Case: Apm Terminals B.V Vs. Union Of India

the hands of one private group or consortium which would be in a dominant position to control not only the rights of tariff, but also the entry of ships, not belonging to such group, into the Major Ports and thereby give an undue advantage to its own ships over other shipping agencies. 60. Normally, the Courts do not interfere with policy decisions of the Government unless they are arbitrary or offend any of the provisions of the Constitution. In the present cases, the adoption of such a course would, in our view, be apposite. 61. It has been the consistent view of this Court that a change in policy by the Government can have an overriding effect over private treaties between the Government and a private party, if the same was in the general public interest and provided such change in policy was guided by reason. Several decisions have been cited by the parties in this regard in the context of preventing private manopolisation of port activities to an extent where such private player would assume a dominant position which would enable them to control not only the berthing of ships but the tariff for use of the port facilities. In both the cases under consideration, the same set of entrepreneurs are interested in gaining control over the different container terminals to the exclusion of other players. The Central Government in its Ministry of Shipping and Transport, therefore, took a decision not to permit licensees who have been granted a licence for running one of the container terminal berths from participating in the bid process for the immediate next container terminal, with the intention of promoting healthy competition for the benefit of the shipping industry and the ports in India as well. The decision to alter its policy is based on sound reasoning and the Central Government has taken such decision for the benefit of the consumers as a whole. The changed policy would also have the effect of preventing cartelisation and dominant status, which could inevitably affect the ultimate pricing of consumer goods within the country. As was held in Shimnit Utsch India Private Ltd. Vs. West Bengal Transport Infrastructure Development Corporation Limited and Ors. [(2010) 6 SCC 303] , the Government was entitled to change its policies with changing circumstances and only on grounds of change a policy does not stand vitiated. 62. It was further held that Government has the discretion to adopt a different policy, alter or change its policy to make it more effective. The only qualifying condition is that such change in policy must be free from arbitrariness, irrationality, bias and malice and must be in conformity with the principle of Wednesbury reasonableness. Although, it has been urged by Ms. Chidambaram that such change in policy could be effected only by way of legislation, such a submission, if accepted, could stultify the powers of the Central Government to alter its policies with changing circumstances for the benefit of the public at large. It is not as if the right of a licensee to bid for a further container terminal berth has been excluded for the entire period of the Licence Agreement but in order to ensure proper competition and participation by all intending tenderers, the said policy has also been altered to enable such licensees to bid for the next but one tender as and when invited. 63. 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 alternate 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 the 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 29th June, 2009, is quashed. 64. As far as PSA Sical Terminals Ltd. is concerned, Ms. Chidambarams submission as to the applicability of the doctrine of legitimate expectation is at best an expectation if there are cogent grounds to deny the same. The said doctrine has been explained by this Court in Sethi Auto Service Station Vs. Delhi Development Authority [(2009) 1 SCC 180] , and it was held that the appellant in the said case had certain expectations which were duly considered and favourable recommendations had also been made, but the final decision-making authority considered the matter when the policy had undergone a change and the cases of the appellants therein did not meet the new criteria for allotment laid down in the new policy. It was also observed that the concept of legitimate expectation has no role to play where State action is based on public policy and in the public interest, unless the action taken amounted to an abuse of power. 65. As we have indicated earlier, the Central Government was within its powers to adopt a policy to prevent the port facilities from being concentrated in the hands of one private group or consortium which could have complete control over the use of the facilities of the ports to the detriment of the shipping industry as a whole. The decision taken by the Tuticorin Port Trust Authorities to exclude PSA Sical Terminals Ltd. from bidding for the 8th Berth Container Terminal cannot, therefore, be said to be arbitrary or unreasonable so as to warrant interference. In fact, the position of PSA Sical Terminals Ltd. is no different from that of A.P.M. Terminals B.V. which had been excluded from the bid for the Third Container Terminal at JNPT. 66. In the aforesaid circumstances,

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]The provisions of Clause 2.3 in the Agreements signed between the Tuticorin Port Trust and PSA Sical cannot be read in isolation of the other provisions in the agreement which prevented the Licensee from bidding for other work within the port area during the period of the licence. In fact, in our view, the change in policy to prevent private mobilization has been held to be justified by the Bombay High Court as well as this Court. In the absence of any arbitrariness in effecting such change in policy and keeping in mind the larger public interest, we are of the view, that the Central Government was within its powers to strike a balance with regard to the control of the port facilities so that the same did not come to be concentrated in the hands of one private group or consortium which would be in a dominant position to control not only the rights of tariff, but also the entry of ships, not belonging to such group, into the Major Ports and thereby give an undue advantage to its own ships over other shippingchange in policy by the Government can have an overriding effect over private treaties between the Government and a private party, if the same was in the general public interest and provided such change in policy was guided by reason. Several decisions have been cited by the parties in this regard in the context of preventing private manopolisation of port activities to an extent where such private player would assume a dominant position which would enable them to control not only the berthing of ships but the tariff for use of the port facilities. In both the cases under consideration, the same set of entrepreneurs are interested in gaining control over the different container terminals to the exclusion of other players. The Central Government in its Ministry of Shipping and Transport, therefore, took a decision not to permit licensees who have been granted a licence for running one of the container terminal berths from participating in the bid process for the immediate next container terminal, with the intention of promoting healthy competition for the benefit of the shipping industry and the ports in India as well. The decision to alter its policy is based on sound reasoning and the Central Government has taken such decision for the benefit of the consumers as a whole. The changed policy would also have the effect of preventing cartelisation and dominant status, which could inevitably affect the ultimate pricing of consumer goods within theonly qualifying condition is that such change in policy must be free from arbitrariness, irrationality, bias and malice and must be in conformity with the principle of Wednesburydecision taken by the Tuticorin Port Trust Authorities to exclude PSA Sical Terminals Ltd. from bidding for the 8th Berth Container Terminal cannot, therefore, be said to be arbitrary or unreasonable so as to warrant interference. In fact, the position of PSA Sical Terminals Ltd. is no different from that of A.P.M. Terminals B.V. which had been excluded from the bid for the Third Container Terminal at JNPT.