The decision to exclude a party from participating in a bid can be upheld if it is taken in public interest and does not offend constitutional provisions.

JUDGMENT - SHAH A.P., J.:---This writ petition under Article 226 of the Constitution of India seeks to challenge the global tender notice inviting pre qualification bids for the redevelopment of the Bulk Terminal into a Container Terminal at Jawaharlal Nehru Port (JNP) on a Build, Operate and Transfer (BOT) basis for a licence period of 30 years. Clause 1.3 of the said tender notice disqualifies the petitioners and their associates and interconnected companies to participate in the bid. The petitioners are seeking direction or order in the nature of mandamus directing the 1st respondent Jawaharlal Nehru Port Trust (JNPT) to delete Clause 1.3 and permit the petitioners and their associates or interconnected companies to participate in the bid. In the alternative a direction is sought that the terms and conditions of the new bid for conversion of the existing bulk terminal into a container terminal should be no different from the terms and conditions on which the petitioners are required to operate the present private container terminal facility at JNP. The facts and circumstances leading to this petition stated briefly are as under.

2. The 1st petitioner company is registered under the laws of Australia and carries on business worldwide as Port and Terminal Operators. The 1st petitioner is a holding company of the second petitioner in which 95% of the equity is beneficially owned by the 1st petitioner and 5% of the equity is owned by other parties. The 1st respondent JNPT is a body corporate constituted under the Major Port Trusts Act, 1963. In December 1995 the 1st respondent invited bids for operating container terminal at JNP for a period of 30 years on BOT basis and the petitioners bid being highest was accepted and licence agreement was entered into between the 2nd petitioner and 1st respondent on 3-7-1997. The licence agreement provided concession to the 2nd petitioner to operate container terminal for period of 30 years, at the end of which entire assets would be transferred back to the 1st respondent free of cost. JNP has two terminals, container terminal and bulk terminal. In November 2001 the 1st respondent took a decision to redevelop the bulk cargo terminal on BOT basis and pursuant thereto pre qualification bids for redevelopment of bulk dated 28th October, 2002 on BOT basis for a license period of 30 years. Clause 1.3 of the said invitation reads as follows :

"The Port is desirous of entrusting the project of redeveloping of the Bulk Terminal to a Container Terminal, on BOT basis, to another licensee other than the existing private terminal operator (licensee) at JNPT i.e. Nhava Sheva International Terminal Container (NSICT) Ltd. or their associates, P O Ports or their associates, interconnected or the sister companies of either of them."

Prior to the publication of the above advertisement by letter dated 25th November 2002 by Chairperson of the 1st respondent conveyed the decision of the Board of Trustees of the JNPT to the petitioners that to avoid concentration of control with one private party and to increase competition and efficiency and to prevent monopoly in public interest, the Board has decided to exclude the petitioners from bidding for the new container terminal. The petitioners contend that the decision of the 1st respondent in effecting the blacklisting of the companies and associates who are interconnected with the 1st petitioner from participating in the bid on the specious premise of preventing monopolies by a single private party is a bogey and merely an eye wash. There is no established or declared policy of the respondents that holding of one concession shall exclude a private operator from the grant of any more concessions in the future and the respondents have simply adopted an ad hoc Rule to exclude the petitioners for extraneous reasons from the bid for the new terminal. At the same time other companies like Maersk Port, Singapore Port Authority, and Dubai Port Trust Authority are allowed t

Click Here to Read the rest of this document