1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 13.12.2011 CORAM THE HONOURABLE MR. JUSTICE V. RAMASUBRAMANIAN W.P.(MD)No.11064 of 2011 And M.P.(MD) Nos.2,3,4,5 and 6 of 2011 ABG-LDA Bulk Handling Pvt. Ltd., represented by Mr.Vivek Savant, Authorised Representative, having its Registered Office at Ground Floor, Bhupati Chambers, 13, Mathew Road, Mumbai-400 004. .. Petitioner vs. 1.The Union of India through the Secretary, Ministry of Shipping Transport Bhavan, 1, Parliament Street, New Delhi-110 001. 2.The Board of Trustees of the V.O. Chidambaranar Port Trust, having its office at Administrative Office, Tuticorin-628 004. .. Respondents Writ Petition filed under Article 226 of the Constitution of India, praying for the issue of a Writ of Certiorarified Mandamus, calling for the records of the case and after examining the legality and validity thereof, quash and the impugned order dated 11th July 2011 and to direct the first respondent to issue RFQ document for the NCB-III Project to the petitioners and allow them to participate in the tender process for the same. For Petitioner : Mr.V.Prakash, Senior Counsel for Mr.C.Muthu Saravanan For Respondent-1 and For Respondent-2 : Mr.M.Ravindran, Additional Solicitor General of India for Mr.S.Yashwanth O R D E R The petitioner has come up with the above writ petition, challenging an order passed by the Government of India, Ministry of Shipping upholding the decision of the V.O.C. Port Trust refusing to grant “Request For Qualification” documents for participating in the Tender For the Development of North Cargo Berth III Project, hereinafter referred to as NCB-III. https://hcservices.ecourts.gov.in/hcservices/ 2 2. I have heard Mr.V.Prakash, learned Senior Counsel for the petitioner, Mr.P.Krishnasamy, learned Central Government Standing Counsel for the first respondent and Mr.M.Ravindran, learned Additional Solicitor General of India for the second respondent. 3. Under Section 42 (1) of the Major Ports Act, 1963, various services are enlisted to be rendered by the Ports. With the introduction of sub-section (3-A) under Section 42, these services are permitted to be rendered by private parties, subject to the tariff rates determined by the Tariff Authority for Major Ports. 4. After the introduction of the policy of privatisation and private participation in the Port Sector, the Central Government issued “Guidelines for Private Sector Participation in Major Ports”, on 26.10.1996. The same was modified and supplemented by the guidelines issued on 1.6.1998, 28.3.2000 and 17.7.2001. In general, the policy is termed as PPP Policy (Public-Private Partnership). One of those guidelines issued by the Union of India vide a letter bearing No.PD-12013/2/2005-JNPT dated 26.9.2007 addressed to the Jawaharlal Nehru Port Trust, Mumbai contains a stipulation with regard to Anti Monopoly. This letter was superceded by another dated 2-8-2010. 5. On 23.6.2009, the V.O.C. Port Trust issued a notification inviting RFQ (Request For Qualification), for the development of NCB-II (North Cargo Berth-II), for handling bulk cargoes at Tuticorin, on DBFOT (Design, Build, Finance, Operate and Transfer) basis. The petitioner participated in the tender and he was awarded the contract, in August 2010 for NCB-II Project. An Agreement dated 11.9.2010 was entered into, with respect to the said NCB-II Project. It is relevant to note that the Agreement is entered into by a Company by name Tuticorin Coal Terminal Private Ltd., which was floated by the petitioner as a SPV (Special Purpose Vehicle) with the second respondent. 6. On 27.1.2010, the second respondent viz., V.O.C. Port Trust issued another notification, inviting RFQ for the up- gradation of mechanical handling infrastructure at Tuticorin Port Trust on BOO Basis (Build, Operate and Own). The petitioner applied and he was issued with RFQ for Berths I to VI and IX. It is under process. Similarly, the second respondent also issued another notification on 27.1.2010, inviting RFQ for the construction of SDB (Shallow Draught Berth) on DBFOT basis. The petitioner applied and he was issued with RFQ. The same is also under process. 7. Subsequently, the second respondent published a notification on 15.2.2011, inviting applications for the issue of RFQ documents for the development of NCB-III for handling bulk cargoes on DBFOT basis. Since the RFQ was available online, the petitioner downloaded the same from the website and sent it to the second respondent along with demand drafts for the prescribed amount. The second respondent convened a Pre- application Conference of all persons who had submitted RFQs, on 20th April 2011. When the representative of the petitioner went for participation in the Pre-application Conference, he was handed over a letter dated 15.4.2011, informing the petitioner that the petitioner is not eligible for RFQ documents in view of https://hcservices.ecourts.gov.in/hcservices/ 3 the Anti Monopoly Policy issued vide Circular dated 2.8.2010. 