Indian Port Act sec. 34 - 2011 Policy - Except Licence , no lease, sale etc., - Since it is Licence - there is no right of renewal - Writ filed for renewal licence etc.,was dismissed by the High court - Apex court confirmed the same - Constitutional court in either granting or declining to grant a relief in exercise of its jurisdiction under Article 136 can take note of developments either of fact or law which leave an impact on the rights and obligations of parties before the Court = Apex court dismissed the SLPs =
whether the respective
allotments made in favour of each of the appellants herein are in
accordance with law and
whether the appellants have any legally
indefeasible right of renewal of such allotments or to continue use of the
respective plots allotted to them. =
1) Whether there is any indefeasible legal right in favour of any one
of the appellants for renewal of the licence granted or continued
use of plots allotted to them?
2) Irrespective of the answer to the above question, whether the Board
is justified to terminate the allotments on the ground that it
proposes to utilise the land in dispute for providing better
amenities in connection with the obligations imposed upon the Board
by law?
3) Whether this Court would be justified in law to decline granting
relief in exercise of its jurisdiction under Article 136 of the
Constitution of India either on the ground that the appellants have
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 is a public
purpose which should override the interest of any of the
appellants? =
After securing allotment of the plot, Auroglobal utilised the same
for about a year and eventually approached the Orissa 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 right of renewal
of the allotment with respect to plot NO. I-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;
III. 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
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 material on record[5] that there are 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 system of tendering process subsequent to June, 2011.
under Section 34 of the Act, the Board of a major
port can lease out ‘its immovable property’.
Relevant portion of the notice issued to M/s Yazdani
International (P) Ltd., the petitioner in SLP(C) No.26321/2012
PARADEEP PORT TRUST
TRAFFIC DEPARTMENT
NO. TD/TM/GEN-01(Pt.1)/2012/3344 Dated: the 21st Aug.,
2012
To
M/s. Yazdani International (P) Ltd.
N-4/135 IRC Village Nayapalli,
Bhubaneswar – 751 015.
Sub.: Cancellation of Manual Iron Ore Storage Plot No. G-8 in
Compliance to order of the Hon’ble High Court of Orissa.
Dear Sir(s),
In obedience to order dtd. 02.08.2012 passed by the Hon’ble High
Court of Orissa in Misc. Case No. 110005 of 2012 arising out of W.P.(C)
No.11785 of 2012 (copy enclosed), the manual iron ore storage plot No. G-8
measuring 3000 sq. mts. Which was allotted by auction June 2010 and again
renewed in your favour upto 28.02.2013 is hereby cancelled with immediate
effect.
Further ……………… hand over the vacant possession of plot within 15
(fifteen) days ……
However, under the policy,
the Central Government directed that “no lease or sale of land inside the
custom bound area should be permitted”, but should be given on licence
basis only.
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.
under the
2004 policy guidelines the licences granted by the Port Trust could be
renewed without any limitation on the number of renewals that could be
granted.
However, under the 2010 policy, the number of renewals was
restricted to two.
From the material on record, it appears that each one
of these appellants (mechanically operated plot licencees) enjoyed a number
of renewals.
We see no reason to interfere with the decision of the Board
to terminate the licences for the following reasons -
Firstly, a licence
does not create any indefeasible legal right.
Secondly, we do not see
any irrationality in the decision of the Board, even from the point of view
of the fact that the Board is a public body (the State within the meaning
of Article 12) and therefore, obliged to act rationally. The Board’s
decision to terminate the licences is consistent with the policy guidelines
of 2010.
Thirdly, in view of the assertion of the Board in its additional
affidavit dated 25th November, 2013, “……… the existing iron ore traffic
which is showing a growth rate of 159.56% during current financial year
(upto October 2013) in comparison to the iron ore traffic handled during
the same period of the previous financial year, it is submitted that non-
availability of mechanical plots to the Paradip Port Trust will entail huge
financial loss to the port which is a major port under Government of India.
This will also result in idling of the existing iron ore handling plant
for which significant money has been spent and dedicated facilities have
been created for efficient and effective handling of iron ore traffic.
This will also result in diversion of iron ore traffic to nearby private
Ports which is already happening due to non availability of Mechanical
plots to Paradip Port Trust”, we do not see any reason to doubt the said
assertion.
to terminate their licences is otherwise violative of any of the
substantive right. In the circumstances, we decline to interfere with the
decision of the Board. All the appeals are, accordingly, dismissed.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 11229 OF 2013
(Arising out of Special Leave Petition (Civil) No. 26321 of 2012)
Yazdani International P. Ltd. …Appellant
Versus
Auroglobal Comtrade P. Ltd. & Ors. …Respondents
WITH
CIVIL APPEAL NO. 11230 OF 2013
(Arising out of Special Leave Petition (Civil) No. 26319 of 2012)
CIVIL APPEAL NO. 11231 OF 2013
(Arising out of Special Leave Petition (Civil) No. 26922 of 2012)
CIVIL APPEAL NO. 11232 OF 2013
(Arising out of Special Leave Petition (Civil) No. 26894 of 2012)
CIVIL APPEAL NO. 11233-11234 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 27013-27014
of 2012)
CIVIL APPEAL NO. 11235 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 27477 of
2012)
CIVIL APPEAL NO. 11236 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 27480 of
2012)
CIVIL APPEAL NO. 11237 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27481 of
2012)
CIVIL APPEAL NO. 11238 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27483 of
2012)
CIVIL APPEAL NO. 11239 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27484 of
2012)
CIVIL APPEAL NO. 11240 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27485 of
2012)
CIVIL APPEAL NO. 11241 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27486 of
2012)
CIVIL APPEAL NO. 11242 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27489 of
2012)
CIVIL APPEAL NO. 11243 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27491 of
2012)
CIVIL APPEAL NO. 11244 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27493 of
2012)
CIVIL APPEAL NO. 11245 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27492 of
2012)
CIVIL APPEAL NO. 11246 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27495 of
2012)
CIVIL APPEAL NO. 11247 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27497 of
2012)
CIVIL APPEAL NO. 11248 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27508 of
2012)
CIVIL APPEAL NO. 11249 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27509 of
2012)
CIVIL APPEAL NO. 11250 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27510 of
2012)
CIVIL APPEAL NO. 11251 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27516 of
2012)
CIVIL APPEAL NO. 11252 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27517 of
2012)
CIVIL APPEAL NO. 11253 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27511 of
2012)
CIVIL APPEAL NO. 11254 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27512 of
2012)
CIVIL APPEAL NO. 11255 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27513 of
2012)
CIVIL APPEAL NO. 11256 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27514 of
2012)
CIVIL APPEAL NO. 11257 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27515 of
2012)
CIVIL APPEAL NOS. 11258-11259 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 27518-27519
of 2012)
CIVIL APPEAL NO. 11260 OF 2013
(Arising out of Special Leave Petition (Civil) No. 35226 of
2012)
CIVIL APPEAL NO. 11261 OF 2013
(Arising out of Special Leave Petition (Civil) No. 38111 of
2012)
CIVIL APPEAL NO. 11262 OF 2013
(Arising out of Special Leave Petition (Civil) No. 38900 of
2012)
CIVIL APPEAL NO. 11263 OF 2013
(Arising out of Special Leave Petition (Civil) No. 13946 of
2013)
CIVIL APPEAL NOS. 11264-11265 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 30071-30072
of 2012)
CIVIL APPEAL NO. 11273 OF 2013
(Arising out of Special Leave Petition (Civil) No. 38013 of
2012)
CIVIL APPEAL NO. 11266 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28840 of
2012)
CIVIL APPEAL NO. 11267 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28841 of
2012)
CIVIL APPEAL NO. 11268 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28842 of
2012)
CIVIL APPEAL NO. 11269 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28844 of
2012)
CIVIL APPEAL NOS. 11270-11271 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 28846-28847
of 2012)
CIVIL APPEAL NO. 11272 OF 2013
(Arising out of Special Leave Petition (Civil) No. 1036 of 2013)
CIVIL APPEAL NO. 11278 OF 2013
(Arising out of Special Leave Petition (Civil) No. 16946 of
2013)
CIVIL APPEAL NO. 11274 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28384 of
2012)
CIVIL APPEAL NO. 11275 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28425 of
2012)
CIVIL APPEAL NOS. 11276-11277 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 29458-29459
of 2012)
CIVIL APPEAL NO. 11279 OF 2013
(Arising out of Special Leave Petition (Civil) No. 32007 of
2012)
CIVIL APPEAL NO. 11280 OF 2013
(Arising out of Special Leave Petition (Civil) No. 32005 of
2012)
CIVIL APPEAL NO. 11281 OF 2013
(Arising out of Special Leave Petition (Civil) No. 32001 of
2012)
CIVIL APPEAL NO. 11282 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28 of 2013)
CIVIL APPEAL NO. 11283 OF 2013
(Arising out of Special Leave Petition (Civil) No. 36 of 2013)
J U D G M E N T
Chelameswar, J.
1. Leave granted in all the SLPs.
2, All these SLPs arise out of an order of the Orissa High 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. M/s. Auroglobal Comtrade Pvt. Ltd. (hereinafter referred to as
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 said Act, insofar as it is
irrelevant.
Paradeep Port is a major 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 Major Port Trusts Act, 1963 (hereinafter
referred to as “the Act”) etc. The Act stipulates under Section 3 that the
Central Government shall cause to be constituted 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 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 is authorised under
Section 37 to compel any sea-going vessel within the port or “port
approaches”[2] 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 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
Authority for Major Ports constituted under Section 47A[3].
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
hereunder –
(a) approaching or lying at or alongside any buoy, 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 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;
(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 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 occupation at a rate
higher than that provided under sub- section (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 47A to frame a “scale 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 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 contemplated under
sub-Section (1) either by resorting to a process of auction or inviting
tenders in the context of the use of the property belonging to the Board.
The relevance of the said sub-Section will be discussed later.
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 constituted under Section 47A 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.
8. In exercise of the authority under Section 111, it appears 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 policy,
the Central Government directed that “no lease or sale of land inside the
custom bound area should be permitted”, but should be given on licence
basis only.
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 record[5] that there are 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 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 tender notice and eventually became the
successful bidder for one of the plots [plot no. I-5 (C group) admeasuring
5,500 sq. mtrs.]
14. By letter dated 1st August, 2011,[6] the Paradeep Board 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.
15. After securing allotment of the plot, Auroglobal utilised the same
for about a year and eventually approached the Orissa 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 right of renewal
of the allotment with respect to plot NO. I-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;
III. 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 found fault with the Paradeep Board for having renewed
certain licences granted earlier.[7]
17. Pursuant to the above-mentioned order of the High Court, notices
were issued by the Board (at least to some of the appellants herein)[8],
the substance of which is that the allotment order made earlier was
cancelled and called upon the allottee to hand over vacant possession of
the plot 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. It is argued on behalf of the appellants that the High Court
grossly erred in coming to the conclusion that the allotments made in
favour of various appellants are in violation of the law declared by this
Court in various decisions relied upon by the High Court in its order
including Centre for Public Interest Litigation and others v. Union of
India and others (2012) 3 SCC 1 [also known as 2G case]. Most of the
appellants (details of which are available on record and not in dispute)
came to be allotted with plots of land either pursuant to a process of
auction or tender where each of the appellant had to pay substantial
amounts to the Board for securing the allotment of the plots, apart from
agreeing to pay the amounts stipulated by the scale of rates prescribed by
the Tariff Authority. Therefore, the assumption of the High Court that the
principles of law laid down by this Court in the various judgments referred
to by the High Court starting from Dayaram Shetty to ‘2G case’ is without
any factual basis. The allotments made in favour of the appellants are in
consonance with the law laid down in 2G’s case.
