# 17 S.C.R. 801 YAZDANI INTERNATIONAL P. LTD v. AUROGLOBAL COMTRADE P. LTD. & ORS

- **Citation:** [2013] 17 S.C.R. 801
- **Court:** Supreme Court of India
- **Decided:** 2013-12-17
- **Case number:** Civil Appeal No. 11229 of 2013
- **Bench:** H. L. Gokhale, J. Chelame;Swar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/17-s-c-r-801-yazdani-international-p-ltd-v-auroglobal-comtrade-p-ltd-ors-28819
- **Pages:** 42

## Headnote

MAJOR PORT TRUSTS ACT, 1963:
A
B
s. 49 rlw s. 111 - Conditions for use of land belonging to c
Board - Held: Board is bound by policy directions given by
Government of India from time to time u/s 111 - Land Policy
guidelines, 2004 forbid sale or lease of land and enable the
Board only to grant or renew a licence -
The 2010 policy
guidelines restrict the authority of the Board to renew the
D
licences for only two terms - The tenure of any licence is
stipulated to be for a maximum period of 11 months - Thus,
the policy only enables the Board to renew licences granted
but does not create any vested right in favour of licensor -
Therefore, allotment of plots in dispute is only by way of a
E
licence, as defined u/s 52 of Easements Act, 1882 -
Land
Policy for Major Ports, 2004- Land Policy for Major Porl:s,
2010 - Easements Act, 1882~s. 52.
s. 49(3) - Discretion of Board to permit .use of its
properties - Held: Sub-s. (3) of s. 49 authorises the Board to
F
lease its properties either by auction or by inviting tenders -
The expression 'the Board may' occurring in the sub-section
indicates that lease is the highest of rights that may be created
on the properties -
It does not eliminate the discretion of
Board to permit use of its properties by any arrangement G
which transfers a lesser or no interest (such as a licence) in
the property - Leave and licence.
Easements Act, 1882:
801
H
802 SUPREME COURT REPORTS .
[2013] 17 S.C.R.
A
ss.52 and 60 - Licence - Held: A licence is revocable
at the will of grantor which is the essence of a licence - The
Act categorically declares that a licence can be revoked by
grantor except in the contingencies specified u/s 60(a) and
(b) - In the instant case, none of the appellants have any
s indefeasible right of renewal either under Easements Act or
under Land Policy guidelines - Appellants failed to establish
that decision of Board to terminate their licences is otherwise
violative of any of substantive right - Decision of the Board
needs no interference.
c
Renewal of licence in respect of land belonging to Board
- Held: A public body like the respondent Board cannot
arbitrarily decline to renew a licence - If it decides not to renew
any licence either with respect to a class of licences or with
reference to a specific area of the land, normally such a
D decision cannot be said to be either irrational or arbitrary
unless there are other compelling reasons to indicate that the
decision has no rational purpose to be achieved - In the
instant case, entire parcel of land which was allotted to the
various licensees of manually operated plots is proposed to
E be utilised by the Board for creating modern operational
facilities in connection with activities of the Port and
termination of licences of mechanically operated plots would
save the Board from huge financial loss - Such a decision
cannot be said to be arbitrary or irrational exercise of authority
F of a public body, having regard to the object sought to be
achieved by Board - Therefore, proposed course of action by
Board neither infringes any legal right of appellants nor does
it amount to an arbitrary exercise of auth.ority by Board -
Constitution of India, 1950 -
Arts. 12 and 14 - Approbate
G and reprobate.
H
Constitution of India, 1950:
Art. 136 - Jurisdiction under - Preliminary objection as
regards new grounds raised- Held: Jurisdiction under Art. 136
YAZDANI INTERNATIONAL P. LTD. v. AUROGLOBAL 803
COMTRADE P. LTD.
is discretionary only to be exercised in order to ensure that A
injustice is not perpetuated -
One of the important attributes
of discretionary jurisdiction is that such jurisdiction is not
exercised where it is likely to be a futile exercise -
Therefore,
accepting preliminary objection and refusing to consider the
ground newly raised by the Board would only "drive parties to
B
fresh litigation" rendeting present adjudication a futile
exercise of the jurisdiction of the Court -
Issue, can be
decided by Supreme Court to prevent a possibl

## Text

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[2013) 17 S.C.R. 801
YAZDANI INTERNATIONAL P. LTD.
v.
AUROGLOBAL COMTRADE P. LTD. & ORS.
(Civil Appeal No. 11229 of 2013)
DECEMBER 17, 2013.
[H. L. GOKHALE AND J. CHELAME;SWAR, JJ.]
