Villianur Iyarkkai Padukappu Maiyam vs Union Of India & Ors

2. Appeal arising from Special Leave Petition (C) No. 9988 of 2007 is directed against judgment dated August 10, 2006, rendered by the Division Bench of Judicature at Madras, in Writ Petition No. 3304 of 2 2006 by which three prayers made by the appellant to quash (1) the Letter of Intent dated June 3, 2005 granted by the Government of Pondicherry to the respondent No. 11 herein, i.e., M/s. Subhash Project and Marketing Limited, for development of port in Pondicherry on Build Operate and Transfer (`BOT' for short) basis, (2) approval dated January 21, 2006 accorded by the Lt. Governor of Pondicherry to the detailed project report dated November 16, 2005 submitted by the respondent No. 11 and its partner M/s. Om Metals Limited for the development of Pondicherry Port on BOT basis as well as to the concession agreement to be entered into between the Government of Pondicherry and the respondent No. 11 with its consortium/partner M/s. Om Metals Limited and with their affiliates for the development of the Pondicherry Port and all related and ancillary/other activities and (3) direction dated January 24, 2006, issued by the Director of Ports, Government of Pondicherry, Port Department, to the officers concerned, to prepare a 3 list of all the existing moveable/immoveable assets of the Pondicherry Port for handing over to the respondent No. 11 by January 30, 2006, consequent upon the decision taken by the Government of Pondicherry for the development of Pondicherry Port on BOT basis, are rejected.

3. Appeal arising from Special Leave Petition (C) No. 6977 of 2007 is also directed against judgment dated August 10, 2006, mentioned above, rendered in Writ Petition No. 12337 of 2006, by which two prayers made by the appellant to quash (1) the approval dated January 21, 2006 accorded by the Lt. Governor of Pondicherry to the detailed project report dated November 16, 2005, submitted by the respondent No. 11 and its partner M/s. Om Metals Limited, for the development of Pondicherry Port on BOT basis as well as to the concession agreement to be entered into between the Government of Pondicherry and the respondent No. 11 with its consortium/partner M/s. Om Metals Limited and 4 with their affiliates for the development of Pondicherry Port and all related and ancillary/other activities and (2) the direction dated January 24, 2006, issued by the Director of Ports, Government of Pondicherry, Port Department, to the officers concerned to prepare a list of all the existing moveable/immoveable assets of the Pondicherry Port for handing over the same to the respondent No. 11 by January 30, 2006 pursuant to the decision taken by the Government of Pondicherry for the development of Pondicherry Port on BOT basis, are rejected.

5. In order to trace the development of events leading to filing of these appeals, it is necessary to notice certain basic facts.

With the objective of developing the port facilities, offers from various Marine Technical Consultancy Firms were invited by the Government of Pondicherry in the year 1973 for the preparation 6 of a Master Plan and a detailed project report. After examining the offers received from various firms, the Port Department of Government of Pondicherry recommended that the project be awarded to M/s. Consulting Engineers Services (India) Pvt. Ltd. By Government order dated September 27, 1973 the said organization was entrusted with the work of preparation of the Master Plan and a detailed project report. The said organization submitted various reports and finally updated its project report in May, 1982. On the basis of the reports, the Ministry of Shipping and Transportation (Ports Wing), Government of India approved the project for the creation of certain facilities at the Pondicherry Port and sanctioned the cost of the project by letter dated June 26, 1984. The Government of Pondicherry entered into an agreement with M/s. Consulting Engineering Services (India) Private Limited on January 22, 1985 for development of the facilities in terms of the approval and sanction granted by the Government of India. During the 7 construction of the facilities, there was a proposal to create additional development facilities for Commercial-cum-Fishing Vessels.

