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SCA/286/2011 35/ 35 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 286 of 2011
For
Approval and Signature:
HONOURABLE
MR.JUSTICE D.H.WAGHELA Sd/-
HONOURABLE
MR.JUSTICE K.A.PUJ Sd/-
===================================
1.
Whether
Reporters of Local Papers may be allowed to see the judgment ?
YES
2.
To
be referred to the Reporter or not ?
YES
3.
Whether
their Lordships wish to see the fair copy of the judgment ?
NO
4.
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
NO
5.
Whether
it is to be circulated to the civil judge ?
NO
NIKHIL
ADHESIVES LIMITED THRO’DHARMESHBHAI DHIRAJBHAI PANDYA – Petitioner
Versus
KANDLA
PORT TRUST – Respondent
Appearance
:
MR MIHIR
THAKORE, SENIOR ADVOCATE WITH MR
KASHYAP K PUJARA
WITH MR VISHAL T. PATEL for Petitioner.
MR DHAVAL D VYAS for
Respondent.
===================================
CORAM
:
HONOURABLE
MR.JUSTICE D.H.WAGHELA
and
HONOURABLE
MR.JUSTICE K.A.PUJ
Date
: 04/02/2011
CAV JUDGMENT
(Per
: HONOURABLE MR.JUSTICE K.A.PUJ)
The
petitioner has filed this petition under Article 226 of the
Constitution of India praying for quashing and setting aside the
Resolution No.108 dated 22.11.2010 passed by the respondent, Kandla
Port Trust. The petitioner has also prayed for stalling the
proceedings of fresh tenders in respect of construction of liquid
storage tanks issued by the respondent. The petitioner further
prayed for the direction to the respondent to issue formal letter of
allotment to the petitioner.
The
brief facts giving rise to the present petition are that the
respondent invited tenders on 12.03.2005 for allotment of 17 plots
for construction of liquid storage tanks at Kandla by issuing a
public notice. The petitioner submitted its price bid in August 2005
for allotment of Plot No.8 for construction of liquid storage tanks
at Kandla. The petitioner was declared the highest bidder for Plot
No.8 by the respondent on 12.01.2006 on the basis of the
recommendation of the Tender Committee constituted in the matter of
tender for allotment of plot for construction of liquid storage
tanks at Kandla. Allotment of 17 plots to the respective highest
bidder for 30 years lease is subject to receipt of CRZ Clearance.
The petitioner thereafter entered into further correspondence with
the respondent between the period from 2006 to 2010. The petitioner
thereafter addressed a letter dated 18.01.2010 informing the
respondent about their subsidiary Company M/s.
Sanghavi Logistics Private Limited, incorporated for
construction, maintenance and operation of liquid storage tanks at
Kandla and asking permission to carry out construction, maintenance
and operation of storage tank at Plot No.8 in the name of M/s.
Sanghavi Logistics Private Limited, instead of M/s. Nikhil Adhesives
Limited, the petitioner
herein. In response to the said letter, the petitioner received a
reply dated 18.03.2010 from the respondent stating that the matter
of allotment is still not finalized. The petitioner, therefore,
approached the respondent and met respondent’s Estate Manager who
assured the petitioner that things will work out. The petitioner
waited in anticipation that things would work out and the respondent
being Govt. Organization would take its own time to take decision.
To
the shock and surprise of the petitioner, a Resolution No.108 was
passed by the respondent on 22.11.2010 terminating the contract
entered into with the petitioner. The respondent vide its letter
dated 09.12.2010 informed the petitioner that the Board of Trustees
of the Port of Kandla vide Resolution No.108 in its meeting held on
22.11.2010 has decided to cancel the tender process started in the
year 2005 for allotment of 17 plots for construction of liquid
storage tanks at Kandla. Despite the fact that CRZ Clearance was
granted by the Ministry
of Forest & Environment on 02.02.2010, the
respondent has cancelled the allotment and started fresh tender
process by issuing fresh public notice on the website of Kandla Port
Trust. The petitioner apprehended that if such tender process is
allowed to be completed, in that case, the petitioner would suffer
huge losses and all the efforts, time, money, labour invested by the
petitioner in furtherance of the said contract would go in vain.