MAJOR PORT TRUSTS ACT, 1963:
A
B
s. 49 rlw s. 111 - Conditions for use of land belonging to c
Board - Held: Board is bound by policy directions given by
Government of India from time to time u/s 111 - Land Policy
guidelines, 2004 forbid sale or lease of land and enable the
Board only to grant or renew a licence -
The 2010 policy
guidelines restrict the authority of the Board to renew the
D
licences for only two terms - The tenure of any licence is
stipulated to be for a maximum period of 11 months - Thus,
the policy only enables the Board to renew licences granted
but does not create any vested right in favour of licensor -
Therefore, allotment of plots in dispute is only by way of a
E
licence, as defined u/s 52 of Easements Act, 1882 -
Land
Policy for Major Ports, 2004- Land Policy for Major Porl:s,
2010 - Easements Act, 1882~s. 52.
s. 49(3) - Discretion of Board to permit .use of its
properties - Held: Sub-s. (3) of s. 49 authorises the Board to
F
lease its properties either by auction or by inviting tenders -
The expression 'the Board may' occurring in the sub-section
indicates that lease is the highest of rights that may be created
on the properties -
It does not eliminate the discretion of
Board to permit use of its properties by any arrangement G
which transfers a lesser or no interest (such as a licence) in
the property - Leave and licence.
Easements Act, 1882:
801
H
802 SUPREME COURT REPORTS .
[2013] 17 S.C.R.
A
ss.52 and 60 - Licence - Held: A licence is revocable
at the will of grantor which is the essence of a licence - The
Act categorically declares that a licence can be revoked by
grantor except in the contingencies specified u/s 60(a) and
(b) - In the instant case, none of the appellants have any
s indefeasible right of renewal either under Easements Act or
under Land Policy guidelines - Appellants failed to establish
that decision of Board to terminate their licences is otherwise
violative of any of substantive right - Decision of the Board
needs no interference.
c
Renewal of licence in respect of land belonging to Board
- Held: A public body like the respondent Board cannot
arbitrarily decline to renew a licence - If it decides not to renew
any licence either with respect to a class of licences or with
reference to a specific area of the land, normally such a
D decision cannot be said to be either irrational or arbitrary
unless there are other compelling reasons to indicate that the
decision has no rational purpose to be achieved - In the
instant case, entire parcel of land which was allotted to the
various licensees of manually operated plots is proposed to
E be utilised by the Board for creating modern operational
facilities in connection with activities of the Port and
termination of licences of mechanically operated plots would
save the Board from huge financial loss - Such a decision
cannot be said to be arbitrary or irrational exercise of authority
F of a public body, having regard to the object sought to be
achieved by Board - Therefore, proposed course of action by
Board neither infringes any legal right of appellants nor does
it amount to an arbitrary exercise of auth.ority by Board -
Constitution of India, 1950 -
Arts. 12 and 14 - Approbate
G and reprobate.
H
Constitution of India, 1950:
Art. 136 - Jurisdiction under - Preliminary objection as
regards new grounds raised- Held: Jurisdiction under Art. 136
YAZDANI INTERNATIONAL P. LTD. v. AUROGLOBAL 803
COMTRADE P. LTD.
is discretionary only to be exercised in order to ensure that A
injustice is not perpetuated -
One of the important attributes
of discretionary jurisdiction is that such jurisdiction is not
exercised where it is likely to be a futile exercise -
Therefore,
accepting preliminary objection and refusing to consider the
ground newly raised by the Board would only "drive parties to
B
fresh litigation" rendeting present adjudication a futile
exercise of the jurisdiction of the Court -
Issue, can be
decided by Supreme Court to prevent a possible damage to
the programme proposed to be undertaken by Board and its
"speedy accomplishment"- Subsequent events.
c
Arts. 32, 136 and 226 - Notices of termination oflicences
based on a decision of High Court in a case in which
appellant-noticees were not parties - Held: Interfering with the
notices of termination of licences on the ground that the
notices were initially based on a decision of High Court to
D
which appellants were not parties, would not be in the larger
public interest- Even otherwise, Court proposed to deal with
the matters as if they were petitions under Art. 32 and
permitted the appellants to place all the material which would
be available to them in law in defence even if the impugned
E
termination orders were not to be based on the decision of
the High Court - Appellants failed to place before the Court
any material to establish that the decision of Board to
terminate their licences is otherwise violative of any of the
substantive right - Practice and Procedure.
F
By notice dated 2-6-2011, Paradeep Port Trust (the
'Board') invited applications for allotment of 20 manual
iron ore plots of different.sizes. Respondent no. 1 in C.A.
No. 112329 of 2013 (Auroglobal) was declared to be one
G
of the successful bidders and was allotted one manual
iron ore storage plot subject to various terms and
conditions. After utilising the same for about a year,
respondent no.1 approached the High Court by way of a
writ petition, inter alia, to seek declarations that it had a
'
H
804
SUPREME COURT REPORTS
[2013] 17 S.C.R.
A right of renewal of the allotment of the plot; that the
pricing modality arrived at through the tender was
contrary to the tender conditions and the conditions for
renewal in the tender were violative of Arts. 14, 16 and 19
of the Constitution of India. The High Court by an interim
B order dated 2.8.2012, held that the Board did not follow
a uniform and consistent procedure in making allotment
of various plots of lands, and that plots could be allotted
only on the basis of an auction to the highest bidders. It
also found fault with the Board for having renewed
c certain licences granted earlier. Pursuant to the said
order, the Board cancelled licences of 48 manually
operated iron ore storage plots and 11 mechanically
operated storage plots. Licensees of 38 manually
operated plots category and 7 of the mechanically
0 operated plots category filed the appeals. Respondent
No. 1 also filed C.A. No. 11273 of 2013, but on different
grounds.
