ORDER
N.Y. Hanumanthappa, J.
1. A
letter was addressed to this Court by one Ch. Jagannadha Reddy making certain allegations against the Union of India, Management of Visakhapatnam Port Trust and Tinna Oils and Chemicals Ltd., New Delhi. The same was taken up as W.P.No. 14043/97 as a public interest litigation. Notices were ordered to the respondents.
2. Subsequently the said Jagannadha Reddy filed W.P.No.18110/97 against the above three respondents and four others namely M/S. Toepfer International Asia Pvt., Ltd., (4th respondent), M/s. Alfared C Toepfer. (India) Pvt., Ltd. (5th respondent), the Central Bureau of Investigation (6th respondent) and the Station House Officer, Harbour Police Station, Port Area, Visakhapatnam (7th respondent). The relief sought in this writ petition is to direct the 6th respondent to probe into (1) the entire issue starting from appointment of the Managing Director of Tinna Oils (3rd respondent) as the members of the Board of Trustees, (2) declare the action of the Visakhapatnam Port Trust (2nd respondent) in allotting the berth to the 3rd respondent namely Tinna Oils as void, illegal and arbitrary and (3) to enquire whether there is any nexus between Respondents 3, 4 and 5.
3. Since some of the facts mentioned in the letter which was taken up as W.P.No. 14043/97 and the averments made in W.P.No.18110/97 and the relief sought are
almost identical, both the writ petitions arc clubbed, heard together and disposed of by this common order.
4. The case of the petitioner is that he is an employee and former member of the Welfare Board of Visakhapatnam Port Trust. He is also the Vice President of Port and Dock Workers Union of Visakhapatnam Port Trust. He is a public spirited person and as such he filed these writ petitions as a public interest litigation as crores of rupees belonging to the 2nd respondent Trust were swindled by fraudulent means by Respondents 2 to 5 which are published in several news papers. Respondents 2 to 5 being influential and wealthy, managed to avoid investigation and prosecution. According to him, the Department of Surface Transport, Government of India is administering the Visakhapatnam Port Trust (2nd respondent) under the provisions of Major Port Trust Act, 1963, hereinafter referred to ‘the 1963 Act’. The 2nd respondent Trust is constituted under the 1963 Act. The Trust has shown undue favour to the 3rd respondent in allotting T-Shed and berth to it by not following the norms. The 3rd respondent has a solvent extraction plant at Lathur, Maharashtra State for processing Soyabean meal. The 3rd respondent influenced the 2nd respondent and obtained sanction for setting up a mechanical system for exporting oil cake and agricultural products through its Managing Director Mr. Bhupendra Kumar. The 4th respondent is a Multi National Company having its subsidiary at Mumbai through whom the activities of the 3rd respondent are promoted. The 5th respondent is again a cent percent subsidiary of 4th respondent whose functions are to organise exports from various exporters to promote the 3rd respondent. The 6th respondent is an Investigation Agency. The 7th respondent is made a party since the petitioner wants protection. According to the petitioner, the Port Trusts arc required to function under the Rules and Regulations under the 1963 Act which include allotment of T-Sheds and berths. The 3rd respondent is a Company carrying on its operations at Kakinada Port. It approached the then Minister for Surface Transport and influenced
Respondents 1 and 2 to allot the berth and T-Sheds ignoring the rules and regulations. According to him any allotment of T-Shed or berth is by way of public global tender system. In case of Tinna Oils (3rd respondent), it got the berth allotted in its favour without calling for any tenders and also got influenced the Union of India to appoint the persons of 3rd respondent as trustees of the 2nd respondent Port. This was done with a view to facilitate smooth sanction of the requests of the 3rd respondent. Allotting to T-Sheds to the 3rd respondent alone was the subject-matter before the Parliament. By allotting T-Shed by Visakhapatnam Port Trust to the 3rd respondent, the Port is losing crores of rupees every year, but the Respondents 1 and 2 arc not taking the responsibility of looking into the matter. Thus the public interest is in jeopardy. The Managing Director of the 3rd respondent who was appointed Trustee of the 2nd respondent and whose appointment itself is bad and illegal got the berths allotted. His appointment was opposed by one Mr. V. V. Rama Rao representing the Labour interest.
5. The illegalities committed by the former Secretary- Ministry of Surface Transport were published in Bharat-English Political Weekly on 16-3-1996. It also narrated the corruption and malpractices of one Mr. T. Gopal Rao, IAS, Chairman and Managing Director of Visakhapatnam Port Trust. M/s Essar and Company set up a pillet plant in the port area on the land allotted to them. The 2nd respondent Port leased out very big bungalow worth Rs.25 lakhs to the daughter of the said Gopala Rao on a monthly rent ranging Rs.3,000/- to 4,000/-. If the same was leased out to the private party it would have fetched the rent of Rs.30,000/- per month. The daughter of Gopala Rao is the wife of one Mr. Venugopal another IAS Officer borne in Orissa cadre and presently he is working as District Collector Gopalapuram. Gopal Rao also secured appointment to his close relatives in Essar and Co., He also helped one Mr. R. V. Sarma, Traffic Manager and Tirupathi Raju, Ex-Manager (Operations) to get their sons appointed in the said firm on high salaries in an arbitrary manner.