The petitioner was, therefore, constrained to file the present
petition before this Court.
Mr.
Mihir Thakore, learned Senior Advocate appearing with Mr. Kashyap
Pujara for the petitioner submitted that the impugned Resolution
No.108 is absolutely illegal, arbitrary, unjust, unfair and is
passed high-handedly and, therefore, deserves to be quashed and set
aside. He further submitted that the impugned Resolution was passed
without giving any opportunity of hearing to the petitioner and
hence, it is violative of the principles of natural justice. He
further submitted that the tender process
was complete in 2006, when the petitioner received the letter of
intent dated 12.01.2006 informing that the petitioner is the highest
bidder, which amounts to a concluded contract. He further submitted
that the doctrine of promissory estoppel is where one party has by
his words or conduct made to the other a clear and unequivocal
promise which is intended to create legal relations or effect a
legal relationship to arise in the future, knowing or intending that
it would be acted upon by the other party to whom the promise is
made and it is in fact so acted upon by the other party, the promise
would be binding on the party making it and he would not be entitled
to go back upon it. He has, therefore, submitted that the principle
of promissory estoppel would certainly estop the respondent from
backing out of its obligation arising from a solemn promise made by
it to the petitioner. In support of this submission, Mr. Thakore
relied on the decision of the Apex Court in the case of The
Gujarat State Financial Corporation V/s. M/s. Lotus Hotels Private
Limited, AIR 1983 SC 848,
wherein it is held that it is too late in the day to contend that
the instrumentality of the State which would be “other
authority” under Article 12 of the Constitution can commit
breach of a solemn undertaking on which other side has acted and
then contend that the party suffering by the breach of contract may
sue for damages but cannot compel specific performance of the
contract. It was not disputed that the Gujarat State Financial
Corporation which is set up under Section 3 of the State Financial
Corporations Act, is an instrumentality of the State and would be
“other authority” under Article 12 of the Constitution.
By its letter of offer and the subsequent agreement the appellant
Corporation entered into a solemn agreement in performance of its
statutory duty to advance the loan of Rs.30 Lacs to the respondent
Company. Acting on the solemn undertaking, the respondent proceeded
to undertake and execute the project of setting up a 4 Star Hotel.
The agreement to advance the loan was entered into in performance of
the statutory duty cast on the Corporation by the statute
under which it was created and set up. On its solemn promise
evidenced by the afore-mentioned two documents, the respondent
incurred expenses, suffered liabilities to set up a Hotel.
Presumably, if the loan was not forthcoming, the respondent may not
have undertaken such a huge project. Acting on the promise of the
appellant evidenced by documents, the respondent proceeded to suffer
further liabilities to implement and execute the project. In that
backdrop of this incontrovertible fact situation, the principle of
promissory estoppel would come into play. Thus, the principle of
promissory estoppel would certainly estop the Corporation from
backing out of its obligation arising from a solemn promise made by
it to the respondent. The respondent acting upon the solemn promise
made by the appellant incurred huge expenditure and if the appellant
is held to its promise, the respondent would be put in a very
disadvantageous position and therefore also the principle of
promissory estoppel can be invoked in this case.
Mr.
Thakore further submitted that the petitioner suffered loss of
opportunity from the year 2005, as there were such other projects
amongst various ports across the country of which tenders were
floated. The petitioner never took part in other tender process in
the country as the petitioner was declared highest bidder and was
allotted Plot No.8 subject to the observance of the formality of CRZ
Clearance. He further submitted that in order to meet with the bid
amount quoted by the petitioner other than the amount invested
towards technical and other purpose, the petitioner always had to
keep provision for a sum of Rs.23,74,00,442.64 ps. and as a result,
he could not utilize the said amount for any other purpose and
thereby suffered loss of opportunity. He further submitted that the
respondent being a Government Undertaking cannot be allowed to
function in such an arbitrary manner as State action must not be
arbitrary, must be based on some rational and relevant principle and
dealing with the public, whether by giving of jobs or entering into
contracts or otherwise, it cannot act arbitrarily and enter into
relationship with any person it likes as its sweet will, but its
action must be in conformity with some principle which meets the
test of reason and relevance. He has, therefore, submitted that the
petition deserves to be admitted and the interim relief as prayed
for is required to be granted. In support of this submission, Mr.
