2011 (2) TMI 1556 - HC - Indian Laws

Summary

Issues Involved:
1. Legality of Resolution No. 108 passed by Kandla Port Trust.
2. Principles of natural justice and opportunity of hearing.
3. Doctrine of promissory estoppel.
4. Public interest and arbitrariness in government actions.
5. Validity and enforceability of the letter of intent.
6. Vested rights and interests of the Petitioner.
7. Judicial review of government contracts and tenders.

Detailed Analysis:

1. Legality of Resolution No. 108 passed by Kandla Port Trust:
The Petitioner challenged the Resolution No. 108 dated 22.11.2010, which terminated the contract for the allotment of Plot No. 8 for the construction of liquid storage tanks at Kandla. The Petitioner argued that this resolution was "absolutely illegal, arbitrary, unjust, unfair and is passed high-handedly."

2. Principles of Natural Justice and Opportunity of Hearing:
The Petitioner contended that the impugned resolution was passed without giving any opportunity of hearing, thereby violating the principles of natural justice. The Court, however, did not find merit in this argument as the Respondent had acted within its rights and followed due process.

3. Doctrine of Promissory Estoppel:
The Petitioner argued that the Respondent was estopped from backing out of its obligation arising from a solemn promise made to the Petitioner. The Petitioner relied on the principle of promissory estoppel, citing the case of *The Gujarat State Financial Corporation v. Lotus Hotels Private Limited* (AIR 1983 SC 848). The Court, however, found that the doctrine of promissory estoppel did not apply as there was no concluded contract and the Petitioner had not altered its position to its detriment based on the Respondent's promise.

4. Public Interest and Arbitrariness in Government Actions:
The Respondent argued that the decision to cancel the tender process and start a fresh one was guided by public interest, as the new tender would fetch a significantly higher premium. The Court agreed, stating that the Respondent's actions were neither arbitrary nor malafide and were taken in the larger public interest.

5. Validity and Enforceability of the Letter of Intent:
The Petitioner claimed that the letter of intent issued on 12.01.2006 constituted a concluded contract. The Court, however, held that the letter of intent was merely an expression of intention and not a binding contract. The Court cited *Dresser Rand S. A. v. Bindal Agro Chem. Ltd.* (AIR 2006 SC 871) to support this view.

6. Vested Rights and Interests of the Petitioner:
The Petitioner argued that it had a vested right to the allotment of the plot. The Court found that no vested right or interest was created in favor of the Petitioner as the formal letter of allotment was never issued, and the Petitioner had not fulfilled the required conditions, such as obtaining CRZ clearance.

7. Judicial Review of Government Contracts and Tenders:
The Respondent cited several cases to argue that judicial review in matters of government contracts and tenders is limited, especially when decisions are made in public interest. The Court agreed, referencing *Siemons Public Communication Private Limited v. Union of India* (AIR 2009 SCW 470) and *Madhya Pradesh Mathur v. DTC* (2006) 13 SCC 706, among others, to support the view that the Respondent's decision was justified and not subject to judicial interference.

Conclusion:
The Court dismissed the petition, holding that the Petitioner was not entitled to any relief. The Respondent's decision to cancel the tender process and start a fresh one was upheld as being in the larger public interest and not arbitrary or malafide. The letter of intent was deemed non-binding, and the doctrine of promissory estoppel was found inapplicable. The Petitioner failed to establish any vested right or significant alteration of position based on the Respondent's actions.