6. The 2nd respondent-Port had placed a supply order before M/s. LIDCAP, a Government of Andhra Pradesh Enterprise to supply safety shoes as per prescribed standard at a cost of Rs.15 lakhs. The Visakhapatnam Dock Labour Board also placed similar order to supply shoes worth Rs.6 lakhs. When the process to supply was going on, the said Gopala Rao who had interest in one Suvarna Raju who is running a small leather shop known as Vizag Leather and Foot Wear Industry, near Madhuravada which is ten kilo metres away from Visakhapatnam city cancelled the order by influencing the officer of the LIDCAP and the Port Trust and floated a proposal to award contract to the said Suvarna Raju to supply shoes. The said Suvarna Raju is not a registered employer. By placing the order to Suvarna Raju, the 2nd respondent showed undue favour to him. In that connection, the Dock Labour Board totally lost the advance of Rs.2 lakhs and so also the 2nd respondent.
7. The Visakhapatnam Port Educational Society contemplated to procure furniture by calling upon tenders. However, at the instance of the said Gopal Rao the order for supply of furniture was placed with M/s. SETWIN influencing one Mr. Baburao, the Managing Director of SETWIN, initially at a cost of Rs.5 lakhs. Later the same was enhanced to Rs. 12 lakhs. Gopala Rao compelled the Chief Material Manager of the 2nd respondent to increase the amount. The material supplied was substandard. The amount thus obtained by Mr. Baburao was later shared by Gopal Rao and Baburao.
8. M/s. Elican Engineering Co. supplied two tripplers for handling complex. There was some delay in commissioning the tripplers. The Chief Mechanical Engineer of the 2nd respondent recommended 1% penalty on the said Company for the delay on the total cost of Rs.3.02 crores. The matter was discussed in the 2nd respondent’s Board meeting and penalty was approved to be imposed at 4%. After the Boards meeting, the agent of the Elican Co., met Gopal Rao who
minimised the penalty with ulterior motive. Thus the Port lost nearly Rs. 12 crores.
9. A tender Committee of the 2nd respondent recommended for procurement of 10 tonnes of ELL Wharf Crane from SIMCO whereas Gopala Rao managed to get the said firm black listed without serving notice. At the instance of Gopal Rao one Mr. Mariya Das, a Civil Contractor was allotted Port land for raising casurina plantation violating the rules and regulations. Gopal Rao did this with a view to help Tirupathi Raju. Gopal Rao with the help of A. Sitaramaraju and Tirupathi Raju set up a firm known as Visakha Aqua Firm wherein Gopal Rao invested huge amounts. He also assigned Ac.118 of Government land free of cost declaring it a creek. Gopal Rao possesses big houses at different places, for example Plot No.41, in Kirlampudi Lay Out and house at Pothina Mallayyapalem Lay Out and a house at Begumpet at Hyderabad and plot at Hyderabad. Suppressing the same, Gopal Rao secured through VUDA a valuable plot in the lay out developed by the VUDA situated at Beach Road leading to Bheemunipatnam, The suppression of the said fact on the part of Gopal Rao amounts to misconduct and misbehaviour. M/s Visakha Aqua Firm thought of floating public shares. In this connection, they had obtained clearance from State Bank of India. Gopal Rao compelled the officers of the State Bank of India to accede to the request of M/s. Visakha Aqua Firm. Gopal Rao eliminated recording as STD calls in the phone provided in the ante room of his chambers and using this phone to speak to Australia and other places to enquire about his private activities. Gopal Rao involved in a scandal regarding floating of lotteries while he was working as Revenue Secretary and the same is kept in abeyance. A contract for hard surfacing west side of VPT Junction was floated for Rs.55,19,777/- on 18-3-1995 the tenders were opened. The lowest tenderer M/s. Vcnkateswara Construction quoted Rs.55,15,655.16 ps. which was 0.7% less than the estimated value. As the said construction Company refused to pay illegal gratification to Gopal Rao, he got the work cancelled
and it was re-tendered and was entrusted to M/s. Suryanarayana and Co., whose proprietor is one P. Satyanarayam, who is the brother-in-law of one Chowdary Apparao working as Head Assistant in Manager (Operations) Department. The said Satyanarayana reached direct understanding with Gopal Rao.
10. A tender for Rs.83 lakhs was flouted for development of stacking area behind the newly constructed EQ 7 berth. The lowest tenderer M/s. Manmada Constructions quoted 17% less than the estimated value. A proposal was placed before the Board during March and the same was approved. But it was cancelled at the instance of Gopal Rao as the said firm failed to offer illegal gratification of 5% of the contract value to Gopal Rao. The scandal referred to the Respondents 3 to 5 has surfaced in the month of July in number of news papers including allotment of EQ 6 berth and T.Shed in front of the berth of the 3rd respondent by the 2nd respondent and it is causing heavy loss to the Port Trust. The same information was published in the press. The 2nd respondent Port provided all facilities at free of cost to M/s. Tinna Oil Company to carry on their business. The 3rd respondent Company while accepting the work had assured to transport one lakh tonnes oil per year. Basing on the said assurance the work was allotted to the 3rd respondent. But the 3rd respondent failed to keep up its promise during 1996-97. The quantum of work turned out by the 3rd respondent is less than the quota fixed. As per the agreement, the 3rd respondent was to export 3.5 tonnes of Soyabean per annum through Q-6 berth allotted to it. But the Company could not export the said quantum during 1995-96, 1996-97. Thus, the Respondents 1 to 7 are hand in glove. The sole idea is to help the 3rd respondent at the cost of the 2nd respondent Port. Since the illegal acts of Gopal Rao and his various other activities including cancellation of works entrusted by the Port Trust to others initially deserve consideration and as such the relief as prayed be ordered.