The creation of these additional facilities was discussed in a meeting held on March 22, 1989 pursuant to which the Director (Ports), Port Department, Government of Pondicherry vide letter dated March 23, 1989 informed the Development Commissioner, Government of Pondicherry that creation of such additional facilities would require a feasibility report. In the said letter it was also stated that since the Port Department lacked competent personnel in this regard, the same should be got prepared by a body having the requisite expertise. It was also mentioned in the letter that M/s. Consulting Engineering Services (India) Private Limited had no requisite expertise and recommended the appointment of M/s. Rail India Technical and Economic Services India Limited, a Government of India undertaking under the Ministry of Railways ("M/s. RITES India 8 Limited" for short) to conduct the study on the technical feasibility and economic viability of the proposed development facilities. This proposal was examined and approved by various officials including the then Chief Minister of Pondicherry on March 27, 1989 and the then Lt. Governor, Pondicherry on March 28, 1989. In terms of those decisions, a Government order dated May 29, 1989 was issued by the Government of Pondicherry sanctioning a techno-economic survey to be conducted by M/s. RITES India Limited.

On June 10, 1991, M/s. RITES India Limited submitted its Techno-Economic Feasibility Study Report pertaining to the Development of the additional facilities at Ariankuppam Port Project. The said report noticed that the proposed development was not only necessary for bridging the gap of technological changes in the sea transport, but was also necessary from the socio-economic point of view. In the report it was mentioned that the investments in the proposed project was 9 justified. By the said report a study to be done on the ways and means of raising the funds for the project was recommended. The report also pointed out that Environmental Impact Assessment for the proposed development indicated that the effect on the environment was not significant and would be well within the acceptable levels specified as per the Indian standards.

Again, some time in March 1996 the Government of Pondicherry made further attempt to develop the Port by inviting the officials of M/s. RITES India Limited to examine and provide consultancy services by privatization of the ports at Pondicherry, Karaikal and Mahe. Accordingly, a meeting was held between the officials of Government and the Company on March 12, 1996. In the said meeting the officials of M/s. RITES India 10 Limited suggested that appropriate approach was to adopt the Build, Own, Share and Transfer mode of privatization. In terms of the said meeting M/s.RITES India Limited, through a letter dated March 12, 1996, submitted a `Terms of Reference' for offering consultancy assignment for privatization of aforementioned ports. The total consultancy fee for the assignments was initially put as Rs.30 lakhs, which was reduced to Rs.20 lakhs as the proposal for consultancy was subsequently limited to the Pondicherry Port only. The Joint Secretary, Ministry of Surface Transport, Government of India, vide letter dated March 22, 1996 informed the Chief Secretary, Pondicherry Administration about the need to expand the existing capacity of the Pondicherry Port to meet the growth requirement of traffic handled by various major ports. In the said letter it was mentioned that a decision was taken to invite capital participation by private sector and from non-maritime land-locked states. In response to the said letter the Director of Ports, Government 11 of Pondicherry addressed a letter dated April 18, 1996 enclosing therein the material for inviting capital participation by the private sector and non- maritime land-locked states.

One company, i.e., Megah Venture Lines (M) SDN BHD vide letter dated March 28, 1996 addressed to the Secretary (Health & Welfare and Port), Government of Pondicherry, referred to the discussion it had on March 28, 1996 and made a proposal to conduct a Feasibility Study relating to the modernization/privatization of the Pondicherry Port. The said company wanted permission to conduct the said Feasibility Study. The said proposal was examined by the Director (Ports), Government of Pondicherry and by letter dated April 19, 1996, the Director (Ports), Government of Pondicherry, recommended that as the entire privatization of port was being examined by M/s. RITES India Limited, the study sought to be conducted by M/s. Megah Ventures Lines should be 12 permitted only after tenders for privatization were invited by M/s. RITES India Limited.