8. Therefore, after giving a representation to the respondents on 26.4.2011, the petitioner filed a writ petition in W.P.No.5076 of 2011, seeking a Mandamus to direct the respondents to issue RFQ documents. By an order dated 28.4.2011, this Court directed the first respondent to consider the petitioner's representation dated 26.4.2011, afford an opportunity of hearing and to pass an order on merits. In accordance with the said order, the first respondent invited the petitioner for a personal hearing on 27.6.2011. The petitioner participated in the hearing and made a power point presentation. 9. Thereafter by a considered order dated 11.7.2011, the first respondent dismissed the representation of the petitioner and upheld the decision of the second respondent to deny RFQ documents to the petitioner for NCB-III Project. 10. Challenging the said order of the first respondent, the petitioner filed a writ petition in W.P.No.6396 of 2011 on the file of the High Court of Delhi. But finding that the weather therein was not conducive for a smooth landing, the petitioner withdrew the writ petition with liberty to approach this Court. Thereafter, the petitioner has come up with the above writ petition, challenging the decision of the first respondent upholding the decision of the second respondent. 11. Along with the writ petition, the petitioner filed 5 miscellaneous petitions in M.P.(MD) Nos.1 to 5 of 2011, praying respectively (i) for dispensing with the production of the original impugned order (ii) for an interim stay of the tender proceedings (iii) for an interim stay of operation of the order of the Union of India dated 11.7.2011 (iv) for an interim direction, directing the respondents to issue RFQ to the petitioner and to allow them to participate in the bidding process and (v) for an interim injunction restraining the respondents from preventing the participation of the petitioner in the tender proceedings 12. The above writ petition was actually filed on 26.9.2011 and it came up for orders as to admission on 27.9.2011. On the said date, another learned Judge (my predecessor) admitted the writ petition. In M.P.No.5 of 2011, praying for interim injunction restraining the respondents from preventing the petitioner from participating in the bidding process, no order was passed by the learned Judge. In M.P.Nos.3 and 4 of 2011, praying respectively for (i) an interim stay of operation of the impugned order and (ii) an interim direction to the respondents to issue RFQ to the petitioner, the learned Judge ordered notice. M.P.No.1 of 2011 to dispense with the production of the original impugned order was allowed. In M.P.No.2 of 2011 praying for interim stay of the tender proceedings, the learned Judge passed the following order:- “The respondents shall receive the tender papers returned, if the same are re-presented by the petitioner within a period of 2 weeks from the date of receipt of a copy of this order and the same shall not be rejected and await passing further orders and maintain status quo. https://hcservices.ecourts.gov.in/hcservices/ 4 Post this matter on 29.9.2011. Notice.” 13. Accordingly, M.P.No.2 of 2011 came up on 29.9.2011. On the said date, the learned Judge passed the following order:- “After the order dated 27.9.2011 was passed, the writ petition was originally directed to be posted on 19.10.2011. However, by mistake, the writ petition is posted today. In view of the above, the next hearing date shall be 19.10.2011.” 14. On 12.10.2011, the second respondent-Port Trust filed an application in M.P.(MD) No.6 of 2011 for vacating the interim order granted on 27.9.2011. The vacate stay application came up before me for the first time on 14.10.2011 and it was adjourned at the request of both sides to 16.11.2011. 15. In the meantime, the petitioner appears to have filed another miscellaneous petition in M.P.(MD) No.7 of 2011 for a clarification. The prayer made therein, reads as follows:- “Under these circumstances, it is prayed that this Hon'ble Court may be pleased to clarify that respondent No.2 is bound under the said order in the above writ petition to receive the petitioner's RFQ documents for NCB-III Project as downloaded by the petitioners from the respondent No.2's website, along with the demand draft bearing No.777060 dated 28.9.2011 issued in favour of “Financial Adviser and Chief Accounts Officer, Tuticorin Port Trust” drawn on Punjab National Bank, payable at Tuticorin for an amount of Rs.52,000/- towards cost of tender document + 4% value added tax and thus render justice”. 16. Though the vacate stay petition had appeared before me at Madurai on 14.10.2011 and adjourned for hearing to 16.11.2011 and though M.P.