KANDLA SALT LEASEHOLDER WELFARE ASSOCIATION THROUGH V. UNION OF INDIA

SCA/7455/2012

AI Insights

The case involves the Kandla Salt Leaseholder Welfare Association challenging a tariff order issued by TAMP, which significantly increased the lease rental for salt land at Kandla Port Trust. The petition argued that the tariff order was arbitrary, discriminatory, and violated principles of natural justice and the guidelines for regulation of tariffs at major ports. The respondents defended the tariff as a legislative function, emphasizing the lack of need for adherence to natural justice principles in such contexts. The court found that the process followed by TAMP did not comply with the mandatory guidelines and principles of natural justice, leading to the quashing of the tariff order and remanding the matter for re-determination.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 722977 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 14-06-2013
• Assessment Year: misc
• Other Referred Cases: Union of India Vs. Adani Export Ltd., Alchemist Ltd. Vs. State Bank of Sikkim, Calcutta Gas Company Vs. State of W.B., Gadde Venkateshware Rao Vs. Govt. of A.P., Attorney General of Gambia Vs. Pierra Sarr N Jie, Kusum Ignots and Alloys Ltd. Vs. Union of India, Cannon Steel Pvt. Ltd. Vs. Commissioner of Customs, Dwarkadas Marfatia and Sons Vs. Board of Trustee of Bombay Port Trust, Jamshed Hormusji Wadia Vs. Board of Trustee Port of Mumbai, M/s.ASAS Motors Pvt. Ltd. Vs. Union of India, W.B. Electricity Regulatory Commission Vs. CESC Ltd.
• Laws Referred To: Major Port Trust Act, 1963, Guidelines for Regulation of Tariff at Major Ports, 2004
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: DD VYAS; K M PATEL; P S CHAMPANERI
• Assessee Lawyers: MIHIR THAKORE; ASIM PANDYA
• Keywords: Lease rental; Locus standi; Natural Justice; Tariff Order; Territorial jurisdiction; Consultative process
• Section: 48; 111; 49; 47A; 2(v); 2(aa)

Judgement Text

"C/SCA/7455/2012 CAV JUDGEMNT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 7455 of 2012 With CIVIL APPLICATION NO. 2179 of 2013 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE Z.K.SAIYED ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ KANDLA SALT LEASEHOLDER WELFARE ASSOCIATION THROUGH....Petitioner(s) Versus UNION OF INDIA & 3....Respondent(s) ================================================================ Appearance: MR MIHIR THAKORE, SR. ADVOCATE with MR ASIM PANDYA for HL PATEL ADVOCATES, ADVOCATE for the Petitioner(s) No. 1 MR DD VYAS, SR. ADVOCATE for M/S.VYAS ASSOCIATES, ADVOCATE for the Respondent(s) No. 3 MR KM PATEL, SR. ADVOCATE with MR DHAVAL VYAS for the Respondent(s) No. 2 MR PS CHAMPANERI, for the Respondent(s) No. 1 Page 1 of 74 C/SCA/7455/2012 CAV JUDGEMNT NOTICE SERVED BY DS for the Respondent(s) No. 4 ================================================================ CORAM: HONOURABLE MR.JUSTICE Z.K.SAIYED Date : 14/06/2013 CAV JUDGEMNT 1 Rule. Mr.P.S.Champaneri, learned Assistant Solicitor General waives service of rule on behalf of respondent No.1, Mr.K.M.Patel, learned Senior Advocate appearing with Mr.Dhaval Vyas waives service of rule on behalf of respondent No.2 and Mr.D.D.Vyas, learned Senior Advocate waives service of rule on behalf of respondent No.3. Though notice has been served none appears on behalf of the respondent No.4. 2. In view of the order dated 10.01.2013 passed by the Division Bench in LPA Nos.1656 with LPA No.1657 of 2012 and with the consent of learned counsel for the respective parties the matter has been heard and decided finally. By consent of all the parties matter is taken up for final hearing. Page 2 of 74 C/SCA/7455/2012 CAV JUDGEMNT 3. By preferring the present petition, the petitioner has challenged the tariff order dated 09.04.2012 passed by respondent No.3 i.e. Tariff Authority for Major Ports (hereinafter referred to as “TAMP” for short for the sake of convenience) and has further challenged the notification dated 04.05.2012 notifying the aforesaid tariff order in the extraordinary gazette of India published in Part­III Section­4 of the said gazette. The notification prescribes the lease rental of the land leased by respondent No.2 i.e. Kandla Port Trust to the members of the petitioner association. 4 The controversy involved in the present case, in brief, can be narrated thus: 5 The petitioner is an association of salt manufacturers having lease­hold rights in certain parcel of land vested in respondent No.2­Kandla Port Trust. Such lease were existing initially in the year 1964 and were extended from time to time. Lastly, in the year 2005, lease rental were Page 3 of 74 C/SCA/7455/2012 CAV JUDGEMNT fixed in three slabs of Rs.445/­, Rs.220/­ and Rs.144/­ per acre per annum for 10 acres of land, 10 to 100 acres of land and over 100 acres of land, respectively. The Kandla Port Trust (hereinafter referred to as “KPT”) proposed to revise such rates of lease rent to Rs.13,570/­ per acre per annum with effect from 05.07.2010 on 19.02.2011 by forwarding its proposal to tariff authority i.e. respondent No.3 prescribed under Major Port Trust Act, 1963 (hereinafter referred to as “Act of 1963”). This revision of rate was in fact sought to be further amended by respondent No.3 to upwardly without any proposal from respondent No.2. It may be necessary to note that the KPT did not prefer to update on the basis of certain sample plots auctioned by the KTP in January, 2012. Objections and comments thereof were invited from the users organization including the present petitioner and joint hearing was held at the office of KPT i.e. respondent No.2 on 05.05.2011. The respondent No.3­tariff authority ultimately passed an order Page 4 of 74 C/SCA/7455/2012 CAV JUDGEMNT dated 09.04.2012 which is impugned herein, approving the lease rental of the salt land of KPT at Rs.23,250/­ per acre per annum with retrospective effect from 5.7.2010, with escalation of 2% per annum. This order is challenged by the petitioner on the ground of it being violative of the principles of natural justice as well as being violative of the mandatory provision contained in the “Guidelines for Regulation Trust at Major Ports, 2004” (hereinafter referred to “Guidelines of 2004” for sake of brevity). 6 It is relevant at this stage to note certain aspects about proceeding of the petition and orders passed thereunder. At the time of first hearing, this Court issued notice to the respondent directing and restraining the respondents from taking any coercive action against the members of the petitioner pursuant to the aforesaid tariff order dated 09.04.2012 published by way of Notification dated 04.05.2012 Page 5 of 74 C/SCA/7455/2012 CAV JUDGEMNT in the Government Gazette. Later on the Court at the interim stage found that the issue involved in the present petition could be said to be interlinked with the public interest litigation about the various issues related to allotment of land of Kandla Port Trust in the Delhi High Court, pursuant to which this Court issued a speaking order dated 06/09.11.2012 wherein in para­17 of the said order, the following directions were issued; “17. Therefore, petitioner is granted time uptil 25.12.2010 to seek appropriate order from Delhi High Court until then the ad­interim arrangement made under the earlier order dated 31.05.2012 in Special Civil Application No.7455 of 2012 is allowed to continue on condition that every member of the petitioner association shall make requisite and appropriate payment/deposit of lease rental at the rate of Rs.14,750/­ and so far as the balance amount i.e. the difference between lease rate at Rs.23,250/­ (as fixed by respondent No.3) and Rs.13,750/­ is concerned every member of the petitioner association shall furnish Bank guarantee (issued by the Nationalized Bank) which should initially be Page 6 of 74 C/SCA/7455/2012 CAV JUDGEMNT valid for a period of 100 days and thereafter the members of the petitioner association shall keep the Bank guarantee alone until further order of the Court. The said deposit/payment and the Bank guarantee shall be without prejudice to the rights and contentions of the petitioner and respondents and will be subject to the order/s that may be passed by way of interim relief subsequently (i.e. after the petitioner places on record order by Delhi High Court). The benefit of the order shall be available only to those members who deposit the amount as aforesaid on or before 10.12.2012.” 7 The above referred order was challenged before a Division Bench by way of Letters Patent Appeal. At the time of hearing the said Letters Patent Appeal, the issue of territorial jurisdiction of Gujarat High Court to entertain the petition was raised by the respondent. The Hon’ble Division Bench disposed of the Letters Patent Appeal directing the Single Judge to decide this Special Civil Application on merits. The direction apparently was given by Hon’ble Division Bench to get decided the petition finally by giving Page 7 of 74 C/SCA/7455/2012 CAV JUDGEMNT findings on all the issues raised by the parties rather than giving tentative findings for the interim relief and/or admission purpose only. 8 It appears that thereafter, the respondents herein filed a review application being Misc. Civil Application No.403 of 2012 seeking clarification of the order dated 10.01.2013 disposing the Letters Patent Appeal. The said Misc. Civil Application was dismissed by the Division Bench by order dated 26.02.2012 observing that, as the order dated 10.01.2012 was absolutely clear, it did not require any clarification. 