21. It is also argued on behalf of the appellants that in the
subsequent judgment of the Supreme Court in Natural Resources Allocation,
In Re, Special Reference No.1 of 2012, (2012) 10 SCC 1, the Constitution
Bench of this Court clearly held that in the matter of alienation of the
property by the State or conferment of largesse, auction is a preferred
mode of securing compliance with the commands of the Constitution under
Article 14 of the Constitution but-not the only mode. It is argued that
even if auction is the only mode of distributing State largesse or
alienating property of the State which passes the test of Article 14, most
of the appellants, as already indicated, have secured allotment of plots
either through the process of auction or of tenders which is nothing but a
variant of the system of auction. Therefore, allotments made in their
favour could not be faulted. It is further submitted that the conclusion
of the High Court that the “licence cannot be granted in favour of persons
after expiry of the licence period by way of renewal”[9] is without any
basis in law. Renewal of licence is a matter of contract between the
parties. If the initial allotment of a plot on licence basis is otherwise
in accordance with law, renewal of such arrangement is a matter which ought
to be governed by the terms of the agreement between the parties. There is
nothing in law or in any of the decisions of this Court relied upon by the
High Court which requires the State or its instrumentalities not to enter
into any contract or arrangement which is renewable periodically. Learned
counsel also submitted that each of the appellants have a right to renewal
of the allotment made to them and there is nothing in any one of the
judgments of this Court relied upon in the order under appeal which
militates against such right of renewal of the allotment which is otherwise
validly obtained. It is submitted that any view of law to the contrary
would not only be impracticable but also detrimental to the larger public
interest as such short term arrangements would not be conducive to the
overall economic growth of the country. It is further submitted by the
appellants that none of the appellants were parties before the High Court
and the order of the High Court is in flagrant violation of the audi
alteram partem rule. If only the appellants had an opportunity to present
their cases before the High Court, the appellants would have placed on
record all relevant facts to substantiate their arguments mentioned
earlier. Therefore, on this ground alone the order under appeal is
required to be set aside. Lastly they submitted that the order is neither
sought by Auroglobal, who was the petitioner before the High Court, nor is
within the scope of the final relief sought by Auroglobal in the writ
petition.
22. With regard to the limited number of plots allotted without
following either the auction route or the tender route it is submitted that
such allotments were made prior to 2005 at which point of time there was
not much demand for allotment of plots by the Board, therefore, the
allotments were on application basis. Hence, such allotments cannot be
faulted.
23. Mr. Rohinton Nariman, learned senior counsel appearing for the
Board argued that (i) none of the appellants have a ‘right of renewal’ as
their possession is only a permissive possession (a licence) which does not
create any interest in the property to enable them to claim a “right” of
renewal. (ii) As on today the Board needs the entire area of land
(occupied, by these various appellants by virtue of the allotment orders
given in their favour earlier) for the purpose of developing the port for
the creation of modern Deep Draught Coal and Iron Ore berths with 10
millions capacity each. The submission is based on the pleadings before
this Court.[10] The Board therefore, does not propose to continue or renew
the licences of the appellants irrespective of the fact whether the order
under appeal is tenable or not, this Court may not exercise its
extraordinary discretion under Article 136 to enable the appellants to
cling on to the property over which they have no substantive right.
24. The first question which is to be examined is whether this Court
is required to set aside the order under appeal and also the consequential
notices issued by the respondent/Board to the various appellants on the
ground that the order under appeal is made in breach of the rule of audi
alteram partem.
25. None of the appellants herein (except Auroglobal) was a party to
the proceedings before the High Court. Therefore, there was no occasion
for the High Court to examine the twin questions whether the respective
allotments made in favour of each of the appellants herein are in
accordance with law and whether the appellants have any legally
indefeasible right of renewal of such allotments or to continue use of the
respective plots allotted to them. In the normal course, the order under
appeal is required to be set aside on the simple ground that the same is in
breach of principles of natural justice. But we do not propose to do so
for reasons to follow.
26. The undisputed facts in these batch of matters are that most of
the appellants were allotted plots either pursuant to an auction or through
the process of tender system, the details of which are already taken note
of (See footnote 5). It is also not in dispute that each of the plots,
which are the subject matter of these appeals was allotted on a licence.
27. Before we deal with the new ground urged by the Board, we would
like to deal with the question of the legality of the initial allotment in
favour of each of these appellants. In view of the fact that most of the
licences in favour of the appellants herein came to be granted pursuant to
a process of either an auction or tender, those allotments, in our view,
cannot be said to be inconsistent with the principles of law laid down by
this Court in 2G case in the absence of any other circumstance vitiating
the allotment. Insofar as the allotment of plots made on application
(prior to 2005), the Paradip Port Trust came out with a clear explanation
that there was hardly any competition at that point of time for the
allotment of plots. Therefore, we do not see any reason to find any fault
with such allotment on the ground that the allotment was made without
following the procedure of auction or tender. More 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
of plots.
28. The opinion of the High Court - that a renewal of the licence in
dispute without following the procedure of auction is inconsistent with the
principles laid down in the 2G case – as an absolute proposition of law
could be examined in appropriate case. Such a scrutiny is not required
for the present as the Board does not propose to renew the licences.
29. However, it is the submission of the Board that this Court need
not examine the legality of the order under appeal for two reasons –
(1) none of the appellants have either any indefeasible right of renewal or to
continue the use of the respective plots allotted to them and the Board is
entitled in law to revoke the licences at any time and debar the appellants
from entering and using the plots in dispute
(2) The Board proposes to
revoke the licences and resume possession of the land (manually operated
iron ore plots) in dispute for the purpose of developing the same and
providing better facilities connected with the operations of the Board.
30. To examine the tenability of the above submissions, the following
questions are required to be examined.
1) Whether there is any indefeasible legal right in favour of any one
of the appellants for renewal of the licence granted or continued
use of plots allotted to them?
2) Irrespective of the answer to the above question, whether the Board
is justified to terminate the allotments on the ground that it
proposes to utilise the land in dispute for providing better
amenities in connection with the obligations imposed upon the Board
by law?
3) Whether this Court would be justified in law to decline granting
relief in exercise of its jurisdiction under Article 136 of the
Constitution of India either on the ground that the appellants have
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 is a public
purpose which should override the interest of any of the
appellants?
31. We therefore, called upon the appellants to address us on the
above questions.
32. We made it clear to the appellants that this Court will consider
the defence, if any, of each of the appellants to the proposed termination
of their licences on a new ground now set up by the respondent Board and
invited them to make their submissions in that regard. Such suggestion was
made in view of the possibility that if the appellants did not have any
substantive defence against the proposed termination of the licences,
interference with the order under appeal on the ground that there is a
procedural lapse would only have the effect of protracting the litigation
thereby enabling the appellants to continue occupation of public property
and deprive the Board of higher revenue.
33. A preliminary objection is raised by the appellants for
examination of the above-mentioned questions. The appellants argued that
neither of the two grounds, now relied upon by the respondent Board, are
the grounds on which either the High Court directed the eviction of the
appellants nor the quit notices issued by the respondent Board are founded.
Therefore, this Court may not embark upon an examination of those
questions as a Court of 1st instance. According to the appellants, such an
examination would take the appellants by surprise. Without prejudice to
the preliminary objection, the learned counsel for the appellants also
argued that they have a right of renewal of the licences and/or to continue
in possession of the land in dispute.
34. In response to the preliminary objection, it is argued on behalf
of the Board that this Court in exercise of its jurisdiction under Article
142 can undertake such an examination in an appropriate case to render
complete justice in these batch of matters. Shri Nariman relied upon
Pasupuleti Venkateswarlu Vs. The Motor & General Traders [(1975) 1 SCC
770][11]a and Rameshwar and Others Vs. Jot Ram and Another etc. [(1976) 1
SCC 194]1b, in support of this submission.
35. We reject the preliminary objection for the following reason:-
The jurisdiction under Article 136 is discretionary. It is settled by
catena of decisions of this Court that the jurisdiction under Article 136
is purely discretionary only to be 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 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.[12]a
Though the statement of the principle in the references in the footnote are
made in the context of the jurisdiction of the Court to issue mandamus, the
principle applies proprio vigore to the discretionary jurisdiction under
Article 136 of the Constitution. Such being the principle of law, even if
the present batch of appeals are to be allowed, as prayed for, on the
ground that the order under challenge is made in breach of the rule of audi
alteram partem, nothing in law prevents the Board from calling upon the
appellants to desist from use of the land in dispute. Such a course of
action is the declared intention of the Board. In such an event, once again
the High Court and this Court would have to examine the questions framed
above.
36. Therefore, accepting the preliminary objection and refusing to
consider the ground newly raised by the Board would only “drive the parties
to fresh litigation” rendering the present adjudication a futile exercise
of the jurisdiction of this Court. The issue can be decided here and now
to prevent a possible damage to the programme proposed to be undertaken by
the Board and its “speedy accomplishment”.
The two decisions (See Footnote 11) relied upon by the Board are a
clear authority for the proposition that this Court in either granting or
declining to grant a relief in exercise of its jurisdiction under Article
136 can take note of developments either of fact or law which leave an
impact on the rights and obligations of parties before the Court.
37. We shall first deal with the question of element of surprise as it
is the duty of this Court to scrupulously ensure the “rules of fairness to
both sides”, in every case. Such duty is more rigorous in the instant case
because of the fact that the respondent Board has come out with a new
ground for denying the relief to the appellants - the legality of which we
will have to consider as the court of first instance.
38. The Board seeks to debar the appellants from using the land in
dispute. Such a decision of the Board rested on the order of the High
Court under challenge. But during the pendency of the present proceedings
the Board altered the basis of its decision and decided to rest 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. The legality of such proposed action of the
Board would depend on (a) the true character of the legal relationship
between the appellants and the Board; (b) whether such relationship confers
a right on the appellants to continue use of the disputed property either
for eternity or for a definite period; (c) the legal authority of the Board
to terminate such relationship; and (d) the procedure required to be
followed for such termination.
39. To answer the above question we examine the nature of the legal
rights flowing from such allotments. 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 conferring privileges
such a body is required to act in public interest under some rational
policy. We have already noticed that the Board is bound by the policy
directions given by the Government of India under Section 111 of the Act,
and that the Government of India from time to time issued policy
guidelines.
In the policy guidelines issued in 2004, the following were
the directives:
“b) No sale or lease should be permitted. Land should be given on
licence basis only. The licence may be up to a maximum period of
11 months and shall normally be in accordance with the Schedule of
Rates (SoR)/rates approved by the competent authority. At the
discretion of the Chairman, such licence may also be given by
inviting tenders. The licence can be renewed at the expiry of the
previous licence period. Each renewal of licence shall be treated
as fresh licence.”