(MD) No.7 of 2011 was filed at Madurai, it is seen from the records that on 19.10.2011, a mention was made before the learned Judge at Chennai and the papers were called for from this Court and taken up at Chennai on 21.10.2011 at 4.30 P.M., in the Chambers of the learned Judge, under the heading “For Clarifications”. On the said date, an order was passed at Chennai, which reads as follows:- “This matter is posted today for clarification of the order dated 27.9.2011 at the instance of the counsel for the petitioner. 2. I have heard the learned Senior Counsel appearing for the petitioner as well as the counsel for the respondents. 3. The learned counsel for the respondents submits that he has filed an application to vacate the order dated 27.9.2011 and such application came up for hearing on 14.10.2011 and adjourned to 16.11.2011. 4. The grievance of the petitioner is that taking advantage of the word “shall receive the tender papers returned”, https://hcservices.ecourts.gov.in/hcservices/ 5 technically, the second respondent is refusing to receive the tender documents. 5. The learned Senior Counsel appearing for the petitioner submits that the tender papers were rejected and was not received by the second respondent. 6. Be that as it may. Now, there is an order against the second respondent to receive the tender papers. Accordingly, if the tender papers are submitted by the petitioner within a period of one week from today, the second respondent shall receive the same, keep it pending without rejecting the same and shall wait till further orders are passed in the vacate order petition. It is made clear that the receipt of tender papers by the second respondent does not take away its right if any available in law. It is also made clear that status quo already granted shall also be maintained.” 17. Thereafter the case papers again came back to this Court and appeared in the list on 30.11.2011. At request, it was adjourned to 8.12.2011 and the writ petition itself was taken up for final disposal on 8.12.2011. 18. Fortunately, there are no disputes on facts. The actual dispute revolves around the interpretation to be given to the Anti Monopoly Policy, on the basis of which the respondents have rejected the request of the petitioner for the issue of RFQ documents. Therefore, before getting into factual details, it may be appropriate to have a look at the policy guidelines and the manner in which the policy guidelines were interpreted and upheld by the Apex Court. 19. We are actually concerned with two policy guidelines, one dated 26.9.2007 and another dated 2.8.2010. The former was issued in response to the clarifications sought by the Jawaharlal Nehru Port Trust, Navi Mumbai, at the time when they undertook the project of extension of container berth. It was stated in the said communication that the Port Trusts had to ensure that private investment did not result in the creation of private monopolies and that private facilities are available to all users on equal and competitive terms. 20. In supersession of the said communication dated 26.9.2007, the Government of India, Ministry of Shipping issued another Directive on 2.8.2010. The Directive was issued in terms of Section 111 of the Major Ports Act, 1963, directing all major Ports to follow the policy enunciated therein, while awarding projects to private parties through Public-Private Partnership route, in order to avoid private sector monopoly in the major Ports. Since the policy formulated in the communication dated 2.8.2010 is not verbose, it is reproduced hereunder for easy appreciation:- “2. Policy If there is only one private terminal/berth operator in a port for a https://hcservices.ecourts.gov.in/hcservices/ 6 specific cargo, the operator of that berth or his associates shall not be allowed to bid for the next terminal/berth for handling the same cargo in the same port. For the purpose of this policy, the terms (i) 'Operator' includes consortium members of the bidder: (ii) 'Associates' means, in relation to the Applicant/Consortium member, a person who controls, is controlled by, or is under common control with such Applicant/Consortium Member (the Associate). As used in the definition, the expression “Control” means, with respect to a person which is a company or corporation, the ownership, directly or indirectly, or more than 50% (fifty per cent) of the voting shares of such person, and with respect to a person which is not a company or corporation, the power to direct the management and policies of such person by operation of law. (iii) 'Berth' shall have the some meaning as “Wharf” given in Section 2(za) of the MPT Act, 1963. (iv) 'Specific Cargo' means (a) containers (b) liquid bulk (c) dry bulk or (d) multipurpose/other general cargo. 3. The policy shall be applicable with immediate effect and shall apply to Request for Qualification (RFQs) issued on or after this date. 4. It is also directed that the above provisions may be incorporated by the Major Parts in the Request for Qualification and Request for Proposal to give effect to the policy in relevant cases. 5. This issues with the concurrence of the Ministry of Law and Justice, Department of Legal Affairs and approval of Hon'ble Minister of Shipping.” 