9 In view of the aforesaid background and in view of the facts and circumstances of the case, the present petition is taken up for final disposal pursuant to the direction contained in the order dated 10.01.2013 passed in Letters Patent Appeal No.1657 of 2012. Page 8 of 74 C/SCA/7455/2012 CAV JUDGEMNT 10 Before dealing with contentions of the parties, I may state that the following three preliminary objections were raised by learned Senior Counsel Mr. D.D. Vyas, appearing for M/s. Vyas Associates for respondent No.3 and learned Senior Counsel Mr. K.M.Patel, appearing for respondent No.2 along with Mr.Dhaval Vyas:­ (i) The Court lacks territorial jurisdiction. The contention is based on the fact that the tariff authority for the major port is having its office at Mumbai. (ii) Even contention was raised on the aspect of jurisdiction by Mr. Vyas that since the issue about the allotment of land of Kandla Port Trust is pending before Delhi High Court by way of public interest litigation being Writ Petition No.11550 of 2009 and allied matters judicial comity requires that petitioner should approach Delhi High Court. (iii) That petitioner association has no locus­ standi to maintain the petition and only Page 9 of 74 C/SCA/7455/2012 CAV JUDGEMNT individual members who are affected by tariff variation can file petition. 11 In view of such preliminary objections raised by learned Senior Counsel Mr.Vyas on behalf of respondent No.3 and learned Senior Counsel Mr.K.M.Patel, appearing for respondent No.2, such preliminary contention deserves to be considered first prior to dealing with petition on merit. Therefore, the parties are first heard on preliminary contention raised by Mr.Vyas and Mr.Patel respectively. 12 Learned Senior Counsel Mr.Vyas appearing for respondent No.3 raising preliminary objection regarding territorial jurisdiction of this Court and has made the following submissions. (a) The respondent No.3 i.e. Tariff authority for major ports is having its office in Mumbai. The tariff rates are published from Mumbai. Therefore, challenge to the aforesaid order could be made before the High Court of Mumbai. Page 10 of 74 C/SCA/7455/2012 CAV JUDGEMNT (b) Merely because office of respondent No.2 and land which are leased to the petitioner are situated in Kandla does not give rise to cause of action to maintain petition before this Court. (c) The cause of action is bundle of facts, required to be proved by petitioner, while no averments have been in this petition regarding petition being maintainable before this Court. (d) Mr.Vyas had relied upon decision in the case of Union of India Vs. Adani Export Ltd., reported in AIR 2002 SC 126, and in the case of Alchemist Ltd., and Anr. Vs. State Bank of Sikkim and Ors., reported in AIR 2007 SC 1812, as well as decision of Division Bench reported in 2007(2) GLR 1202. Both learned Senior Counsel Mr.K.M.Patel and Mr.D.D.Vyas have raised following further contentions. (e) Delhi High Court is seized of larger issue about lease land of Kandla Port in PIL and propriety requires that the petitioner be relegated to jurisdiction of Delhi High Court. It Page 11 of 74 C/SCA/7455/2012 CAV JUDGEMNT has been further argued that the interim decision of this Court should have been treated as final about jurisdiction of this Court. (f) The petition at the behest of association is not maintainable as for infringement of individual right separate petition is require to be filed. In support of this submission reliance has been placed on decision of Apex Court delivered in the case of Calcutta Gas Company Vs. State of W.B. Reported in AIR 1962 SC 1044 and decision of various High Courts. 13 Mr.Mihir Thakore, learned Senior Counsel and Mr.Asim Pandya, learned counsel for M/s.H.L.Patel Associates appearing for the petitioner, while dealing with the preliminary contention, submitted following aspects; (a) The salt land in respect of which lease rentals are required to be determined by the impugned tariff are situated in Kandla in the State of Gujarat. Page 12 of 74 C/SCA/7455/2012 CAV JUDGEMNT (b) The members of petitioner association are engaged in manufacturing salt in Kandla. Therefore, the consequences of charging and recovering of lease rentals at the rate of determined by the impugned tariff will be applied in the State of Gujarat. (c) The compensation bills were issued as per Land Policy, 2010 to the member of petitioner association on the basis of impugned tariff in Kandla which has been challenged by way of Special Civil Application No.6691 of 2013 which has been entertained by Division Bench and granted stay finding having jurisdiction of this Court (d) The office of respondent No.2 is situated at Kandla. (e) The proposal dated 19/12.02.2011 was initiated by respondent No.2 from Kandla pursuant to resolution No.200 approved by Kandla Port Trust in the meeting in Kandla. (f) The tariff proposal was sent to the Page 13 of 74 C/SCA/7455/2012 CAV JUDGEMNT petitioner under guideline Nos.3.2.2 of Tariff Guidelines 2004 at Kandla for the comments and objections. (g) The joint hearing as per the provisions of Tariff Guidelines, 2004 as well as guideline of 2004 was held on 05.05.2011 at the premises of Kandla Port Trust. (h) The tariff order about lease rentals are specific tariff orders for the Kandla Port Trust land only and are not fixed by TAMP in respect of all the ports of India. It is further submitted that though impugned tariff is published by TAMP having office situated in Bombay, the effect of tariff would ensue in the territory of Gujarat. Hence except issuance of tariff in Mumbai by TAMPS no other part of cause of action had arisen in Mumbai or Delhi. 14 Mr.Thakore further submitted that though provision of Civil Procedure Code may not apply Page 14 of 74 C/SCA/7455/2012 CAV JUDGEMNT stricto sensu to the writ jurisdiction of this Court in view of Section 141 of Civil Procedure Code broad principle therefore definitely applies. Pursuant thereto, Mr.Thakore had invited my attention to the provisions of Sections 16 and 20 of the Civil Procedure Code and Article 226(2) of the Constitution of India. Mr.Thakore has also relied on decisions of Apex Court in the case of Kusum Ignots and Alloys Ltd., vs. Union of India, reported in AIR 2004 SC 2321 more particularly para­21 and 25, which reads as under :­ “21A. Parliamentary legislation when receive the assent of the President of India and published in an official Gazette unless specifically excluded will apply to the entire territory of India. If passing of legislation gives rise to a cause of action, a writ petition questioning the constitutionality thereof can be filed in any High Court of the country. It is not so done because a cause of action will arise only when the provisions of the act or some of them which Page 15 of 74 C/SCA/7455/2012 CAV JUDGEMNT were implemented shall give rise to civil or civil consequences to the petitioner. A writ Court, it is well settled would not determine a constitutional question in vacuum.” 15 Pertaining to the contentions about locus­ standi of petitioner learned Senior counsel Mr.Thakore submitted that so far as petitioner association is concerned, is member thereof and there is infringement of legal rights. The locus­ standi of the association was recognised by respondent Nos.2 and 3 authorities themselves by calling them for filing their objection and provided them hearing being users organisation a joint hearing of proposal dated 19/21.02.2011 forwarded by respondent No.2 for fixation of tariff was conducted on 05.05.2011 at the premises of KPT where the association was heard by the authorities. Mr.Thakore has further submitted that admittedly association is not described as busy Page 16 of 74 C/SCA/7455/2012 CAV JUDGEMNT body but it is an association of “aggrieved person” Mr.Thakore has placed reliance on the decision in the case of Gadde Venkateshware Rao Vs. Govt., of A.P. Reported at AIR 1966 SC 828. 16 With regard to the pendency of public interest litigation before Delhi High Court Mr.Thakore has submitted as under :­ (i) In the public interest litigation before Delhi High Court, TAMP is not a party respondent at all. In the said public interest litigation there is no prayer against TAMP. (ii) When the public interest litigation was filed in the year 2009 the impugned tariff order was not in existence. (iii) There were few contentions about less lease rental of the land of port authority. In the present petition there is challenge about jurisdiction process of fixing tariff non­ following legal procedure and violation of principle of natural justice in fixing tariff by Page 17 of 74 C/SCA/7455/2012 CAV JUDGEMNT TAMP about impugned order are raised. Such cause of action is not under consideration before Delhi High Court. (iv) The determination of tariff by TAMP has given a fresh cause of action to the person aggrieved and validity of such tariff order cannot be examined by the public interest litigation pending before Delhi High Court. The validity of tariff order will have to be decided by the competent Court in an independent proceeding. (v) The petitioner cannot be restrained to approach the writ Court in spite of breach of fundamental rights. 