40. When it came to 2010, it is specifically laid down that the
“licence can be renewed by the Chairman twice”[13] subject to
either the prior approval or subsequent ratification of the board.
41. It can be seen from the policy guidelines that while the 2004
policy forbids sale or lease of land, the 2010 policy makes it the normal
rule subject to exceptions. The 2004 Land Policy guidelines enable the
Board only to grant or renew 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 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, we are of the opinion that the allotment of plots
in dispute is only by way of a licence, as defined under Section 52 of the
Easements Act, 1882[14].
42. As rightly pointed out by Shri Nariman, licence by definition does not
create any interest in the property[15]. A licence only gives a right to
use the immovable property of the grantor, to the grantee. There is no
transfer of any interest in such property in favour of the grantee. On the
other hand, under the Transfer of Property Act, an interest either limited
or unlimited is created in favour of the transferee depending upon the
nature of the transfer (sale, mortgage or lease etc.). Under Section
60[16], a licence is revocable at the will of the grantor which is the
essence of a licence. [17] The Easements Act categorically declares that a
licence can be revoked by the grantor except in the two contingencies
specified under Section 60(a) & (b). No such exceptions are pleaded or
demonstrated by the 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 above mentioned policy.
43. However, that does not mean that a public body like the respondent
Board can arbitrarily decline to renew a licence. It is well settled by a
catena of decisions of this Court that no public body under our
Constitutional system is vested with such arbitrary powers, as was pointed
out by this Court in R.D. Shetty Vs. Airport Authorities, (1979) 3 SCC
489[18]. 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, 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.
44. In the counter filed by the respondent Board (in this batch of
appeals), it is stated that the entire parcel of land which was allotted to
the various appellants who are licencees of the manually operated plots
(and others, who are not before us), 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
herein 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
amenities. The exception in favour of the Odisha Mining Development
Corporation cannot, in our opinion, amount to 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 neither infringes any legal right of the
appellants nor amounts to an arbitrary exercise of the authority by the
Board.
45. We also place on record that the appellants submitted that
the concession agreements on BOT basis[19] dated 01.07.2009 ended in
litigation and therefore the proposed project of the Board is not likely to
materialise. In response it is submitted by the Board that even if the
parties with whom the BOT arrangement was entered into eventually default
in their obligation, the Board would explore alternatives to proceed with
the project but will not abandon the same.
46. We are left with the question whether this Court would be
justified in the above mentioned circumstances in declining to interfere
with the order under appeal and deny relief to the appellants.
47. The Board desires to utilise the parcel of land in dispute (in
this batch of cases) for a purpose which is authorised by law and serves
better the larger interests of nation – including the 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 as explained earlier. The respondent Board/licensor can always
terminate/revoke the licences. In view of our conclusion that the
proposed revocation 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 subserve
public interest. This Court shall not contribute to such delay on the
ground of some perceived procedural irregularity, particularly when the
appellants have no substantive right. The appellants were given a
wholesome opportunity by this Court to establish their legal right, to
prevent the Board from terminating their licences.
48. Civil Appeal arising out of SLP(C) No.38013 of 2012 is filed by
Auroglobal Comtrade Pvt. Ltd, which was the petitioner in W.P. (C)
No.11785/2012 in the High Court of Orissa. The appellant was allotted a
plot by the Board pursuant to a process of tender in which the appellant
became the successful bidder quoting an amount of Rs.3,06,29,759/-. A
licence for the use of the plot for 11 months was granted by the respondent
Board under a letter dated 1st August, 2011, after collecting the
abovementioned amount. The appellant made two representations in the
months of April and June 2012 to the Board seeking a renewal of the
licence. The Board again called upon the appellant to deposit
Rs.3,06,29,759/- for renewing the licence. Challenging the demand, the
appellant approached the High Court seeking reliefs already noted earlier
in the judgment (see para 14).
49. The writ petition was filed essentially on the ground that one of
the tender conditions contained in para 5 of the tender notice dated
2.6.2011 is violative of Articles 14 and 19 of the Constitution of India,
therefore void ab initio. Consequently, demand of the bid amount afresh
for renewal of the licence is also illegal. Though it is not clearly spelt
out in the writ petition, the legal basis of attack on para 5 of the tender
notice is that while the licencees, who secured allotments prior to 2005,
continued to pay a fixed licence fee of Rs.9/- per sq. ft per month under
the ‘scale of Rates’ fixed by the Tariff Authority created under Section
47A of the Act, the appellant is compelled to pay substantially higher
amount, apart from the amount fixed by the Tariff Authority. The size and
use of the plot allotted to the appellant is similar to that of the
allottees prior to 2005.
50. The above submission of the appellant is sought to be repelled by
the Board on the principle that the appellant secured the licence pursuant
to tender notice with eyes wide open and in full knowledge of the terms and
conditions under which licences are offered. The petitioner enjoyed the
benefit of the licence for a year (and still continues in occupation of the
property pursuant to the interim orders of this Court, for about a year);
and now the appellant cannot turn back and challenge the conditions subject
to which the licence was granted to it. In support of the said submission,
the Board relied upon the following judgments. Hari Shankar & Ors. Vs. Dy.
Excise & Taxation Commissioner & Ors., (1975) 1 SCC 737, Shyam Lal & Ors.
Vs. State of Punjab, (1977) 1 SCC 336 and State Bank of Haryana & Ors. Vs.
Jage Ram & Ors., (1980) 3 SCC 599.
51. We reject the submission of the appellant for two reasons.
Firstly, the appellant 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 (approbate and reprobate). Secondly, the claim of the appellant
that they are being discriminated against is required to be rejected since
those licencees who are paying a lower ‘licence fee’ had secured these
licenses at a point of time when there was no competition. The market
conditions were different. Things or events seemingly similar and at par
need not always be so. There can be facets which distinguish. The
present situation is one of them.
52. One of the grounds pleaded in the appeal and argued before us by
Shri C.A. Sundaram, learned senior counsel appearing for the appellant that
–
“………. there is distinction between lease and license and both are
dealt with separately. License comes under Section 49(1)(d) i.e.
any other use. Section 49(3) of the Major Port Trust Act says that
the board may lease any land at a rate higher than that provided
under Section 49(1). Thus, only in respect of lease the port trust
can change a rate higher than the scale of rates approved by TAMP.
Clause 6.1.1(a) of the Land Policy 2010 clearly states that license
can be granted by inviting tender but renewal will have to be under
the scale of rates approved by TAMP.”
It is submitted by learned counsel for the appellant that: Section
49(1) authorises the collection of licence fees in accordance with the
scale of rates framed by the Tariff Authority for the various uses (of the
property of the Board) specified under Clauses (a) to (d) of Section 49 sub-
section(1). Section 49, sub-section (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-section (1). The
learned counsel argued that having regard to the language of sub-section
(3), once the Board resorts to the process of auction or inviting tenders,
the Board can only allot a plot on lease but not a licence.
53. Though, the Port Trust sought to repel the submission on various
grounds, we do not propose to examine those defences in extenso.
54. We reject the submission since we do not see any warrant for
placing such restriction on the authority of the Board, from the language
of Section 49 sub-section (3). The opening clause of sub-section (3)–
“Notwithstanding anything contained in sub-section (1), the Board
may, by auction or by inviting tenders, lease ……”
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
sub-section a legislative intention that in every case where the 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, to our mind indicates that the lease is
the highest of rights that may be created on the properties, by the 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.
55. On the above analysis, we see no merits in the claim of the
appellant. For the same reason as given for dismissing the appeals, the
appeal of the Auroglobal is also dismissed, as the plot allotted to this
appellant is also required for the developmental project proposed to be
undertaken by the respondent Board.
56. Civil Appeal arising out of SLP(C) No.28841/2012 is filed by
Odisha Mining Corporation Ltd., one of the licensees of the respondent
Board. This matter can be disposed of in view of a specific statement
made at the bar on behalf of the Board that the Board does not 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. Accordingly, this appeal stands disposed of.
57. Coming to the 7 mechanically operated iron ore plots, they were
allotted on different dates the details of which are as follows:
|S.No.|Plot Holder & SLP No. |Initial Allotment |Renewals |
|1. |Bagadiya Brothers |01.08.2011 |Last renewal|
| | | |upto |
| |SLP No. 28842/2012 | |28.02.2013 |
| |(Manual Iron Ore plot | | |
| |holder) | | |
|2. |Rungta Mines Ltd. |04.06.2011 and |Last renewed|
| | |25.07.2005 |on |
| |SLP No.27512/2012 | |01.04.2012 |
| | | |upto |
| | | |28.02.2013 |
|3. |M/s Core Minerals |2001 and 2004 |Last renewal|
| | | |granted in |
| |SLP No.27511/2012 | |July 2012 |
| | | |upto |
| | | |30.09.2012 |
|4. |Essel Mining and Industries|Allotment by various|Last renewal|
| |Ltd. |allotment orders |upto |
| | |from June 2001 to |30.09.2012 |
| |SLP No.27516/2012 |July 2005 | |
|5. |JSW Ispat Steel Ltd. |13.02.2012 |Last renewed|
| | | |upto |
| |SLP No. 26922/2012 | |30.09.2012 |
|6. |Orissa Mining Corporation |16.05.1996, | |
| |Ltd. |04.04.1997, | |
| | |20.08.1997 | |
| |SLP No.28841/2012 | | |
|7. |Taurian Iron & Steel Ltd. |2003 |Last renewed|
| | | |upto |
| |SLP No.32005/2012 | |30.09.2012 |
Each one of them enjoyed the benefit of the allotment of plot by virtue of
successive renewals. We have already taken note of the fact that under the
2004 policy guidelines the licences granted by the Port Trust could be
renewed without any limitation on the number of renewals that could be
granted.
However, under the 2010 policy, the number of renewals was
restricted to two.
From the material on record, it appears that each one
of these appellants (mechanically operated plot licencees) enjoyed a number
of renewals.
We see no reason to interfere with the decision of the Board
to terminate the licences for the following reasons -
Firstly, a licence
does not create any indefeasible legal right.
Secondly, we do not see
any irrationality in the decision of the Board, even from the point of view
of the fact that the Board is a public body (the State within the meaning
of Article 12) and therefore, obliged to act rationally. The Board’s
decision to terminate the licences is consistent with the policy guidelines
of 2010.
Thirdly, in view of the assertion of the Board in its additional
affidavit dated 25th November, 2013, “……… the existing iron ore traffic
which is showing a growth rate of 159.56% during current financial year
(upto October 2013) in comparison to the iron ore traffic handled during
the same period of the previous financial year, it is submitted that non-
availability of mechanical plots to the Paradip Port Trust will entail huge
financial loss to the port which is a major port under Government of India.
This will also result in idling of the existing iron ore handling plant
for which significant money has been spent and dedicated facilities have
been created for efficient and effective handling of iron ore traffic.
This will also result in diversion of iron ore traffic to nearby private
Ports which is already happening due to non availability of Mechanical
plots to Paradip Port Trust”, we do not see any reason to doubt the said
assertion.
58. 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 these appellants were not
parties, would not be in the larger public interest.
59. We have already made it clear earlier in this judgment that we
propose to deal with these petitions as if they were petitions under
Article 32 and permitted the appellants to place all the material which
would be available to them in law in defence even if the impugned
termination orders were not to be based on the decision of the High Court.
