.02.2011, the arbitrary extension of Kolkata Port limits is a design to bail out shipping companies who want to use their old vessels for transloading operations. The report points out that the notification for extension of Kolkata port limit coincided with invitation by the Kolkata Port regarding the application for transloading. Bigger vessels which cannot come to Kolkata due to shallow draft, would now berth in the - 6 - Orissa coast and unload cargo to transloaders (old vessels) which would act as floating stock yards. It is stated that such transloading operation involving old vessels will result in increasing environmental pollution of Orissa coast with devastating consequences for its people living at coastal areas. 7. It is further submitted by Mr. Narasingh Mishra, learned Sr. Counsel for the petitioner that when the country needs more port capacity, the approach of the Central Government-Opp. Party No.1 to extend the Kolkata Port Limit is laced with naked favoritism to KOPT. To add few extra million tones to the capacity of the Kolkata Port, the Central Government is jeopardizing the development of seven modern ports in Orissa, each of which can handle much larger quantity of cargo after completion. The Central Government by extending the limit of KOPT into Orissa territory, deliberately intrude upon the State’s sphere. The law is well settled that federalism in the Indian Constitution is not a matter of administrative convenience, but one of the principle, the outcome of historical process and a recognition of ground realities. The interpretation of Entries can afford to remove imbalance, so far as it can. Any conscious whittling down of the power of the State can be guarded against by the Courts. It is further submitted that the treatment of Kolkata Port in a preferential manner and allow the newer ports in Orissa to die natural death by the Central Government is wholly unjustified and illegal. It is also against larger public interest. It would have serious repercussion on the economy of the State of Orissa and deprive the livelihood of its lakhs of people, - 7 - therefore, the impugned notifications are malafide, without any cogent material to support it and is based on mere ipse dixit and it is prayed that the impugned notifications are liable to be quashed. 8. The case of the petitioners in the second writ petition in brief is that not only the petitioners but also the Government of Orissa are taking substantial steps towards ensuring development of the project by processing request for handing over the land and taking other steps as envisaged under the Concession Agreement-MOU including steps to secure environment clearance for the project. The Government of Orissa has expressly notified the Port area limits of the Subarnarekha Port by a notification (being Notification No. 8027-GPP- 128-06/Com) dated 1.12.2009 in exercise of power under Section 5 of the Indian Ports Act, 1908. It is alleged that the KOPT, which is the beneficiary of the illegal action on the part of the Central Government, has illegally conspired with the Central Goernment to extend its jurisdiction over the Port area limit previously notified for other ports in Orissa including the Port area limit of Subarnarekha Port with an ulterior motive to secure its own commercial interest at the cost of the development of other ports in the State of Orissa. The KOPT certainly does not want any developement of Minor other ports in Orissa coast because the traffic will get diverted and there is likelihood of loss of revenue as a result thereof. The KOPT after securing the Notification of the Central Government issued a Notification on 10.11.2010 under Section 132(2) of the Major Ports Act, 1963 whereby it has sought to give effect to the Notification issued by the - 8 - Central Government on 22.10.2010. The KOPT in its impugned notification dated 10.11.2010 acknowledges that the Central Government has amended its earlier notification dated 19.06.2001. As a result of such notifications the Subarnarekha Port will cease to exist as an independent non-major port as its entire port limit will now be under the jurisdiction and control of the KOPT. It is stated that Entry-27 in List-I of Schedule VII of the Constitution of India relates to Ports which are declared as Major Ports in terms of the Major Port Trusts Act, 1963 and Entry 31 in the List III of Schedule VII of the Constitution of India relates to Ports other than major ports. By virtue of that, Subarnarekha Port being a non-major port (other port) falling within the coastline of the State of Orissa, the Government of Orissa has the competence to legislate all necessary legislations and issue notifications in relation to the minor ports in Orissa. The Government of Orissa vide its Notification dated 5.4.1997 notified the port limits for the ports at Subarnarekha Mouth, Chudamani, Chandipur, Inchuri, Astaranga, Baliharichandi, Palur and Bahuda. Hence the decision of the State Government to create/ develop Minor Ports in the northern