Thakore relied on the decision of the Apex Court in the case of
State of H.P. &
Others V/s. Ganesh Wood Products and others, (1995) 6 SCC 363,
wherein it is held that the rule of promissory estoppel being an
equitable doctrine, has to be moulded to suit the particular
situation. It is not a hard and fast rule but an elastic one, the
objective of which is to do justice between the parties and to
extend an equitable treatment to them. The doctrine of promissory
estoppel was evolved to protect a promisee who acts on the faith of
a promise / representation made by promisor and alters his position
even though there is no consideration for the promise and even
though the promise is not
recorded in the form of a formal contract. Anything and everything
done by the promisee on the faith of the representation does not
necessarily amount to altering his position so as to preclude the
promisor from resiling from his representation. Altering his
position should mean such alteration in the position of the promisee
as it makes it appear to the Court that holding the promisor to his
representation is necessary to do justice between the parties. The
doctrine should not be reduced to a rule of thumb. If the equity
demands that the promisor is allowed to resile and the promisee is
compensated appropriately, that ought to be done. If, however,
equity demands, in the light of the things done by the promisee on
the faith of the representation, that the promisor should be
precluded from resiling and that he should be held fast to his
representation, that should be done. This is the proper way of
understanding the words “promisee altering his position”.
Mr.
Thakore further relied on the decision of the Apex
Court in the case of Mahabir
Auto Stores V/s. Indian Oil Corporation, AIR 1990 SC 1031
wherein it is held that the State acts in its executive power under
Article 298 of the Constitution in entering or not entering in
contracts with individual parties. Article 14 of the Constitution
would be applicable to those exercise of power. Therefore, the
action of State organ can be checked under Article 14. Every action
of the State executive authority must be subject to rule of law and
must be informed by reason. So, whatever be the activity of the
public authority, it should meet the test of Art.14 of the
Constitution. If a Government action even in the matters of
entering or not entering into contracts, fails to satisfy the test
of reasonableness, the same would be unreasonable. Rule of reason
and rule against arbitrariness and discrimination, rules of fair
play and natural justice are part of the rule of law applicable in
situation or action by State instrumentality in dealing with
citizens. Even though the rights of the citizens are in the nature
of contractual rights, the manner, the method and motive
of a decision of entering or not entering into a contract, are
subject to judicial review on the touchstone of relevance and
reasonableness, fair play, natural justice, equality and
non-discrimination.
Mr.
Thakore further relied on the decision of the Apex Court in the case
of State of
Maharashtra and others V/s. Atur India Private Limited, (1994) 2 SCC
497, wherein the Apex
Court was concerned with the leviability of stamp duty under the
Bombay Stamp Act on agreement to lease. While pointing out the
distinction between the agreement to lease and agreement of lease,
the Court has referred to Woodfall on law of Landlord and Tenant
wherein it is observed that a contract for lease is an agreement
enforceable in law whereby one party agrees to grant and another to
take a lease. The expressions ‘contract for lease’ and ‘agreement
for lease’ is to be preferred as being more definite, agreement
frequently means one of many situations in a contract. A contract
for a lease is to be distinguished
from a lease, because a lease is actually a conveyance of an estate
in land, whereas a contract for a lease is merely an agreement that
such a conveyance shall be entered into at a future date. In
contradistinction to this, in the case of a lease, there must be
words of demise. The usual words by which a lease is made are
‘demise’ and ‘let’; but any words which amount to a grant are
sufficient to make a lease. Whatever words are sufficient to
explain the intent of the parties, that the one shall divest himself
of the possession and the other come into it, for any determinate
time, whether they run in the form of a license, covenant or
agreement, are sufficient, and will in construction of law amount to
a lease for years as effectually as if the most proper and pertinent
words had been used for that purpose; for if the words used are
sufficient to prove a lease of land, in whatsoever form they are
introduced, the law calls in the intent of the parties, and moulds
and governs the words accordingly.
Based
on the facts and circumstances of the case and
decided case law on the subject, Mr. Thakore strongly urged that the
impugned Resolution deserves to be quashed and set aside and the
petitioner is entitled to the letter of allotment and contract in
its favour.