11. On service of notices, the 1st respondent is represented by the Standing
Counsel for Central Government. The 2nd respondent is represented by its Standing Counsel Sri. K. Srinivasa Murthy, 3rd respondent is represented by the learned advocate Sri Durga Prasad. 4th respondent is also represented by an advocate. So far as Respondents 5 to 7 are concerned no representation.
12. Respondents 1 to 4 filed their counters denying the allegations made by the petitioner and they contended that public interest litigation filed by the petitioner is not maintainable. The stand taken by the respondents in their respective counters run almost on the same lines.
13. Mr. B.V.R. Sharma, Law Officer of the 2nd respondent organisation (VPT), has sworn to the counter-affidavit. According to him, the petitioner is an employee holding III Class Cadre in Medical Department of the 2nd respondent Port. He has no locus standi to maintain the writ petition, it has been filed with a view not to expose public cause but to score and settle the private differences between the petitioner and the management. The petitioner was appointed as peon on 22-1-1971 in the Accounts Department of the Visakhapatnam Port Trust and thereafter he was appointed as Clerk w.e.f. 29-6-1973 in the erstwhile Secretary’s Department. After creation of Medical Department w.e.f. 1-4-1980 the petitioner was promoted as Junior Assistant and thereafter he was reverted as clerk w.e.f. 1-8-1988 and presently he is working in the Medical Department. Many a time disciplinary proceedings were initiated against the petitioner and punishments were imposed due to his various omissions and commissions.
14. The Visakhapatnam Port Trust is a
Corporate body constituted under Section 5 of the Major Port Act, 1963. The Port can enter into contract including contracts of lease. In view of second proviso to Section 34(1) of the Act, there cannot be a lease of immovable property of the Port for a period exceeding 30 years. The same shall be approved by the Central Government. The Port can lease and
renew the lease of the land of the Port for a period of three years and upto 30 years whose annual rent does not exceed to Rs.25 lakhs. Regarding allotment of berths, the Port Trust Board has framed Visakhapatnam Port Trust Dock Regulations. The Traffic Manager of the Port is empowered to deal with the allotment of berths. In the 2nd respondent organisation there are many slevedoring agents, clearing and forwarding agents including shipping agents who deal with import and export operations of other cargo through the 2nd respondent port. So far no Company has come forward requesting to provide certain facilities to export cargo of their own. The entrustment of work pertaining to agro-products to the 3rd respondents was given after satisfying the undertaking given by the Tinna Oil Company (3rd respondent) to export oil cake and agricultural products provided the Port permits the 3rd respondent to use mechanised cargo handling system including berth storage facilities. Originally, the 3rd respondent requested to allot T-2 Shed or T-4 Shed for stocking soyabean extracts to export it through the Port. The Port allotted only T-6 Shed for storing the 3rd respondent’s material meant to be exported. The allotment of T6 Shed was pursuant to the Board’s meeting dated 6-8-1994 for a period of thirty years subject to review once in ten years and further subject to government’s approval to enable the 3rd respondent to export oil cake and agricultural products. The same was approved by the Central Government. The 3rd respondent entered into an agreement with the 2nd respondent by signing on memorandum of understanding on 13-5-1994. The Board in its meeting on 31-8-1995 resolved to approve the request of the 3rd respondent to stock rice, wheat and other agro-products of their own besides their oilcake and agricultural products only in T-6 Shed on condition that the 3rd respondent shall give a guarantee that it would export a minimum of 5 lakh tonnes per year as against 3.55 tonnes approved earlier. Thus, the agreerment was reached and executed on 17-10-1995 for leasing the transit shed T-6 for a period of 30 years on certain terms and conditions which arc extracted below :
“14(a)15 months from the date of handling over the transit shed T.6 i.e., the period requires for setting up the new facilities-nil.
(b) For 4 years after the scheduled date of commissioning i.e. 15 months from the date of handing over the transit shed T.6 five lakh tonnes per annum.
(c) During the 5th year after the scheduled date of commissioning i.e. 15 months from the date of handing over the transit shed T.6 one million tonnes per annum.
(d)(i) For the failure of the lessee to attain the above mentioned minimum guarantee, he shall pay for the short fall in Port Charges that may be collected by the lessor arising from failure to export.”
The Port has power to terminate the lease if the 3rd respondent fails to achieve the required target. In case of shipping of cargo of less man 5 lakh tonnes, the Board has got power to collect port charges from the 3rd respondent for the quantity of short fall. When there was a failure to fulfil the target the 3rd respondent was called upon to pay a bill for Rs.75 lakhs towards wharfage charges. The 2nd respondent denied that allotment of T.Shcd to the 3rd respondent was at the instance of the Hon’ble Minister for Surface Transport. Regarding appointment of trustees it is averred that the Central Government is the competent authority to appoint the trustees under Section 3 of 1963 Act. The term of office of the trustee is two years from the date of first April. Section 3(1)(c)(i)(7) empowers the Government to appoint the trustees representing such interest. Accordingly Mr. Bhupendra Kumar and Mr. Madhusudan Reddy representing other interests were appointed as trustees. The meetings were held on different dates. Allotment of berths was done as per the VPT Dock Regulations. There was no necessity to call for global tenders. EQ.6 berth has not been given to the 3rd respondent exclusively, but only priority berth has been given to the vessels in view of the minimum guaranteed
transport of 5 lakhs and the Port is using the said berth for operation of other’s cargos as well. Earlier there used to be shipment of oil cake. Only after providing mobile mechanical loading facilities by the 3rd respondent exporting of oil cake started. By allotting shed to the 3rd respondent the Port has not lost any revenue. On the other hand, it earned additional revenue of Rs.1,88,44,466/- on an earlier occasion, this petitioner filed W.P.No. 13305/97 seeking to quash the Boards proceedings dated 11-6-1997. This Court rejected the same by its order dated 30-6-1997. Thus contending the respondent sought the writ petition be dismissed.
