Case: Jsw Infrastructure Limited  Vs. Kakinada Seaports Limited

3. The facts necessary for decision of these appeals are that the Paradip Port Trust, issued Request For Qualification (RFQ) on 31.10.2015 inviting global invitations for Mechanisation of EQ-1-2 and EQ-3 berths at Paradip Port Trust of 30 MTPS Capacity on BOT basis under PPP mode for concession period of Thirty (30) years. It is not disputed that in response to the said RFQ, 4 parties including the first and second consortium, submitted their bids. All the four parties were duly qualified and were asked to participate in the next stage of bid, that is, Request For Proposal (RFP) and submit their offers with regard to revenue sharing. Only two parties, i.e., the first consortium and the second consortium submitted the RFP. The bid quoted by the first consortium was 31.70% as against 28.70% bid quoted by the second consortium. Since the first consortium were the highest bidders their proposal was recommended for acceptance by the tender committee of the Paradip Port Trust on 26.02.2016. At this stage, on 27.02.16 the second consortium submitted objections to the consideration of the application of the first consortium on the ground that in terms of the Policy Clause against creation of monopoly the appellants were not entitled to take part in this entire bidding process since they were already operating one berth for dry cargo. The Clause which is subject matter of interpretation reads asthere is only one private terminal/berth operator in a port for a 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 samewould also be pertinent to mention that specific cargo in this very Policy has been defined to be (i) containers, (ii) liquid, (iii) dry bulk. Letter of Award was issued in favour of the appellant of the first Consortium by the Paradip Port Trust on 29.02.2016.4. Aggrieved by this action, the second consortium filed a writ petition before the Orissa High Court. The submission of unsuccessful bidders was that since the first consortium was already operating a berth for dry cargo it could not have submitted its application to bid for the berth in question which is also admittedly meant for dry cargo. It was contended that as per the policy quoted above, if a private operator is operating a berth he cannot be allowed to bid for the next berth for handling the same cargo in the same port. This contention of the original writ petitioners was accepted by the Orissa High Court which interpreted the Policy clause by holding that the wordin the Clause indicated that a private operator cannot take part or bid for next successive berth for the same cargo. The High Court, therefore, held that the application for the first consortium JSW Infrastructure Limited, was wrongly considered and consequently set aside the award of Letter of Award in favour of the first consortium and further directed that the Paradip Port Trust may either accept the single remaining bid of the second consortium of Respondent Nos. 1-3 after negotiating the price which should not be less than the price offered by the consortium of JSW Infrastructure, or it may invite fresh bids for the berth in question.5. Aggrieved by the judgment of the High Court the first consortium and the Paradip Sea Port have filed the two appeals.

Court's reasoning:
8. On a bare reading of the Policy Clause some weightage and meaning has to be given not only to the wordas done by the High Court but also to the wordsappearing in the opening part of the Clause. The wordscannot be treated as surplusage. The entire clause has to be read as a whole in the context of the purpose of the policy which is to avoid and restrict monopoly. In our opinion, this Clause will apply only when there is one single private operator in a port. If this single private operator is operating a berth, dealing with one specific cargo then alone will he not be allowed to bid for next berth for handling the same specific cargo. The High Court erred in interpreting the clause only in the context of the wordand ignored the opening part of the Clause which clearly indicates that the Clause is only applicable when there is only one private berth operator. It appears to us that the intention is that when a port is started, if the first berth for a specific cargo is awarded in favour of one private operator then he cannot be permitted to bid for the next berth for the same type of cargo. However, once there are more than one private operators operating in the port then any one of them can be permitted to bid even for successive berths. In the present case, as pointed out above there already 5 private operators other than the first consortium.9. We may also add that the law is well settled that superior courts while exercising their power of judicial review must act with restraint while dealing with contractualIn Jagdish Mandal vs. State of Orissa (2007) 14 SCC 517  )this Court held that evaluation of tenders and awarding contracts are essentially commercial functions and if the decision is bonafide and taken in the public interest the superior courts should refrain from exercising their power of judicial review. In the present case there are no allegations of mala fides and the appellant consortium has offered better revenue sharing to the employer.Strong reliance has been placed on behalf of the second consortium on the judgment rendered in APM Terminals B.V. vs. Union of India and Another (2011 ) 6 SCC 756)  . We are of the considered view that the said judgment cannot be applied to the present case because in that case this court considered the clauses of the contract. The policy which was applicable in APM Terminal, was not the policy of 2010 but the policy of 2007, the wording of which is totally different. True it is, that in the said judgment reference has also been made to the new policy but that was not specifically dealt with by the Court, and the matter was decided on an interpretation of the terms of the contract and the policy of 2007.13. In view of the above discussion we are clearly of the view that the High Court erred in interpreting the Clause in the manner which it is done. As explained above, the Clause will apply only when there is single private operator operating a single berth. Once there are more than one private operators then the Clause will not apply. The decision taken by Paradip Port Trust could not be termed to be arbitrary, perverse or mala fide. Therefore, the High Court was not justified in setting aside the same.