Mr.
Dhaval D. Vyas, learned advocate appearing for the respondent on
caveat, on the other hand, has invited the Court’s attention to the
affidavit-in-reply filed on behalf of the respondent. He submitted
that the offers were invited for leasing 23 plots of land of various
sizes of Kandla Port Trust to be utilized for construction of liquid
storage tanks. The offers were invited for a minimum basic premium
fixed at Rs.612/- per Sq. Mtr. The annual lease rent was fixed at
nominal rate of Rs.1 per plot. The bidders would have to submit an
EMD of Rs.3 Lacs, along with the offer. He has, therefore,
submitted that the revenue to be received for parting of the subject
plots would only be the amount of upfront premium and not
thereafter. The minimum premium to be offered in the present tender
was Rs.612/- per Sq. Mtr. The minimum premium to be offered for
qualifying bid in the subsequent tender dated 03.01.2011 would be
Rs.8358 per Sq. Mtr. He has, therefore, submitted that apparently,
there would be considerable amount of escalation, which would be a
relevant consideration. The respondent being a Public authority,
the decision, action and resolution are to be guided by the public
interest. Public interest requires Kandla Port Trust to fetch
maximum price. He further submitted that there is a specific term
in the tender document that the validity of any bid, would be for a
period of six months from the date of opening of tenders, unless the
extension is sought for by Kandla Port and is agreed by the bidders.
On lapse of six months, there would be no valid bid or offer for
which enforcement could be sought.
Mr.
Vyas further submitted that in a pre-bid meeting, the prospective
bidders were persuaded and queried on mandatory government
clearances to be taken, including CRZ Clearance. The respondent by
communication dated 25.05.2005 informed the prospective bidders that
the respondent would obtain general clearance for the area for tank
farms. However, further clearances were to be obtained by the
individual lessee. Since the bid of the petitioner was highest, the
Tender Committee recommended the Board of Trustees for approval,
which was approved by the Resolution dated 08.12.2005. In view of
prior mandatory clearances required for the Project, it was
communicated to the petitioner vide letter dated 12.01.2006 that it
is only after the receipt of CRZ Clearance, the formal letter of
allotment will be issued to the petitioner. He further submitted
that the communication dated 12.01.2006 would, at best, be pitched
to be a letter of intent. The said letter would be an expression of
intention to acceptance of the offer of the petitioner for being
allotted the plot in question. The offer of the petitioner would be
finally accepted by a further act of allotment, which would
obviously be as per the terms of the tender.
Mr.
Vyas has invited the Court’s attention to certain terms and
conditions of the tender document, more particularly, Clause 11
regarding validity of Bids, Clause 12 regarding right of acceptance
or rejection of any Bid, Clause 16 regarding allotment, Annexure II,
Clause 1 regarding lease execution and Clause 2 regarding payment
period. Based on these provisions contained in the tender document,
Mr. Vyas has submitted that the petitioner would not have any vested
right or interest for allotment. Unless the possession of land is
offered upon receipt of all payments, there would be no right,
interest or otherwise in favour of bidder for allotment of land.
The petitioner is at present at the stage of submission of bid and
payment of EMD only, without there being any offer by the petitioner
for payment of premium amount. He further submitted that there was
no promise of whatsoever nature, which was offered by the
respondent. In fact, the ingredients of promise under law, are not
met with. Even if it is considered that there were any promise
which have been given that would estop the respondent to cancel the
tender process, it would be highly inequitable in set of present
circumstance to direct the respondent to grant the prayers made in
this petition. The decision has been taken considering the public
interest which is involved, for allotment of Government lands. The
public interest would entitle the respondent to change its stand and
the same would give power to withdraw the representation made by it,
if at all. The public interest would have to be accepted as equity,
which can override the individual equity.
Mr.
Vyas has further submitted that there is no iota of evidence and
details worth credence, which confirms the petitioner to have
altered its position. Vague averments are made in the petition
without any support or evidence. Even these averments are not
satisfying that the petitioner has altered its position to its
detriment.
Mr.
