While delivering a very significant judgment, the Supreme Court in an extremely laudable, learned, landmark and latest judgment titled Adani Ports and Special Economic Zone Limited Vs The Board of Trustees of Jawaharlal Nehru Port Authority & Ors. in Civil Appeal No. 5878 of 2022 With Writ Petition (C) No. 569 of 2022 pronounced as recently as on September 5, 2022 has held explicitly, elegantly and effectively that the termination of the agreement by Vishakhapatnam Port Authority shall not be treated as disqualification of Adani Port to participate in future tenders floated by public bodies. We thus see that the Apex Court has provided a major relief to Adani Port SEZ Ltd concerning their disqualification to participate in future tender processes floated by public bodies. It must be mentioned here that a Bench of Justice MR Shah and Justice Krishna Murari observed thus: “That in the peculiar facts and circumstances of the case and as agreed between the parties, termination of the Concession Agreement dated 01.08.2011 by Visakhapatnam Port Authority shall not be treated as a disqualification or ineligibility of the appellant/petitioner for the purpose of participating in any other tender issued by any public authorities in future.” It merits mentioning that senior advocates Abhishek Manu Singhvi and Neeraj Kishan Kaul appeared for Adani Ports SEZ Ltd while Solicitor General of India Tushar Mehta appeared for the Board of Trustees for JNPA and senior advocates Shyam Divan and Huzefa Ahmadi appeared for the M/s JM Baxi Ports & Logistics Ltd.
At the very outset, this brief, brilliant, bold and balanced judgment authored by Justice MR Shah for a Bench of Apex Court comprising of himself and Justice Krishna Murari sets the pitch in motion by first and foremost putting forth most explicitly in para 1 that, “Feeling aggrieved and dissatisfied with the impugned judgment and order dated 27.06.2022 passed by the High Court of Judicature at Bombay in Writ Petition No. 14657 of 2022 by which the Division Bench of the High Court has dismissed the said writ petition with respect to the Tender No. JNP/TRAFFIC/MCB/PPP/2021/01, the original writ petitioner – Adani Ports and Special Economic Zone Limited has preferred the present Civil Appeal No. 5878 of 2022.”
While elaborating on the prayer made, the Bench then discloses in para 1.1 that, “Writ Petition No. 569 of 2022 under Article 32 of the Constitution of India has been preferred by the petitioner – M/s. Adani Port and Special Economic Zone Limited seeking following prayers:-
“a. to declare Petitioner’s disqualification under the Tender as illegal, wrongful and /or revoke Petitioner’s disqualification under Tender No. JNP/T/BT/SWB-CB/2021-22/T-03 dated 4.2.2022 (Annexure P-1 );
b. to issue a Writ of Mandamus or any other writ in the nature of Mandamus or any other appropriate writ, order or directions under Article 32 of the Constitution of India to Respondent No. I and 2: (i) to forthwith withdraw and/or cancel the impugned communications dated 15.7.2022 (Annexure P-5) (ii) to permit the Petitioner to participate in the bidding process as provided under Tender No. JNP/T/BT/SWB-CB/2021-22/T-03 dated 4.2.2022; and (iii) to open and evaluate the Petitioner’s bid, when submitted, on merits;
c. to declare Clause 2.2.8 of the RFQ unconstitutional and ultra vires Article 14 of the Constitution of India and quash and strike down the same;
XXXXXXXXXX”.”
As things stand, the Bench then mentions in para 2 that, “At the outset, it is required to be noted that with respect to the aforesaid two tenders namely Tender No. JNP/TRAFFIC/MCB/PPP/2021/01 and Tender No. JNP/T/BT/SWB-CB/2021-22/T-03, the appellant/petitioner has been considered disqualified and/or ineligible in view of the termination of the Concession Agreement dated 01.08.2011 pursuant to the termination letter dated 26.12.2020 issued by the Visakhapatnam Port Authority. While disqualifying the appellant/petitioner, the respondent No. 1 [the Board of Trustees of Jawaharlal Nehru Port Authority (JNPA)] has relied upon Clause 2.2.8 of the Request for Qualification (RFQ) documents.”
To put things in perspective, the Bench then envisages in para 4 that, “Dr. A.M. Singhvi, learned Senior Advocate appearing on behalf of the appellant/petitioner has vehemently submitted that as such the respondent No. 1 first terminated the contract/Concession Agreement dated 01.08.2011 on 21.10.2020 and only thereafter as a counterblast, the Visakhapatnam Port Authority terminated the very said Concession Agreement vide letter dated 26.12.2020. It is submitted that the termination of the Concession Agreement is the subject matter of dispute pending before the Arbitral Tribunal. It is submitted that therefore the termination of the Concession agreement dated 01.08.2011 with the appellant/petitioner cannot be treated as a disqualification or ineligibility for the purpose of participating in any other tender issued by any public authorities.”