15. The 3rd respondent filed its counter. According to the 3rd respondent it is a Shipping Company which exports mainly cargo products like rice, wheat, soyabean meal and sugar and is shipping the exports mainly through Kakinada besides Bedi, Bandar, Kandla, Tuticorn Ports since 1982. These Ports are anchorage Ports and the vessels have to be even while in anchorage. The cargo has to be carried, in small boats and to be carried unboated to the ships in the anchorage. The loading is slow. Loss due to handling was very much. The Company was looking for better alternative shipping system. It approached the 2nd respondent, explained its experience and capacity to ship or transport and also expressed its willingness to bind whatever terms and conditions the 1st and 2nd respondents would put if the works is entrusted. The idea mooted by the 3rd respondent was to the satisfaction of the Government, the 2nd respondent and also the railway department. It has submitted an application on 24-4-1994 to the 2nd respondent. The memorandum of understanding was executed on 13-5-1994 whereby Transit Shed bearing No.6 on berth No.6 was allotted to it on lease for a period of 30 years on several terms and conditions which safeguards the interest of the Port. The 3rd respondent agreed to provide the Port with a guaranteed cargo of 3.5 to 4 lakhs metric tonnes per year for the first year and ten lakh metric tonnes per year thereafter. It also agreed
to pay the rent on usual standard tariffs without any concession and also agreed for periodical escalation of rent as per the norms proposed by the Government. The facilities and constructions made by the 3rd respondent to carry on its business shall always be the property of the Port. The berth given to the 3rd respondent is not for ever. It is only for 60 to 70 days in an year. During this short period, the respondent transported 2.5 metric tonnes. As per the conditions, the Port is free to use the berth allotted to the 3rd respondent for any other cargo at its discretion. The 3rd respondent provided mechanised handling system at the Port which is not available in any Port in India. This mechanised handling enables the respondent to clear its cargo in a fast manner and in a more efficient way. So that the Port can use the said berth for handling other cargo namely fertilizers, liquid cargo etc. On this allotment, the Port started earning income on T-Shed No.6 for the first time after several decades. The rent fixed is on the basis of standard tariff, prescribed by the Central Government. There is no complaint from any user of the Port. The income derived by the Port made the Port as premier port of the country. Its utilisation capacity increased by 8% over its previous performance during the year 1995-96. It is purely because of mechanised handling system introduced by the 3rd respondent. When the highest cargo transport of other ports at 34.5 million metric tonnes, the 2nd respondent was able to achieve 144% capacity utilisation. Thus, the activities of the Port have been increased by leaps and bounds. To establish this project the time given to the 3rd respondent was 15 months. The mechanised handling system was set up after consultation with several competent engineers in the country and abroad and this company incurred a sum of Rs.3 crorcs for construction of T-Sheds. In total it had incurred Rs.15 crores towards construction of T-Sheds, setting up of mechanised handling system and other advanced equipment to commission the project within the time granted. The present shed has been rebuilt which will lost for 100 years. It will be the exclusive property of the Trust after 30 years. After the improvement of T-6
Shed, the cargo export activities have been increased. Modernising of T-Shed and providing mechanised handling system is exclusively the innovation of the 3rd respondent. The allotment of T-Shed and installation of mechanised handling system was approved by the Government. By allotting T-shed the Government lost nothing. The Board of trustees of the 2nd respondent consists of not only the official members but also the representatives of various sections including Sri D. Srinivasa Rao, V.B. V. Reddy representing the Chamber of Commerce, Vizag, Sri G. Pattabhiramaiah representing the Indian Ship Owners Association, Sri Bhupender Kumar, K. Madhusudhan Reddy, V. V. Prasad and M. Apparao representing the users of the Port and D.K. Sarma and V. V. Rama Rao representing the different labour unions. Thus, there is nothing strange or extraneous consideration in the appointment of Sri Bhupender Kumar as member of the Port Trust. Bhupender Kumar did not participate in the meeting of Board of Trustees when the matter pertaining to allotment of T-Shed to the 3rd respondent was taken up for consideration, it denied obtaining any favouritism from any of the trustees. The 3rd respondent explained in para 5 of its counter the improvements in shipping activities. The 3rd respondent denied that it influenced the then Minister for Surface Transport and others namely Sri Jagdish Titler and R.K. Dhavan to get the T.Shed allotted in its favour. It is averred in para 6 of the counter that the petitioner has got controversial background and in the year 1993 he was prosecuted for dealing in fake currency notes. But the Court acquitted him by giving benefit of doubt. He was suspended from service. Earlier he was also punished in departmental proceedings for his misbehaviour. He is personally enemical to the Chairman of the 2nd respondent. He filed several petitions against him. He has been set up by some vested interests and business rivals of this Company. Thus contending, he sought the writ petitions be dismissed.