17 Before dealing merits of the matter, I deal with all preliminary contentions as under:­ 18 Considering the rival contentions I have dealt with contention of parties threadbare about territorial jurisdiction of this Court as well as aspect of locus­standi. It is undisputed that the Page 18 of 74 C/SCA/7455/2012 CAV JUDGEMNT salt land in respect of which lease rentals are required to be determined by the impugned tariff are situated in Kandla in the State of Gujarat. The members of petitioner association are engaged in manufacturing salt in Kandla. Therefore, the consequences of charging and recovery of the lease rental is at the rate determined by the impugned tariff will be applied in the State of Gujarat. From record of this case it emerges that the compensation bills were issued as per land policy, 2010 to the members of petitioner association on the basis of impugned tariff in Kandla which has been challenged by way of Special Civil Application No.6691 of 2013 which has been entertained by Division Bench and granted stay, finding having jurisdiction of this Court. The office of respondent No.2 is situated at Kandla. The proposal dated 19/21.02.2011 was initiated by respondent No.2 from Kandla pursuant to Resolution No.200 approved by Kandla Port Trust in the meeting held at Kandla. The proposal dated 19/21.02.2011 was held on the Page 19 of 74 C/SCA/7455/2012 CAV JUDGEMNT recommendation of the land valuation committee which had held meeting in Kandla. The tariff proposal was sent to the petitioner under guideline No.3.2.2 of tariff guidelines 2004 at Kandla for the comments and objections. The joint hearing as per provisions of tariff guidelines 2004 was held on 05.05.2011 at the premises of Kandla Port Trust. This tariff order about lease rentals are specific tariff orders for Kandla Port Trust land only and are not fixed by TAMP in respect of all the ports of India. It is to be noted that though impugned tariff is published and decided by TAMP situated in Bombay the effect of tariff would ensue in the territory of Gujarat. Hence except issuance of tariff in Mumbai TAMPS no other part of cause of action had arisen in Mumbai. Hence though impugned tariff is fixed by TAMP having its office at Mumbai and published at Mumbai the effect of the tariff and actual recovery pursuant to tariff would ensue at Kandla Page 20 of 74 C/SCA/7455/2012 CAV JUDGEMNT within territory of Gujarat. In my view, the decision cited by learned counsel Mr.Vyas about site is totally different on peculiar facts. The law settled by Apex Court in the case of Kusum Ingots and Alloys (Supra) squarely applies to the present case. It is to be noted that the said decision is further following in the case of Cannon Steel Pvt. Ltd., Vs. Commissioner of Customs, reported in 2007 (14) SCC 464. It is to be noted that many statutory tribunals are having their suit outside of State having their jurisdiction and authority on multiple State. In such situations the aggrieved party is having liberty to approach the High Court where order is to implement as well as having liberty to approach the High Court before the Tribunal is situated. The Court exercises with jurisdictional power about various Tribunals namely, Company Law Board Settlement Commission for Excise and for Customs, Debt Recovery (Appellate) Tribunal etc., though office of such Tribunals are not situated Page 21 of 74 C/SCA/7455/2012 CAV JUDGEMNT within territory of Gujarat High Court in view of Article 226(2) of Constitution of India. The law settled by Apex Court in the case of Kusum Ignots and Alloys Pvt. Ltd., (Supra) in my humble opinion is squarely applicable to the facts of the case. The objection regarding territorial jurisdiction is not well founded and the same is rejected herewith. 19 As regards the contention raised by the learned Senior counsel Mr.Vyas on behalf of respondent No.2 and learned Senior counsel Mr.K.M.Patel for respondent No.3 about locus standi of petitioner association, it is to be noted that at the time of fixation of impugned tariff the petitioner association alongwith Gandhidham Chamber of Commerce and Industries were invited to offer their comments and objections and in the facts and circumstances being user organization the petitioner had lodged various objections and raised contentions in writing. The joint hearing was also provided by Page 22 of 74 C/SCA/7455/2012 CAV JUDGEMNT TAMP alongwith officer of KPT on 05.05.2011 at the premises of KPT. These facts are undisputed and emerge from para No.7.1 and 7.4 of tariff order itself. It is also relevant to note that on this objection the petitioner were granted hearing and comments were sought from KPT on the subject matter. Even otherwise the “Guidelines for Regulation of Tariff at Major Ports 2011” provides for hearing for the user association in tariff fixation process. Even the issue is required to be considered from the aspect that whether the members of the petitioner association can be termed as “person aggrieved” being sufferer having a legal grievance to be agitated. The test is to be applied as settled by celebrated judgment of the case of Attorney General of Gambia Vs. Pierra Sarr N Jie, reported in (1961) 2 All ER 504, in which Lord Denning has stated that “The words “person aggrieved” are of wide import and should not be subjected to a restrictive interpretation. They Page 23 of 74 C/SCA/7455/2012 CAV JUDGEMNT do not include of course a mere busy body who is interfering in things which do not concern him but they do include a person who has a genuine grievance because an order has been made prejudicially affect his interest”. The Apex Court in the case of Calcutta Gas Company (Supra) has taken a view that an application should ordinarily be one who has a personal or individual right in the subject matter of petition, though in some writs such as habeas corpus or qua­warranto the rule is relaxed or modified. However, facts of that case were quite different. In the present case the members of the petitioner association are having legal grievance due to infringement of their right. The Apex Court distinguishing Calcutta Gas Company (Supra) in the latter decision in the case of Gadda Venkateshwara Rao (Supra) held as under :­ “The Court held in the decision cited (Supra) “ordinarily” the petitioner who seek to file an Page 24 of 74 C/SCA/7455/2012 CAV JUDGEMNT application under Article 226 of the Constitution should be one who has a person or individual right in the subject matter of the petition. A personal right need not be in respect of a propriety interest it can also relate to an interest of a trustee. That apart, in exceptional cases has the expression “ordinarily” indicated, a person who has been prejudicially affected by an act omission of an authority can file a writ even though he has no proprietary or even fiduciary interest in the subject matter thereof”. The said principle further reiterated in the case of Bar Counsel of Maharashtra Vs. M.V.Dabholkar, reported in 1975 (2) SCC 702, holding that Bar Counsel of India is having locus­standi about the rules framed thereof. It is to be noted that in later development of law, the Apex Court in the case of Cotton Corporation of India Vs. United Industrial Bank, reported in 1983 (4) SCC 625, has taken a view that anyone having a right, that is, legally protected Page 25 of 74 C/SCA/7455/2012 CAV JUDGEMNT interest, complaints of its infringement and seeks relief through Court must have an unhindered uninterrupted access to Court of law. The expression of “Court” must be understood in its widest amplitude corresponding every forum where relief can be obtained in accordance with law. “Access to justice must not be hampered even at the hand of judiciary”. I respectfully follow the principle laid down by Apex Court thereof. Even looking at the present matter from different angle, if the petitioners are allowed to ventilate their grievance through association, no prejudice occurs to the respondents. After admitting petition at this stage asking the members of petitioner association to challenge same impugned tariff order separately may seriously prejudice the members of petitioner association. On other hand the respondent has failed in showing any serious prejudice or any irretrievable injustice due to filing of petition by user organization. The Court of equity always Page 26 of 74 C/SCA/7455/2012 CAV JUDGEMNT considers and evaluates the aspect of procedural law on the basis of occurrence of prejudice and injustice to the parties. In view of this aspect also, contention raised by respondents seems to be only technical with a view to hinder the members of petitioner association of “aggrieved person”, it has a locus­standi to challenge the impugned tariff order. 