Vyas further submitted that during the last five years, there was no
communication or representation by the petitioner confirming any
urgency or desire to have the proposal of the allotment made by it
being accepted by the respondent. He further submitted that for
application for CRZ Clearance, the consultants, namely, National
Institute of Ocean Technology, New Delhi was appointed by the
respondent who had called for material particulars which were in
turn requested to be supplied by the petitioner and all other
bidders. Vide communication dated 15.02.2006, the petitioner was
called upon to submit the relevant particulars. In absence of
details supplied by the petitioner and other bidders, the same could
not be sent for the CRZ Clearance. If details were available and
they were sent to the Consultant, he would have in term submitted
his advise there upon. It is only after that the CRZ Clearance
would be applied to much later. The respondent had thereafter made
repeated reminders to the Ministry of Environment and Forest
requesting early clearance for Project. The said permission came to
be received by the Trust as late as in February, 2010.
Mr.
Vyas further submitted that it is a specific term that the allotment
would commence from the actual date of handing over the possession
to the allottee upon issuance of letter of allotment. Therefore,
the allotment and possession would apply prospectively.
While
dealing with the specific issue raised by Mr. Thakore with regard to
concluded contract, Mr. Vyas submitted that there is no contract,
much less, concluded contract between the petitioner and the
respondent and, therefore, there is no question for the petitioner
to be entitled for the reliefs prayed for. He further submitted that
the ingredients for a concluded contract are not satisfied in the
present case since there is no acceptance much less final acceptance
to the proposal of the petitioner for being allotted Plot No.8. In
absence of there being any final acceptance, there would be no
promise and thereby there would be no agreement to enforce at law.
He has, therefore, submitted that the petition deserves to be
dismissed with cost.
In
support of his submissions, Mr. Vyas relied on the following
decisions :-
In Siemons
Public Communication Private Limited and Another V/s. Union of India
and others, 2009 AIR SCW 470, the Apex Court held that
when the power of judicial review is invoked in the matters relating
to tenders or award of contracts, certain special features have to
be considered. A contract is a commercial transaction and
evaluating tenders and awarding contracts are essentially commercial
functions. In such cases, principles of equity and natural justice
stay at distance. If the decision relating to award of contract is
bonafide and is in public interest, Courts will not exercise the
power of judicial review and interfere even if it is accepted for
the sake of argument that there is a procedural lacuna.
In M. P.
Mathur and others V/s. DTC & others, (2006) 13 SCC 706, the
Apex Court held that once the public interest is accepted as the
superior equity which can override individual equity, the principle
would be applicable. If there is a supervening public equity, the
Government would be allowed to change its stand and has the power to
withdraw from representation made by it which induced persons to
take certain steps which may have gone adverse to the interest of
such persons on account of such withdrawal. Merely because the
resolution was announced for a particular period, it did not mean
that the Government could not amend and change the policy under any
circumstances. If the party claiming application of doctrine acted
on the basis of a notification, it should have known that such
notification was liable to be amended or rescinded at any point of
time, if the Government felt that it was necessary to do so in
public interest.
In Dresser
Rand S. A. V/s. M/s. Bindal Agro Chem. Ltd. & Another, AIR 2006
SC 871, the Apex Court held that it is now well settled that a
letter of intent merely indicates a party’s intention to enter into
a contract with the other party in future. A letter of intent is
not intended to bind either party ultimately to enter into any
contract. It is no doubt true that a letter of intent may be
construed as a letter of acceptance if such intention is evident
from its terms. It is not uncommon in contracts involving detailed
procedure, in order to save time, to issue a letter of intent
communicating the acceptance of the offer and asking the contractor
to start the work with a stipulation that a detailed contract would
be drawn up later. If such a letter is issued to the contractor,
though it may be termed as a letter of intent it may amount to
acceptance of the offer resulting in a concluded contract between
the parties. But the question whether the letter of intent is
merely an expression of an intention to place an order in future or
whether there is a final acceptance of the offer thereby leading to
a contract, is a matter that has to be decided with reference to the
terms of the letter.
In Speech &
Software Technologies (India) Private Limited V/s. Neos Interactive
Limited, (2009) 1 SCC 475, the Apex Court held that it is well
settled legal position that an agreement to enter into an agreement
is not enforceable nor does it confer any right upon the parties.