16. On behalf of the 4th respondent one Mr. Dilip K. Sheth filed counter stating
that the 4th respondent is not amenable under Article 226 of the Constitution of India, The 4th respondent is made as party to the proceedings with ulterior motive. The 4th respondent is a Company registered at Singapore having wider presence in South East and Far East Asia. India is one of the important countries with whom the 4th respondent has long-term business relationship. It is operating cargo from different parts including Visakhapatnam Port. It has appointed the 5th respondent as its broker for procurement of products dealt in by the 4th respondent. Earlier it used to carry on its operations from Kakinada. After mechanised handling facility was made available at Visakhapatnam Port, this respondent decided to request the shippers and the broker to use Visakhapatnam Port instead of anchorage ports. It denied the alleged understanding between the 2nd and 3rd respondent. It denied that it is trying to get the penalty levied by Visakhapatnam Trust (2nd respondent) on the 3rd respondent waived by pressurising Port authorities influencing the Ministry of Surface Transport. It denied that the mechanised handling machinery belongs to it. It also denied all other allegations while affirming that because of introduction of mechanised handling system the Port has increased its revenues.
17. Dissatisfied with the averments made in the counter filed by the Respondents 2, 3 and 4, the petitioner filed his reply affidavit whose averments are nothing but reiteration of the averments made either in the representation or in the writ petition.
18. Both sides addressed arguments in support of their respective cases. The sum and substance of the argument of Sri Bali Reddy, learned senior Advocate for the petitioner is that T.6 Shed should not have been allotted to the 3rd respondent without calling the tenders. This has been done by the 2nd respondent yielding to the influence of 3rd respondent both at Government and Port Trust level. Sri T. Gopal Rao is hand in glove in all the activities of the Port Trust in its entrustment and purchase etc. The entrustment of the said shed and the activities of Gopal Rao caused
considerable loss to the Port Trust. He maintained that the property of a public undertaking should not have been parted with throwing the rules and regulations and norms to the wind. When once it is shown that the interest of a public undertaking has been jeopardised, any public spirited citizen including ”an employee of the said undertaking can challenge such an action in the form of Public Interest Litigation. As such the present writ petitions are maintainable. The present writ petition are also maintainable against the other respondents though their registered offices are at different parts of the country. Inspite of several representations made to the Central Bureau of Investigation to interfere and enquire as to various nafarious activities of the 2nd and 3rd respondents, no action was taken. Hence the 6th respondent has been made a party seeking a direction to it to investigate and take action against the respondents particularly Respondents 2 to 5. Thus contending, he sought the writ petitions be allowed and the relief sought be granted.
19. No counter has been filed on behalf of the 1st respondent-Union of India. Sri G. Ramakrishna Reddy, learned Standing Counsel appearing for the Union of India submitted that no favouritism has been shown to the 3rd respondent in allotting T.Shed. They did not put any pressure on the 2nd respondent to allot the said shed to the 3rd respondent. Whatever allotment has been made if purely in accordance with the provisions of M.P.T. Act. The Board of Trustees has been constituted as per the powers conferred under the said Act. There is no arbitrariness or illegality in any of the facts referred to in the writ petition.
20. Sri K. Srinivasa Murthy, learned senior Advocate appearing for the 2nd respondent-Port Trust submitted that the Port Trust allotted T.Shed to the 3rd respondent after satisfying its experience and the offer made in favour of the Port Trust. The lease is subject to several conditions. The allotment has been done in pursuance of the approval given by the Central Government.
After introduction of mechanised handling system, the activities of the Port Trust in shipping and transportation from Visakhapatnam Trust have been increased by leaps and bounds and in turn increased the revenue of the Port. The 2nd respondent neither showed any favouritism to R3 nor ignored the case of others. He also contended that making allegations against Gopal Rao, the Chairman of the Port Trust did not merit and they do not deserve to be considered as the said Gopal Rao is not made a party to the proceedings. The said allegations were made as the petitioner was suspended by the 2nd respondent for his misconduct and various acts prejudicial to the interests of the Port. Gopal Rao had not shown any favouritism or nopotism in favour of the 3rd respondent. Any action or decision taken as purely pursuant to the Boards resolution. According to him, the writ petition is not maintainable as it is filed not with an intention to expose the public interest but with a view to harass the officers of the Trust who are discharging their duties with utmost sincerity.
21. Sri Durga Prasad, learned Advocate for the 3rd respondent while supporting the contentions of Sri Srinivasa Murthy submitted that the lease was given to the 3rd respondent not on the basis of any mis-representation or fraud as alleged but only after satisfying that the request made by the 3rd respondent is a just one. Before allotment, the 1st and 2nd respondents satisfied with the qualifications of the 3rd respondent. The 3rd respondent by investing huge sums installed the machinery and improved the export operations and so also the revenue of the Port Trust (2nd respondent). Mechanisation handling system introduced by the 3rd respondent in the 2nd respondent Port is first of its kind in the country. Before getting the allotment in question the 3rd respondent did not bring any pressure on any of the officers of the Respondents 1 and 2. Whatever has been entrusted in favour of the 3rd respondent is purely in accordance with law supported by various Board’s resolutions. There is no arbitrariness or illegality in the entrustment or allotment of the shed in question or any work
to the 3rd respondent. According to him, the petitioner has no locus standi to maintain the writ petition. He has been set up by busy bodies and rivals in the business. He also took us to some of the provisions of Major Port Trust Act, 1963 and the decisions on the scope of public interest litigation which will be referred to a little later.
