TMI Blog2014 (4) TMI 1211X X X X Extracts X X X X X X X X Extracts X X X X ..... 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doctrine acted on the basis of a notification, it should have known that such notification was liable to be amended or rescinded at any point of time, if the Government felt that it was necessary to do so in public interest. This contention of the appellant, therefore, is equally devoid of any merits. Concluded contract between the parties - Held that:- When the LOI is itself hedged with the condition that the final allotment would be made later after obtaining CRZ and other clearances, it may depict an intention to enter into contract at a later stage. Thus, we find that on the facts of this case it appears that a letter with intention to enter into a contract which could take place after all other forma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for which they intended to bid. The basic value of this premium was fixed at ₹ 612/- per sq. mtr. The bids were to accompany the earnest money deposit of ₹ 3 lakhs per plot. As per the prescribed procedure in such matters, the Port Trust held pre-bid meeting on 21.4.2005 wherein the terms of NIT of the bidders were explained and querries answered. The bidders were also informed that since these plots fall under Coastal Regulatory Zone (CRZ), requisite permission from the competent authority under CRZ was required which would be obtained by the Kandla Port Trust. However, at the same time it was also made clear that any specific clearance like safety, pollution control etc. was to be obtained by the individual lessee (s). This was also reiterated vide communication dated 25.5.2005. In this letter it was also stated that the successful bidder was required to pay the premium within a period of 3 months from the issuance of formal letter of allotment or CRZ clearance whichever was earlier. One more pre-bid meeting was held on 20.6.2005 and, thereafter the last date of submitting the tender was also postponed and subsequently fixed as 11.8.2005. 3. The appellant submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CA No. 1877 of 2011 came up before the same Bench of the High Court on 10.2.2011, following the decision in the said two Writ Petitions the Court dismissed the petition of the appellant as well with one paragraph order, which reads as follows:- Identical petitions for the same purpose and with the same prayer being Special Civil Application Nos. 286 of 2011 and 1328 of 2011 have been decided by this Court by CAV judgment dated 4.2.2011 and order dated 7.2.2011 respectively. Since no new issue is raised and the factual matrix admittedly remains the same, present petition is summarily dismissed for the reasons discussed in detail in CAV judgment dated 4.2.2011 in Special Civil Application No. 286 of 2011. 7. Appellant has challenged the aforesaid order in the present appeal. 8. We may also record at this stage that IMC limited, M/s. Nikhil Adhesive Ltd. as well as one more similarly situated person had also filed Special Leave Petitions. All these four petitions were listed and were taken together for hearing from time to time. When these matters came up for hearing 14.3.2014 other three petitioners sought permission to withdraw their Special Leave Petitions which were acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it or within 3 months of issuance of allotment letter whichever was earlier. In the opinion of the High Court it did not result in any concluded contract. In the process, the High Court also noted that after the issuance of LOI on 12.1.2006 till the passing of Resolution No. 108 dated 22.11.2010, no effective steps were taken by the said petitioner despite the fact that it was informed by the Port Trust on 15.2.2006 that the work of preparation of EIA studies in respect to allotment of 17 plots for construction of Liquid Storage Tanks for obtaining CRZ clearance from the Government of India, Ministry of Environment has already been entrusted to M/s. NIOT, Chennai along with other project works and the said institute had already completed site survey work for the purpose. The petitioner was also informed that the said M/s. NIOT, Chennai had 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 informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner had paid only ₹ 3 lakhs by way of earnest money as against the total premium amount which was 23.74 crores and was to be paid only after receipt of the said CRZ clearance, which amount was never paid. 14. The reading of the judgment in IMC Limited case would reveal that the Counsel for the petitioner in that case had argued that their case was distinguishable from the case of Nikhil Adhesives Limited on facts. Endeavour was made to demonstrate that in so far as the petitioner in IMC is concerned, it had supplied all the requisite details promptly and because of this reason the Port Trust had not issued any letters to them alleging default on their part in furnishing the details. Therefore, it could not be held responsible for delaying the tender process. It was, thus, argued that there was a concluded contract in their case and not a contingent one. Further, in any case the only contingency at the time of issuing LOI was the clearance of CRZ authorities which also was granted subsequently. In view of aforesaid argument, the court went into the specific question as to whether there was already a concluded contract between the parties. This issue has been ans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued after receiving the CRZ clearance in general and if any further CRZ clearance was required for installation, safety, pollution etc. the same was to be obtained by the appellant. The Port Trust applied to the Ministry of Environment, Government of India for such permission. However, for one reason or the other, this permission/ clearance was not forthcoming. Even when Ghandhidham Chamber of Commerce and Industry wrote to the Port Trust, on behalf of these allottees who were issued LOI's and were waiting for formal letter of allotment, in reply the Port Trust had requested the said Chamber of Commerce and Industry to also use its good offices with the Ministry of Environment and Forests for early clearance of CRZ permission. It is a matter of record that for more than 5 years the clearance had not been granted and came to be granted only on 16.8.2010. By that time significant change had occurred from the date of the issuance of the NIT in March, 2005. The prices of the property had taken quantum jump. Though in the NIT premium was fixed on ₹ 612/- per sq. mtr., it was more than ₹ 8,000/- per sq. mtr. in 2010. In this backdrop the Port Trust wanted to take a deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blic body which is of the view that it need not go further ahead with the tender process. It is true if such a decision is taken without any reasons to support it or mere ipsi dixit it would be arbitrary. In this case there are reasons. The High Court analysed the reasons and has taken the view that those reasons are valid. In our view in matters particularly to the disposal of valuable assets by the State when the State seeks to explore the possibility of getting higher price. 