60. Except arguing that the decision of the Orissa High Court is in
violation of principles of natural justice, 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 the
substantive right. In the circumstances, we decline to interfere with the
decision of the Board. All the appeals are, accordingly, dismissed.
………………………………….J.
(H.L. GOKHALE)
………………………………….J.
(J. CHELAMESWAR )
New Delhi;
December 17, 2013.
| | | |
-----------------------
[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 leading to the port, in which the Indian Ports Act is
in force;
[3] 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.
(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 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 analysis in the Government or in any financial
institution or industrial or services sector.
[4] 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.
(2) The decision of the Central Government whether a question is
one of policy or not shall be final.
[5] Page 9 of the counter affidavit 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:
Sl. No. Type of plotNo. of AllotteesAllotted During 1Non-auction
plot152003 to May 20052Auction plot52June, 2005 to May, 20113.Plots
allotted through tender 13June 2011 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
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.”
[6] Relevant portion of the allotment letter issued to the petitioner
in SLP(C) No.26321/2012
1. You are allotted plot No. I-5(C group) measuring 5,500 Sq.
mtr. for a period of 11 (eleven) months from 01.08.2011 to 30.06.2012.
[7] 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. 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
Urgent certified copy of this order be granted on proper
application.”
[8] Relevant portion of the notice issued to M/s Yazdani
International (P) Ltd., the petitioner in SLP(C) No.26321/2012
PARADEEP PORT TRUST
TRAFFIC DEPARTMENT
NO. TD/TM/GEN-01(Pt.1)/2012/3344 Dated: the 21st Aug.,
2012
To
M/s. Yazdani International (P) Ltd.
N-4/135 IRC Village Nayapalli,
Bhubaneswar – 751 015.
Sub.: Cancellation of Manual Iron Ore Storage Plot No. G-8 in
Compliance to order of the Hon’ble High Court of Orissa.
Dear Sir(s),
In obedience to order dtd. 02.08.2012 passed by the Hon’ble High
Court of Orissa in Misc. Case No. 110005 of 2012 arising out of W.P.(C)
No.11785 of 2012 (copy enclosed), the manual iron ore storage plot No. G-8
measuring 3000 sq. mts. Which was allotted by auction June 2010 and again
renewed in your favour upto 28.02.2013 is hereby cancelled with immediate
effect.
Further ……………… hand over the vacant possession of plot within 15
(fifteen) days ……
[9] See Footnote 7 (supra)
[10] Counter filed by the Port Trust in SLP(C) No.26321/2012
“……….It is also a matter of fact, that the Port has signed
Concession Agreements with M/s. Essar Paradeep Terminals Ltd. and M/s Blue
Water Iron Ore Terminal Pvt. Ltd. for development of Deep Draught Coal and
Iron Ore Berth respectively with 10 Million tons capacity each. After
completion of the project, the Port would be able to handle cape size
vessels of 1.25 lakh DWT as against present vessel size of maximum 70,000
DWT. Since both the berths will be fully mechanized with draught of 16.1
mtrs. berth-day output will be much more than the existing facilities and
will result in faster turn round of vessels. However, for the purpose of
development of these two facilities, the entire area of about 2.32 lakh
sq.mtr. allotted to the manual iron ore exporters is required to be vacated
for handing over the project site to the BOT operators. Vacating the iron
ore plots have become essential in view of Environmental Clearance granted
by MOEF for the BOT projects. Since this is a developmental activity of
the Port to meet the future traffic requirement, the Port can ill afford to
delay in vacating the land allotted to the iron ore exporters. ……….”
Para 6 of I.A. No.4 filed by the Port Trust in SLP(C)
No.26321/2012
“6. That it is to state that since the Paradeep Port Trust has
desired to retain the plot in question for its own use and purpose i.e. for
construction of Iron Ore Berth and Coal Berth respectively, the port trust
had entered into an Concession Agreement dated 01.07.2009 with respect to
Iron Berth and dated 10.11.2009 with respect to Coal Berth, with M/s. Blue
Water Iron Ore Terminal Private Limited and with Essar Paradeep Terminal
Limited respectively on BOT basis. The Paradeep Port Trust was awaiting
the clearance from the Ministry of Environment and Forest (MOEF), which was
granted on 02.07.2012 a copy of MOEF clearance dated 02.07.2012 is annexed
herewith and marked as Annexure-A/4 which runs from page 15 to page 18.
The Paradeep Port Trust was accordingly to take over the plots and handover
the possession to the above two BOT operators, when the present order dated
31.08.2012 was passed directing the parties to maintain status quo.”.
[11] a Rameshwar and Others Vs. Jot Ram and Another etc. [(1976) 1 SCC
194] – para (7) The realism of our processual justice bends our
jurisprudence to mould, negate or regulate reliefs in the light of
exceptional developments having a material and equitable import, occurring
during the pendency of the litigation so that the Court may not stultify
itself by granting what has become meaningless or does not, by a myopic
view, miss decisive alterations in fact-situations or legal positions and
drive parties to fresh litigation whereas relief can be given right here.
The broad principle, so stated, strikes a chord of sympathy in a court of
good conscience. But a seeming virtue may prove a treacherous vice unless
judicial perspicacity, founded on well-grounded rules, studies the plan of
the statute, its provisions regarding subsequent changes and the possible
damage to the social programme of the measure if later events are allowed
to unsettle speedy accomplishment of a restructuring of the land system
which is the soul of the whole enactment. No processual equity can be
permitted to sabotage a cherished reform, nor individual hardship thwart
social justice. This wider perspective explains the rulings cited on both
sides and the law of subsequent events on pending actions.
1b Pasupuleti Venkateswarlu Vs. The Motor & General Traders
(1975) 1 SCC 770 - para (4) – We feel the submissions devoid of substance.
First about the jurisdiction and propriety vis-à-vis circumstances which
come into being subsequent to the commencement of the proceedings. It is
basic to our processual jurisprudence that the right to relief must be
judged to exist as on the date a suitor institutes the legal proceeding.
Equally clear is the principle that procedure is the handmaid and not the
mistress of the judicial process. If a fact, arising after the lis has
come to court and has a fundamental impact on the right to relief or the
manner of moulding it, is brought diligently to the notice of the tribunal,
it cannot blink at it or be blind to events which stultify or render inept
the decretal remedy. Equity justifies bending the rules of procedure,
where no specific provision or fairplay is violated, with a view to promote
substantial justice – subject, of course, to the absence of other
disentitling factors or just circumstances. Nor can we contemplate any
limitation on this power to take note of updated facts to confine it to the
trial Court. If the litigation pends, the power exists, absent other
special circumstances repelling resort to that course in law or justice.
Rulings on this point are legion, even as situations for applications of
this equitable rule are myriad. We affirm the proposition that for making
the right or remedy claimed by the party just and meaningful as also
legally and factually in accord with the current realities, the Court can,
and in many cases must, take cautious cognizance of events and developments
subsequent to the institution of the proceeding provided the rules of
fairness to both sides are scrupulously obeyed..
[12] a In some cases the courts have refused applications for
mandamus to restore to office persons who have been irregularly removed, on
the ground that the remedy might be of no use to the applicant, because it
would still be open to the competent authority to remove him by the proper
procedure. There are also decisions in licensing cases to like effect (de
Smith’s Judicial Review of Administrative Action, Fourth Edition Pg. 561.)
12b. Seervai H.M., Constitutional Law of India [Bombay: N.M.
Tripathi Pvt. Ltd., 3rd Edn. Vol.2 (1984) para 16.279 page 1367]
[13] Normally, land inside custom bound area shall be given on
licence basis only. The licence may be granted by the Chairman. It may be
granted up to a maximum period of 11 months and shall normally be in
accordance with the Scale of Rates (SoR)/ rates approved by the competent
authority. Any concession shall be given only with the approval of the
Board. At the discretion of the Chairman, such licence may also be given
by inviting tenders. The licence can be renewed by the Chairman twice.
Further renewal shall be with the approval of the Board or by the Chairman,
subject to ratification by the Boards. Each renewal of licence shall be
treated as a fresh licence.
[14] “52. “Licence” defined – Where one person grants to another, or
to a definite number of other persons, a right to do, or continue to do, in
or upon the immoveable property of the grantor, something which would, in
the absence of such right, be unlawful, and such right does not amount to
an easement or an interest in the property, the right is called a licence.”
[15] Associated Hotels of India Ltd., Vs. R.N. Kapoor [AIR 1959 SC
1262] – (27) [There is a marked distinction between a lease and a
licence. S. 105 of the Transfer of Property Act defines a lease out of
immoveable property as a transfer of a right to enjoy such property made
for a certain time in consideration for a price paid or promised. Under S.
108 of the said Act, the lessee is entitled to be put in possession of the
property. A lease is therefore a transfer of an interest in land. The
interest transferred is called the leasehold interest. The lessor parts
with his right to enjoy the property during the term of the lease, and it
follows from it that the lessee gets that right to the exclusion of the
lessor. Whereas S. 52 of the Indian Easements Act defines a licence thus:
“Where one person grants to another, or to a definite number
of other persons, a right to do or continue to do, in or upon the
immoveable property of the grantor, something which would, in the absence
of such right, be unlawful, and such right does not amount to an easement
or an interest in the property, the right is called a licence.”
Under the aforesaid section,] if a document gives only a right to
use the property in a particular way or under certain terms while it
remains in possession and control of the owner thereof, it will be a
licence. The legal possession, therefore, continues to be with the owner
of the property, but the licencee is permitted to make use of the premises
for a particular purpose. But for the permission his occupation would be
unlawful. It does not create in his favour any estate or interest in the
property. There is, therefore, clear distinction between the two
concepts. The dividing line is clear though sometimes it becomes very
thin or even blurred………
[16] “60. Licence when revocable - A licence may be revoked by the
grantor, unless –
(a) it is coupled with a transfer of property and such
transfer is in force;
(b) the licencee, acting upon the lilcense, has executed a
work of a permanent character and incurred expenses in the execution.”
[17] Mrs. M.N. Clubwala and another vs. Fida Hussain Saheb and others
[AIR 1965 SC 610] - (12) While it is true that the essence of a licence is
that it is revocable at the will of the grantor the provision in the
licence that the licencee would be entitled to a notice before being
required to vacate is not inconsistent with a licence. [In England it has
been held that a contractual licence may be revocable or irrevocable
according to the express or implied terms of the contract between the
parties. It has further been held that if the licencee under a revocable
licence has brought property on to the land, he is entitled to notice of
revocation and to a reasonable time for removing his property, and in which
to make arrangements to carry on his business elsewhere. (see Halsbury’s
Laws of England, 3rd edn. Vol. 23, p. 431). Thus the mere necessity of
giving a notice to a licencee requiring him to vacate the licenced premises
would not indicate that the transaction was a lease…….”
[18] Para 10 – “…… It is indeed unthinkable that in a democracy
governed by the rule of law the executive Government or any of its officers
should possess arbitrary power over the interests of the individual.
Every action of the executive Government must be informed with reason and
should be free from arbitrariness. That is the very essense of the rule
of law and its bare minimal requirement. And to the application of this
principle it makes no difference whether the exercise of the power involves
affectation of some right or denial of some privilege.”