'
During the pendency of the instant appeals, the
Board altered the basis of its decision and decided to rest
E on the need of (i) the land in the dispute (covered by the
manually operated plots) for providing better facilities and
(ii) mechanically operated plots for securing better/higher
revenue. A preliminary objection was raised by the
appellants that neither of the two grounds, relied upon
F by the respondent Board in the instant proceedings were
the grounds on which either the High Court directed the
eviction of the appellants or the 'quit notices issued by
the respondent Board were founded and, therefore, the
Supreme Court may not embark upon an examination of
G those questions as a court of ·first instance.
The following questions arose for consideration of
the Court:
(1) Whether there was any indefeasible legal right in
H favour of any one of the appellants for renewal of the
YAZDANI INTERNATIONAL P. LTD. v. AUROGLOBAL 805
COMTRADE P. LTD.
licence g~anted or continued use of plots allotted to
A
them?
""'
(2) Irrespective of the answer to the above question,
whether the Board was justified to terminate the
allotments on the ground that it proposed to utilise the
land in dispute for providing better amenities in
connection with the obligations imposed upon the Board
by law?
B
(3) Whether the Court would be justified in law to
decline granting relief in exercise of its jurisdiction under c
Art. 136 of the Constitution of India either on the ground
that the appellants had no indefeasible right of renewal
or on the ground that irrespective of the rights of the
appellants, the purpose sought to be achieved by the
Board in proposing to resume the disputed lands was a
public purpose which 'should override the interest of any
D
of the appellants?
Disp·osing of the appeals, the Court
HELD: 1.1. The jurisdiction under Art. 136 of the
Constitution of India, 1950 is discretionary only to be
E
exercised in order to ensure that injustice is not
perpetuated. One of the important attributes of
discretionary jurisdiction is that such jurisdiction is not
exercised where it is likely to be a futile exercise i.e. where
the relief might be of no use to the applicant because it
F
would still be open to the competent authority to achieve
the result sought to be achieved by the disputed action
leaving the defeat i.e. by following the proper procedure
etc. In the instant case, nothing in law prevents the Board
from calling upon the appellants to desist from use of the
G
land in dispute. Such a course of action is the declared
intention of the Board. [para 35] [829-B-C; 830-A-B]
1.2. Therefore, accepting the preliminary objection
and refusing to consider the ground newly raised by the
Board would only "drive the parties to fresh litigation"
H
806 SUPREME COURT REPORTS
[2013] 17 S.C.R.
A rendering the present adjudication a futile exercise of the
jurisdiction of this Court. The issue can be decided by
this Court to prevent a possible damage to the
programme proposed to be undertaken by the Board and
its "speedy .accomplishment". Besides, this Court in
B either granting or declining to grant a relief in exercise of
its jurisdiction under Art. 136 can take note of the
developments either of fact or law which leave an impact
on the r1ghts and obligations of parties before the Court.
Even otherwise, this Court proposed to deal with the
c matters as if they were petitions under Art. 32 and
permitted the appellants to place all the material which
would be available to them in iaw in defence even if the
impugned termination orders were not to be based on the
decision of the High Court. [paras 36 and 59] [830-C-F,
D 842-0]
E
Pasupuleti Venkateswarlu vs . .The Motor & General
Traders 1975 (3) SCR 958 = (1975) 1 SCC 770 and
Rameshwar and Others vs. Jot Ram and Another etc. 1976
(1) SCR 847 = (1976) 1 sec 194 - relied on.
2.1. In view of the fact that most of the licences in
favour of the appellants came to be granted pursuant to
a process of either an auction or tender, those allotments
cannot be said to be inconsistent with the principles of
F law laid down by this Court in 2G case in the absence of
any other circumstance vitiating the allotment. [para ~7]
[825-G-H]
Centre for Public Interest Litigation and others v. Union
of India and others 2012 (3) SCR 147 = (2012) 3 SCC 1 -
G referred to.
2.2. Insofar as the allotment of plots made on
application (prior to 2005), the Board came out with a
clear explanation that there was hardly any competition
H at that point of time for the allotment of plots. Therefore,
YAZDANI INTERNATIONAL P. LTD. v. AUROGLOBAL 807
COMTRADE P. LTD.
there is no reason to find any fault with such allotrm~nt A
on the ground that the allotment was made withou~
following the pro.i:;edure of auction or tender. Moh!!
particularly, in the absence of any dispute regarding the
correctness of the assertion of the Board that there was.
hardly any demand at that point of time for allotment <>f
B
plots. [para 27) [825-H; 826-A-B]
3.1. The plots in dispute are property vested in a
public body (statutory corporation) performing important
public functions. In the matter of. creating rights and/or C
conferring privileges such a body is required to act in
public interest under some rational policy. The Boarct is
bound by the policy dire.:;tions given by the Government
of India from time to time u/s 111 of the Major Port Trusts
Act, 1963. [para 39) [831-D-E]
3.2. The Land Policy guidelines, 2004 forbid sale or
lease of land and enable the Board only to grant or renew
D
a licence without any limitation on the number of
renewals. The 2010 policy guidelines clearly restrict the
authority of the Board to renew the licences for only two
E
terms. The tenure of any licence is stipulated to be for a
maximum period of 11 months. In either case, from the
language of the policy guidelines it is clear that the policy
only enables the Board to renew the licences granted but
·does not create any vested right in favour of the licensor.