21. After the issue of the policy guidelines dated 26.9.2007, but before the issue of the one dated 2.8.2010, a Company by name A.P.M. Terminals B.V., unsuccessfully challenged before the Bombay High Court, the decision of the Jawaharlal Nehru Port Trust to exclude them from participating in the tender process for the development of the fourth container terminal at Bombay Port. Therefore, they filed Civil Appeal No.4270 of 2010 on the file of the Supreme Court. In the meantime, a Company by name P.S.A. Sical Terminals Ltd., challenged before this Court, the decision of the Tuticorin Port Trust to prevent them from participating in the tender for https://hcservices.ecourts.gov.in/hcservices/ 7 additional facilities in Tuticorin Port. On the ground that the said writ petition raised similar issues, it was withdrawn from the file of this Court and transferred to the Supreme Court in T.C. Nos.36 and 37 of 2010 to be taken up along with the appeal filed by A.P.M. Terminals in C.A.No.4270 of 2010. 22. By a judgment dated 11.5.2011, the Supreme Court allowed the appeal filed by APM Terminals, but dismissed the transferred cases filed by PSA Sicals {reported in A.P.M. Terminals vs. Union of India – 2011 (6) SCC 756}. After accepting the general proposition that Courts would not interfere with policy decisions of the Government, unless they are arbitrary or offend any of the provisions of the Constitution, the Supreme Court found that the case of A.P.M. Terminals, stood on a different footing. This is highlighted in paragraph-71 of the decision which reads as follows:- “71. However, as far as the appellant is concerned, it is because of certain fortuitous circumstances that it came to be excluded from the tender process for the fourth container terminal. If the tender process for the third container terminal had been concluded, the various complications could have been avoided since under the revised policy, the appellant was entitled to participate in the alternative bids. The appellant having been excluded from one bid on the basis of an existing policy, cannot be debarred from participating in the next bid, by taking recourse to a different yardstick. Such a course of action would be contrary to public policy. Accordingly, the authorities of JNPT shall allow the appellant to continue to participate in the tender process for the fourth container terminal and the decision to the contrary conveyed to the appellant on 29.6.2009, is quashed.” 23. In other words, the Supreme Court upheld the Anti Monopoly Policy, which has the effect of prohibiting a Company from participating in alternative bids. But once it is found that a person was excluded from participating in one bid on the basis of an existing policy, he cannot be debarred from participating in the subsequent bid. Therefore, we have to see whether the petitioner has already been excluded from one bid, so as to become eligible for participation in respect of NCB-III. 24. In the affidavit in support of the writ petition, the petitioner has furnished the list of notifications issued by the second respondent-Port, the Cargo in relation thereto and the Project in respect of which those notifications were issued. These details are furnished in order to show that the case of the petitioner is identical to that of A.P.M. Terminals, before the Supreme Court. The details furnished by the petitioner in a tabular form in the affidavit in support of their writ petition, are as follows:- https://hcservices.ecourts.gov.in/hcservices/ 8 S.No. Invitation for qualification and eligibility Cargo Project 1. 23.6.2009 Awarded to ABG-LDA Thermal Coal & other Bulk Cargoes Development of North Cargo Berth-II for Handling Bulk Cargoes at Tuticorin Port on Design, Built, Finance, Operate and Transfer (DBFOT) basis (“NCB-II”) 2. 27.1.2010 RFQ issued to and submitted by ABG- LDA Copper Concentrate, Fertilizer, Sulphur, Coal etc. RFQ for Up-gradation of mechanical handling infrastructure at Tuticorin Port Trust (Berths I to VI and IX) through Public Private Partnership on Build, Own and Operate Basis (“Berths I to VI and IX”) 3. 27.1.2010 RFQ issued to and submitted by ABG- LDA Building blocks, Bricks, Tiles (ceramic/mosaic) , Coarse, Fine aggregate, timber, Stone dust, Granite and Reinforcement steel RFQ for Construction of Shall Draught Berth for handling of Construction Material at Tuticorin Port Trust on Design, Build, Finance, Operate and Transfer (DBFOT) basis (“SDB Construction) 4. 4.8.2010 Not Applicable Containers “Conversion of 8th Berth as Container Terminal on Build, Operate and Transfer (BOT) basis. 5. 15.2.2011 RFQ denied to ABG-LDA Thermal Coal and Rock Phosphate etc. Development of North Cargo Berth-III for handling Bulk Cargoes (Thermal Coal and Rock Phosphate etc.) through Public-Private Partnership on Design, Build, Finance, Operate and Transfer (DBFOT) basis at Tuticorin Port (“NCB- III”) https://hcservices.ecourts.gov.in/hcservices/ 9 6. 