20 The contention was raised by the respondents that certain public interest litigation are pending before Delhi High Court about the lease rates levy at Kandla Port Trust filed in the year 2009, therefore this Court should not proceed with the matter and petitioner should be asked either to seek clarification from Delhi High Court or should be relegated to jurisdiction of Delhi High Court. It is also submitted that the interim order passed by Court dated 06/09.11.2012 in Special Civil Application No.7455 of 2012 and Special Civil Application No.8929 of 2012 are conclusive so far as jurisdiction of this Court Page 27 of 74 C/SCA/7455/2012 CAV JUDGEMNT is concerned, though petitions were not admitted by learned Single Judge. Mr.Thakore for the petitioner has submitted that the interim order always gets merged with the final order and it is not vice­a­versa. It is further submitted that in fact the order of the learned Single Judge was assailed before the appellate bench in Letters Patent Appeal No.1656 of 2012 and Letters Patent Appeal No.1657 of 2012. On 10.01.2013 while disposing of Letters Patent Appeals against order dated 06/09.11.2012 of learned Single Judge the appellate bench has directed to decide writ petition on merit finally. The clarification sought on this aspect is also rejected by the Hon’ble Division bench. In view of the rival submissions, it is to be noted that there are certain undisputed facts that in the public interest litigation before Delhi High Court, TAMP is not a party respondent at all. In said public interest litigation there is no prayer against TAMP. When the public Page 28 of 74 C/SCA/7455/2012 CAV JUDGEMNT interest litigation was filed in the year 2009 the impugned tariff order were not in existence and there were few contentions about less lease rental of the land of Port Authority. In the present petition there is challenge about jurisdiction, process and procedure of fixing tariff, non­following of legal procedure and violation of principle of natural justice in fixing tariff are raised. Such cause of action is not under consideration before Delhi High Court. The determination of tariff by TAMP has given a fresh cause of action to the person aggrieved and validity of such tariff order should not be asked to be examined in the public interest litigation pending before Delhi High Court. In my view the validity of tariff order will have to be decided by the competent Court in an independent proceeding. The petitioner cannot be restrained to approach the writ Court against the grievance of breach of fundamental rights. It is also to be noted that the Delhi High Page 29 of 74 C/SCA/7455/2012 CAV JUDGEMNT Court had passed order dated 04.04.2011 directing respondent No.2 to carry out another round of sample auction to find out the best price for the salt land. The said order does not speak about deciding tariff of lease rental. Even otherwise, the decision of TAMP of deciding the tariff has given a fresh cause of action to the aggrieved persons which can be examined by this Court. In my humble opinion matter deserves to be decided on merit, and petitioners cannot be asked to approach Delhi High Court, more particularly, when the issue involved in the present petition is not an issue which is directly and substantially involved in the pending public interest litigation before the Delhi High Court. 21 In view of the above discussion I do not find substance in the preliminary objections raised by respondent Nos.2 and 3 and the same are rejected. In view of this fact the preliminary objections raised by the respondent do not detain this Court any more. It is to be noted that the Page 30 of 74 C/SCA/7455/2012 CAV JUDGEMNT challenge before this Court is about the tariff fixation of lease rental given for salt manufacturing of the land of Kandla Port Trust. It is to be noted that this Court will have limited jurisdiction in the case of fixation of tariff. It is for the executive to decide the tariff after considering various parameters fixed by the statute as well as guidelines issued by Central Government from time to time. However, this Court is concerned with the process and procedure prescribed for fixation of tariff, this Court is therefore mainly concerned about the procedure and process followed by statutory authority and the aspect of legality and propriety of decision making process in fixing the tariff therefore this Court has preferred to concentrate only on the concept of legality and procedure followed in fixation of tariff by respondent Nos.2 and 3. It is to be noted that this Court cannot have commercial and technical prudence and therefore Court cannot assess fairness or reasonableness of price fixation. The Page 31 of 74 C/SCA/7455/2012 CAV JUDGEMNT price fixation can be said even a policy matter in respect of economic matter and such policy cannot be interfered unless it is contrary to the act, constitutional provisions or arbitrary and suffering of extraneous consideration. This aspect is well settled by catena of decisions of Apex Court. 22 For deciding the challenge posed before this Court about tariff fixation under the provision of the Major Port Act, 1963, guideline issued in 2004 and land policy for Major Port, 2010 by following same the respondent No.2 had proposed for revising the lease rent of the land of Kandla Port Trust leased out to the manufacturer of Salt. Section 2(aa) defines “authority” means the tariff authority. Section 2(v) defines “rate”. Section 47A provides for constitution of tariff authority. Section 48 provides for fixation of scale of rates. Section 49 provides scale of State for use of property belonging to the board. The Central Government is empowered to frame the Page 32 of 74 C/SCA/7455/2012 CAV JUDGEMNT policy for the major ports for fixation of tariff under the Act of 1963. Initially there was land policy for major port issued in 2004. In 2010, land policy for Major Port, 2010 was declared by Central Government. The land policy of Major Port, 2010 is on the record of petition at pages 186 to 197. Certain relevant provisions of the Major Port Act, 1963 are reproduced for ready reference; “2(aa) “Authority” means the tariff authority for major ports constituted under Section 47A” 2(v) “rate” includes any toll, due, rent, rate fee or charge leviable under this Act. 47A Constitution and incorporation of Tariff Authority for Major Ports; (1) with effect from such date as the Central Government may, by notification in the official gazette, appoint there shall be constituted for the purposes of this Act as authority to be called the tariff authority for major ports. (2) The authority shall be a body corporate by Page 33 of 74 C/SCA/7455/2012 CAV JUDGEMNT the name aforesaid having perpetual succession and a common seal and shall by the said name sue and be sued. (3) The head office of the authority shall be at such place as the Central Government may decide from time to time. (4) The authority shall consist of the following members to be appointed by the Central Government, namely:­ (a) The chairperson from amongst persons who is or who has been a secretary to the Government of India or has held any equivalent post in the Central Government and who has experience in management and knowledge of the functioning of the ports. (b) A member from amongst economists having experience of not less than fifteen years in the filed of transport or foreign trade. (c) A member from amongst persons having experience of not less than fifteen years in the filed of finance with special reference to Page 34 of 74 C/SCA/7455/2012 CAV JUDGEMNT investment or cost analysis in the Government or in any financial institute or industrial or service sector. 