Even the letter of allotment makes it clear that what is
granted is only a licence. (See Footnote 6) Therefore, the
allotment of plots in dispute is only by way of a licence,
as defined u/s 52 of the Easements Act, 1882. [para 41]
[832-B-D]
3.3. Licence by definition does not create any interest
in the property. A licence only gives a right to the grantee
F
G
to use the immovable property of the grantor. There is no
transfer of any interest in such property In favour of the
grantee. Under s. 60, a licence is revocable at the will of H
808
SUPREME COURT REPORTS
[2013] 17 S.C.R.
A the grantor which is the essence of a licence. The
Easements Act categorically declares that a licence can
be revoked by the grantor except in the two
contingencies specified u/s 60(a) and (b). No such
exceptions are pleaded or demonstrated by the
B appellants. Therefore, it must be held that none of the
appellants have any indefeasible right of renewal either
under the Easements Act or under the said Land Policy
guidelines. [para 42] [832-E; 833-A; 834-A-B]
3.4. However, a public body like the respondent
C Board cannot arbitrarily decline to renew a licence. No
public body under our Constitutional system is vested
with such arbitrary powers. If the Board decides not to
renew any licence either with respect to a class of
licences or with reference to a specific area of the land,
D normally such a decision cannot be said to be either
irrational or arbitrary unless there are other compelling
reasons to indicate that the decision has no rational
purpose to be achieved. [para 43] [834-B-D]
E
R.O. Sheffy vs. Airport Authorities, 1979 (3) SCR 1014 =
(1979) 3 sec 489 - relied on.
3.5. In the counter filed by the respondent Board
before this Court, it is stated that the entire parcel of land
which was allotted to the various licensees of the
F manually operated plots from time to time by the Board
in favour of iron ore exporters, (except a small portion of
the land allotted in favour of the Odisha Mining
Development Corporation), is proposed to be utilised by
the Board after terminating the licences of the appellants
G for creating certain modern operational facilities in
connection with the activities of the Port. Such a decision
cannot be said to be arbitrary or an irrational exercise of
authority of a public body, having regard to 'the object
sought to be achieved by the Board of creating modern
H amenities. The exception in favour of the Odisha Mining
YAZDANI INTERNATIONAL P. LTD. v. AUROGLOBAL 809
COMTRADE P. LTD.
Development
Corporation
cannot
amount
to
A
discriminatory treatment of the appellants, since that
Corporation is admittedly a State owned Corporation and
forms a class by itself. Therefore, the proposed course
of action by the Board to terminate the licences neither
infringes any legal right of the appellants nor does it B
amount to an arbitrary exercise of the authority by the
Board. [para 44] [834-E; 835-A-D]
3.6. The Board desires to utilise the parcel of land in
dispute for a purpose which is authorised by law and
serves better the larger interests of nation - including the
C
interests of the exporters and importers such as the
appellants. Setting aside the, order under appeal on the
ground of breach of natural justice would be a futile
exercise. The respondent Board/licensor can always
terminate/revoke the licences. The proposed revocation
D
of licences would not amount to an irrational or arbitrary
decision, rejecting the new plea of the Board or any
ground would only lead to protracted litigation
consuming considerable time and delay in execution of
the project, by the Board. Such a delay would not E
subserve public interest. The appellants were given a
wholesome opportunity by this Court to establish their
legal right, to prevent the Board from terminating their
licences. [para 47] [835-G-H; 836-A-D]
4.1. The appellant in C.A. 11273 of 2013 (respondent no.
F
1 in C.A. No. 11229 of 2013) acquired the licence knowing
fully well the terms and conditions subject to which the
licence is offered by the Board. So they cannot take the
benefit of the offer and renounce the corresponding
obligation (~pprobate and reprobate). Further, the appellant G
can'\ot be said to have discrimiilated against, since the
other licencees who are paying a lower 'licence fee' had
secured the licenses at a point of time when there was no
competition and the market conditions were different. [para
51] [837-G-H; 838-A]
H
' 210 SUPREME COURT REPORTS
[2013] 17 S.C.R.
A
Hari Shankar & Ors. Vs. Dy. Excise & Taxation
B
Commissioner & Ors. 1975 (3) SCR 254 = (1975) 1 SCC 737,
Sh yam Lal & Ors. Vs. State of Punjab, (1977) 1 SCC 336 and
State Bank of Haryana & Ors. Vs. Jage Ram & Ors. 1980 (3)
SCR 746 = (1980) 3 SCC 599 - referred to.
4.2. Section 49(3) authorises the Board to allot plots
either by following the procedure of auction or inviting
tenders and demand amounts higher than those
contemplated under sub-s (1). It cannot be said that once
C the Board resorts to the process of auction or inviting
tenders, the Board can only allot a plot on lease but not
a licence. Sub-s. (3) of s. 49 authorises the Board to lease
its properties either by auction or by inviting tenders.
