Point of law: Where there is arbitrariness in State action, Article 14 springs in and judicial review strikes such an action down. Every action of the 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 Article 14.

JUDGMENT :

1. By this writ-application under Article 226 of the Constitution of India, the writ-applicant has prayed for the following reliefs :

“(a) Quash and set aside the termination of the letter of intent awarded to the petitioner, dated 19th July 2019 on the ground that it is arbitrary, unreasonable and violative of the principles of fairness and public policy;

(b) Issue a writ of mandamus, directing the respondent to extend the petitioner’s LOI till 31st December 2019 or any such period as the Hon’ble Court deems fit;

(c) Pending hearing and final disposal restrain the respondent from issuing a fresh tender/bid and/or issuing the Letter of Intent for the development of the Nargol Port or any part thereof to any other party;

(d) Ex-parte ad-interim relief in terms of prayer (c) above may kindly be granted;

(e) Pass such other and further reliefs as may be deemed just and proper in the interest of justice.”

2. The facts giving rise to this writ-application may be summarised as under :

2.1 On 21st April 2011, a request for proposal was issued by the Gujarat Maritime Board to develop a Greenfield Port at Nargol, District Valsad.

2.2 On 20th September 2011, the petitioner, in response to the request for proposal, submitted its proposal as a lead promoter (along with the key consortium partners) to develop the port.

2.3 On 30th August 2012, the Gujarat Maritime Board issued a Letter of Intent (LOI) to the petitioner for the development of the Greenfield Port at Nargol, District Valsad, on Build-Own-Operate-Transfer (BOOT) basis, in consortium with M/s.Amarillis Limited, a wholly owned subsidiary of the Israel Port Company.

2.4 The LOI was valid for a period of 8 months from the date of issuance. The petitioner was required to adhere to the conditions mentioned in Clauses 3 and 4 of the LOI, as mentioned below :

a. To submit the application for all the environment clearances for the project within 6 months of the issue of LOI;

b. To submit a Development Guarantee of Rs.17,50,00,000/- in form of a bank guarantee within 4 weeks of the issue of LOI;

c. To share the details of the proposed SPV, along with the Joint Equity Shareholders’ Agreement within 3 months from the date of issue of LOI;

d. To submit a Detailed Project Report (DPR) within 12 months from the date of issue of LOI; and

e. To ensure that the Environment Clearance and Financial Closure of the project is achieved within 18 months from the date of issue of LOI.

2.5 On 4th September 2012, the petitioner accepted the LOI and on 16th August 2013, the petitioner sought for the extension of the LOI by one year.

2.6 On 8th October 2014, the petitioner sought for another extension of the LOI with the following extended time-lines :

a. Submission of DPR - March 2015

b. Obtaining Environment Clearance - December 2015

c. Obtain Financial Closure - December 2015

2.7 In the month of March 2015, the petitioner submitted a draft Detailed Project Report which included the master plan of the entire project.

2.8 On 2nd June 2015, the Gujarat Maritime Board informed the petitioner that it was required to submit the Joint Equity Shareholders’ Agreement, as mentioned in the LOI.

2.9 On 18th June 2015, the Maritime Board again requested the petitioner to submit the Joint Equity Shareholders’ Agreement, along with the Monthly Progress Report.

2.10 On 10th February 2016, the Maritime Board requested the petitioner to provide the information about the proposal for change in the consortium partner, along with the other details.

2.11 On 26th February 2016, the petitioner sought for the extension of the LOI, along with the information that it has appointed consultants for finding a consortium partner for the project.

2.12 On 13th July 2016, the Maritime Board informed the petitioner that its consortium partner, i.e. Amarilis Limited, had requested the Maritime Board for confirmation regarding its exit from the Nargol Po