22. The submissions made by Sri Tulzapurkar, learned Counsel for the 4th and 5th respondents are of the same as made on behalf of the 2nd and 3rd respondents. The additional submissions arc that the writ against a foreign undertaking is not maintainable as this Court has no jurisdiction. It is also submitted that in the matter of allotment of shed by the 2nd respondent to the 3rd respondent this respondent had no say. This respondent started to carry on its business operations through the 3rd respondent as they found the 3rd respondent’s work more satisfactory and it is capable of completing the work without loss of time.
23. Sri M.R. Reddy, learned Standing Counsel for R6, adopted the arguments of other Respondents on the question of maintainability and locus standi. Further submitted, in case this Court gives any direction to investigate as to the complaint, then State Government shall provide adequate men and material power to cause the investigation.
24. After hearing both sides and going through the records, the following points arise for consideration:
1. Whether the petitioner has got any locus standi to maintain these writ petitions ?
2. Whether it is a public interest litigation or to settle private interest ?
3. Whether there was any favouritism or arbitrariness in allotting T.shed by way of lease for 30 years to the 3rd respondent ?
4. Whether the writ against 4th respondent is maintainable ?
25. Before answering the locus standi of the petitioner to maintain these writ petitions and whether the grievance made out by the petitioner is to expose the public cause or to settle private interest, it is proper to discuss whether there was any favouritism or arbitrariness in allotting the T.Shed by way of lease for thirty years to the 3rd respondent. The case of the petitioner is that the T.Shed has been allotted to the 3rd respondent by the 1st and 2nd respondents by misusing the powers on them. The shed was allotted yielding to the influence of one Mr. Gopal Rao, the then Chairman of the Visakhapatnam Port Trust (for short the VPT). The 3rd respondent got the work allotted in its favour by influencing the 2nd respondent and it got appointed its Managing Director as trustee in the 2nd respondent Port. Any work to be entrusted shall be by inviting global tenders. But in the case of the 3rd respondent the shed was allotted by private negotiations which caused great loss of revenue to the VPT on one hand and indirectly to enrich the 3rd respondent on the other. The constitution of Board of Trustees, entrustment of work of the Port Trust or allotment of its property on lease etc., are governed by the provisions of the 1963.Act. Section 3 of the Act deals with the constitution of the Board of Trustees which is extracted below:
“(1) With effect from such date as may be specified by notification in the Official Gazette, the Central Government shall cause to be constituted in respect of any major port a Board of Trustees to be called the Board of Trustees of that port, which shall consist of the following Trustees, namely:
(a) a Chairman to be appointed by the Central Government;
(b) one Deputy Chairman or more, as the Central Government may deem fit to appoint;
(c) not more than nineteen persons in the case of each of the ports of Bombay, Calcutta and Madras and not more than seventeen persons in the case of any other port who shall consist of-
(i) such number of persons, as the Central Government may, from time to time by notification in the Official Gazette, specify, to be appointed by that Government from amongst persons who arc in its opinion capable of representing any one or more of such of the following interests as may be specified in the notification, namely:
(1) labour employed in the Port;
(2) the Mercantile Marine Department;
(3) the Customs Department;
(4) the Government of State in which the port is situated;
(5) the Defence Services;
(6) the Indian Railways; and
(7) such other interests as, in the opinion of the Central Government, ought to be represented on the Board;
Section 5 of the Act reads as follows :
”Every Board constituted under this Act shall be a body corporate having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold or dispose of property and may by the name by which it is constituted, sue or be sued.”
It is also relevant to bear in mind the scope of Section 34 of the At which reads as follows:
“Mode of executing contracts on behalf of Board :-(1) Every contract shall, on behalf of a Board, be made by the Chairman or by any such officer of the Board not below the rank of the Head of a Department as the Chairman may, by general or special order, authorise in this behalf and shall be sealed with the common seal of the Board :
Provided that no contract whereof the value or amount exceeds such value or amount as the Central Government may from time to time fix in this behalf shall be made
unless it has been previously approved by the Board;
Provided further that no contract for the acquisition or sale of immovable property or for the lease of any such property for a term exceeding thirty years, and no other contract whereof the value or amount exceeds such value or amount as the Central Government may from time to time fix in this behalf, shall be made unless it has been previously approved by the Central Government.
(2) Subject to the provisions of subsection (1), the form and manner in which any contract shall be made under this Act shall be such as may be prescribed by regulations made in this behalf.
(3) No contract which is not made in accordance with the provisions of this Act and the regulations made thereunder shall be binding on the Board.”
26. A reading of the said sections make it clear that the appointment of Board of Trustee is exclusively the discretion of the Central Government. The Board consists of members from different categories. To have a preferential berthing is not a disqualification. On the other hand, the transactions are part of the regular business of the Port. Section 117-A of the Act supports this.