There is no warrant to read into the language of said subsection a legislative intention that in every case where the
D Board undertakes the process of auction or inviting
tenders, it is bound,{obliged to grant a lease of its
properties. The expression 'the Board may' occurring in
the said sub-section indicates that the lease is the highest
of rights that may be created on the properties, by the
E Board under the said provision. It does not eliminate the
discretion of the Board to permit use of its properties by
any arrangement which transfers a lesser or no interest
(such as a licence) in the property. [paras 52 and 54] [838F-G; 839-A-D]
F
4.3. C. A. 11267 of 2013 filed by Odisha Mining
Corporation Ltd., one of the licensees of the respondent
Board, stands disposed of in view of a specific statement
made at the bar on behalf of the Board that it does not
G propose to terminate the licence of the appellant as the
plot of land. allotted to the appellant is not required for the
purpose of its proposed developmental project. [para 56]
t839-F-G]
4.4. As regards the civil appeals filed by licensees of
H the 7 mechanically operated iron ore plots, each one of
-·
YAZDANI INTERNATIONAL P. LTD. v. AUROGLOBAL 811
COMTRADE P. LTD.
them enjoyed the benefit of the allotment of plot by virtue
A
of successive renewals. There is no reason to interfere
with the decision of the Board to terminate the licences
for the reasons: Firstly, a licence does not create any
indefeasible legal right. Secondly, there is no irrationality
in the decision of the Board, even from the· point of view
B
of the: fact that the Board is a public body (the State within
the meaning of Art. 12) and, therefore, obliged to act
rationally. The Board's decision to terminate the licences
is consistent with the policy guidelines of 2010. Thirdly,
the Board in its additional affidavit dated 25.11. 2013 has c
stated to the effect that keeping in view the growth rate
of iron ore traffic, non- availability of mechanically
operated plots to the Port Trust will entail huge financial
loss to the Port, and there is no reason to do)Jbt the said
assertion. [para 57) [839-H; 841-C-G; 842-B] .
D
5.1. Interfering with the notices of termination of
licences in each one of these cases on the ground that
the notices were initially based on a decision of the
Orissa High Court to which the appellants were not
parties, would not be in the larger public interest. [para
E
58] [842-B-C]
5.2. The appellants failed to place before this Court
any material to establish that the decision of the Board
to terminate their licences is otherwise violative of any of
F
the substantive right. In the circumstances, this Court
declines to interfere with the decision of the Board. [para
60) [842-E-F]
Natural Resources Allocation, In Re, Special
Reference No.1of2012 2012 (9) SCR 311=(2012)10 SCC
G
1 - cited.
Case Law Reference :
2012 (3) SCR 147
referred to
para 20
H
A
B
c
D
812
SUPREME COURT REPORTS
[2013] 17 S.C.R.
2012 (9) SCR 311
cited
para 21
1975 (3) SCR 958
relied on
para 34
1976 (1) SCR 847
relied on
para 34
1979 (3) SCR 1014
relied on
para 43
1975 (3) SCR 254
referred to
para 50
(1977) 1 sec 336
referred to
para 50
1980 (3) SCR 746
referred to
para 50
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
11229 of 2013.
From the Judgment and Order dated 02.08.2012 of the
High Court of Orissa at Cuttack in WPC No. 11785 of 2012.
WITH
C.A. No. 11230, 11231, 11232, 11232-11234, 11235, 11236,
11237, 11238, 11239, 11240, 11241, 11242, 11243, 11244,
E 11245, 11246, 11247, 11248, 11249, 11250, 11251, 11252,
11253, 11254, 11255, 11256, 11257, 11258-11259, 11260,
11261, 11262, 11263, 11264-11265, 11273, 11266, 11267,
11268, 11269, 11270-11271, 11272, 11278, 11274, 11275,
11276-11277, 11279, 11280, 11281, 11282, 11283 of 2013.
F
G
H
Kedar Nath Tripathy, Khaitan & Co., L.R. Singh, Milind
Kumar, Jyoti Mendiratta, Parmanand Gaur, Rakesh K. Sharma,
Raj Kumar Mehta, Siddhartha Chowdhury, A. Venayagam
Balan, Mukul Kumar, Vinodh Kanna B for the Appellant.
Sharmila Upadhyay, Mukul Kumar for the Respondents.
The Judgment of the Court was delivered by
CHELAMESWAR, J. 1. Leave granted in all the SLPs.
YAZDANI INTERNATIONAL P. LTD. v. AUROGLOBAL 813
COMTRADE P. LTD. [CHELAMESWAR, J.]
2. All these SLPs arise out of an order of the Orissa High
A
Court made in Miscellaneous Case No. 11005 of 2012 in Writ
Petition (Civil) No. 11785 of 2012 on 2nd August, 2012. The
said writ petition was filed by the appellant in the appeal arising
out of Special Leave Petition (C) No. 38013 of 2012 i.e. Mis.
Auroglobal Comtrade Pvt. Ltd. (hereinafter referred to as
B
Auroglobal).
3. Since the appeals at hand require examination of the
rights and obligations arising under the Major Port Trusts Act,
1963, we deem it appropriate to examine the scheme of the
C
said Act, insofar as it is irrelevant.