part of the State’s coastline was well established as early as 1997. On 19.06.2001, the Central Government issued a notification bearing No. GSR 439(E) revising the Port area limits of the KOPT. The said notification revised the limits of the navigable channel to facilitate its trans-loading operations at Sandheads. This identifies an area for fair weather trans-loading operations in deep waters around the 20 m. contour and is far away from the Orissa coast. The said notification - 9 - prescribes a western limit of 87 Degrees 40’E and this limit ends at the eastern limit of the Subarnarekha Port of Orissa. Mr. Sen, learned Sr. Counsel for the petitioners in 2nd writ petition submitted that, the Central Government was well aware of its jurisdictional limits and did not seek to encroach on the coastal waters of the State of Orissa while revising the port area limits of the KOPT. The said notification dated 19.06.2001 issued by the Central Government does not in any manner interfere with the ports limits in northern Orissa and all such ports had access to the open sea. The 2001 Notification of the Central Government which defines the port area of KOPT constituted a representation and expression of intent to the State Government as well as the private investors, such as the petitioners for enabling development of minor ports in Orissa under the guidance of the State Government. It is submitted that the map will disclose the impact of the impugned notification dated 22.10.2010 which illegally revises the earlier notification of 19.06.2001 and encroaches on the port area limits of the Subarnarekha Port and how the KOPT violated the jurisdictional sovereignty of the State of Orissa over its coastal waters. It is stated that the Government of India which accepted the earlier stand of the State Government, now in colourable exercise of power has tried to circumvent the right, title and interest of the State of Orissa and the private concessionaire by issuing the impugned notification dated 22.10.2010. 9. It is further submitted by Mr. Sen, learned Sr. Counsel that when the promoters and the new financial partner had resolved - 10 - all outstanding issues and were focusing entirely on the implementation of the Subarnarekha Port Project, the Central Government without prior notice or intimation, has issued the impugned notification dated 22.10.2010 altering/extending southwards jurisdictional limits of the KOPT, as a result, the entire port area limits of the Subarnarekha port has been encroached upon by the KOPT and as such Subarnarekha Port project is left without any port area limit of its own to allow entry or exit of ships/ vessels. The impugned notifications in effect are to take away the vested rights of the petitioners as well as the State Government. Therefore, it is submitted by Mr. Sen, learned Sr. Counsel that the notification dated 22.10.2010 issued by the Central Government is illegal as the Central Government has no jurisdiction to unilaterally modify port limits in a manner which takes away the area already notified for other ports in the region. The State Government is the competent authority to notify the port area limits of minor ports within its territorial jurisdiction. Therefore, the Government of Orissa in exercise of power under Section 5 of the Indian Ports Act issued a notification on 1.12.2009 in relation to the port area limit of the Subarnarekha port and the said notification is presently valid and subsisting. For that reason, it is submitted that, in relation to the other ports (non-major), the notification of the State Government dated 1.12.2009 occupies the field and there cannot be a subsequent notification of the Central Government altering the decision of the State Government in relation to the limit of the port area of the other ports (non-major ports). It is - 11 - further submitted that the Central Government does not have the jurisdiction over the State Government’s notification dated 1.12.2009 in relation to the port area limits of non-major ports and such action of the Central Government is excess of jurisdiction and hence it is arbitrary and in colourable exercise of power and hence it is liable to be quashed. 10. Mr. Narasingh Mishra, learned Sr. counsel for the petitioner contended that the impugned notifications challenged by the petitioner in the Public Interest Litigation petition will affect the economic development of the Orissa State as the extension of the KOPT limits 200 k.m. south of Haldia, is going to block the entire coast of North Orissa where seven ports, namely, Dhamara, Chudamani, Chandipur, Inchudi, Subarnarekha South, Bichitrapur, & Bahabalpur are in different stages of development. By extending the limits of KOPT, access of vessels to the aforesaid ports will be blocked. By an additional affidavit dated 5.5.2011 the petitioner has submitted that extension of area of KOPT will deprive employment to the people of Orissa, besides loss of revenue to the State. It is submitted in the additional affidavit that