[19] Footnote No.10
-----------------------
2
whether the respective
allotments made in favour of each of the appellants herein are in
accordance with law and
whether the appellants have any legally
indefeasible right of renewal of such allotments or to continue use of the
respective plots allotted to them. =
1) Whether there is any indefeasible legal right in favour of any one
of the appellants for renewal of the licence granted or continued
use of plots allotted to them?
2) Irrespective of the answer to the above question, whether the Board
is justified to terminate the allotments on the ground that it
proposes to utilise the land in dispute for providing better
amenities in connection with the obligations imposed upon the Board
by law?
3) Whether this Court would be justified in law to decline granting
relief in exercise of its jurisdiction under Article 136 of the
Constitution of India either on the ground that the appellants have
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 is a public
purpose which should override the interest of any of the
appellants? =
After securing allotment of the plot, Auroglobal utilised the same
for about a year and eventually approached the Orissa 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 right of renewal
of the allotment with respect to plot NO. I-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;
III. 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
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 material on record[5] that there are 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 system of tendering process subsequent to June, 2011.
under Section 34 of the Act, the Board of a major
port can lease out ‘its immovable property’.
Relevant portion of the notice issued to M/s Yazdani
International (P) Ltd., the petitioner in SLP(C) No.26321/2012
PARADEEP PORT TRUST
TRAFFIC DEPARTMENT
NO. TD/TM/GEN-01(Pt.1)/2012/3344 Dated: the 21st Aug.,
2012
To
M/s. Yazdani International (P) Ltd.
N-4/135 IRC Village Nayapalli,
Bhubaneswar – 751 015.
Sub.: Cancellation of Manual Iron Ore Storage Plot No. G-8 in
Compliance to order of the Hon’ble High Court of Orissa.
Dear Sir(s),
In obedience to order dtd. 02.08.2012 passed by the Hon’ble High
Court of Orissa in Misc. Case No. 110005 of 2012 arising out of W.P.(C)
No.11785 of 2012 (copy enclosed), the manual iron ore storage plot No. G-8
measuring 3000 sq. mts. Which was allotted by auction June 2010 and again
renewed in your favour upto 28.02.2013 is hereby cancelled with immediate
effect.
Further ……………… hand over the vacant possession of plot within 15
(fifteen) days ……
the Central Government directed that “no lease or sale of land inside the
custom bound area should be permitted”, but should be given on licence
basis only.
Under the 2010 Policy, it is stated that
“normally land inside custom bound area should be given on licence basisonly”.
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.
2004 policy guidelines the licences granted by the Port Trust could be
renewed without any limitation on the number of renewals that could be
granted.
However, under the 2010 policy, the number of renewals was
restricted to two.
From the material on record, it appears that each one
of these appellants (mechanically operated plot licencees) enjoyed a number
of renewals.
We see no reason to interfere with the decision of the Board
to terminate the licences for the following reasons -
Firstly, a licence
does not create any indefeasible legal right.
Secondly, we do not see
any irrationality in the decision of the Board, even from the point of view
of the fact that the Board is a public body (the State within the meaning
of Article 12) and therefore, obliged to act rationally. The Board’s
decision to terminate the licences is consistent with the policy guidelines
of 2010.
Thirdly, in view of the assertion of the Board in its additional
affidavit dated 25th November, 2013, “……… the existing iron ore traffic
which is showing a growth rate of 159.56% during current financial year
(upto October 2013) in comparison to the iron ore traffic handled during
the same period of the previous financial year, it is submitted that non-
availability of mechanical plots to the Paradip Port Trust will entail huge
financial loss to the port which is a major port under Government of India.
This will also result in idling of the existing iron ore handling plant
for which significant money has been spent and dedicated facilities have
been created for efficient and effective handling of iron ore traffic.
This will also result in diversion of iron ore traffic to nearby private
Ports which is already happening due to non availability of Mechanical
plots to Paradip Port Trust”, we do not see any reason to doubt the said
assertion.
failed to place
before this Court any material to establish that the decision of the Boardto terminate their licences is otherwise violative of any of the
substantive right. In the circumstances, we decline to interfere with the
decision of the Board. All the appeals are, accordingly, dismissed.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 11229 OF 2013
(Arising out of Special Leave Petition (Civil) No. 26321 of 2012)
Yazdani International P. Ltd. …Appellant
Versus
Auroglobal Comtrade P. Ltd. & Ors. …Respondents
WITH
CIVIL APPEAL NO. 11230 OF 2013
(Arising out of Special Leave Petition (Civil) No. 26319 of 2012)
CIVIL APPEAL NO. 11231 OF 2013
(Arising out of Special Leave Petition (Civil) No. 26922 of 2012)
CIVIL APPEAL NO. 11232 OF 2013
(Arising out of Special Leave Petition (Civil) No. 26894 of 2012)
CIVIL APPEAL NO. 11233-11234 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 27013-27014
of 2012)
CIVIL APPEAL NO. 11235 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 27477 of
2012)
CIVIL APPEAL NO. 11236 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 27480 of
2012)
CIVIL APPEAL NO. 11237 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27481 of
2012)
CIVIL APPEAL NO. 11238 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27483 of
2012)
CIVIL APPEAL NO. 11239 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27484 of
2012)
CIVIL APPEAL NO. 11240 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27485 of
2012)
CIVIL APPEAL NO. 11241 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27486 of
2012)
CIVIL APPEAL NO. 11242 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27489 of
2012)
CIVIL APPEAL NO. 11243 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27491 of
2012)
CIVIL APPEAL NO. 11244 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27493 of
2012)
CIVIL APPEAL NO. 11245 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27492 of
2012)
CIVIL APPEAL NO. 11246 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27495 of
2012)
CIVIL APPEAL NO. 11247 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27497 of
2012)
CIVIL APPEAL NO. 11248 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27508 of
2012)
CIVIL APPEAL NO. 11249 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27509 of
2012)
CIVIL APPEAL NO. 11250 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27510 of
2012)
CIVIL APPEAL NO. 11251 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27516 of
2012)
CIVIL APPEAL NO. 11252 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27517 of
2012)
CIVIL APPEAL NO. 11253 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27511 of
2012)
CIVIL APPEAL NO. 11254 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27512 of
2012)
CIVIL APPEAL NO. 11255 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27513 of
2012)
CIVIL APPEAL NO. 11256 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27514 of
2012)
CIVIL APPEAL NO. 11257 OF 2013
(Arising out of Special Leave Petition (Civil) No. 27515 of
2012)
CIVIL APPEAL NOS. 11258-11259 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 27518-27519
of 2012)
CIVIL APPEAL NO. 11260 OF 2013
(Arising out of Special Leave Petition (Civil) No. 35226 of
2012)
CIVIL APPEAL NO. 11261 OF 2013
(Arising out of Special Leave Petition (Civil) No. 38111 of
2012)
CIVIL APPEAL NO. 11262 OF 2013
(Arising out of Special Leave Petition (Civil) No. 38900 of
2012)
CIVIL APPEAL NO. 11263 OF 2013
(Arising out of Special Leave Petition (Civil) No. 13946 of
2013)
CIVIL APPEAL NOS. 11264-11265 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 30071-30072
of 2012)
CIVIL APPEAL NO. 11273 OF 2013
(Arising out of Special Leave Petition (Civil) No. 38013 of
2012)
CIVIL APPEAL NO. 11266 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28840 of
2012)
CIVIL APPEAL NO. 11267 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28841 of
2012)
CIVIL APPEAL NO. 11268 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28842 of
2012)
CIVIL APPEAL NO. 11269 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28844 of
2012)
CIVIL APPEAL NOS. 11270-11271 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 28846-28847
of 2012)
CIVIL APPEAL NO. 11272 OF 2013
(Arising out of Special Leave Petition (Civil) No. 1036 of 2013)
CIVIL APPEAL NO. 11278 OF 2013
(Arising out of Special Leave Petition (Civil) No. 16946 of
2013)
CIVIL APPEAL NO. 11274 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28384 of
2012)
CIVIL APPEAL NO. 11275 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28425 of
2012)
CIVIL APPEAL NOS. 11276-11277 OF 2013
(Arising out of Special Leave Petition (Civil) Nos. 29458-29459
of 2012)
CIVIL APPEAL NO. 11279 OF 2013
(Arising out of Special Leave Petition (Civil) No. 32007 of
2012)
CIVIL APPEAL NO. 11280 OF 2013
(Arising out of Special Leave Petition (Civil) No. 32005 of
2012)
CIVIL APPEAL NO. 11281 OF 2013
(Arising out of Special Leave Petition (Civil) No. 32001 of
2012)
CIVIL APPEAL NO. 11282 OF 2013
(Arising out of Special Leave Petition (Civil) No. 28 of 2013)
CIVIL APPEAL NO. 11283 OF 2013
(Arising out of Special Leave Petition (Civil) No. 36 of 2013)
J U D G M E N T
Chelameswar, J.
1. Leave granted in all the SLPs.
2, All these SLPs arise out of an order of the Orissa High 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. M/s. Auroglobal Comtrade Pvt. Ltd. (hereinafter referred to as
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 said Act, insofar as it is
irrelevant.
Paradeep Port is a major 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 Major Port Trusts Act, 1963 (hereinafter
referred to as “the Act”) etc. The Act stipulates under Section 3 that the
Central Government shall cause to be constituted 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 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 is authorised under
Section 37 to compel any sea-going vessel within the port or “port
approaches”[2] 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 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
Authority for Major Ports constituted under Section 47A[3].
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
hereunder –
(a) approaching or lying at or alongside any buoy, 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 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;
(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 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 occupation at a rate
higher than that provided under sub- section (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 47A to frame a “scale 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 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 contemplated under
sub-Section (1) either by resorting to a process of auction or inviting
tenders in the context of the use of the property belonging to the Board.
The relevance of the said sub-Section will be discussed later.
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 constituted under Section 47A 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.
8. In exercise of the authority under Section 111, it appears 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 policy,
the Central Government directed that “no lease or sale of land inside the
custom bound area should be permitted”, but should be given on licence
basis only.
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 record[5] that there are 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 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 tender notice and eventually became the
successful bidder for one of the plots [plot no. I-5 (C group) admeasuring
5,500 sq. mtrs.]
14. By letter dated 1st August, 2011,[6] the Paradeep Board 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.
15. After securing allotment of the plot, Auroglobal utilised the same
for about a year and eventually approached the Orissa 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 right of renewal
of the allotment with respect to plot NO. I-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;
III. 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 found fault with the Paradeep Board for having renewed
certain licences granted earlier.[7]
17. Pursuant to the above-mentioned order of the High Court, notices
were issued by the Board (at least to some of the appellants herein)[8],
the substance of which is that the allotment order made earlier was
cancelled and called upon the allottee to hand over vacant possession of
the plot 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. It is argued on behalf of the appellants that the High Court
grossly erred in coming to the conclusion that the allotments made in
favour of various appellants are in violation of the law declared by this
Court in various decisions relied upon by the High Court in its order
including Centre for Public Interest Litigation and others v. Union of
India and others (2012) 3 SCC 1 [also known as 2G case]. Most of the
appellants (details of which are available on record and not in dispute)
came to be allotted with plots of land either pursuant to a process of
auction or tender where each of the appellant had to pay substantial
amounts to the Board for securing the allotment of the plots, apart from
agreeing to pay the amounts stipulated by the scale of rates prescribed by
the Tariff Authority. Therefore, the assumption of the High Court that the
principles of law laid down by this Court in the various judgments referred
to by the High Court starting from Dayaram Shetty to ‘2G case’ is without
any factual basis. The allotments made in favour of the appellants are in
consonance with the law laid down in 2G’s case.