Paradeep Port is a majo; port as defined under Section
3 sub-Section (8)1 of the Indian Ports Act, 1908. The activities
of all major ports including the Paradeep Port are regulated by
various enactments such as the Indian Ports Act, 1908 and the
D
Major Port Trusts Act, 1963 (hereinafter referred to as "the Acf')
etc. The Act stipulates under Section 3 that the Central
Government shall cause to be cons~tuted a Board of Trustees
with respect to each of the major ports. Such Boards are
declared to be bodies corporate. The second respondent in the
E
appeal arising out of SLP(C) No.26321 of 2012 (also a
respondent in all the appeals), described (wrongly) as
Paradeep Port Trust is one such Board of Trustees constituted
under Section 3 of the Act. But for the sake of convenience
hereinafter will be referred to as the 'Board'. Each such Board
F
is authorised under Section 37 to compel any sea-going vessel
within the port or "port approaches'., to use the various facilities
provided by the Board. Section 35 enumerates the various
facilities and services at the port which can be undertaken by
1.
3(8) "major port" means any port which the Central Government may by
notification in the Official Gazette declare, or may under any law for the
time being in force have declared. to be a major port.
2.
Section 2(r) of Major Port Trusts Act, 1963 - 2(r) " port approaches", in
relation to a port, means those parts of the navigable rivers and channels
G
leading to the port, in which the Indian Ports Act is in force;
H
814 SUPREME COURT REPORTS
[2013] 17 S.C.R.
A the Boards. Section 48 of the Act authorises the framing of a
"scale of rates" for any one of the services rendered by a Board.
Such a scale of rate is required to be notified in the official
gazette. The scale of rates is required to be framed by the Tariff
B
c
D
E
Authority for Major Ports constituted under Section 47A3.
4. Section 49 of the Act, 1963, as it stands today reads
as follows:-
"49. Scale of rates and statement of conditions for use
of property belonging to Board- (1) The Authority shall
from time to time, by notification in the Official Gazette,
also frame a scale of rates on payment of which, and a
statement of conditions under which, any property
belonging to, or in the possession or occupation of, the
board, or any place within the limits of the port or the port
approaches may be used for the purposes specified
hereunder3.
47A. Constitution and incorporation of Tariff Authority for Major Ports. - (1)
With effect from such date as the Central Government may, by notification
in the Official Gazette, appoint there shall be constituted for the purposes
of this Act an Authority to be called the Tariff Authority for Major Ports.
(2) The Authority shall be a body corporate by the name aforesaid having
perpetual succession and a common seal and shall by the said name
sue and be sued.
F
3) The head office of the Authority shall be at such place as the Central
Government may decide from time to time.
(4) The Authority shall consist of the following Members to be appointed by the
Central Government, namely:-
(a) A Chairperson from amongst persons who is or who has been a Secretary
to the Government of India or has held any equivalent post in the Central
G
Government and who has experience in the management and knowledge
of the functioning of the ports;
(b) A Member from amongst economists having experience of not less than
fifteen years in the field of transport or foreign trade;
(c) a Member from amongst persons having experience of not less than fifteen
years in the field of finance with special reference to investment or cost
H
analysis in the Government or in any financial institution or industrial or
YAZDANI INTERNATIONAL P. LTD. v. AUROGLOBAL 815
COMTRADE P. LTD. [CHELAMESWAR, J.]
(a)
approaching or lying at or alongside any buoy,
A
. mooring, wharf, quay, pier, dock, land, building or
place as aforesaid by vessels;
(b)
entering upon or plying for hire at or on any wharf,
quay, pier, dock, land, building, road, bridge or
B
place as aforesaid by animals or vehicles carrying
passengers or goods;
(c)
leasing of land or sheds by owners of goods
imported or intended for export or by ..steamer
agents;
C
(d)
any other use of any land, building, works, vessels
or appliances belonging to or provided by the
Board.
(2) Different scales and conditions may be framed for
D
different classes of goods and vessels.
(3) Notwithstanding anything contained in sub- section (1 ),
the Board may, by auction or by inviting tenders, lease
any land or shed belonging to it or in its possession or E
occupation at a rate higher than that provided under subsection (1)."
5. It is necessary to notice here that sub-Section (3) was
inserted by Act 17 of 1982 with effect from 31.5.1982. For the
present, it is sufficient to note that Section 49 also authorises
the authority constituted under Section 4 7 A to frame a "scale
F
of rates" for using any property either belonging to or in the
possession or occupation of the Board. The.distinction between
Sections 48 and 49 is that while Section 48 deals with the scale
of rates for the services to be rendered by the Board, Section
G
49 deals with the scale of rates for the utilisation of the property
(both moveable and immovable) of the Board.
6. However, sub-Section (3) authorises the Board to collect
amounts higher than those prescribed under the scale of rates
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816
SUPREME COURT REPORTS
[2013] 17 S.C.R.
A contemplated under sub-Section (1) either by resorting to a
process of auction or inviting tenders in the contei..1 of the use
of the property belonging to the Board. The relevance of the
said sub-Section will be discussed later.