The Managing Director of M/s. Mega Ventures Lines along with letter dated January 25, 1997, addressed the then Chief Minister, Pondicherry, enclosed a draft of MOU pursuant to the meeting which had taken place between the then Chief Minister and the officials of M/s. Megah Ventures Lines on January 23, 1997 and claimed that the same was in accordance with the economic policy of the Government of India. The benefits, which were to accrue, were also mentioned in the said letter. The Director of Ports, Government of Pondicherry, by his letter dated June 24, 1997, made a proposal to the Under Secretary (Ports), Pondicherry to examine the issue as to whether it would be preferable to call for competitive tenders. It was also mentioned in the said letter that in the meanwhile M/s. RITES India Limited be approached for consultancy services. By the said letter the Director of Ports also proposed that M/s. RITES 13 India Limited be appointed as the consultant for the assignment of selection of suitable entrepreneurs for `additional development facilities of Ariankuppam Port Project' by competitive tenders on BOOST basis. The Director also requested for sanction of Rs.14 lakhs as expenditure. On September 19, 1997 a meeting was held between the senior officials of the Government of Pondicherry and the Group General Manager of M/s. RITES India Limited. The minutes of the meeting recorded that due to resource crunch at the Centre and State level, the Government of Pondicherry had decided to invite private participation for the development of Pondicherry Port. The minutes also reflected that a decision was taken to call for pre-qualifications bids in order to ascertain the technical capacity and financial soundness of the entrepreneurs. The minutes also indicated that a decision was taken that in order to invite the best parties, the Government of Pondicherry should grant concessions at par with 14 other maritime States. On November 4, 1997 a meeting was held between the officials of the Government of Pondicherry including the then Lt. Governor and the Group General Manager of M/s. RITES India Limited. At the said meeting the officials of M/s. RITES India Limited gave a detailed presentation relating to various aspects of competitive bidding process. At the said meeting a decision was taken to adopt a transparent open competitive bidding procedure in preference to the MOU Route. The minutes of the said meeting also reflected that a decision relating to the appointment of M/s. RITES India Limited as a consultant for this purpose was also taken. The minutes further recorded that the Pondicherry Port was a minor Port and, therefore, the provisions of Major Ports Trust Act were not applicable. The draft minutes were, thereafter, approved and signed by the officials of the Government of Pondicherry.

On November 6, 1997, a Government Order was issued appointing M/s. RITES India Limited as 15 a consultant. The Consultancy Service Agreement between the Government of Pondicherry and M/s. RITES India Limited was signed on December 10, 1997. The Group General Manager (Ports) by letter dated December 22, 1997 forwarded draft advertisement titled "Invitation for Private Investment in Pondicherry Port", a Draft Invitation Document for "Initial Proposals" and the Draft Agreement to be entered into between the Government of Pondicherry and M/s. RITES India Limited. These draft documents and the draft advertisement were forwarded for the purpose of approval by the competent authority. The draft advertisement and the draft initial proposal were examined by various departments of the Government of Pondicherry. The Secretary (Finance), Government of Pondicherry in his noting dated May 18, 1998 noted that there were long term implications of the Draft Advertisement. He, therefore, recommended that the draft initial proposal and the Draft Agreement be placed before 16 the Council of Ministers. These recommendations were approved by the Chief Secretary, Pondicherry on August 3, 1998 and by the then Chief Minister on August 13, 1998. Accordingly, a Cabinet meeting was convened on January 19, 1999 wherein the agenda of the meeting was to discuss and decide amongst other items, the proposal for privatization of Port and calling for advertisements by M/s. RITES India Limited. The Cabinet in the said meeting resolved to defer the discussion on this item till the next meeting. The said agenda was again circulated to the Ministers of the Cabinet on April 7, 1999 and all the Ministers of the Cabinet approved the proposal for privatization of the Port as well as calling for advertisement by M/s. RITES India Limited. The proposals were finally approved by the Cabinet on October 13, 1999. The then Lt. Governor accorded his approval on October 15, 1999. After the said approval, various departments of the Government of Pondicherry examined the Draft Agreement to be entered into between the 17 Government of Pondicherry and M/s. RITES India Limited. After necessary changes, the agreement was entered into between the parties on January 10, 2000.