49. Scale of rates and statement of condition for use of property belonging to Board (1) The authority shall from time to time by notification n the official gazette also frame a scale of rates on payment of which, and a statement of conditions under which, any property belonging to, or in the possession or occupation of, the Board, or any place within the limits of the port or the port approaches may be used for the purpose specified hereunder]:­ (a) Approaching or lying at or alongside any buoy, mooring, wharf, quay, pier, dock, land, building or place aforesaid by vessels; (b) Entertaining upon or plying for hire at or on any wharf, quay, pier, dock, land, building, road, bridge, or place as aforesaid by animals or vehicles carrying passengers or goods. (c) Leasing of land or sheds by owners of goods Page 35 of 74 C/SCA/7455/2012 CAV JUDGEMNT imported or intended for export or by steamer agents; (d) Any other use of any land, building, works, vessels or appliances belonging to or provided by the Board. (2) Different scales and conditions may be framed for different classes of goods and vessels. (3) Notwithstanding anything contained in sub­ section (1) the Board may by auction or by inviting tenders, lease any land or shed belonging to it or in its possession or occupation at the rate higher than that provided under sub­section (1) ] 111 of Central Government to issue directions to Board. (1) Without prejudice to the foregoing provisions of this chapter the authority and every Board shall, in the discharge of its functions under this Act be bound by such direction or questions of policy as the Central Page 36 of 74 C/SCA/7455/2012 CAV JUDGEMNT Government may give in writing from time to time: 41Provided that the authority or the Board, as the case may be, shall be given opportunity to express its views before any direction is given under the sub­section] (2) The decision of the Central Government whether a question is one of policy or not shall be final. The Central Government has constituted respondent No.3 i.e. tariff authority or properties of the port. 23 The learned Senior counsel Mr.Thakore for the petitioner in support of the petition has submitted and raised following main contentions :­ (A) The impugned tariff order passed by the respondent No.3 is beyond the proposal for fixation of tariff forwarded by respondent No.2 on 19/21.2.2011. In the proposal forwarded by the respondent No.2 it has demanded fixation of a Page 37 of 74 C/SCA/7455/2012 CAV JUDGEMNT uniform lease rent of Rs.13,570/­ per acre per annum with escalation of 2% per annum for a period of 5 years with a retrospective effect from 05.07.2010. By the impugned tariff order TAMP has decided the lease rental of the salt land at Rs.23,250/­ per acre per annum with retrospective effect from 05.07.3010 with escalation of 2% per annum till such rate is revised again. It was, therefore, contended that on the short ground the tariff order deserves to be quashed and set aside having fixation of tariff at quite higher rate than the proposed rate. (B) The lease rentals fixed at the rate of Rs.23,250/­ per acre per annum is in gross violation of guidelines for regulation of tariffs at Major Port, 2004 as well as land policy for Major Port, 2010 issued by Central Government under Section 111 of the Major Port Trust Act, 1963 and also in gross violation of principle of natural justice. Page 38 of 74 C/SCA/7455/2012 CAV JUDGEMNT (C) The TAMP had no authority to consider upfront price of entire 30 years period obtained in the second option conducted by respondent No.2 on 31.1.2012 pursuant to the order dated 04.04.2011 passed by the Delhi High Court in public interest litigation i.e. Writ Petition No.11550 of 2009. (D) A joint hearing of the proposal dated 19/21.2.2011 forwarded by the respondent No.2 for fixation of tariff was conducted on 05.05.2011 at the premises of Kandla Port Trust and during that hearing only original proposal was discussed and the objections were invited only in respect of original proposal. Therefore, TAMP had no authority to fix the lease rentals beyond the amount proposed by the respondent No.2 and that too without giving an opportunity of hearing to the petitioners and other objectors. (E) That the respondent No.2 had chosen not to revise or update its proposal on the basis of second auction despite a specific clarification Page 39 of 74 C/SCA/7455/2012 CAV JUDGEMNT sought by TAMP from respondent No.2. (F) The impugned tariff order is passed in complete violation of Clause No.3.4.1, 3.2.1 to 3.2.5 of the Tariff Guidelines 2004. Such violation of guidelines has culminated into serious injustice and prejudice to the members of the petitioner association. (G) The TAMP has ignored lease rentals prevalent for salt land or the market value of the land used for salt manufacturing in the State of Gujarat and on other ports. The objections raised about the notified rates for salt manufacturing in the State of Gujarat and All India lease rates for salt manufacturing in the State of Gujarat were completely ignored by the authority and no findings were recorded by TAMP on those issues. Such aspect has created a case of discrimination by statutory authority amongst equals. (H) For fixing of lease rental to be made applicable with effect from 05.07.2010, the Page 40 of 74 C/SCA/7455/2012 CAV JUDGEMNT market value of the land or the lease rentals prevailing in the year 2009­2010 were relevant and subsequent valuation of the land obtained during sample auction in the year 2012 was wholly irrelevant. (I) The cost of maintenance of the salt land is not borne by respondent No.2. The respondent No.2 has to incur expenditure of approximately Rs.30 lacs towards the administrative expenses in respect of salt lease. As against the expenditure of Rs.30 lacs by fixing the lease rentals at Rs.23,250/­ would earn a huge and disproportionate profile to the tune of Rs.30 to 40 crore per annum. Such action is contrary to the settled law by Apex Court in the case of Dwarkadas Marfatia and Sons Vs. Board of Trustee of Bombay Port Trust, reported in AIR 1989 SC 1642 , and Jamshed Hormusji Wadia Vs. Board of Trustee Port of Mumbai, reported in AIR 2004 SC 1815 , by laying down law that reck­renting profiteering is opposed to the basic policy of Page 41 of 74 C/SCA/7455/2012 CAV JUDGEMNT the State of instrumentally of the State. This decision was pertaining the port land and in the background that port authorities are exempted from the provisions of Rent Act. According to the petitioners such binding decisions are totally disregarded by the respondent No.3. (J) The whole purpose is to provide excess land at reasonable rate to develop the backward area of Kutch. (K) Thousands of family dependents on salt pan for manufacturing of salt may get employment. They will be direct sufferer. (L) There was existence of three different slabs of lease rentals for different size of plots based on valid classifications were eliminated arbitrarily and without any just reason. TAMP in its impugned order has not given any findings as to why the elimination of three slabs were necessary, just or reasonable. (M) It has been submitted that fixation of tariff by the impugned order was based on Page 42 of 74 C/SCA/7455/2012 CAV JUDGEMNT complete misreading of the directions issued by the Delhi High Court. Therefore, there is no any independent fixation of tariff, but it was for extraneous reasons. (N) The lease rentals were fixed on the basis of land policy of 2010 issued by the Ministry of Shipping which had no cabinet approval and therefore, not binding to respondent No.3 which fixing the lease rentals. (O) TAMP has failed to exercise its statutory power vested in Section 49 of the Major Port Trust Act, 1963 independently and TAMP was swayed away by irrelevant consideration in fixing the lease rentals under wrong belief and on the basis of misinterpretation of various orders passed by Delhi High Court in the public interest litigation being Writ Petition No.11550 of 2009. 24 Mr.Pankaj S. Champaneri, learned Assistant Solicitor General of India appearing for Page 43 of 74 C/SCA/7455/2012 CAV JUDGEMNT respondent No.1 has opposed the petition mainly on the ground that fixation of tariff is a legislative function, where the principles of natural justice have no role to play. He has contended that the impugned tariff order is eminently just, proper and does not require any interference by this Court in exercise of Article 226 of the Constitution of India. 25 Mr.K.M.Patel, learned Senior Counsel appearing with Mr.Dhaval Vyas, learned counsel has contended that the tariff has been fixed pursuant to the order dated 04.04.2011 passed by the Delhi High Court in public interest litigation bearing Writ Petition No.11550 of 2009. The order of Delhi High Court was brought on the record of proceedings during the course of joint hearing conducted on 05.05.2011 and hence it cannot be said that the petitioner association was unaware about the direction of the Delhi High Court about holding the second auction. Page 44 of 74 C/SCA/7455/2012 CAV JUDGEMNT 26 Mr.Patel has further argued that if it is assumed that there was violation of the principle of natural justice then also it would not invalidate the tariff order, unless a gross prejudice is shown to have accord to the petitioner on account of violation of principle of natural justice. Mr.Patel has relied on the decision of the Apex Court in the case of M/s.ASAS Motors Pvt. Ltd., Vs. Union of India, reported in 2013(3) Scale 15 (SC). It is submitted that the impugned order of TAMP cannot be faltered on alleged breach of principle of natural justice. Even otherwise there was no dispute about the price recovered in the second auction held in January, 2013 and therefore, it cannot be said that the petitioner has suffered any prejudice. 27 Mr.Patel has further submitted alternatively that without conceding violation of principles of natural justice, in case the Court considers to remand the matter to TAMP for breach of Page 45 of 74 C/SCA/7455/2012 CAV JUDGEMNT principles of natural justice, the lease holders should be put to condition of deposit of amount due and payable as per the impugned order of TAMP. It is, therefore, submitted that the interest of KPT deserves to be protected by directing deposit of amount in case the Court consider remanding the matter. 