B
7. Chapter IX of the Act contains provisions which
authorise the Government of India to exercise supervisory
control as specified in the various provisions of the said
Chapter over the activities of the boards constituted under the
Act. Relevant in the context of the present litigation is Section
111 4 of the Act which declares that both, the authority
C constituted under Section 4 7 A and the Boards constituted
under the Act are bound "by such directions on questions of
policy" as the Central Government may give in writing from time
to time.
D
8. In exercise of the authority under Section 111, it appears
E
that the Central Government issued certain directions to all the
major ports except Kolkata 'and Mumbai styled as Land Policy
for Major Ports initially in the year 2004 which was modified in
the year 2011.
9. In the first of the above-mentioned policies, the
Government took note of the fact that under Section 34 of the
Act, the Board of a major port can lease out 'its immovable
property'. However, under the poJicy, the Central Government
directed that "no lease or sale of land inside the custom bound
F area should be permitted", but should be given on licence basis
only.
G
H
111. Power of Central Government to issue directions to Board - (1) Without
prejudice to the foregoing provisions of this Chapter, the Authority and every
Board shall, in the discharge of its functions under this Act, be bound by
such directions on_ questions of policy as the Central Government may give
in writing to it from time to time:
Provided that the Authority or the Board, as the case may be, shall be given
opportunity to express its views before any direction is given under this
sub-section.
YAZDANI INTERNATIONAL P. LTD. v. AUROGLOBAL 817
COMTRADE P. LTD. [CHELAMESWAR, J.]
10. In the policy directions issued under the Land Policy
for Major Ports, 2010, there is a slight shift in the policy
regarding the land inside the custom bound area. Under the
2010 Policy, it is stated that "normally land inside custom
bound area should be given on licence basis only". Thus, it
can be seen that while the 2004 Policy prohibited giving out of
the land inside the custom bound area by any mode other than
·licence, the 2010 Policy stipulated licensing is' the normal rule,
implying there could be exceptions to the rule.
Facts leading to the Litigation
11. Pursuant to the order dated 2nd August, 2012 of the
Orissa High Court, the Board cancelled the licences of 48
manually operated iron ore storage plots and 11 mechanically
operated storage plots. It appears from the additional affidavit
filed by the Board on 25th November, 2013, of the 59 licences
purported to have been cancelled by the Board, only 38
licences of the manually operated plots category and 7 of the
mechanical category are before us.
12. It appears from the material on record5 that there are
5.
Page 9 of the counter affidavn filed on behalf of Paradeep Port in SLP(C) No.26321/
2012
2.13 Prior to cancellation of licence in respect of iron plots w.e.f. 21.08.2012, there
were three types of manual iron ore plot holders in Paradeep Port Trust namely:
SI. No.
Type of plot
No. of Allottees
Allotted During
1
Non-auction plot
15
2003 to May 2005
2
Auction plot
52
June, 2005 to
May, 2011
3.
Plots allotted
13
June 2011
throuah tender
onwards
It is relevant to state that during the initial period, the iron ore plots were allotted on
payment of normal licence fees as per Port Scale of Rates (SOR). Due to surge in
demand for iron ore in the international market, demands for the plots also increased
in Paradeep Port. Accordingly Paradeep Port Trust vide resolution no. 31/2005-06
dated 28.05.2005 decided to introduce auction for allotment of manual iron ore plots
for export of iron ore. Subsequently since there were lot of interested parties,
Paradeep Port Trust decided to introduce the system of allotment of plots
A
B
c
D
E
F
G
H
818 SUPREME COURT REPORTS
(2013] 17 S.C.R.
A three classes of plot holders who manually handle iron ore
exports in the Paradeep Port; (i) 15 plot holders who were
allotted plots prior to May, 2005, (ii) 52 plot holders who were
allotted plots from June, 2005 to May, 2011 on the basis of
auction; and (iii) 13 plot holders who acquired plots under the
B system of tendering process subsequent to June, 2011.
13. By notice dated 2nd June, 2011, the Paradeep Board
invited applications from interested iron ore exporters, traders
etc. for allotment of 20 manual iron ore plots of different sizes.
Auroglobal was one of the parties who responded to the said
C tender notice and eventually became the successful bidder for
one of the plots [plot no. 1-5 (C group) admeasuring 5,500 sq.
mtrs.]
14. By letter dated 1st August, 2011 6 , ttie Paradeep Board
D informed Auroglobal that it had been declared to be one of the
successful bidders for the allotment of one manual iron ore
storage plot subject to various terms and conditions. Relevant
for our purpose are conditions Nos. 1, 2 and 4.
E
15. After securing allotment of the plot, Auroglobal utilised
the same for about a year and eventually approached the ~rissa
F
G
H
through tender w.e.f. June-July 2011. In all the cases the respective plot
holders are required to pay licence fees as per the Scale of Rate (SOR)
i.e. Rs. 9/- per sq. mtr per month, whereas the plot holders in the second
category as mentioned above, the allotees are required to pay one time
premium amount over and above the licence fees and for the third category,
the tender value is required to be paid every eleven month towards licence
fees apart from the licence fees as per the Scale of Rate (SOR) i.e. Rs. 9/
- per sqmtr per month subject to fulfillment of other conditions. A statement
containing the details of auction price and licence fee paid by these parties
are placed as Annexure-R/2 which runs from page 228 to 230."