7. Relevant facts The General Manager (Ports) of M/s. RITES India Limited by his letter dated March 16, 2000 informed the Secretary (Ports) Government of Pondicherry that the advertisement seeking interest of the parties for development of Pondicherry Port through private investment had appeared in the Daily Hindustan Times on March 16, 2000 and the same advertisement would appear in editions of the Economic Times, Times of India (Bombay edition), Hindu (Chennai and Delhi editions) and Statesman (Calcutta edition) between 17th to 21st March, 2000. By this advertisement, the Government of Pondicherry sought involvement of the private sector in the development and operation of the Pondicherry Port on BOST basis from reputed and financially sound Indian and/or international parties. The last date for 18 submissions of proposal for pre-qualification of the above project was May 20, 2000. However, the General Manager (Ports) of M/s. RITES India Limited by his letter dated May 9, 2000 sought permission from the Government of Pondicherry for extension of last date by one month, i.e., June 20, 2000, which was approved on May 19, 2000. The General Manager (Ports) of M/s. RITES India Limited by his letter dated June 29, 2000 informed the Principal Secretary (Power), Government of Pondicherry about the developments of private investment in the Pondicherry Port. In the said letter it was mentioned that in response to the advertisement, 48 parties had initially indicated interest in the project and that certain firms were short listed. It was mentioned that the document seeking initial proposals from short listed parties was issued to all interested parties and they were requested to submit their initial proposals by May 20, 2000. However, by the last date for submission of initial proposals, only five parties/ consortiums had submitted their proposals. It was also mentioned in the said letter that the evaluation 19 of the proposals by M/s. RITES India Limited would be submitted on or before July 15, 2000. M/s. RITES India Limited submitted its report on evaluation of initial proposals as well as invitation documents for detailed proposals. The said report indicated that M/s. RITES India Limited had rejected the proposal of one party, i.e., M/s. Rockers (India) Pvt. Ltd. In the report preference regarding remaining four parties was shown as under: -

The short listing of four parties and recommendation of M/s. RITES India Limited to invite detailed proposals 20 from the four parties within five months was approved by the Government of Pondicherry on July 21, 2000. The parties which were short listed subject to certain conditions were asked to provide documentary proof in support of their claims before September 15, 2000. In consequence thereof, M/s. Durgeshwari Shipping Agency Pvt. Ltd. had submitted the requisite documents. Therefore M/s. RITES India Limited confirmed the short listing of consortium of M/s. Durgeshwari Shipping Agency Pvt. Ltd. whereas the other two short listed parties had sought extension of time by about two months for furnishing the required documentary proof. Accordingly the General Manager (Ports) of M/s. RITES India Limited had, by his letter dated September 22, 2000, sought approval of the Government of Pondicherry in relation to (a) final confirmation of short listing of consortium of M/s. Durgeshwari Shipping Agency Pvt. Ltd. and (b) allowing time up to November 15, 2000 for the parties mentioned at serial numbers 1 and 2 for submitting proof in respect of conditions mentioned by them. The Government of Pondicherry by its 21 communication dated October 8, 2000 informed M/s. RITES India Limited that a decision in this regard would be made after hearing the representations of the consortium parties in the pre bid meeting to be held on October 12, 2000. A pre bid meeting for the development and operation of Pondicherry Port on the basis of the clarifications sought by the short listed parties was held in Delhi on October 13, 2000. This meeting was to clarify all the doubts of the parties in relation to the project prior to the submission of a detailed proposal. The meeting was attended by the Principal Secretary (Power and Ports), Government of Pondicherry, and only three parties/ consortiums, i.e., (i) M/s. Ashok Leyland of India, (ii) M/s. Seaways Shipping Limited of India and (iii) M/s. Durgeshwari Shipping Agency Pvt. Ltd. After the said pre bid meeting, only two parties/consortiums submitted their detailed proposals, i.e., M/s. Ashok Leyland of India and M/s. Durgeshwari Shipping Agency Pvt. Ltd. M/s. Durgeshwari Shipping Agency Pvt. Ltd. sought an extension of time till January 15, 2001 to submit their detailed proposals, which was granted. The 22 General Manager (Ports) of M/s. RITES India Limited by his letter dated January 15, 2001 informed the Principal Secretary (Power and Ports) Government of Pondicherry that till the last date of submission of detailed proposals it had received proposals from two parties, namely,