27. The law says for any lease of immovable property of the Port Trust for a term exceeding 30 years and if the value of the said property exceeds a sum of Rs.25 lakhs, the approval of the Central Government is a must. The 3rd respondent who has rich experience in the transport business submitted an application to the 2nd respondent Port on 24-1-1994 requesting that a berth be allotted to the 3rd respondent. The 2nd respondent after satisfying the efficiency and experience of the 3rd respondent and prior consultation with the Ministry of Surface Transport, Government of India and obtaining its approval on 3-10-1994 allotted priority berthing in EQ Berth No.6 to the 3rd respondent. One of the
reasons which attracted the 2nd resppndent to lease out EQ 6 T.Shed in favour of the 3rd respondent was that for the first time, the 3rd respondent put forth the idea of installing mechanised handling system which the 3rd respondent proposed only after satisfying its worth and efficiency and after consultation with efficient engineers in the field like Tata Robins Frazer Ltd., who contributed their experience to the mechanised handling system existing outside the country. The installation of mechanised handling system is the first of its kind in the country. Before allotment the transit Shed.6 was in a dilapidated condition. The Board in its meeting on 31-8-1995 proposed to lease the same to the 3rd respondent and the Central Government by its order dated 31 -8-1995 approved it and lease was executed on 17-10-1995. From this it is clear the leasing of the berth was not in any way arbitrary but it was done only with the approval of the Central Government as per the provisions of the 1963 Act and the rules thereunder. It is stated in the counter that inviting of global tenders is not required as the same is not in vogue. Installation of mechanised handling system is not only new one but it was agreed to instal it at the cost of the 3rd respondent- Its installation not only increased the efficiency of the Port in transportation. The leasing of the shed in question to the 3rd respondent is not without any condition. An option is kept with the 2nd respondent that in case of any violation of the terms and conditions of the agreement entered into between the 2nd and 3rd respondents, the 2nd respondent will have a right to determine the lease. Using of mechanised system has been appreciated by other transporting agencies including Railways. The petitioner alleged mala fides against the 1 st and 2nd respondents in allotting T.Shed to the 3rd respondent mainly referring to the name of Mr. Gopal Rao, the then Chairman of VPT connecting its relationship with Mr. R.K. Dhavan and Jagdish Titler Ministers. But the fact remains that on the date of allotment of even earlier to that the said two persons were not in the office. It has come in the counter of the 3rd respondent that Bhupendra Kumar against whom a reference
has been made was not a director of the 3rd respondent at the time of allotment. His appointment of Board of Trustee was only to help other interests. During the period of lease, the said Bhupendra Kumar was on leave. He was not a party to the resolution dated 31-8-1995. The petitioner alleged that Mr. O.K. Sharma, V.V.Rama Rao objected for installation of mechanised handling system, but factually the same is incorrect. On the other hand, D.K. Sharma in his letter dated 23-7-1997 supported the mechanised handling system project. It is alleged that one G. Appa Raju issued a press statement to the effect that the allotment of T.Shed to the 3rd respondent was done in an arbitrary way with a view to help the 3rd respondent. But the said Appalaraju denied as having issued a press note on 24-7-1997. It was alleged by the petitioner that installation of mechanised handling system has resulted in causing loss to the Port Trust, but from the facts given by the respondents, it is crystal clear that the installation of mechanised handling system is first of its kind in the country. The entire cost of Rs.3 crores for installation of the said system was borne out by the 3rd respondent. The T.6 Shed after allotment was re-built into a modem bulk storage shed wherein cargo can be stored in bulk which helps the fast and efficient loading. As per the terms of the agreement, after 30 years of lease period the entire T-Shed and the mechanised handling system will become the property of the 2nd respondent. No favouritism has been shown to the 3rd respondent infixing the quantum of rent. The rent fixed is on par with all India standard rate with periodical escalation clauses. Earlier to installation of mechanised handling system, the Port was not in a position to cope up with the transportation of cargo whereas after the installation of the said system a guarantee has been given to the Port to transport 3.5 to 4 lakhs metric tonnes per year of a non-conventional export cargo. The export cargo benefited the railways also. The above system do help both ways, namely export and import of cargos. In the year 1995-96, the 3rd respondent shipped 1.6 lakh metric tonnes which falls within the 15 months free period
and a quantity of 2.50 lakhs metric tonnes was shipped during 1996-97. As on the date of filing of writ petition, the shipping quantify of cargo went upto 4.10 lakh metric tonnes. The mechanised handling system increased in the capacity utilisation, non-conventional cargo and income. The contention that the 3rd respondent by misleading the Port Trust is now getting more profit is incorrect. On the other hand, the 3rd respondent gets priority berting only for 60 to 70 days per year. The Memorandum of Understanding imposes a few more conditions which are more in favour of the 2nd respondent.
28. From the above it is clear that there is no arbitrariness or mala fides on the part of Respondents 1 and 2 in allotting T.Shed to the 3rd respondent who in turn introduced mechanised handling system. It has proved as an advantage for the VPT. Though serious mala fides have been alleged the same were not established. The petitioner failed to notice that when serious allegations have been made against a person, that person shall be made as party to the proceedings. Any allegation made in the absence of a person alleged, does not bind him. In the case on hand, serious allegations have been made against Gopal Rao, Bhupendra Kumar etc. But no opportunity was given to them to meet the allegations as they were not made parties to the proceedings.
29. In our view, allotting T.Shed, berth and permitting the 3rd respondent to ship the cargo by mechanised handling system is not illegal. On the other hand it is in conformity with the provisions of the 1963 Act. The conditions of the agreement of lease fully safeguards the interests of the 2nd respondent. This Point No.3 has been answered against the petitioner.