28 Mr.D.D.Vyas, learned Senior Counsel appearing for M/s.Vyas Associates for respondent No.3 raised contention by drawing attention of this Court to the provision of Section 33, 34 and 49 of the Major Port Trust Act, 1963 and submitted that to enter or not to enter the contract of future lease with the members of the petitioner association is privilege of respondent No.2 Board and whether the members of petitioner will be given salt lease in future or not is uncertain and hence unless respondent No.2 decide to give the land to the members of the association for salt manufacturing on lease and association or individual members can have no grievance about Page 46 of 74 C/SCA/7455/2012 CAV JUDGEMNT fixation of the tariff. 29 In rejoinder Mr.Thakore, learned Senior Counsel for the petitioner has submitted that there is a gross violation of principles of natural justice in deciding the tariff by TAMP. It has been further submitted that the impugned tariff does not only affect the grant of future lease but it affects past and current lease also. It is apparent from the tariff order that the revised lease rental has been applicable retrospectively with effect from 05.07.2010. Since the members of petitioner association were admittedly occupying the lease upto 31.03.2011, it would certainly affect the members of association. Even about such lease­hold rights separate proceedings are pending before competent Courts. The tariff guidelines 2004 issued in exercise of Section 111 of Major Port Trust Act, 1963 clearly provides locus standi to the association and user organization in the procedure for fixation of tariff. Mr.Thakore has Page 47 of 74 C/SCA/7455/2012 CAV JUDGEMNT further submitted in rejoinder that grievance is not only violation of principle of natural justice but even violation of mandatory guidelines contained in regulation of tariff guidelines 2004 are not followed dealing with the contention raised by Mr.Champaneri, learned Assistant Solicitor General it had been reiterated that fixation of tariff under the Major Port Trust Act, 1963 by TAMP is the statutory function, deciding of tariff fixation in other enactment like Income Tax, Excise Duty rates cannot be compared herewith as in those cases rates are decided by introducing a Finance Bill in Parliament and ultimately they are brought in force in Finance Act and therefore, such fixation of rates are considered as legislative function. In support of the submission decision of Apex Court in the case of W.B. Electricity Regulatory Commission Vs. CESC Ltd., reported in AIR 2002 SC 3588 (at para 39, 49) are relied upon. Page 48 of 74 C/SCA/7455/2012 CAV JUDGEMNT 30 I have considered the rival contention raised by petitioner and respondent Nos.1 and 3 through their respective counsel. The moot question that requires consideration by this Court is validity of the tariff order passed by the respondent No.3 on 09.04.2012 revising the scale of rate (SOR) of salt land of KPT. 31 It is to be noted that fixing of tariff in the present case is pursuant to a statutory function under Section 49 of Major Act, 1963. For fixing the tariff of the port land the guidelines are issued, namely, guideline for Regulation of Tariff at Major Ports, 2004. The relevant clauses of tariff guideline are reproduced hereinbelow; “3.2.2 With a view to promote the greatest number of interested parties, copies of tariff proposals will be forwarded to representative bodies of concerned users and major users of that port for their comments to be receiving within the stipulated time limit. Page 49 of 74 C/SCA/7455/2012 CAV JUDGEMNT 3.2.3 TAMP will maintain a list of organization at each port to be consulted on tariff proposal of that port. It will review and update the list from time to time in consultation with the port. 3.2.4 Tariff proposal with all supporting details, as filed by ports will be circulated as part of the consultative process excepting such details/documents which are requested by the port not to be circulated on the grounds of being commercially sensitive/confidential nature. Such request must adequately explain the reasons for classifying the sensitive/confidential and also explain how any irreparable damage will be caused to the port of the request is not acceded to. In any case, tariff projections, consolidated cost statement giving board details of income/expenditure projections alongwith the assumption on which these are based and revised proposed tariff will be circulated to users. 803.2.5 As part of the consultative process, Page 50 of 74 C/SCA/7455/2012 CAV JUDGEMNT if necessary, hearing/s of a case or proposal will be organized jointly with port and users of the port, either at the office of the authority or at the port.” 32 The aforesaid guideline of 2004 clearly describes for a detailed consultative process and grant of reasonable opportunity of hearing to the concerned user/organization/ association in respect of any tariff proposal. Pursuant to the aforesaid guideline even the TAMP definitely invited objections and comments from the user organization including the present petitioner. However, it is apparent on the record that TAMP gave the opportunity to all concern in respect of proposal dated 19/20.02.2011 only and not on the aspect of second auction held on 31.01.2012. The said action can be said to be in violation of the mandatory guidelines of 2004 issued under Section 111 of Major Port Trust Act, 1963 besides the violation of principles of natural justice. Page 51 of 74 C/SCA/7455/2012 CAV JUDGEMNT 33 If the matter is evaluated from other aspect and it is presumed for the sake of argument that TAMP has jurisdiction for revising the tariff without proposal from the port, then also, TAMP is required to follow the normal consultative process as provided in Clause 3.3.2 which reads as under :­ “3.3 REVIEW OF ORDERS 3.3.2 TAMP may, suo motu, review its order, for good and sufficient reasons. In such proceedings normal consultative process will be followed.” In view of this specific provision it is not permissible for TAMP to revise lease rental suo­ motu without following the entire gamut of aforesaid guidelines 2004, more particularly when respondent No.2 stuck to the original proposal” 34 The contention was raised by the petitioners that guideline for port land policy, 2010 issued by Ministry of Shipping and surface transport is not having nod of cabinet of Central Government Page 52 of 74 C/SCA/7455/2012 CAV JUDGEMNT of India and therefore, in view of Section 111 of Act of 1963 it has no legal force or validity. However, lateron, both the parties did not assist on this aspect therefore, such issue is left open to be decided in appropriate proceedings. It is to be noted that the impugned tariff order has relied on the provisions of land policy guideline of 2010. The land policy guideline of 2010 lays down procedure and methodology for determining the market value and lease rental of the port land. The clause 6.3(1A) reads as under :­ “6.3(1) Market value of land schedule of Rates (SOR) (a) Sor for land will be recommended to the competent authority/TAMP by a committee as decided by the Board headed by the Chairman of Port Trust. The Committee may take into account the applicable factors from among those listed below to determine the market value of port land. (i) State Government’s ready to recovery of the land values in the area, if available. Page 53 of 74 C/SCA/7455/2012 CAV JUDGEMNT (ii) Average rate of actual relevant transaction registered in last three years in the ports vicinity adding 2% escalation per annum and in case of Mumbai Port Trust @ 4% escalation per annum, as may be necessary. (iii) Highest accepted tender of port land for similar transaction. (iv) Rate arrived at by an approved valuer appointed for the purpose of the port. (v) Any other relevant factor as may be identified by the port. (b)... ... ...