As the agreement contemplated by the letter of intent was never
executed, it cannot be said that the agreement contemplated by the
said letter of intent had novated, rescinded or superseded the
Tripartite Share Purchase Agreement.
Based
on the aforesaid decisions of the Apex Court and considering the
provisions contained in the tender document and further considering
the aspect of public interest, Mr. Vyas has strongly urged that the
petitioner is not entitled to any relief prayed for in this petition
and hence, it deserves to be summarily dismissed.
Having
heard learned Counsel appearing for the parties and having
considered their rival submissions, in light of the statutory
provisions contained in the Indian Contract Act as well as the
decided case law on the subject, the Court is of the view that the
petitioner cannot succeed merely on the basis of the letter of
intent issued by the respondent Port Trust on 12.01.2006 informing
the petitioner that the petitioner had been declared highest bidder
for the plot that has been applied by it for construction of liquid
storage tank at Kandla and further informing that formal allotment
letter shall be issued to the petitioner after the receipt of the
CRZ clearance in general by the Kandla Port Trust for tank farms for
handling of hazardous and non-hazardous cargo and further informing
that further CRZ clearance if required for installation, safety,
pollution control etc. has to be obtained by the petitioner from
time to time at its cost and the payment shall have to be made by
the petitioner after obtaining the CRZ clearance for the individual
premises allotted to the petitioner or within three months of issue
of allotment letter, whichever was earlier. Between the period from
12.01.2006 to the passing of another Resolution No.108 of
22.11.2010, no effective steps were taken by the petitioner despite
the fact that the petitioner was informed by the respondent Kandla
Port Trust on 15.02.2006 that the work of preparation of EIA studies
in respect of allotment of 17 plots for construction of Liquid
Storage Tanks for obtaining CRZ clearance from the Govt. of India,
Ministry of Environment has already been entrusted to M/s. NIOT,
Chennai along with other project works and the said institute has
already completed site survey work for the purpose. The petitioner
was also informed that the said M/s. NIOT, Chennai has suggested to
provide following information for incorporation of the same in EIA
studies :- (i) Approximate estimation for the activity (ii) Proposed
activity (type of Cargos to be stored) (iii) Proposed storage
capacity (approximate quantum of the liquid commodity, size etc.).
The
petitioner was specifically informed that the said information was
urgently required to be furnished to the NIOT so that the same would
enable the said institute to submit the report as early as possible
for obtaining CRZ clearance in the matter. Since these informations
were not supplied by the petitioner, another letter was issued by
the respondent Trust on 13.05.2008 reiterating the same request to
provide the said information. Instead of furnishing these details,
the petitioner sought appointment of the Deputy Secretary (Estate)
of the respondent Port Trust vide letters dated 27.05.2008,
18.07.2008 and 13.11.2008. The petitioner thereafter vide its
letter dated 18.01.2010 giving reference of the respondent’s letter
dated 12.01.2006, informed the respondent that for construction,
maintenance and operation of Liquid Storage Tank, it had
incorporated a wholly owned subsidiary Company, namely, M/s. Sanghvi
Logistics Private Limited, which is fully owned by them and the said
Company would carry out the construction, operation and maintenance
of Storage Tanks on the said plot. The petitioner has also sought
the permission to carry out construction, operation and maintenance
of Storage Tank on the said plot in the name of M/s. Sanghvi
Logistics Private Limited instead of M/s. Nikhil Adhesives Limited.
This request was turned down by the respondent vide its letter dated
20.03.2010 informing that the matter of allotment was not finalized
and hence, the request could not be considered. The respondent
thereafter vide letter dated 10.12.2010 informed the petitioner that
the Board of Trustees of the Port of Kandla vide Resolution No.108
at its meeting held on 22.11.2010 has decided to cancel the tender
process, started in the year 2005 of allotment of 17 numbers of
Plots for construction of Liquid Storage Tanks at Kandla. In this
view of the matter, it cannot be said that there was any concluded
contract between the petitioner and the respondent Port Trust nor
any promise was given by the respondent Port Trust to allot Plot
No.8 to the petitioner. The letter of intent issued by the
respondent was merely an expression of intention and imparting an
information that the petitioner stood highest bidder and on receipt
of CRZ clearance, the formal letter of allotment would be issued.