30. Public Interest Litigation is an instrument for the administration of justice to be used properly in appropriate cases. It shall not be meant that it is a process of settling disputes between individual parties as held by the Supreme Court in “Rural Litigation v. State of UP., AIR 1989 SC 594. Whether there is any public interest involved in these
writ petitions, we have to see what interest the petitioner has got in the allotment of T.Shed to the 3rd respondent. The petitioner did not deny the averments in the counter-affidavit filed by the 2nd and 3rd respondents that he started his career as a peon and now he is working as clerk in the 2nd respondent Port and on many an occasion, disciplinary actions were initiated against him, and he was involved in many criminal cases including a case of fake notes. The writ petitions are mainly directed against Mr. Gopal Rao, the then Chairman of the VPT who is not a party to the writ petitions and the petitions appear to have been filed with a view to harass the members of the VPT and also Gopal Rao. To maintain a Public Interest Litigation the person who approaches the Court shall first show that the acts of persons against whom allegations are made have caused substantial injury either to the petitioner or to the public at large and redressal of such injury is warranted. To maintain the petition it shall be shown that public wrong or a public injury has been caused by an act or omission of the State or a public authority which is contrary to the constitution or the law. The person presenting the petition shall act bona fide and must have sufficient interest and he alone can maintain an action for redressal of such public wrong or public injury as held by the Supreme Court in “S.P. Gupta v. Union of India, . The contents of the petition shall indicate the public interest. Its violation will cause irreparable loss to the society at large. To entertain Public Interest Litigation apart from attempting to vindicate the public interest, one must also establish the arbitrariness on the part of the authorities in doing a particular act or not performing a particular duty. As discussed above, the allotment of T.Shed in question to the 3rd respondent is neither arbitrary nor illegal. Any allotment is in the interest of the 2nd respondent and that too after the approval and permission given by the Central Government.
31. As far as the locus standi to maintain the writ petition is concerned, the Supreme Court in “Janata Dal v. H.S. Chowdary“, and in number of other
cases held that there is no rigid rule as to the applying of locus standi principle to a Public Interest Litigation. Any person acting bona fide and having sufficient interest can maintain an action for judicial redressal for public injury to put the judicial machinery in motion. However, the Supreme Court cautioned that a person acting bona fide and having sufficient interest in the proceedings of Public Interest Litigation will alone have a locus standi. On the other hand, a person prompted by personal gain or private profit or political motive or any oblique consideration has no locus standi. If the Court comes to know that the petition is for oblique consideration it will not allow its process to be abused by busy bodies.
32. In number of cases including one in the case of “Hardoi Roadways v. Contonment Board”, Allahabad High Court held that an employee of an organisation cannot maintain a writ petition alleging that allotment of a particular work of the organisation may cause loss to the organisation and in turn it may affect the financial prospects of its employees. To establish that a person is an aggrieved person and whether it is a public interest or otherwise one should show that he has no self-interest in such litigation. Whereas from the averments in the affidavits filed in support of the writ petitions, it can be held without any hesitation that the attempt of the petitioner is not to espouse the public cause but to serve his self-interest namely to harass the trustees of the 2nd respondent on the one hand and the 3rd respondent on the other, the reason being number of disciplinary proceedings were initiated against the petitioner by the 2nd respondent port for his mis-conduct. In our view, the petitioner has no locus standi to maintain the writ petitions and seek for cancellation of allotment of T.Shed to the 3rd respondent by the 2nd respondent as there is no favouritism or arbitrariness in the allotment. Thus Points 1 and 2 are answered against the petitioner.
33. In our view, the facts stated in both the writ petitions are quite vague and misconceived in law and as such the petitioner
is not entitled to the reliefs sought for. The 2nd and 3rd respondents are right in their contentions that the taken up matter and the writ petition presented and filed by the petitioner are not maintainable as the petitioner is neither aggrieved by the action of the 2nd respondent in allotment of T.Shed to the 3rd respondent nor established any locus standi to maintain the writ petitions. Mere allegations in the absence of proof do not require to be considered. The allegations of the petitioner are not based on proper information but made with a view to harass the respondents to settle his private differences with them.
34. Since the information furnished by the petitioner is quite contrary and it is made, with a view to settle his private differences with the respondents, it is not a fit case where a direction can be given to the Central Government to direct the C.B.I, to investigate into the transaction pertaining to the allotment of T.Shed to the 3rd respondent. As far as last prayer of the petitioner is concerned namely was there any nexus between the Respondents 2 to 5, the facts themselves disclose that there was no nexus. Each one is different from another. Any work entrusted to the 3rd respondent is only pursuant to the approval of the Central Government which approved the same keeping in mind the effect of some of the provisions of the 1963 Act.
35. The 4th respondent is an outsider. In its counter, it clearly stated it is no way interested in the allotment of T.Shed to the 3rd respondent. On the other hand, the 4th respondent is a Multi-National Company. Having satisfied with the work of the 3rd respondent it decided to transact with the 3rd respondent in the matter of shipping of cargo. The fourth point is also answered against the petitioner. In our view, both the writ petitions are devoid of merits and as such they are liable to be dismissed.
36. Accordingly, both the writ petitions are dismissed. However, there is no order as to costs.