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IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. DURAISWAMY, T.V. THAMILSELVI, JJ.
PSA SICAL Terminals Limited., Chennai - Appellant
Versus
Union of India, New Delhi & Another - Respondent
W.A. Nos. 227 & 229 of 2022 & C.M.P.Nos.1649, 1658, 1660, 1652, 1653 & 1656 of 2022
Decided On : 07-06-2022
ARBITRATION - AWARD - VALIDITY - ROYALTY - REVENUE SHARING - TARIFF - SETTLEMENT OF DISPUTES - COMMITTEE - DISBANDMENT - JUDICIAL REVIEW - WRIT PETITION - DISMISSAL - [PSA Sical Terminals Pvt. Ltd. Vs. The Board of Trustees of V.O.Chidambranar Port Trust, Tuticorin and others].
Fact of the Case:
Appellant, a container terminal operator, entered into an agreement with the 2nd respondent, a port trust, for the development and operation of a container terminal. The agreement provided for payment of royalty to the 2nd respondent, with periodic escalation. Appellant challenged the tariff orders issued by the Tariff Authority for Major Ports (TAMP), which disallowed inclusion of royalty as an element of cost while fixing the tariff. Appellant also initiated arbitration proceedings against the 2nd respondent, seeking to convert royalty to revenue sharing model. The arbitral award was set aside by the High Court and the Supreme Court. Appellant filed writ petitions seeking a direction to the 1st respondent, the Union of India, to ensure that the Committee constituted for settlement of disputes between appellant and the port trusts proceeds with the process and to quash the office memorandum disbanding the Committee. The learned Single Judge dismissed the writ petitions.
Finding of the Court:
The Supreme Court held that the issue of royalty/revenue share dispute had already been decided by the Supreme Court in Civil Appeal Nos.3699-3700 of 2018 [PSA Sical Terminals Pvt. Ltd. Vs. The Board of Trustees of V.O.Chidambranar Port Trust, Tuticorin and others], and that the filing of the present writ petitions was an attempt to review the order that had already been confirmed by the Supreme Court. The Court further held that the Committee constituted by the 1st respondent was concerned with pending disputes and not those that had already reached finality. The Court also held that the appellant had no vested right to a forum, and that the disbandment of the Committee was within the realm of the 1st respondent.
Issues: 1. Whether the issue of royalty/revenue share dispute had already been decided by the Supreme Court in Civil Appeal Nos.3699-3700 of 2018 [PSA Sical Terminals Pvt. Ltd. Vs. The Board of Trustees of V.O.Chidambranar Port Trust, Tuticorin and others], and whether the filing of the present writ petitions was an attempt to review the order that had already been confirmed by the Supreme Court? 2. Whether the Committee constituted by the 1st respondent was concerned with pending disputes and not those that had already reached finality? 3. Whether the appellant had a vested right to a forum, and whether the disbandment of the Committee was within the realm of the 1st respondent?
Ratio Decidendi: 1. The Supreme Court held that the issue of royalty/revenue share dispute had already been decided by the Supreme Court in Civil Appeal Nos.3699-3700 of 2018 [PSA Sical Terminals Pvt. Ltd. Vs. The Board of Trustees of V.O.Chidambranar Port Trust, Tuticorin and others], and that the filing of the present writ petitions was an attempt to review the order that had already been confirmed by the Supreme Court. The Court further held that the Committee constituted by the 1st respondent was concerned with pending disputes and not those that had already reached finality. The Court also held that the appellant had no vested right to a forum, and that the disbandment of the Committee was within the realm of the 1st respondent. 2. The Court relied on the following judgments: (i) (1975) 3 Supreme Court Cases 503 [Dr.Amarjit Singh Ahluwalia Vs. The State of Punjab and others] (ii) (1986) 2 Supreme Court Cases 679 [Comptroller and Auditor- General of India, Gian Prakash, New Delhi and another Vs. K.S.Jagannathan and another] (iii) (1993) 1 Supreme Court Cases 71 [Food Corporation of India Vs. M/s.Kamdhenu Cattle Feed Industries] (iv) (2000) 1 Supreme Court Cases 600 [A.P.Aggarwal Vs. Govt. of NCT of Delhi and another] (v) 2016 SCC Online Cal 6525 [Subrata Chakravarty Vs. Union of India & Ors.]
Final Decision: The Writ Appeals were dismissed.
