1. Dispute over unilateral revision of port tariff for a captive berth under the Major Port Trusts Act, 1963, and a bilateral agreement. (Para 3 , 8 , 9 , 14 , 35 )
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2025 Supreme(SC) 1194
SUPREME COURT OF INDIA
M.M. SUNDRESH, RAJESH BINDAL, JJ.
Paradip Port Authority - Appellant
Versus
Paradeep Phosphates Ltd. - Respondent
Civil Appeal No. 10542 of 2025 [Arising Out of S.L.P. (C) No. 9751 of 2023]
WITH
Board of Trustees of Paradip Port - Appellant
Versus
Paradeep Phosphates Ltd. and Another - Respondents
Civil Appeal No. 10543 of 2025 [Arising Out of S.L.P. (C) No. 9870 of 2023]
Decided On : 12-08-2025
Important Points
The court emphasized that tariff revisions under contractual agreements should be mutually agreed upon and prohibited unilateral changes by authorities without consent.
Subject
Administrative Law - Tariff and Regulatory Law
Act Referred
Headnote
(A) Major Port Trusts Act, 1963 - Sections 48 to 52; Major Port Authorities Act, 2021 - Dispute over tariff fixation by Paradip Port Authority - The court found that the agreement between the parties allowed for tariff revision only through mutual consent, not unilaterally by the authority - The arbitrator's award that upheld unilateral increases was found incorrect; the matter is remitted to the Tariff Authority for Major Ports for adjudication of the dispute. (Para 34 and 61)
(B) Arbitration - Limits of court intervention - The court ruled that the scope of its interference is limited when lower authorities have rendered concurrent findings unless there is a gross error. (Paragraphs 18.1 and 29)
(B) Arbitration - Limits of court intervention - The court ruled that the scope of its interference is limited when lower authorities have rendered concurrent findings unless there is a gross error. (Paragraphs 18.1 and 29)
Legal Category Hierarchy
- administrative law
-
commercial law
-
contract law
- contract interpretation
- conflict between contract and statute (Para 21)
-
contract law
- infrastructure and transport law
- arbitration and conciliation
Advocates appeared:
For the Petitioner(s): Mr. Dipak Kumar Jena, AOR Mr. Pramod Kumar, Adv. Ms. Smita Kumari, Adv. Mr. Pradeep Kumar Verma, Adv. Mr. Sandip Munian, Adv. Ms. Ayushi Goyal, Adv. Mr. Ashutosh Singhdeo, Adv. Mr. Raj Shekhar Jena, Adv.
For the Respondent(s): Mrs. Anushka Sharda, Adv. Mrs. Raveena Rai, Adv. For M/s Khaitan & Co., AOR
For the Petitioner(s): Mr. Dipak Kumar Jena, AOR Mr. Pramod Kumar, Adv. Ms. Smita Kumari, Adv. Mr. Pradeep Kumar Verma, Adv. Mr. Sandip Munian, Adv. Ms. Ayushi Goyal, Adv. Mr. Ashutosh Singhdeo, Adv. Mr. Raj Shekhar Jena, Adv.
For the Respondent(s): Mrs. Anushka Sharda, Adv. Mrs. Raveena Rai, Adv. For M/s Khaitan & Co., AOR
Table of Contents
2. Appellant asserts statutory power to revise tariffs; Respondent contends that the bilateral agreement mandates mutual consent and prohibits unilateral enhancement. (Para 17 , 18 , 36 , 39 )
3. Agreements cannot override statutory law; tariff fixation requires expert adjudication; TAMP's failure to provide a hearing violated principles of natural justice. (Para 21 , 26 , 28 , 43 )
4. Statutory tariff-fixing authorities maintain jurisdiction regardless of contractual terms; technical adjudications must comply with principles of natural justice, including the right to a hearing. (Para 21 , 43 )
5. Arbitral award and High Court orders set aside; matters remitted to TAMP for fresh adjudication of tariff revision with due opportunity of hearing. (Para 34 , 47 )
6. Can a bilateral agreement prevent a port authority from revising tariffs under statutory power?
No. An agreement cannot override the provisions of law. While agreements may provide for mutual consent, statutory authorities (such as TAMP) have the jurisdiction to resolve tariff disputes and fix scales of rates. (Para 21 , 32 )
7. What is the requirement for natural justice in technical tariff adjudication?
When complicated issues of fact and figures are involved, an opportunity of hearing is essential. Adjudicating such matters solely by reading documents without a hearing constitutes a violation of the principles of natural justice. (Para 43 )
8. Which authority has jurisdiction over port tariff disputes under the 2021 Act?
The Adjudicatory Board is the designated authority under Section 54 of the 2021 Act. However, until such a board is constituted, the Tariff Authority for Major Ports (TAMP) continues to discharge these functions. (Para 32 , 51 , 52 )
9. Why is a specialized appellate body recommended for tariff disputes?
Tariff fixation is highly technical, involving finance, economics, and engineering. Neither the High Courts nor the Supreme Court are ideal forums for such factual and technical matters; hence, a specialized expert appellate body is recommended. (Para 54 , 56 , 57 , 60 )
JUDGMENT :
RAJESH BINDAL, J.