21. It is also argued on behalf of the appellants that in the
subsequent judgment of the Supreme Court in Natural Resources Allocation,
In Re, Special Reference No.1 of 2012, (2012) 10 SCC 1, the Constitution
Bench of this Court clearly held that in the matter of alienation of the
property by the State or conferment of largesse, auction is a preferred
mode of securing compliance with the commands of the Constitution under
Article 14 of the Constitution but-not the only mode. It is argued that
even if auction is the only mode of distributing State largesse or
alienating property of the State which passes the test of Article 14, most
of the appellants, as already indicated, have secured allotment of plots
either through the process of auction or of tenders which is nothing but a
variant of the system of auction. Therefore, allotments made in their
favour could not be faulted. It is further submitted that the conclusion
of the High Court that the “licence cannot be granted in favour of persons
after expiry of the licence period by way of renewal”[9] is without any
basis in law. Renewal of licence is a matter of contract between the
parties. If the initial allotment of a plot on licence basis is otherwise
in accordance with law, renewal of such arrangement is a matter which ought
to be governed by the terms of the agreement between the parties. There is
nothing in law or in any of the decisions of this Court relied upon by the
High Court which requires the State or its instrumentalities not to enter
into any contract or arrangement which is renewable periodically. Learned
counsel also submitted that each of the appellants have a right to renewal
of the allotment made to them and there is nothing in any one of the
judgments of this Court relied upon in the order under appeal which
militates against such right of renewal of the allotment which is otherwise
validly obtained. It is submitted that any view of law to the contrary
would not only be impracticable but also detrimental to the larger public
interest as such short term arrangements would not be conducive to the
overall economic growth of the country. It is further submitted by the
appellants that none of the appellants were parties before the High Court
and the order of the High Court is in flagrant violation of the audi
alteram partem rule. If only the appellants had an opportunity to present
their cases before the High Court, the appellants would have placed on
record all relevant facts to substantiate their arguments mentioned
earlier. Therefore, on this ground alone the order under appeal is
required to be set aside. Lastly they submitted that the order is neither
sought by Auroglobal, who was the petitioner before the High Court, nor is
within the scope of the final relief sought by Auroglobal in the writ
petition.
22. With regard to the limited number of plots allotted without
following either the auction route or the tender route it is submitted that
such allotments were made prior to 2005 at which point of time there was
not much demand for allotment of plots by the Board, therefore, the
allotments were on application basis. Hence, such allotments cannot be
faulted.
23. Mr. Rohinton Nariman, learned senior counsel appearing for the
Board argued that (i) none of the appellants have a ‘right of renewal’ as
their possession is only a permissive possession (a licence) which does not
create any interest in the property to enable them to claim a “right” of
renewal. (ii) As on today the Board needs the entire area of land
(occupied, by these various appellants by virtue of the allotment orders
given in their favour earlier) for the purpose of developing the port for
the creation of modern Deep Draught Coal and Iron Ore berths with 10
millions capacity each. The submission is based on the pleadings before
this Court.[10] The Board therefore, does not propose to continue or renew
the licences of the appellants irrespective of the fact whether the order
under appeal is tenable or not, this Court may not exercise its
extraordinary discretion under Article 136 to enable the appellants to
cling on to the property over which they have no substantive right.
24. The first question which is to be examined is whether this Court
is required to set aside the order under appeal and also the consequential
notices issued by the respondent/Board to the various appellants on the
ground that the order under appeal is made in breach of the rule of audi
alteram partem.
25. None of the appellants herein (except Auroglobal) was a party to
the proceedings before the High Court. Therefore, there was no occasion
for the High Court to examine the twin questions whether the respective
allotments made in favour of each of the appellants herein are in
accordance with law and whether the appellants have any legally
indefeasible right of renewal of such allotments or to continue use of the
respective plots allotted to them. In the normal course, the order under
appeal is required to be set aside on the simple ground that the same is in
breach of principles of natural justice. But we do not propose to do so
for reasons to follow.
26. The undisputed facts in these batch of matters are that most of
the appellants were allotted plots either pursuant to an auction or through
the process of tender system, the details of which are already taken note
of (See footnote 5). It is also not in dispute that each of the plots,
which are the subject matter of these appeals was allotted on a licence.
27. Before we deal with the new ground urged by the Board, we would
like to deal with the question of the legality of the initial allotment in
favour of each of these appellants. In view of the fact that most of the
licences in favour of the appellants herein came to be granted pursuant to
a process of either an auction or tender, those allotments, in our view,
cannot be said to be inconsistent with the principles of law laid down by
this Court in 2G case in the absence of any other circumstance vitiating
the allotment. Insofar as the allotment of plots made on application
(prior to 2005), the Paradip Port Trust came out with a clear explanation
that there was hardly any competition at that point of time for the
allotment of plots. Therefore, we do not see any reason to find any fault
with such allotment on the ground that the allotment was made without
following the procedure of auction or tender. More 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
of plots.
28. The opinion of the High Court - that a renewal of the licence in
dispute without following the procedure of auction is inconsistent with the
principles laid down in the 2G case – as an absolute proposition of law
could be examined in appropriate case. Such a scrutiny is not required
for the present as the Board does not propose to renew the licences.
29. However, it is the submission of the Board that this Court need
not examine the legality of the order under appeal for two reasons –
(1) none of the appellants have either any indefeasible right of renewal or to
continue the use of the respective plots allotted to them and the Board is
entitled in law to revoke the licences at any time and debar the appellants
from entering and using the plots in dispute
(2) The Board proposes to
revoke the licences and resume possession of the land (manually operated
iron ore plots) in dispute for the purpose of developing the same and
providing better facilities connected with the operations of the Board.
30. To examine the tenability of the above submissions, the following
questions are required to be examined.
1) Whether there is any indefeasible legal right in favour of any one
of the appellants for renewal of the licence granted or continued
use of plots allotted to them?
2) Irrespective of the answer to the above question, whether the Board
is justified to terminate the allotments on the ground that it
proposes to utilise the land in dispute for providing better
amenities in connection with the obligations imposed upon the Board
by law?
3) Whether this Court would be justified in law to decline granting
relief in exercise of its jurisdiction under Article 136 of the
Constitution of India either on the ground that the appellants have
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 is a public
purpose which should override the interest of any of the
appellants?
31. We therefore, called upon the appellants to address us on the
above questions.
32. We made it clear to the appellants that this Court will consider
the defence, if any, of each of the appellants to the proposed termination
of their licences on a new ground now set up by the respondent Board and
invited them to make their submissions in that regard. Such suggestion was
made in view of the possibility that if the appellants did not have any
substantive defence against the proposed termination of the licences,
interference with the order under appeal on the ground that there is a
procedural lapse would only have the effect of protracting the litigation
thereby enabling the appellants to continue occupation of public property
and deprive the Board of higher revenue.
33. A preliminary objection is raised by the appellants for
examination of the above-mentioned questions. The appellants argued that
neither of the two grounds, now relied upon by the respondent Board, are
the grounds on which either the High Court directed the eviction of the
appellants nor the quit notices issued by the respondent Board are founded.
Therefore, this Court may not embark upon an examination of those
questions as a Court of 1st instance. According to the appellants, such an
examination would take the appellants by surprise. Without prejudice to
the preliminary objection, the learned counsel for the appellants also
argued that they have a right of renewal of the licences and/or to continue
in possession of the land in dispute.
34. In response to the preliminary objection, it is argued on behalf
of the Board that this Court in exercise of its jurisdiction under Article
142 can undertake such an examination in an appropriate case to render
complete justice in these batch of matters. Shri Nariman relied upon
Pasupuleti Venkateswarlu Vs. The Motor & General Traders [(1975) 1 SCC
770][11]a and Rameshwar and Others Vs. Jot Ram and Another etc. [(1976) 1
SCC 194]1b, in support of this submission.
35. We reject the preliminary objection for the following reason:-
The jurisdiction under Article 136 is discretionary. It is settled by
catena of decisions of this Court that the jurisdiction under Article 136
is purely discretionary only to be 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 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.[12]a
Though the statement of the principle in the references in the footnote are
made in the context of the jurisdiction of the Court to issue mandamus, the
principle applies proprio vigore to the discretionary jurisdiction under
Article 136 of the Constitution. Such being the principle of law, even if
the present batch of appeals are to be allowed, as prayed for, on the
ground that the order under challenge is made in breach of the rule of audi
alteram partem, nothing in law prevents the Board from calling upon the
appellants to desist from use of the land in dispute. Such a course of
action is the declared intention of the Board. In such an event, once again
the High Court and this Court would have to examine the questions framed
above.
36. Therefore, accepting the preliminary objection and refusing to
consider the ground newly raised by the Board would only “drive the parties
to fresh litigation” rendering the present adjudication a futile exercise
of the jurisdiction of this Court. The issue can be decided here and now
to prevent a possible damage to the programme proposed to be undertaken by
the Board and its “speedy accomplishment”.
The two decisions (See Footnote 11) relied upon by the Board are a
clear authority for the proposition that this Court in either granting or
declining to grant a relief in exercise of its jurisdiction under Article
136 can take note of developments either of fact or law which leave an
impact on the rights and obligations of parties before the Court.
37. We shall first deal with the question of element of surprise as it
is the duty of this Court to scrupulously ensure the “rules of fairness to
both sides”, in every case. Such duty is more rigorous in the instant case
because of the fact that the respondent Board has come out with a new
ground for denying the relief to the appellants - the legality of which we
will have to consider as the court of first instance.
38. The Board seeks to debar the appellants from using the land in
dispute. Such a decision of the Board rested on the order of the High
Court under challenge. But during the pendency of the present proceedings
the Board altered the basis of its decision and decided to rest 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. The legality of such proposed action of the
Board would depend on (a) the true character of the legal relationship
between the appellants and the Board; (b) whether such relationship confers
a right on the appellants to continue use of the disputed property either
for eternity or for a definite period; (c) the legal authority of the Board
to terminate such relationship; and (d) the procedure required to be
followed for such termination.
39. To answer the above question we examine the nature of the legal
rights flowing from such allotments. 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 conferring privileges
such a body is required to act in public interest under some rational
policy. We have already noticed that the Board is bound by the policy
directions given by the Government of India under Section 111 of the Act,
and that the Government of India from time to time issued policy
guidelines.
In the policy guidelines issued in 2004, the following were
the directives:
“b) No sale or lease should be permitted. Land should be given on
licence basis only. The licence may be up to a maximum period of
11 months and shall normally be in accordance with the Schedule of
Rates (SoR)/rates approved by the competent authority. At the
discretion of the Chairman, such licence may also be given by
inviting tenders. The licence can be renewed at the expiry of the
previous licence period. Each renewal of licence shall be treated
as fresh licence.”