(ii) consortium with M/s. Durgeshwari Shipping Agency Pvt. Ltd. In the said letter it was mentioned that both the parties had not submitted valid Bank Guarantee as bid securities and, therefore, both the proposals should be rejected straightaway. As only two proposals were received and both were found to be deficient with regard to the bid security deposit, it was recommended that both the parties should be given time of seven to ten working days to enable them to submit valid Bank Guarantees. The Government accordingly extended the time up to January 25, 2001 to enable both the parties to submit valid Bank Guarantees. The General Manager (Ports) of M/s. RITES India Limited by his letter dated January 27, 2001 informed the Principal Secretary (Power and Ports), Government of Pondicherry that even 23 within the extended time limit, the parties mentioned had not submitted valid Bank Guarantees. In the said letter it was stated that the attitude of both the parties had shown utter lack of conviction and commitment to the project. It was further mentioned that the privatization process was not successful. By the said letter the General Manager recommended two other alternative schemes for the development of Pondicherry Port. Those recommendations were examined by various officials of Government of Pondicherry. On the proposals made by the General Manager, the then Lt. Governor of Pondicherry in her note dated March 8, 2001 expressed her desire to have a meeting with the officials of M/s. RITES India Limited. On March 30, 2001 the then Lt. Governor of Pondicherry convened a meeting with the officials of M/s. RITES India Limited. At the said meeting various alternative methods were suggested for the development of the Pondicherry Port. At the said meeting it was decided that a Corporation on the line of Pondicherry Power Corporation be established and a proposal be made to the Planning Commission for the 24 purpose of grant of funds to undertake the development of the Pondicherry Port. This is how the first attempt made by the State Government to develop the Port failed.

Certain parties were unable to make their presentations on the above mentioned dates and, therefore, the Director of Ports, Government of Pondicherry, by his e-mails dated December 10, 2004, requested the following parties again to make a presentation on the preparation of the Feasibility Report, on December 17, 2004. The parties, to whom the said e-mails were dispatched, were as under: -

The Under Secretary (Ports), Government of Pondicherry issued a Letter of Intent dated June 3, 2005 in favour of M/s. SPML. It was stated in the said letter that it was proposed to engage the said company for the 54 development of Pondicherry Port on BOT basis and the Letter of Intent was subject to the condition that Detailed Project Report was approved by the Competent Authority. It was mentioned in the said letter that the said company would have to undertake the preparation of a Detailed Project Report and Feasibility Study at its own cost. It was also mentioned therein that the Detailed Project Report should be submitted within 45 days from the date of issue of the letter and if the company agreed upon the conditions stipulated in Letter of Intent then the company should deposit a Bank Guarantee of Rs.50 lakhs within a period of 15 days. In terms of the aforesaid Letter of Intent, the company made available a Bank Guarantee to the Government of Pondicherry on June 18, 2005. The company, along with its letter dated July 18, 2005, submitted a Detailed Project Report to the Government of Pondicherry. In terms of the recommendations of the Committee for Port Privatisation the Government of Pondicherry by order dated August 4, 2005 appointed National Institute of Port Management, Chennai as a Consultant for the development of the Port. 55 The Under Secretary (Port), Government of Pondicherry, by his letter dated August 4, 2005, forwarded a Detailed Project Report submitted by M/s. SPML to NIPM with a request to make a detailed analysis and evaluation of technical, financial, environmental and legal aspects on the Detailed Project Report. The Detailed Project Report was examined in a meeting held on August 31, 2005 and various draw-backs such as traffic forecast, detailing of the plans, etc. emerging from the Detailed Project Report were examined. It was thereafter decided that M/s. SPML should have a re-look on the issues raised and revise the Detailed Project Report suitably. The NIPM submitted its draft report on September 13, 2005. In terms of the discussions held on August 31, 2005, M/s. SPML by its letter dated September 23, 2005 submitted the First Revised Detailed Project Report to the Director of Ports. The meeting was held on September 24, 2005 and it was agreed that NIPM would examine the First Revised Detailed Project Report and submit a report. The reports submitted were examined. M/s. SPML submitted the Second Revised Detailed 56 Project Report along with its letter dated October 5, 2005, after which a meeting was held on November 12, 2005. In the said meeting officials of M/s. SPML, the officials of M/s. NIPM and the officials of the Government of Pondicherry were present and the minutes were drawn and noted. In pursuance thereof NIPM submitted its final report on December 1, 2005. The issues raised by all the parties concerned were resolved and, therefore, the Second Revised Detailed Project Report was accepted by the Government as Approved Detailed Project Report. The Government of Pondicherry thereafter constituted a Committee to draft the Concession Agreement to be entered into between the Government of Pondicherry and M/s. SPML. The Committee examined various model Concession Agreement of various States and more specifically of Gujarat State. The said Concession Agreement was thereafter drafted on the basis of the Approved Detailed Project Report. The said draft agreement was examined and approved by various departments of the Government of Pondicherry. The draft agreement was placed before the Council of 57 Ministers for its approval. The Council of Ministers in a meeting dated January 20, 2006 approved the same and resolved that the existing Port Land of 153 acres be handed over for Port development whereas remaining 107 acres should be acquired and handed over within 180 days to SPML. It was further resolved that a lease amount of Rs.2,000/- per acre per annum should be charged from SPML. The order dated January 21, 2006 issued by the Government of Pondicherry indicates that approval of the Lt. Governor of Pondicherry was obtained to the Detailed Project Report as revised on November 16, 2005 for the development of Port on BOT basis. The Government Order also mentions that approval was also granted to the Concession Agreement to be entered into between the Government of Pondicherry and SPML along with its consortium partners. On January 21, 2006 the Government of Pondicherry entered into a Concession Agreement with SPML along with its consortium partners. On January 24, 2006 the Director of Ports, Government of Pondicherry issued an Office Memorandum in favour of SPML. By the said 58 Memorandum all the existing moveable/immoveable assets of the Port were to be handed over to the developer as per the Concession Agreement.