(f)” It is true that it is open to adopt all or anyone of the method for deciding the lease rental by TAMP, however in the present case the TAMP has committed two serious error in adopting the methodology preserved under the guidelines of 2010. (A) Firstly upfront premium received in the auction held in January, 2012 for the entire 30 Page 54 of 74 C/SCA/7455/2012 CAV JUDGEMNT years period is treated and made basis for treating it as prevailing market value for all the lands of Salt Pan. The primarily such procedure adopted seems to be erroneous. Therefore, methodology adopted by TAMP is erroneous deserves to be reconsidered. The order of TAMP itself also prescribes that reverse way prescribed in land policy was not adopted to derive annualized lease rental. (B) Secondly the rates prevailing of the lease rental for the SALT PAN of land leased by the State Government of Gujarat are concerned which are of surrounding area are totally ignored. Inspite of fact that the details were available of charging Rs.300/­ per hector x Rs.8/­ per metric tonne as royalty (considering minimum production of SALT land as 20 metric tonne per year, which approximately comes to Rs.460/­ per hector). No doubt it was open for TAMP to adopt any or all matters prescribed in guideline of 2010. However, such huge disparity of rates in Page 55 of 74 C/SCA/7455/2012 CAV JUDGEMNT similar area has created artificial balconies and discrimination by statutory authority without assigning any reason for ignoring the rates prevailing for SALT Pan of lease rental of State Government in surrounding area. It is to be noted that the TAMP order is discriminatory as in respect of certain land situated in SEZ, Kandla, the Ministry of Commerce has issued directions that the revision in lease rental could not be more than 25% of applicable lease rent. Such decision of TAMP which has jurisdiction to decide tariff of all the port land India has created discrimination as equals are treated differently by adopting incorrect method and ignoring rates of other part of India. (C) Further it is to be noted that the upfront fee is not subject to any revision of lease rental for entire period of 30 years as against which the annual lease rental fixed by TAMP are subject to escalation clause and are also subject to revision every five years. Therefore, such Page 56 of 74 C/SCA/7455/2012 CAV JUDGEMNT vital aspect is also not considered by TAMP. The TAMP has committed serious error in putting the upfront premium allotted and presently lease rental on same footing. In those cases of upfront premium basis rental will be fixed for the entire period of 30 years while gross yield on lease rental considering the escalation Clause of 2% every year, there would be 60% rise over a period of 30 years. Even it is vague on the aspect that escalation of 2% is on flat amount or cumulative. (D) The above two aspects require to be considered in view of the fact that the land valuer had failed to give valuation of SALP Pan land. There was no recent transaction of SALT Pan of similar land. The land of KPT are spread over 50 Kms., region having different geography and location. Under such circumstances adoption of wrong methodology against the prescribed land policy of 2010 as well as totally ignoring the rates prevailing in surrounding area prima facie shows that there is defective process adopted by Page 57 of 74 C/SCA/7455/2012 CAV JUDGEMNT TAMP. (E) The contention raised by the petitioner about violation of principle of natural justice also seems to be well founded in the facts and circumstances of present case. The Hon’ble Supreme Court in the case of West Bengal Electricity Regulatory Authority (Supra) at para­ 39 has held as under :­ “39. Having considered the finding of the High Court, we are of the opinion that though generally it is true that the price fixation is in the nature of a legislative action and no rule of natural justice is applicable (See Sitaram Sugar Co. Ltd, Vs., Union of India SCC Para­45), the said principle cannot be applied where the statute itself has provided a right of representation to the party concerned. Therefore, it will be out endevaour to find out whether as contended by learned counsel for the appellants, the statute has provided such a right to the consumers or not. Page 58 of 74 C/SCA/7455/2012 CAV JUDGEMNT 35. While considering this question, it is relevant to notice that so far as 1948 Act is concerned the consumers had no such specific right. But we notice that 1998 Act brought about a substantial change in the manner in which the determination of tariff has to be made. It not only took away the right of the licensee or a utility to determine the tariff, but also conferred the said power of commission. This was done because one of the primary object of the year 1998 Act was to create an independent regulatory authority with the power of determining the tariff bearing in mind the interest of the consumers whose rights were till then totally neglected. The fact that the commission was obligated to bear in mind the interests of the consumers is also indicative of the fact that the commission had to hear the consumers in regard to fixation of tariff. This right of the consumers is further supported by the language of Section 26 of the Act which specifically mandates the commission to Page 59 of 74 C/SCA/7455/2012 CAV JUDGEMNT authorize any person as it deems fit to represent the interest of consumers in all proceedings before it. If the above provision of the Act is read in conjunction with Sections 22 and 29 read with Section 58(2)(d) of the 1998 Act, it is clear that the commission while framing the regulations must keep in mind the interest of consumers for the purpose of determining the tariff. At this stage, it may be worthwhile to notice the mandate of Parliament in Section 37 of 1998 Act to the commission that the commission should be ensure transparency while exercising its powers and discharging its functions which also indicates that the proceedings of the commission should be public which in itself, shows participation by interested persons. That apart the State of West Bengal in exercise of its power under Section 57 of the Act has enacted the West Bengal Electricity Regulatory Commission (Appointment of Chairperson and Members Functions, Budget on Annual Report) Rules, 1999. In the said Rules under 737 Rule 4(1)(c) the Page 60 of 74 C/SCA/7455/2012 CAV JUDGEMNT State Government has provided that the commission before taking any decision on the rates of tariff must notify its intention in this behalf in leading newspapers of West Bengal and hold public hearing for the said purpose (Emphasis supplied). Even the commission under the power conferred on it in Section 58 of the Act has framed the West Bengal Electricity Regulatory Commission (Conduct of Business) Regulation 2000 as amended by the Regulation dated 03.02.2000, wherein under Regulation 18 the Commission can permit an association or other body corporate or any group of consumers to participate n any proceedings before the commission on such terms and conditions, including in regard to the nature and extent of participation as the commission may consider appropriate. The commission under Regulation 19 is also empowered to notify a procedure to associations, groups. Forums or body corporates or registered consumer association for the purpose of representation before the commission. These regulations also provide for Page 61 of 74 C/SCA/7455/2012 CAV JUDGEMNT the procedure for filing of affidavits, pleadings, service of notice and the right of participation. Under Regulation 32 the manner of hearing before the Commission is also provided for. These rules and regulations framed by the State Government and the Commission will have to be placed before the State legislature under Section 59 of the 1998 Act. Thus, these rules and regulations have the necessary statutory force. A combined reading of these provisions of the Act, Rules, and Regulations, clearly shows that the statute has unequivocally provided a right of hearing/representation to the consumers, though the manner of exercise of such right is to be regulated by the Commission. This right of the consumers is neither indiscriminate nor unregulated as erroneously held by the High Court. It is true that in Calcutta the respondent Company supplies energy to nearly 17 lakh consumers, but the Statute does not give individual rights to everyone of these consumers. The same is controlled by the Page 62 of 74 C/SCA/7455/2012 CAV JUDGEMNT regulations. Therefore, the question of indiscriminate hearing as held by the High Court will not arise. That apart, when a statute confers a right which is in conformity with the principles of natural justice, in our opinion, the same cannot be negatived by a Court on an imaginary ground that there is a likelihood of an unmanageable hearing before the forum concerned. As noticed above, though normally price fixation is in the nature of a legislative function on the principles of natural justice are not normally applicable, in case where such right is concerned under a statute it becomes a vested right, compliance of which becomes mandatory which the requirement of the principles of natural justice can be taken away by a statute, such a right when given under the statute cannot be taken away by Courts on the ground of practical inconvenience, even if such inconvenience does in fact exist. In our opinion, the statute having conferred a right on the consumer to be heard in the matter pertaining to determination of tariff, the High Page 63 of 74 C/SCA/7455/2012 CAV JUDGEMNT Court was in error in denying right to the consumers. Consequently, the right of the consumers to prefer an appeal under Section 27 of 1998 Act to the High Court is similar, if they are in any manner aggrieved by any order made by the Commission. Alternatively, if the company is an aggrieved party and if it prefers an appeal, then it has to make such of those consumers who have 738 been heard by the Commission, as party respondent and such consumers will have the right of audience before the appellate Court. In the instant case, none of the consumers/consumer organizations who were allowed to participate in the proceedings by the have been made parties to appeal. Therefore, the High Court ought to have impleaded and heard the appellant consumers herein. (F) I respectfully follow the law laid down by the Apex Court. In the present