40. When it came to 2010, it is specifically laid down that the
“licence can be renewed by the Chairman twice”[13] subject to
either the prior approval or subsequent ratification of the board.
41. It can be seen from the policy guidelines that while the 2004
policy forbids sale or lease of land, the 2010 policy makes it the normal
rule subject to exceptions. The 2004 Land Policy guidelines enable the
Board only to grant or renew 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 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, we are of the opinion that the allotment of plots
in dispute is only by way of a licence, as defined under Section 52 of the
Easements Act, 1882[14].
42. As rightly pointed out by Shri Nariman, licence by definition does not
create any interest in the property[15]. A licence only gives a right to
use the immovable property of the grantor, to the grantee. There is no
transfer of any interest in such property in favour of the grantee. On the
other hand, under the Transfer of Property Act, an interest either limited
or unlimited is created in favour of the transferee depending upon the
nature of the transfer (sale, mortgage or lease etc.). Under Section
60[16], a licence is revocable at the will of the grantor which is the
essence of a licence. [17] The Easements Act categorically declares that a
licence can be revoked by the grantor except in the two contingencies
specified under Section 60(a) & (b). No such exceptions are pleaded or
demonstrated by the 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 above mentioned policy.
43. However, that does not mean that a public body like the respondent
Board can arbitrarily decline to renew a licence. It is well settled by a
catena of decisions of this Court that no public body under our
Constitutional system is vested with such arbitrary powers, as was pointed
out by this Court in R.D. Shetty Vs. Airport Authorities, (1979) 3 SCC
489[18]. 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, 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.
44. In the counter filed by the respondent Board (in this batch of
appeals), it is stated that the entire parcel of land which was allotted to
the various appellants who are licencees of the manually operated plots
(and others, who are not before us), 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
herein 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
amenities. The exception in favour of the Odisha Mining Development
Corporation cannot, in our opinion, amount to 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 neither infringes any legal right of the
appellants nor amounts to an arbitrary exercise of the authority by the
Board.
45. We also place on record that the appellants submitted that
the concession agreements on BOT basis[19] dated 01.07.2009 ended in
litigation and therefore the proposed project of the Board is not likely to
materialise. In response it is submitted by the Board that even if the
parties with whom the BOT arrangement was entered into eventually default
in their obligation, the Board would explore alternatives to proceed with
the project but will not abandon the same.
46. We are left with the question whether this Court would be
justified in the above mentioned circumstances in declining to interfere
with the order under appeal and deny relief to the appellants.
47. The Board desires to utilise the parcel of land in dispute (in
this batch of cases) for a purpose which is authorised by law and serves
better the larger interests of nation – including the 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 as explained earlier. The respondent Board/licensor can always
terminate/revoke the licences. In view of our conclusion that the
proposed revocation 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 subserve
public interest. This Court shall not contribute to such delay on the
ground of some perceived procedural irregularity, particularly when the
appellants have no substantive right. The appellants were given a
wholesome opportunity by this Court to establish their legal right, to
prevent the Board from terminating their licences.
48. Civil Appeal arising out of SLP(C) No.38013 of 2012 is filed by
Auroglobal Comtrade Pvt. Ltd, which was the petitioner in W.P. (C)
No.11785/2012 in the High Court of Orissa. The appellant was allotted a
plot by the Board pursuant to a process of tender in which the appellant
became the successful bidder quoting an amount of Rs.3,06,29,759/-. A
licence for the use of the plot for 11 months was granted by the respondent
Board under a letter dated 1st August, 2011, after collecting the
abovementioned amount. The appellant made two representations in the
months of April and June 2012 to the Board seeking a renewal of the
licence. The Board again called upon the appellant to deposit
Rs.3,06,29,759/- for renewing the licence. Challenging the demand, the
appellant approached the High Court seeking reliefs already noted earlier
in the judgment (see para 14).
49. The writ petition was filed essentially on the ground that one of
the tender conditions contained in para 5 of the tender notice dated
2.6.2011 is violative of Articles 14 and 19 of the Constitution of India,
therefore void ab initio. Consequently, demand of the bid amount afresh
for renewal of the licence is also illegal. Though it is not clearly spelt
out in the writ petition, the legal basis of attack on para 5 of the tender
notice is that while the licencees, who secured allotments prior to 2005,
continued to pay a fixed licence fee of Rs.9/- per sq. ft per month under
the ‘scale of Rates’ fixed by the Tariff Authority created under Section
47A of the Act, the appellant is compelled to pay substantially higher
amount, apart from the amount fixed by the Tariff Authority. The size and
use of the plot allotted to the appellant is similar to that of the
allottees prior to 2005.
50. The above submission of the appellant is sought to be repelled by
the Board on the principle that the appellant secured the licence pursuant
to tender notice with eyes wide open and in full knowledge of the terms and
conditions under which licences are offered. The petitioner enjoyed the
benefit of the licence for a year (and still continues in occupation of the
property pursuant to the interim orders of this Court, for about a year);
and now the appellant cannot turn back and challenge the conditions subject
to which the licence was granted to it. In support of the said submission,
the Board relied upon the following judgments. Hari Shankar & Ors. Vs. Dy.
Excise & Taxation Commissioner & Ors., (1975) 1 SCC 737, Shyam Lal & Ors.
Vs. State of Punjab, (1977) 1 SCC 336 and State Bank of Haryana & Ors. Vs.
Jage Ram & Ors., (1980) 3 SCC 599.
51. We reject the submission of the appellant for two reasons.
Firstly, the appellant 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 (approbate and reprobate). Secondly, the claim of the appellant
that they are being discriminated against is required to be rejected since
those licencees who are paying a lower ‘licence fee’ had secured these
licenses at a point of time when there was no competition. The market
conditions were different. Things or events seemingly similar and at par
need not always be so. There can be facets which distinguish. The
present situation is one of them.
52. One of the grounds pleaded in the appeal and argued before us by
Shri C.A. Sundaram, learned senior counsel appearing for the appellant that
–
“………. there is distinction between lease and license and both are
dealt with separately. License comes under Section 49(1)(d) i.e.
any other use. Section 49(3) of the Major Port Trust Act says that
the board may lease any land at a rate higher than that provided
under Section 49(1). Thus, only in respect of lease the port trust
can change a rate higher than the scale of rates approved by TAMP.
Clause 6.1.1(a) of the Land Policy 2010 clearly states that license
can be granted by inviting tender but renewal will have to be under
the scale of rates approved by TAMP.”
It is submitted by learned counsel for the appellant that: Section
49(1) authorises the collection of licence fees in accordance with the
scale of rates framed by the Tariff Authority for the various uses (of the
property of the Board) specified under Clauses (a) to (d) of Section 49 sub-
section(1). Section 49, sub-section (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-section (1). The
learned counsel argued that having regard to the language of sub-section
(3), once the Board resorts to the process of auction or inviting tenders,
the Board can only allot a plot on lease but not a licence.
53. Though, the Port Trust sought to repel the submission on various
grounds, we do not propose to examine those defences in extenso.
54. We reject the submission since we do not see any warrant for
placing such restriction on the authority of the Board, from the language
of Section 49 sub-section (3). The opening clause of sub-section (3)–
“Notwithstanding anything contained in sub-section (1), the Board
may, by auction or by inviting tenders, lease ……”
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
sub-section a legislative intention that in every case where the 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, to our mind indicates that the lease is
the highest of rights that may be created on the properties, by the 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.
55. On the above analysis, we see no merits in the claim of the
appellant. For the same reason as given for dismissing the appeals, the
appeal of the Auroglobal is also dismissed, as the plot allotted to this
appellant is also required for the developmental project proposed to be
undertaken by the respondent Board.
56. Civil Appeal arising out of SLP(C) No.28841/2012 is filed by
Odisha Mining Corporation Ltd., one of the licensees of the respondent
Board. This matter can be disposed of in view of a specific statement
made at the bar on behalf of the Board that the Board does not 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. Accordingly, this appeal stands disposed of.
57. Coming to the 7 mechanically operated iron ore plots, they were
allotted on different dates the details of which are as follows:
|S.No.|Plot Holder & SLP No. |Initial Allotment |Renewals |
|1. |Bagadiya Brothers |01.08.2011 |Last renewal|
| | | |upto |
| |SLP No. 28842/2012 | |28.02.2013 |
| |(Manual Iron Ore plot | | |
| |holder) | | |
|2. |Rungta Mines Ltd. |04.06.2011 and |Last renewed|
| | |25.07.2005 |on |
| |SLP No.27512/2012 | |01.04.2012 |
| | | |upto |
| | | |28.02.2013 |
|3. |M/s Core Minerals |2001 and 2004 |Last renewal|
| | | |granted in |
| |SLP No.27511/2012 | |July 2012 |
| | | |upto |
| | | |30.09.2012 |
|4. |Essel Mining and Industries|Allotment by various|Last renewal|
| |Ltd. |allotment orders |upto |
| | |from June 2001 to |30.09.2012 |
| |SLP No.27516/2012 |July 2005 | |
|5. |JSW Ispat Steel Ltd. |13.02.2012 |Last renewed|
| | | |upto |
| |SLP No. 26922/2012 | |30.09.2012 |
|6. |Orissa Mining Corporation |16.05.1996, | |
| |Ltd. |04.04.1997, | |
| | |20.08.1997 | |
| |SLP No.28841/2012 | | |
|7. |Taurian Iron & Steel Ltd. |2003 |Last renewed|
| | | |upto |
| |SLP No.32005/2012 | |30.09.2012 |
Each one of them enjoyed the benefit of the allotment of plot by virtue of
successive renewals. We have already taken note of the fact that under the
2004 policy guidelines the licences granted by the Port Trust could be
renewed without any limitation on the number of renewals that could be
granted.
However, under the 2010 policy, the number of renewals was
restricted to two.
From the material on record, it appears that each one
of these appellants (mechanically operated plot licencees) enjoyed a number
of renewals.
We see no reason to interfere with the decision of the Board
to terminate the licences for the following reasons -
Firstly, a licence
does not create any indefeasible legal right.
Secondly, we do not see
any irrationality in the decision of the Board, even from the point of view
of the fact that the Board is a public body (the State within the meaning
of Article 12) and therefore, obliged to act rationally. The Board’s
decision to terminate the licences is consistent with the policy guidelines
of 2010.
Thirdly, in view of the assertion of the Board in its additional
affidavit dated 25th November, 2013, “……… the existing iron ore traffic
which is showing a growth rate of 159.56% during current financial year
(upto October 2013) in comparison to the iron ore traffic handled during
the same period of the previous financial year, it is submitted that non-
availability of mechanical plots to the Paradip Port Trust will entail huge
financial loss to the port which is a major port under Government of India.
This will also result in idling of the existing iron ore handling plant
for which significant money has been spent and dedicated facilities have
been created for efficient and effective handling of iron ore traffic.
This will also result in diversion of iron ore traffic to nearby private
Ports which is already happening due to non availability of Mechanical
plots to Paradip Port Trust”, we do not see any reason to doubt the said
assertion.
58. 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 these appellants were not
parties, would not be in the larger public interest.
59. We have already made it clear earlier in this judgment that we
propose to deal with these petitions as if they were petitions under
Article 32 and permitted the appellants to place all the material which
would be available to them in law in defence even if the impugned
termination orders were not to be based on the decision of the High Court.