The IPCO Menang, Singapore and M/s Larsen & Toubro, Chennai, had participated in the Port privatisation process in the year 2003 but had not responded, though they were chosen. However, they had expressed their intent to develop the Pondicherry Port by communications dated December 15, 2004 and December 22, 2004 as mentioned above. In view of these letters, the Director of Ports by his letter dated January 7, 2005 sought a decision from the Under Secretary (Port) 79 regarding the future course of action to be taken in the matter. The Under Secretary (Port) made a noting dated January 19, 2005 recounting the facts and circumstances relating to IPCO Menang, Singapore and M/s Larsen & Toubro, Chennai. The Chief Secretary expressed his view on this noting and recommended that M/s Larsen & Toubro, Chennai, be called as third party in addition to Apollo construction and M/s DS Constructions. The Deputy Secretary (Law) was requested to examine the issue. It was for this reason that the Inter-Departmental Note dated January 21, 2005 was submitted to the Law Department. On January 23, 2005, one Walter-Bau-AG sent a communication informing the Chief Secretary about its desire to participate in the Deep Sea Project on DBOOT basis and submitted its profile. A letter was also written by Digital Hub, Malaysia, stating that it wanted to participate in the Deep Sea Project on DBOOT basis. What is important to note is that the moment firm offers for development of the Port came before the Government of Pondicherry, the choice before the Government was 80 very clear. The Government had been trying to develop the Port since 1973. As concrete proposals for the development of the Port were available, the Government felt that proper course was to move the proceeding forward to select a developer. It is relevant to notice that certain parties had sought permission to participate in the process of development of the Port itself and not just prepare a Feasibility Report. The records indicate that the Chief Secretary met the Lieutenant Governor on February 2, 2005 and it was decided that a list of firms, which had expressed their interest to develop the Port through private investment, should be prepared. This is clearly reflected in the note of the Executive Director of Port to the Government of Pondicherry dated February 2, 2005. In terms of the said direction, the Director (Ports) in his note dated February 3, 2005 gave a list of 11 firms/ companies which had expressed their desire to develop the Port through private investment. Out of the 11 parties, whose names were mentioned, IPCO Menang and Larsen & Toubro were already short listed in the year 2003. Hauer Associates, Mahindra Acres 81 Consulting Engineers Ltd., Marshals Power and Telecom (I) Ltd. and M.O.H. Group did not give any firm indication about their willingness to develop the Port. DS Constructions, Subhash Projects & Marketing Ltd. and Apollo Infrastructure Projects and Finance Co. Ltd. expressed willingness to develop the Port. The Digital Hub and Walter Bau AG came in the year 2005. The record makes it very clear that this was only a list of the firms/companies interested in developing the Port and not ranking. The Digital Hub and Walter Bau AG had also expressed their willingness to develop the Port in January 2005 itself. The respondent No. 11 addressed a letter dated February 4, 2005 reiterating its desire to develop the Port. It was clearly pointed out by the Respondent No. 11 that it was desirous of developing the Port and was not interested in acting as a Consultant.