Table of Contents
S. No. | Heading |
(I) | Preliminary |
(II) | C.A. No............of 2025 [Arising Out of S.L.P. (C) No. 9751 of 2023] |
1. Factual Aspects | |
2. Arguments for the Appellant | |
3. Arguments for the Respondent | |
4. Discussion | |
5. Conclusion | |
(III) | C.A. No............of 2025 [Arising Out of S.L.P. (C) No. 9870 of 2023] |
1. Factual Aspects | |
2. Arguments for the Appellant | |
3. Arguments for the Respondent | |
4. Discussion | |
5. Conclusion | |
(IV) | Constitution of Appellate Authority |
(V) | Relief |
1. Leave granted.
2. This order will dispose of two appeals.
3. The issue pertains to fixation of tariff by the Paradip Port Authority.1 [Earlier Paradip Port Trust] There were two Writ Petitions2 [W.P. (C) No. 732 of 2012 and W.P. (C) No. 11 of 2010] decided by the High Court by a common order.3 [Dated 11.01.2023] Both were filed by the appellant herein. Though the period involved is different, the High Court had decided both the writ petitions by a common order. For this reason, both the appeals are being taken up and decided together.
C.A. NO............OF 2025 [ARISING OUT OF S.L.P. (C) NO. 9751 OF 2023
FACTUAL ASPECTS
4. The present appeal has been filed by the Appellant (formerly Paradip Port Trust) challenging the common order of the High Court dated 11.01.2023 disposing of W.P. (C) No. 11 of 2010.
5. The aforesaid petition was filed against order dated 19.10.2009 passed by the Appellate Authority in appeal4 [Appeal No. 5/LS/2003] which upheld the arbitral award5 [Case No. MA/NCJ/12/2001dated 27.12.2002] dated 27.12.2002. The Appellant was ordered to refund the additional amount charged till 31.03.1999 along with interest, holding the same to be unilaterally enhanced. As far as refund from 01.04.1999 and interest is concerned, both the parties were directed to file petition before Tariff Authority for Major Ports (hereinafter referred to as the TAMP). The award and appellate order were subject matter of challenge in the Writ Petition.
6. The High Court dismissed the petition, upholding the impugned award and the appellate order.
7. The appellant is a major port authority, governed by the provisions of the 1963 Act6 [ MAJOR PORT TRUSTS ACT , 1963] which is now renamed as Paradip Port Authority (PPA) under the 2021 Act.7 [ Major Port Authorities Act , 2021] The 1963 Act was replaced by the 2021 Act.
8. The respondent herein was a public sector unit when it entered into a bilateral agreement with the appellant/Authority on 03.08.1985. The idea thereof, as is evident from the agreement, was that the appellant/Authority agreed for construction of berth at Paradip Port, to be known as Fertilizer Berth, to provide berthing facilities exclusively to the respondent. The tariff to be paid by the respondent was prescribed in the Agreement. The rates could be suitably enhanced at such intervals as would be mutually agreed upon by the parties from time to time. It was the responsibility of the respondent to make such construction and install such equipments exclusively at their cost to ensure smooth handling of its cargo. It was responsible for its maintenance as well. Clause 19 of the Agreement provided that the respondent shall be subjected to application of all relevant laws, rules and regulations of the Paradip Port Trust, as may be applicable from time to time.
9. In exercise of power conferred under Sections 48 to 52 of the 1963 Act, Traffic Department of Paradip Port Trust issued Notification8 [Notification No. 1344] dated 05.10.1993 for revision of scale of rates for use of various facilities at the Ports. It was conveyed to the respondent. The payments were made by respondent to the Authority at revised rates.
10. Vide letter dated 11.05.2000, the Appellant/authority while rejecting request made by the Respondent for waiver of interest on account of delayed payment of revised port charges, offered the facility of payment thereof in 3-4 installments. This was replied to by the respondent vide its letter dated 18.05.2000 seeking waiver of interest on account of