60. Except arguing that the decision of the Orissa High Court is in
violation of principles of natural justice, 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 the
substantive right. In the circumstances, we decline to interfere with the
decision of the Board. All the appeals are, accordingly, dismissed.
………………………………….J.
(H.L. GOKHALE)
………………………………….J.
(J. CHELAMESWAR )
New Delhi;
December 17, 2013.
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[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 leading to the port, in which the Indian Ports Act is
in force;
[3] 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.
(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 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 analysis in the Government or in any financial
institution or industrial or services sector.
[4] 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.
(2) The decision of the Central Government whether a question is
one of policy or not shall be final.
[5] Page 9 of the counter affidavit 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:
Sl. No. Type of plotNo. of AllotteesAllotted During 1Non-auction
plot152003 to May 20052Auction plot52June, 2005 to May, 20113.Plots
allotted through tender 13June 2011 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
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.”
[6] Relevant portion of the allotment letter issued to the petitioner
in SLP(C) No.26321/2012
1. You are allotted plot No. I-5(C group) measuring 5,500 Sq.
mtr. for a period of 11 (eleven) months from 01.08.2011 to 30.06.2012.
[7] 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. 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
Urgent certified copy of this order be granted on proper
application.”
[8] Relevant portion of the notice issued to M/s Yazdani
International (P) Ltd., the petitioner in SLP(C) No.26321/2012
PARADEEP PORT TRUST
TRAFFIC DEPARTMENT
NO. TD/TM/GEN-01(Pt.1)/2012/3344 Dated: the 21st Aug.,
2012
To
M/s. Yazdani International (P) Ltd.
N-4/135 IRC Village Nayapalli,
Bhubaneswar – 751 015.
Sub.: Cancellation of Manual Iron Ore Storage Plot No. G-8 in
Compliance to order of the Hon’ble High Court of Orissa.
Dear Sir(s),
In obedience to order dtd. 02.08.2012 passed by the Hon’ble High
Court of Orissa in Misc. Case No. 110005 of 2012 arising out of W.P.(C)
No.11785 of 2012 (copy enclosed), the manual iron ore storage plot No. G-8
measuring 3000 sq. mts. Which was allotted by auction June 2010 and again
renewed in your favour upto 28.02.2013 is hereby cancelled with immediate
effect.
Further ……………… hand over the vacant possession of plot within 15
(fifteen) days ……
[9] See Footnote 7 (supra)
[10] Counter filed by the Port Trust in SLP(C) No.26321/2012
“……….It is also a matter of fact, that the Port has signed
Concession Agreements with M/s. Essar Paradeep Terminals Ltd. and M/s Blue
Water Iron Ore Terminal Pvt. Ltd. for development of Deep Draught Coal and
Iron Ore Berth respectively with 10 Million tons capacity each. After
completion of the project, the Port would be able to handle cape size
vessels of 1.25 lakh DWT as against present vessel size of maximum 70,000
DWT. Since both the berths will be fully mechanized with draught of 16.1
mtrs. berth-day output will be much more than the existing facilities and
will result in faster turn round of vessels. However, for the purpose of
development of these two facilities, the entire area of about 2.32 lakh
sq.mtr. allotted to the manual iron ore exporters is required to be vacated
for handing over the project site to the BOT operators. Vacating the iron
ore plots have become essential in view of Environmental Clearance granted
by MOEF for the BOT projects. Since this is a developmental activity of
the Port to meet the future traffic requirement, the Port can ill afford to
delay in vacating the land allotted to the iron ore exporters. ……….”
Para 6 of I.A. No.4 filed by the Port Trust in SLP(C)
No.26321/2012
“6. That it is to state that since the Paradeep Port Trust has
desired to retain the plot in question for its own use and purpose i.e. for
construction of Iron Ore Berth and Coal Berth respectively, the port trust
had entered into an Concession Agreement dated 01.07.2009 with respect to
Iron Berth and dated 10.11.2009 with respect to Coal Berth, with M/s. Blue
Water Iron Ore Terminal Private Limited and with Essar Paradeep Terminal
Limited respectively on BOT basis. The Paradeep Port Trust was awaiting
the clearance from the Ministry of Environment and Forest (MOEF), which was
granted on 02.07.2012 a copy of MOEF clearance dated 02.07.2012 is annexed
herewith and marked as Annexure-A/4 which runs from page 15 to page 18.
The Paradeep Port Trust was accordingly to take over the plots and handover
the possession to the above two BOT operators, when the present order dated
31.08.2012 was passed directing the parties to maintain status quo.”.
[11] a Rameshwar and Others Vs. Jot Ram and Another etc. [(1976) 1 SCC
194] – para (7) The realism of our processual justice bends our
jurisprudence to mould, negate or regulate reliefs in the light of
exceptional developments having a material and equitable import, occurring
during the pendency of the litigation so that the Court may not stultify
itself by granting what has become meaningless or does not, by a myopic
view, miss decisive alterations in fact-situations or legal positions and
drive parties to fresh litigation whereas relief can be given right here.
The broad principle, so stated, strikes a chord of sympathy in a court of
good conscience. But a seeming virtue may prove a treacherous vice unless
judicial perspicacity, founded on well-grounded rules, studies the plan of
the statute, its provisions regarding subsequent changes and the possible
damage to the social programme of the measure if later events are allowed
to unsettle speedy accomplishment of a restructuring of the land system
which is the soul of the whole enactment. No processual equity can be
permitted to sabotage a cherished reform, nor individual hardship thwart
social justice. This wider perspective explains the rulings cited on both
sides and the law of subsequent events on pending actions.
1b Pasupuleti Venkateswarlu Vs. The Motor & General Traders
(1975) 1 SCC 770 - para (4) – We feel the submissions devoid of substance.
First about the jurisdiction and propriety vis-à-vis circumstances which
come into being subsequent to the commencement of the proceedings. It is
basic to our processual jurisprudence that the right to relief must be
judged to exist as on the date a suitor institutes the legal proceeding.
Equally clear is the principle that procedure is the handmaid and not the
mistress of the judicial process. If a fact, arising after the lis has
come to court and has a fundamental impact on the right to relief or the
manner of moulding it, is brought diligently to the notice of the tribunal,
it cannot blink at it or be blind to events which stultify or render inept
the decretal remedy. Equity justifies bending the rules of procedure,
where no specific provision or fairplay is violated, with a view to promote
substantial justice – subject, of course, to the absence of other
disentitling factors or just circumstances. Nor can we contemplate any
limitation on this power to take note of updated facts to confine it to the
trial Court. If the litigation pends, the power exists, absent other
special circumstances repelling resort to that course in law or justice.
Rulings on this point are legion, even as situations for applications of
this equitable rule are myriad. We affirm the proposition that for making
the right or remedy claimed by the party just and meaningful as also
legally and factually in accord with the current realities, the Court can,
and in many cases must, take cautious cognizance of events and developments
subsequent to the institution of the proceeding provided the rules of
fairness to both sides are scrupulously obeyed..
[12] a In some cases the courts have refused applications for
mandamus to restore to office persons who have been irregularly removed, on
the ground that the remedy might be of no use to the applicant, because it
would still be open to the competent authority to remove him by the proper
procedure. There are also decisions in licensing cases to like effect (de
Smith’s Judicial Review of Administrative Action, Fourth Edition Pg. 561.)
12b. Seervai H.M., Constitutional Law of India [Bombay: N.M.
Tripathi Pvt. Ltd., 3rd Edn. Vol.2 (1984) para 16.279 page 1367]
[13] Normally, land inside custom bound area shall be given on
licence basis only. The licence may be granted by the Chairman. It may be
granted up to a maximum period of 11 months and shall normally be in
accordance with the Scale of Rates (SoR)/ rates approved by the competent
authority. Any concession shall be given only with the approval of the
Board. At the discretion of the Chairman, such licence may also be given
by inviting tenders. The licence can be renewed by the Chairman twice.
Further renewal shall be with the approval of the Board or by the Chairman,
subject to ratification by the Boards. Each renewal of licence shall be
treated as a fresh licence.
[14] “52. “Licence” defined – Where one person grants to another, or
to a definite number of other persons, a right to do, or continue to do, in
or upon the immoveable property of the grantor, something which would, in
the absence of such right, be unlawful, and such right does not amount to
an easement or an interest in the property, the right is called a licence.”
[15] Associated Hotels of India Ltd., Vs. R.N. Kapoor [AIR 1959 SC
1262] – (27) [There is a marked distinction between a lease and a
licence. S. 105 of the Transfer of Property Act defines a lease out of
immoveable property as a transfer of a right to enjoy such property made
for a certain time in consideration for a price paid or promised. Under S.
108 of the said Act, the lessee is entitled to be put in possession of the
property. A lease is therefore a transfer of an interest in land. The
interest transferred is called the leasehold interest. The lessor parts
with his right to enjoy the property during the term of the lease, and it
follows from it that the lessee gets that right to the exclusion of the
lessor. Whereas S. 52 of the Indian Easements Act defines a licence thus:
“Where one person grants to another, or to a definite number
of other persons, a right to do or continue to do, in or upon the
immoveable property of the grantor, something which would, in the absence
of such right, be unlawful, and such right does not amount to an easement
or an interest in the property, the right is called a licence.”
Under the aforesaid section,] if a document gives only a right to
use the property in a particular way or under certain terms while it
remains in possession and control of the owner thereof, it will be a
licence. The legal possession, therefore, continues to be with the owner
of the property, but the licencee is permitted to make use of the premises
for a particular purpose. But for the permission his occupation would be
unlawful. It does not create in his favour any estate or interest in the
property. There is, therefore, clear distinction between the two
concepts. The dividing line is clear though sometimes it becomes very
thin or even blurred………
[16] “60. Licence when revocable - A licence may be revoked by the
grantor, unless –
(a) it is coupled with a transfer of property and such
transfer is in force;
(b) the licencee, acting upon the lilcense, has executed a
work of a permanent character and incurred expenses in the execution.”
[17] Mrs. M.N. Clubwala and another vs. Fida Hussain Saheb and others
[AIR 1965 SC 610] - (12) While it is true that the essence of a licence is
that it is revocable at the will of the grantor the provision in the
licence that the licencee would be entitled to a notice before being
required to vacate is not inconsistent with a licence. [In England it has
been held that a contractual licence may be revocable or irrevocable
according to the express or implied terms of the contract between the
parties. It has further been held that if the licencee under a revocable
licence has brought property on to the land, he is entitled to notice of
revocation and to a reasonable time for removing his property, and in which
to make arrangements to carry on his business elsewhere. (see Halsbury’s
Laws of England, 3rd edn. Vol. 23, p. 431). Thus the mere necessity of
giving a notice to a licencee requiring him to vacate the licenced premises
would not indicate that the transaction was a lease…….”
[18] Para 10 – “…… It is indeed unthinkable that in a democracy
governed by the rule of law the executive Government or any of its officers
should possess arbitrary power over the interests of the individual.
Every action of the executive Government must be informed with reason and
should be free from arbitrariness. That is the very essense of the rule
of law and its bare minimal requirement. And to the application of this
principle it makes no difference whether the exercise of the power involves
affectation of some right or denial of some privilege.”
[19] Footnote No.10
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