15.2.2011 RFQ issued to and submitted by ABG- LDA Thermal Coal and Copper Concentrate etc. Development of North Cargo Berth-IV for Handling Bulk Cargoes (Thermal Coal and Copper Concentrate etc.) through Public- Private Partnership on Design, Build, Finance, Operate and Transfer (DBFOT) basis at Tuticorin Port (“NCB-IV”) 25. It is admitted by the petitioner that they have participated in the tender for the Award of NCB-II and they have also bagged the contract. It is also admitted by the petitioner that they have been issued with RFQs in respect of Berths I to VI and IX. They have also been issued RFQ for the construction of Shallow Draught Berth. Therefore, the petitioner has not been issued with RFQ for NCB-III, but admittedly they have been issued with RFQ for NCB-IV. The respondents have taken alternative bids in a particular sequence, but the petitioner wants the same to follow a different sequence. 26. The contention of Mr.V.Prakash, learned Senior Counsel for the petitioner is that the second and third projects for which the petitioner was issued with RFQs, have not been finalised. In other words, the tender for Berths I to VI and IX and the tender for Shallow Draught Berth have not been finalised. If they have been finalised and the contract awarded to the petitioner, the petitioner would have become ineligible for NCB-III. On the other hand, if the petitioner's bid had been rejected and someone else had been awarded the contract for Berths I to VI and IX and Shallow Draught Berth, the petitioner would have become eligible for NCB-III. In short, the contention of the petitioner is that when the tender for Berths I to VI and IX and the tender for Shallow Draught Berth have not been finalised, the petitioner cannot be prevented from participating in NCB-III. 27. In response, Mr.M.Ravindran, learned Additional Solicitor General of India contended that NCBs I, II, III & IV, together constituted a set of distinct and different projects, while the development of Berths I to VI and IX and Shallow Draught Berth constitute a different set of projects. While the projects relating to Berths I to VI and IX and Shallow Draught Berth, are only for the up-gradation of the existing mechanical handling infrastructure, the projects relating to North Cargo Berths I to IV relate to the construction, maintenance and operation of the very terminals. Out of the 4 North Cargo Berth Terminals viz., NCBs I to IV, NCB-I has been exclusively handed over to the Neyveli Lignite Corporation, a Government of India Undertaking. The contract for NCB-II has been awarded to the petitioner. The RFQ for NCB-IV has been given to the petitioner on the premise that the petitioner is not eligible for NCB-III. This according to the learned Additional Solicitor General is in compliance with Anti Monopoly Policy, since if the contract https://hcservices.ecourts.gov.in/hcservices/ 10 for NCB-IV is eventually awarded to the petitioner, he would have NCBs II and IV, which are alternative Terminals. The learned Additional Solicitor General also produced a sketch showing the location of the Terminals, NCBs I to IV and Berths I to VI and IX and Shallow Draught Berth. While the Terminals, NCBs I to IV are located on one side abutting each other, the Berths I to VI and IX and Shallow Draught Berth are located on the other side. Therefore, the contention of the learned Additional Solicitor General is that the projects for construction of NCBs I to IV cannot be mixed up with the project for up-gradation of machinery in the other Berths. 28. As pointed out earlier, the petitioner does not dispute either the existence or the validity of the Anti Monopoly Policy. The policy itself has been upheld by the Supreme Court. Therefore, the only issue is as to whether the projects for the up-gradation of mechanical handling infrastructure in Berths I to VI and IX and SDB can be taken along with the projects for NCBs II, III & IV, so as to entitle the petitioner to identify the sequence in a particular way or not. If both sets of projects are one and the same, then the sequence of the projects would go in the chronological order. If both sets of projects are not identical, the sequence to be followed will be independent of each other. 29. The petitioner has produced copies of the RFQs issued to him on 27.1.2010 for (i) Berths I to VI and IX and (ii) Shallow Draught Berth. Though the RFQs for NCB II, III and IV are not filed, the details of the projects are available on record. From the material available on record, the following distinguishing features emerge, between the two sets of projects:- S.No . NCB Project Up-gradation of Berths Project. 1. The facilities proposed are the construction of the Berth, dredging for a Draught of 12.8 Meters, unloading, transporting and stacking systems and development of stake yards on DBFOT basis for a concession period of 30 years. The work comprises of up- gradation of existing mechanical