case fixation of the tariff of SALT land cannot be equated with fixation of rate of taxes with legislative fiat Page 64 of 74 C/SCA/7455/2012 CAV JUDGEMNT without inviting objection for prescribing the rate of auction of the SALT Pan held in January, 2012 to the users organisation prima facie seems to be in violation of principle of natural justice. The normal consultative process as enumerated in the guideline of 2004 ought to have been followed. In view of this fact also the impugned order is violative of principle of natural justice and contrary to statutory guidelines issued in the year 2004 by Central Government. The tariff rates prescribed by TAMP applies to the member of users association, therefore, aspect of prejudice due to non­ following principle of natural justice is concern, I hold that prejudice occurs to the member of petitioner association due to non­ following of principles of natural justice. (G) Now I would prefer to deal with one specious plea raised by respondents jointly that even if there is a consultative procedure prescribed in Major Land Policy of 2004 as well as 2010, with Page 65 of 74 C/SCA/7455/2012 CAV JUDGEMNT user organization there is no procedure prescribed to provide personal hearing thereof. It has been submitted that since personal hearing is not provided by provision of law, it may not be directed in the process of tariff fixation. In my view such submission seems to be attractive, but the same deserves to be rejected. It is well known that when any of the action of authority is having civil consequences, the authority needs to provide an opportunity of hearing. During personal hearing, it is possible to exchange ideas, persuasion, rising of queries and replies thereof etc. It is an eye­ball to eye­ball persuasion and discussion which can never be equated with written representations more particularly in such highly technical aspects where number of aspects are required to be considered by the body of experts. The Division Bench of this Court in the case reported at 1995 (1) GLH 2 – 1 has taken view, that provision of principles of natural justice requires to be read Page 66 of 74 C/SCA/7455/2012 CAV JUDGEMNT in statute, if statute is silent thereupon. In my view personal hearing is sine­qua known in judicial and quasi judicial proceedings as well as executive act, also, when act of executive is hearing for reaching civil consequences. 36. The fixing of tariff rate is normally an executive statutory function. Such fixation of rate is done by considering various aspect by expert body including market value, productivity, various representation of various organization, comparative rate of surrounding lands as well as various criteria prescribed in particular provision of law as well as executive guidelines. Normally Court does not have such expertise to verify fairness and reasonableness of fixing such tariff, therefore in such policy decision Court does not normally interfere. However, in the present case it is to be noted that the rates of lease rental with effect from 2005 onwards were in three slabs, Rs.445/­ per acre per annum for the plots admeasuring 10 acres. For the plot Page 67 of 74 C/SCA/7455/2012 CAV JUDGEMNT admeasuring more than 10 acres but less than 100 acres it was Rs.222/­ per acre per annum. For the plot admeasuring more than 100 acres it was Rs.144/­ per acre per annum. The KPT had proposed Rs.13,570/­ per acre per annum, while TAMP has ultimately fixed Rs.23,250/­ per acre per annum with effect from 5.7.2010, with escalation of 2% per annum without there being even amending the proposal by KPT for such higher rates, keeping the issue open to change lesser rate at its discretion. In my view such decision is vitiated on two counts, firstly KPT has received its proposal seeking higher rate of lease rental from Rs.13,570/­ per acre per annum. I further find that the increase of lease rental from Rs.144/­ to Rs.23,400/­ is approximately 160 times higher merely based on sample auction. Such exorbitant change of lease rent prima facie seems to be arbitrary, high­handed and unreasonable as various factors like capacity to produce salt in particular area per acre per annum is not considered i.e. production capacity of land. Land Page 68 of 74 C/SCA/7455/2012 CAV JUDGEMNT of surrounding area of State Government of Gujarat as well as lease rental schedule provided by the petitioner of various port areas of India where schedules were quite low, though those area are also within jurisdiction of very same tariff authority are also ignored. In absence of such speaking order and ignoring of vital aspect adduce to creating of discrimination, namely, SALT manufacturer within port area of Kandla Port and other parts of Gujarat and India, I hold that tariff fixation is arbitrary discriminatory and violative of Articles 14 and 19 of the Constitution of India. 37 The respondent No.2 has stated that with present tariff fixation approximately Rs.1,42,00,00,000/­ requires to be recovered from the SALT Pan manufacturers. Ordinarily I would have directed for deposits of amount to protect interest of public sector undertaking. However, in the present case the order of tariff authority prescribes that there was existence of three Page 69 of 74 C/SCA/7455/2012 CAV JUDGEMNT slabs of tariff for 10 acres upto 100 acres and more than 100 acres of lands. Total recovery of lease rentals of those SALT Pan was Rs.27.54 lacs (Rupees Twenty Seven Lacs and Fifty Four Thousand Only) annually. Now new tariff prescribes 160 times higher tariff rates. I find that such rates are prima facie oppressive, exorbitant and fixed by violating binding guidelines framed for land policy for Major Port 2004 as well as 2010. I do not propose to direct the members of petitioner association to pay such huge bills. However, it is open to respondent No.2 KPT to raise their tentative bill as per prevailing tariff of June, 2005. 38 Resultantly, I propose to remand the matter to respondent No.3 authority to re­determine tariff, considering following aspects :­ (a) The respondent No.3 will determine tariff after providing sufficient notice of its intention and proposed tariff to all affected parties; including users organization and KPT by Page 70 of 74 C/SCA/7455/2012 CAV JUDGEMNT sending complete details of proposed tariff and documents relied thereupon enabling users organization to give their comments and/or objections. Such procedure will be done after receiving fresh proposal from KPT. (b) The respondent No.3 will provide reasonable opportunity of hearing to the representatives of the users organization and respondent No.2 thereof. (c) The respondent No.3 authority will determine strictly adhering to the provisions of the Major Port Trust Act, 1963 and guideline of land policy for Major Port 2004 and guideline of land for Major Port, 2010 issued by Central Government. (d) The respondent No.3 authority is free to adopt one or more mode or any of them prescribed by Land Policy of 2004 and guideline of Land Policy for Major Port, 2010 but it will not ignore the circumstances prevailing in the other areas, namely, rates of lease rental of other Page 71 of 74 C/SCA/7455/2012 CAV JUDGEMNT SALT Pan existing in Gujarat as well as at other port land of country; by creating huge disparity and discriminations. (e) The respondent No.3 authority is also directed to consider and follow the settled law by Apex Court in the case of Dwarkadas Marfatia and Sons (Supra) and Jamshed Hormusji Wadia (Supra) while determining tariff. (f) The respondent No.3 will complete such procedure with a reasonable time and not later than a period of six months of the receipt of writ of this Court, latest by 31.12.2013. 39 Resultantly, the petition is partly­allowed. The impugned order dated 09.12.2010 issued by the respondent No.3 and notified by Government Gazette dated 04.05.2012 are quashed and set aside, declaring the same it unjust, arbitrary and violative of fundamental rights of petitioner under Articles 14 and 19 of the Constitution of India and the matter is remanded back to Page 72 of 74 C/SCA/7455/2012 CAV JUDGEMNT respondent No.3 authority for redetermination of tariff, in the manner stipulated hereinabove. Respondent No.3 shall fix the rates afresh by following the procedure prescribed under the guidelines for Land Policy of 2004 and provision of Major Port Trust Act, 1963, and by following the principles of natural justice. 40 Rule is made absolute to above extent. There shall be no orders as to costs. 41. In view of disposal of main petition the Civil Application does not survive. Accordingly, it is disposed of. (Z.K.SAIYED, J.) After pronouncement of this judgment Mr.Vyas, learned senior counsel for the respondent No.2 request for stay of this judgment for some period. Mr.Pandya, learned counsel for the petitioner strongly opposed request of Mr.Vyas. Looking to the question involved in the Page 73 of 74 C/SCA/7455/2012 CAV JUDGEMNT present matter request made by Mr.Vyas, learned senior counsel for the respondent No.2 is granted. This judgment is stayed for a period of four weeks. (Z.K.SAIYED, J.) KKS Page 74 of 74 "