Furthermore, the Bench then mentions in para 4.1 that, “Dr. Singhvi, learned Senior Advocate has stated at the Bar that in view of the passage of the time and the contract entered into/granted/in process of being granted by the respondent No. 1 with respect to the aforesaid two tenders, the appellant/petitioner does not claim any right to participate in respect of the aforesaid two tenders. However, has prayed to pass an appropriate order that the termination of the Concession Agreement dated 01.08.2011 by the Visakhapatnam Port Authority may/shall not be treated as a disqualification/ineligibility for the purpose of participating in any other tender issued by the public authorities in view of the peculiar facts and circumstances.”
What’s more, the Bench then lays bare in para 4.2 that, “Dr. Singhvi, learned Senior advocate has stated at the Bar that the petitioner withdraws the Writ Petition No. 569 of 2022 with the liberty to challenge the validity of Clause 2.2.8 of the RFQ Documents or any other identical clauses before the High Court and it may be observed that the same be decided and disposed of in accordance with law and on its own merits and uninfluenced by the impugned judgment and order passed by the High Court dated 27.06.2022 passed in Writ Petition No. 14657 of 2022.”
Needless to say, the Bench then states in para 7 that, “We have heard Dr. A.M. Singhvi, learned Senior Advocate appearing with Shri Neeraj Kishan Kaul, learned Senior Advocate on behalf of the appellant/petitioner, Shri Tushar Mehta, learned Solicitor General appearing on behalf of the respondent – Board of Trustees of Jawaharlal Nehru Port Authority and Shri Shyam Divan and Shri Huzefa Ahmadi, learned Senior Advocates appearing on behalf of the contesting respondent namely M/s. J.M. Baxi Ports & Logistics Ltd.”
Most significantly, the Bench then minces no words to hold in para 8 what constitutes the cornerstone of this judgment stating that, “At the outset, it is required to be noted that the appellant/petitioner is disqualified and/or is held ineligible to participate in any tender issued by the respondent No. 1 and/or any other public authorities in view of the termination of the Concession agreement dated 01.08.2011 by the Visakhapatnam Port Authority and for which Clause 2.2.8 of the RFQ documents has been relied upon. However, it is required to be noted that it is the case on behalf of the appellant/petitioner that the respondents first terminated the Concession Agreement on 21.10.2020 and only thereafter and as a counterblast, the Visakhapatnam Port Authority terminated the Concession agreement vide termination letter dated 26.12.2020. It is also required to be noted that the termination of the Concession Agreement dated 01.08.2011 is the subject matter of dispute pending before the Arbitral Tribunal. Therefore, the issue of termination of Concession Agreement is at large before the Arbitral Tribunal. Be that as it may, there is a broad consensus between the appellant/petitioner and the respondent No. 1 that the present proceedings be disposed of by observing that the termination of the Concession Agreement dated 01.08.2011 by the Visakhapatnam Port Authority shall not be treated as a disqualification or ineligibility for the purpose of participating in any other tender issued by any public authorities in view of the peculiar facts and circumstances and, more particularly, when the appellant/petitioner has undertaken not to participate and will have no claims in respect of the above two tenders issued and granted/in process of being granted by the respondents namely, the Board of Trustees of Jawaharlal Nehru Port Authority and M/s. J.M. Baxi Ports & Logistics Ltd., we dispose of the Civil Appeal No. 5878 of 2022 as under:-
(i) That the appellant/petitioner shall have no claims in respect of the two tenders namely Tender No. JNP/TRAFFIC/MCB/PPP/2021/01 and Tender No. JNP/T/BT/SWB-CB/2021-22/T-03 as undertaken on behalf of the appellant/petitioner;
(ii) That in the peculiar facts and circumstances of the case and as agreed between the parties, termination of the Concession Agreement dated 01.08.2011 by Visakhapatnam Port Authority shall not be treated as a disqualification or ineligibility of the appellant/petitioner for the purpose of participating in any other tender issued by any public authorities in future.”
Finally, the Bench then concludes by holding in para 9 that, “Writ Petition No. 569 of 2022 is dismissed as withdrawn with the liberty in favour of the petitioner to challenge the validity of Clause 2.2.8 of the RFQ documents or any other identical clauses before the High Court and as and when such a challenge is made, the same be decided and disposed of in accordance with law and on its own merits and uninfluenced by the impugned judgment and order dated 27.06.2022 passed by the High Court of Judicature at Bombay in Writ Petition No. 14657 of 32022 as the validity of Clause 2.2.8 was not the subject matter before the High Court and we have also not examined the validity or otherwise of Clause 2.2.8 of the RFQ documents. Present Civil Appeal No. 5878 of 2022 and the Writ Petition No. 569 of 2022 stand disposed of in terms of the above.”
In conclusion, we thus see that the Apex Court Bench comprising of Justice MR Shah and Justice Krishna Murari has made it indubitably clear that the termination of the agreement by Vishakhapatnam Port Authority shall not be treated as disqualification of Adani Port to participate in future tenders floated by public bodies. To put it differently, the Adani Port are fully eligible to participate in future tenders floated by public bodies as there is no bar on them not to do so! No denying it!
Sanjeev Sirohi