However, the petitioner had not cooperated in the meantime for
obtaining CRZ clearance and before any formal letter of allotment is
issued, the earlier tender process stood cancelled. Even while
canceling the earlier tender process, the respondent Port Trust
neither acted arbitrarily nor it would amount to any malafide
exercise of discretionary powers. Before taking this decision at
its Board meeting held on 22.11.2010, the respondent Prot Trust
sought an opinion of the Additional Solicitor General who opined
that it would be prudent to cancel 2005 tender process and start
fresh process so as to fetch the realistic market price in
accordance with the present market value of the land. He further
opined that there is no legal impediment in cancellation of the
tender process of the year 2005 since there is no concluded contract
which is in existence.
The
respondent is well within its rights to take such a decision in the
year 2010 keeping in mind the larger public interest. The figures
itself would indicate that the original tender premium was of
Rs.612/- per Sq. Mtr. whereas fresh tender premium is Rs.8358/- per
Sq. Mtr. Thus, the premium amount to be received by the respondent
Port Trust by issuance of fresh tender would come to more than 10
times than the original premium amount. Moreover, the petitioner
had paid only Rs.3 Lacs by way of earnest money. The total premium
amount is of Rs.23,74,00,442.64 ps. This amount was to be paid by
the petitioner only after receipt of the CRZ clearance in general
and after issuance of allotment letter, receipt of individual CRZ
clearance and on execution of lease document. None of these events
took place and hence, it cannot be said that any vested right or
interest is created in favour of the petitioner. The judgments
relied upon by Mr. Thakore in support of his contentions are not of
much assistance to the petitioner. In Gujarat State Financial
Corporation V/s. M/s. Lotus Hotels Private Limited (Supra), not
only an agreement was executed, but the respondent on the basis of
the said agreement incurred further liabilities to implement and
execute the Project. There is nothing on record of the present case
to show that except making payment of Rs.3 Lacs by way of earnest
money, the petitioner had incurred any other expenses or suffered
liabilities to implement the project of construction and maintenance
of the Tank. Even if it is assumed that the issuance of letter
dated 12.01.2006 tantamounts to a promise given by the respondent
Port Trust, the petitioner has not altered his position to such an
extent which inspires the Court to take the decision that holding
the promisor to his representation is necessary to do justice
between the parties. The equity demands that the respondent Port
Trust is allowed to resile looking to the facts and circumstances.
Thus, the decision of H.P. & Others V/s. Ganesh Wood Products
and others (Supra) helps the respondent rather than it helps the
petitioner.
There
is no dispute about the proposition laid down by the Apex Court in
Mahabir Auto Stores V/s.
Indian Oil Corporation, AIR 1990 SC 1031 (Supra).
However, looking to the facts of the present case, it cannot be
said that the action of the respondent Port Trust of not issuing
allotment letter or of cancelling the tender process fails to
satisfy the test of reasonableness. It would neither amount to an
arbitrary action nor give rise to any discrimination. The Court
does not see any justification in interfering with the said action
on the touchstone of relevance and reasonableness, fair play,
natural justice, equality and non-discrimination.
The
letter of intent issued by the respondent Port Trust
on 12.01.2006, at best, can be said to be an agreement to issue the
allotment letter and to execute the lease document in favour of the
petitioner subject to fulfillment of certain conditions. However,
in absence of issuance of allotment letter, the said letter of
intent cannot be enforced in the Court of law. The Apex Court in
Dresser Rand S.A. V/s.
Bindal Agro Chem Limited and others
(Supra) clearly stated that a letter of intent merely indicates a
party’s intention to enter into a contract with the other party in
future. Such a letter of intent is not intended to bind either
party ultimately to enter into any contract. Even in Speech
& Software Technologies (India) Private Limited V/s. Neos
Interactive Limited (Supra),
the Apex Court clearly held that an agreement to enter into an
agreement is not enforceable nor does it confer any right upon the
parties.
Taking
any view of the matter, the petitioner is not entitled to any relief
prayed for in this petition. The petition is, therefore, dismissed
at the threshold without any order as to costs.
Sd/-
[D. H. WAGHELA, J.]
Sd/-
[K. A. PUJ, J.]
Savariya
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