The order of preference was prepared by the Committee keeping in mind the credentials and the presentations made by the firms as well as on the basis of recommendations and approval given by the Minister (Port), the then Chief Minister and the Lt. Governor. Thereafter a decision was taken by the Government of Pondicherry to issue a Letter of Intent to the respondent No. 11 as its name appeared first in the order of preference. Another decision was also simultaneously taken to appoint National Institute of Port Management, a Government of India Undertaking, as the consultant for the Government of Pondicherry and accordingly the appointment order was issued to the respondent No. 14 91 for carrying out a detailed analysis and evaluation of the Detailed Project Report (`DPR' for short) from all angles and for submission of comprehensive report, as well as finalization of DPR which would form the basic document for the Port development. The respondent No. 14 was also to advise and assist the Government of Pondicherry in obtaining all the statutory clearance, preparation of Draft Concession Agreement for the development of the Port on BOT basis, assist the Government in negotiation and finalization of final Agreement as well as to monitor, supervise and other related work. It is necessary to mention that pursuant to advertisement, which had appeared in The Hindu dated October 18, 2004, the respondent No. 14 had offered to prepare a feasibility report. In the order of appointment issued to respondent No. 14, it was mentioned that a Letter of Intent was issued to the respondent No. 11 for preparation of DPR. The record further establishes that the DPR was submitted by the respondent No. 11 to the Government which was forwarded to the respondent No. 14 for offering comments/views along with an advance payment 92 of Rs.2 lacs. Thereafter, a number of meetings were held between the officers of respondent No. 11, respondent No. 14 and the officials of Government of Pondicherry to discuss the DPR. During the meetings certain shortcomings in the DPR prepared by the respondent No. 11 were pointed out and, therefore, the respondent No. 11 was called upon to revise the DPR. Accordingly 2nd and final revised DPR was submitted by the respondent No. 11 on November 16, 2005. The 2nd revised DPR was also sent to the respondent No. 14. After assessment, analysis and evaluation of the 2nd revised DPR, the respondent No. 14 gave independent analysis and evaluation of the various aspects of the final DPR. In the independent analysis made by the respondent No. 14 it was stated that though the project was technically viable, it was not financially viable. However the respondent No. 11 and its associates had come forward to undertake the project with their own investment, whereas the Government of Pondicherry was not expecting to invest any money. Further, the Port Development Project is/was to result in direct and indirect employment to a 93 large number of persons as well as other economic and infrastructure development catering to the needs of the shipping industry and development of allied industries in the immediate hinter land and, therefore, the Government of Pondicherry had decided to proceed further in the matter. Accordingly the Government of Pondicherry constituted a Committee to draft the Concession Agreement to be entered into between the Government of Pondicherry and M/s. SPML. The Committee so constituted examined various model concession agreements of different states and more particularly of Gujarat State. After undertaking such study, Concession Agreement was drafted on the basis of approved DPR. The said draft agreement was examined and approved by various departments of the Government of Pondicherry. Thereafter, the draft agreement was placed before the Council of Ministers for its approval. The Council of Ministers in meeting dated January 20, 2006, approved the same and resolved that the existing port land measuring 153 acres be handed over for port development, whereas remaining 107 acres should be 94 acquired to be handed over to M/s. SPML. It was further resolved that a lease amount of Rs.2000/- per acre, per annum, should be charged from M/s. SPML. The order dated January 21, 2006, issued by the Government of Pondicherry, indicate that approval of the Lt. Governor was obtained to the revised DPR as well as to the Concession Agreement after which the Government of Pondicherry entered into a Concession Agreement with M/s. SPML along with its consortium partners on January 21, 2006.

26.Further, the Ministry of Shipping filed an affidavit before the High Court expressly endorsing the stand taken by the Government of Pondicherry that Pondicherry Port is not a major port and as such its jurisdiction and control vest with the Government of Pondicherry.

31.For the reasons stated in the judgment, this Court does not find any merit in any of the appeals and both the appeals are liable to be dismissed. Therefore, both the appeals fail and are dismissed. Having regard to the facts of the case, there shall be no orders as to cost.

May 14, 2009.