JUDGMENT
(Prayer: Appeals filed under Clause 15 of the Letters Patent against the order dated 19.01.2022 passed in W.P.Nos.26121 & 26119 of 2021.)
Common Judgment
M. Duraiswamy
1. The above Writ Appeals have been filed by the appellant challenging the common order passed by the learned Single Judge dated 19.01.2022 made in W.P.Nos.26121 & 26119 of 2021.
2. Since the issues involved in both the Writ Appeals are common, the appeals are disposed of by this common judgment.
3. The appellant filed the Writ Petition in W.P.No.26121 of 2021 to issue a Writ of Mandamus to direct the 1st respondent to ensure that the members of the Committee expeditiously proceed with the process/ proceedings initiated by the 1st respondent vide Office Memorandum dated 21.07.2020 for settlement of disputes between the appellant and the 2nd respondent, including by issuing necessary directions to submit report/ recommendations to the 1st respondent suggesting the way forward and solutions to the issues within a time frame fixed by this Court, after granting the appellant an opportunity to be heard and making representations and after considering the issues raised by the appellant.
4. The appellant also filed a Writ Petition in W.P.No.26119 of 2021 to issue a Writ of Certiorarified Mandamus to call for the records of the 1st respondent, culminating in the impugned Office Memorandum dated 11.11.2021 disbanding the Committee constituted by the 1st respondent and to quash the same and to consequently direct the 1st respondent to set out the policy/the manner in which the disputes/issues between the appellant and the 2nd respondent are to be settled within a time frame to be determined by this Court.
5. The brief case of the appellant is as follows:
5.1. According to the appellant, they are one of the oldest and most reputed Container Terminal Operators, operating at the 2nd respondent – Port Trust. The 2nd respondent, in March 1997, issued a global notice inviting bids for the purpose of development of Berth-VII of the Tuticorin Port as a Container Terminal and for the operation and maintenance of the terminal for a period of 30 years on a Build, Operate and Transfer (in short “BOT”) basis.
5.2. According to the appellant, being a successful bidder in the tender process, they were awarded the contract. Pursuant to which, Licence Agreement dated 15.07.1998 was entered into between the parties to design, engineer, finance, erect, operate, replace Container Handling Equipment and to maintain and repair the Container Terminal at Tuticorin Port for a period of 30 years. The appellant has been operating in the Terminal for over a period of 20 years and has played a vital role in augmenting commercial activities, which in turn, was revenue for the 2nd respondent – Port Trust.
5.3. The appellant had performed their obligations under the said Agreement and had made substantial investments and had also paid huge amounts by way of royalty to the 2nd respondent. The terms of the Licence as contained in the Licence Agreement contemplated an escalating royalty for all the years. The bid itself was submitted based on the tariff indicated in the bid documents. The annexures to the bid documents contained the scale of rates prevailing in Chennai Port Trust at that point of time, which was cost based. It was also stated in the bid document that the tariff would be revised by the Government/Tariff Regulator, viz., Tariff Authority for Major Ports (in short “TAMP”) once in three years and for any increase from the prevailing scale, the licensee has to apply to the licensor for revision of tariff.
5.4. According to the appellant, when the Licence Agreement was entered between the appellant and the 2nd respondent, it was a common understanding between the parties that the tariff to be charged by the appellant would include the royalty payable to the 2nd respondent as an admissible costs. This was also clearly indicated in the tariff order passed by TAMP in December 1999 in t
The Supreme Court held that the issue of royalty/revenue share dispute had already been decided by the Supreme Court in Civil Appeal Nos.3699-3700 of 2018 [PSA Sical Terminals Pvt. Ltd. Vs. The Board....
The court emphasized that tariff revisions under contractual agreements should be mutually agreed upon and prohibited unilateral changes by authorities without consent.
The court upheld that the re-evaluation of abnormally low bids by a constituted Sub-committee was proper, ensuring adherence to fair evaluation standards in public procurement processes.
The Supreme Court ruled that the absence of clearance from the Committee on Disputes does not invalidate the right to file a suit, and that disputes between government corporations should be adjudica....
(1) Court, while interpreting a particular provision, will have to apply principles of purposive construction – Modern approach of interpretation is a pragmatic one, and not pedantic.(2) Court should....
A writ of mandamus cannot be issued for contractual disputes involving disputed questions of fact without exhausting alternative dispute resolution mechanisms.
Writ petitions to enforce contractual obligations are generally not maintainable unless there is a statutory duty; parties must exhaust internal dispute resolution mechanisms in contract disputes.
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