19. The guiding principles in such cases can be noted from the judgments discussed hereinafter. In Meerut Development Authority v. Assn. of Management Studies; (2009) 6 SCC 171, the decision related to disposal of public property by an instrumentality of the State. In the said context, the Court inter alia held as follows: 26. A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated it must be unconditional; must be in the proper form, the person by whom tender is made must be able to and willing to perform his obligations. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Government. But the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, bu the decision making process itself. The duty of the court is to confine itself to the question of legality. Its concern should be: (i) Whether a decision making authority exceeded its powers? (ii) Committed an error of law, (iii) Committed a breach of rules of natural justice, (iv) reached a decision which no reasonable tribunal would have reached or, (v) Abused its powers. Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Municipal Council, Sendhwa Anr.; 2012 (6) SCC 464, the Court was dealing with the case of challenge to the awarding of contract to the 2nd respondent in the writ petition on the ground that he had not complied with eligibility requirements in NIT. Paragraph 17 of that case reads as follows: In Raunaq International Ltd. v. IV.R. Construction Ltd. (1999) 1 SCC 492, this Court reiterated the principle governing the process of judicial review and held that the writ court would not be justified in interfering with commercial transaction in which the State is one of the parties to the same except where there is substantial public interest involved and in cases where the transaction is mala fide. 22. In so far as argument of malafides is concerned, apart from bald averment, there are no pleadings and there is not even a suggestion as to how the aforesaid decision was actuated with malafides and on whose part. Even at the time of arguments Mr. Vikas Singh did not even advert to this aspect. In fact, the entire emphasis of Mr. Vikas Singh was that since there was a concluded contract between the parties, cancellation of such a contract amounted to arbitrariness. As already pointe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing an order of cancellation was not arbitrary and unreasonable, it should normally desist from giving any finding on disputed or complicated questions of fact as to whether there was a contract, and relegate the petitioner to the remedy of a civil suit. Even in cases where the High Court finds that there is a valid contract, if the impugned administrative action by which the contract is cancelled, is not unreasonable or arbitrary, it should still refuse to interfere with the same, leaving the aggrieved party to work out his remedies in a civil court. In other words, when there is a contractual dispute with a public law element, and a party chooses the public law remedy by way of a writ petition instead of a private law remedy of a suit, he will not get a full fledged adjudication of his contractual rights, but only a judicial review of the administrative action. The requisition whether there was a contract and whether there was a breach may, however, be examined incidentally while considering the reasonableness of the administrative action. But where the question whether there was a contract, is seriously disputed, the High Court cannot assume that there was a valid contract and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants did not alter its position to its prejudice pursuant thereto to such an extent which could inspire the court to take the decision that holding the promisor to its representation is necessary to do justice between the parties. 26. In MP Mathur Ors. v. OIC Ors.; 2006 (13) SCC 706 it is 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. This contention of the appellant, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Secretary (Sugar) held that there was no valid contract for supply of molasses to the first respondent and that, therefore, the allotment letter issued by the ACC was without any authority. Consequently he cancelled the same. Aggrieved by the interim order of the High Court to supply 20,000 quintals of molasses to the respondent, the appellants approached the Supreme Court which in turn, set aside that interim order and permitted the respondent to amend the writ petition to challenge the order of the Secretary (Sugar). The respondent amended its writ petition accordingly. During the hearing, certain disputed facts cropped up. The High Court called the managers of two of the sugar mills and put some questions to them and recorded their statements. The High Court reached the conclusion that there was a concluded contract between the five sugar mills and the respondent for sale of 85,000 quintals of molasses at a price of ₹ 127 per quintal. Thereafter, it held that having regard to the doctrines of part performance, legitimate expectation, estoppel and acquiescence, the cancellation of the allotment letter issued by ACC was unsustainable. Therefore, the High Court quashed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scious of the position that merely because one of the authorities raises a dispute in regard to the facts, it may not be always necessary to relegate the parties to a suit. This was so stated in ABL International Ltd. Anr. v. Export Credit Guarantee Corporation of India Ltd. Ors.; JT 2013 (10) SC 300 in the following manner:- 37. In our opinion, this limited areas of dispute can be settled by looking into the terms of the contract of insurance as well as the export contract, and the same does not require consideration of any oral evidence or any other documentary evidence other than what is already on record. The claim of the contesting parties will stand or fall on the terms of the contracts, interpretation of which, as stated above, does not require any external aid. 32. At the same time, as already noted in Kisan Sahkari (Supra) this court had taken a view that where the question whether there was a contract or not is seriously disputed, the court is not to assume that there was a valid contract and on that basis examined the validity of the administrative action. Therefore, keeping in view the aforesaid understanding of the law, a very limited inquiry on this aspect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 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. When the LOI is itself hedged with the condition that the final allotment would be made later after obtaining CRZ and other clearances, it may depict an intention to enter into contract at a later stage. Thus, we find that on the facts of this case it appears that a letter with intention to enter into a contract which could take place after all other formalities ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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