the revenue loss to the State will be approximately Rs.684 crores per year and loss of employment would approximately be 875. Therefore, the extension of the area of KOPT by the impugned notifications will definitely affect the interest of the people of Orissa. So far as the attempt has been made by the Union of India and KOPT during their submission to the court that since there is no physical obstruction, entering of vessels, to the non-major - 12 - ports, will not be prevented in any way is not at all correct. Learned counsel for the petitioner, referring to Section 31 of the Indian Ports Act and Sections 38, 49(B) and Section 50(B) of the Major Port Trust Act and paragraph 30 of the writ petition, contended that the averments made by the petitioner in the first writ petition at paragraphs 9 and 30 and in paragraphs 1 to 4 of the additional affidavit dated 5.5.2011 have not been disputed either by the Union of India or by KOPT. Therefore, there is no dispute that entering of vessels to seven non-major ports of Orissa coast will be subjected to the control of the KOPT i.e. O.P. No.3 if the impugned notifications are not quashed. 11. It is further submitted by Mr. Mishra, learned Sr.counsel that Port limits are notified under the Indian ports Act, 1908 and Sections 4 & 5 of the said Act provide for notification and alteration of Port limits. It may be seen that Section 4 lays down although in a disjointed manner, the purposes for which Port limits are fixed, they include : (1) to cover any part of any navigable river or Channel which leads to port (Section 4.1.a); (2) Section 4.3 defines “Convenience of traffic”; (3) Section 4.3 defines “Safety of Vessels”; (4) “Maintenance of the good governance of the port and its approaches” (Section 4.3) Section 5 provides for alteration of Port Limits, but it would be prudent to infer that the alteration serves the same purposes as fixation under Section 4.2. The Government under Sections 4 & 5 of the Indian ports Act can fix port limits. “Government” has been defined in Section 3(9) as Central - 13 - Government for ‘Major Ports’ and State Government for ‘other Ports’ so far as the power of fixing or altering limits is concerned. Since both the Governments derive their powers from the same Central legislation, the powers can be said to be equal in respect of the ports under each one’s control. 12. Mr. Narasingh Mishra, learned Sr. Counsel submitted that the KOPT limits were last fixed/altered in 1977, 2001 and then 2010. A perusal and comparison of these notifications would show that the notifications have three parts- one pertaining to the port per se, the other pertaining to rivers and channels leading to the port. However, the limits of all the three above constitute port limits under the Indian Ports Act which include rivers and channels leading to the port. It is in respect of these rivers of Kolkata port has been substantially extended and expanded in 2010 so much so that it encroaches into the pre notified limits of certain ports and even the onshore location of two of the proposed ports and in all cases it surrounds the ports of Orissa north of Paradeep in such a manner that no ship can enter these ports without passing through the Kolkata port limits. Mr. Mishra, learned Sr. Counsel contended that the extension of port limits of KOPT is grossly illegal for following more reasons that the extended limits encroach into the pre notified limits of number of ports of Orissa including the onshore location of two of the proposed ports. The contention of the opposite parties to the effect that a central notification overrides a notification of the State Government is misleading and not at all correct. The question of repugnancy or overriding due to conflict - 14 - between central law and State law, would arise when there is a conflict between the two laws. In the instant case all the notifications, both of the State and Union Governments are under the same provision of the same central law which gives power to the appropriate Government to notify the port limits and the State Government of Orissa has appropriately and legally notified the limits of the ports of Orissa in exercise of its constitutional powers and powers conferred under the statute. Opposing the contention of the opposite parties that the extension of KOPT is purely for transloading, Mr. Mishra submitted that it is purely unacceptable for the reason that it is not the provisions of Indian Ports Act and Indian Major Ports Act. It provides levy of charge on every ship passing through the port limits of Kolkata. Further, so far as transloading is concerned, it is not necessary that transloading to take place within the port limits of receiving port, such transloading can take place within the limits of any other ports. 13. The Indian Ports Act, 1908 is a Central legislation, under which certain powers are vested in the State Government and once the power vested in the State Government is exercised under Section 5 of the Indian Ports Act, the right has