Relevant portion of the allotment letter issued to the petitioner in SLP(C)
No.26321/2012
1. You are allotted plot No. l-5(C group) measuring 5,500 Sq. mtr. for a period
of 11 (eleven) months from 01.08.2011 to 30.06.2012.
''
.
YAZDANI INTERNATIONAL P. LTD. v. AUROGLOBAL 819
COMTRADE P. LTD. [CHELAMESWAR, J.]
High Court by way of Writ Petition No. 11785 of 2012, some
time in July, 2012 with prayers as follows:-
I.
To hold and declare that the petitioner has a rigtlt
of renewal of the allotment with respect to plot NO.
1-5 inside the Port area;
II.
Holding and declaring that the pricing modality
arrived at through the tender is contrary to the
tender conditions and the conditions for renewal in
the tender are violative of Articles 14, 16 and 19 of
the Constitution. of India;
Ill.
set aside imposing/demanding of licence fee by the
opp. Parties for renewal under the tender
conditions,
IV.
direct the opposite parties to renew and extend the
allotment of the plot without demanding additional
licence fee under Annexure-5;
v.
to quash the letter dated 05.07.2012 under
Annexure-9
16. Along with the said writ petition, M.C, No. 11005 of
2012 came to be filed for certain interim relief. It is in the said
M.C., the order under appeal came to be passed. By the said
order, the High Court opined that the Paradeep Board did not
follow a uniform and consistent procedure in making allotment
of various plots of lands to various parties and that plots could
be allotted only on the basis of an "auction to the highest bidders.
It also foi.md fault with the Paradeep Board for having renewed
certain licences granted earlier7•
5.
Therefore, from the aforesaid decision, it is clear that in respect of the
property which is owned by the Paradeep Port Trust, licence cannot be
granted in favour of persons after expiry of licence period by way of renewal.
Uniform and consistent procedure must be followed to auction the plots
inviting tenders from general public fixing certain terms and conditions.
A
B
c
D
E
F
G
H
A
B
c
D
E
F
G
H
820
SUPREME COURT REPORTS
[2013] 17 S.C.R.
17. Pursuant to the above-mentioned order of the High
Court, notices were issued by the Board (at least to some of
The plots may be required to be allowed in favour of eligible persons who
offer the highest licence fee in respect of the plots as the same being the
public property. If that price is not given the tender Accepting Authority need
not accept it and can re-tender it. The aforesaid procedure will fetch more
revenue to the State Exchequer to protect the public interest. The statement
in the additional affidavit filed by the Chairman of the Trust today disclose
the number of plots allotted in favour of certain licencees by way of renewal.
The same is not permissible in law as laid down by the apex Court in
catena of cases referred to above. The petitioners in these cases are
discriminated by the Port Trust as it has granted licences to the similarly
placed persons by way of renewal whereas these petitioners have
participated in the public auction got licence to their plots on the bid amount
offered by them which amount is much more than the scale of rates fixed
in favour of the other licencees. Their only grievance is regarding the
condition incorporated by the traffic manager. apart from the auction price,
the rates which are fixed by the Tariff Authority of Major Ports. In addition to
the auction mentioned In the financial bid by the petitioners that portion
according to them is arbitrary and it is a discrimination between the
petitioners and the licencees who have got the benefit of renewal. There
is no auction price. They are only paying the rates fixed by the TAMP.
Therefore. at this stage we have passed this order to see that the public
property is protected for which the Port Trust is required to look after its
affairs properly and fix the correct revenue to its property for having granted
licensing right in favour of the eligible persons. It is brought to the notice
of this Court that largesse are conferred on the basis of the policy of TAMP
without auctioning the property of the Port Trust by granting licence by way
of renewal which is contrary to the law laid down by the apex Court in the
aforesaid cases. That apart in a substantial number of cases interim orders
passed by this Court where the licence period is expired long back and
the licencees are continuing in the Port Trust property. is the submission
of Mr. S.K. Padhi, Learned senior counsel which shocks the conscience
of this Court. For implementation of our direction. Mr. Padhi learned senior
counsel appearing for the opposite parties seeks three weeks time. The
same is granted.
The amount that may be collected on the basis of the condition of the tender
call notice, as mentioned above, will be subject to the final decision that
may be rendered by this Court in these cases. Public auction price may
be given the Port to collect the rates fixed by the TAMP.
List this matter along with W.P.(C) Nos. 10339, 12295, 12296, 11783 in
three weeks
YAZDANI INTERNATIONAL P. LTD. v. AUROGLOBAL 821
COMTRADE P. LTD. [CHELAMESWAR, J.]
the appellants herein)8 , the substance of which (s t)lat th,e
allotment order made earlier was cancelled and called upon the
allottee to hand over vacant possession of the pJpt within 15
days from the date of the letter.
·
18. Hence, this batch of SLPs by the various-allottees.
19. Auroglobal also preferred an SLP on slightly different
grounds. We propose to deal with the case of Auroglobal
separately. We first deal with the cases of appellants other than
Auroglobal.
·
,,
20.