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Synopsis

A Supreme Court Bench of Justice B.R. Gavai and Justice C.T. Ravikumar, while allowing an appeal preferred by Central Warehousing Corporation (CWC), quashed the impugned Gujarat High Court's order. Court then further remitted back the matter to the Single Judge Bench for a fresh consideration. The Court was of the opinion that,

"...If a settlement was to be arrived at, unless the same was found to be in the interest of both the parties, it could not have been thrust upon a statutory Corporation to its detriment and to the advantage of a private entity".

In the present matter, the appellant-CWC was set up by the Government of India in the year 1957 to provide support to the agricultural sector by operating warehouses and Container Freight Stations across the country. the Gujarat Maritime Board (GMB) executed a Lease and Possession Agreement, thereby granting lease of an undeveloped land within New Mundra Port Limits to Gujarat Adani Port Limited for 30 years. Then GAPL sub-leased a plot of land admeasuring about 34 acres to the appellant-CWC. Subsequently, citing violation of SEZ norms, the appellant-CWC was informed that APSEZL has taken a decision of discontinuing the issuance of gate passes, and further that it would not permit the appellant-CWC to continue the warehousing activities. 

Therefore, aggrieved by it the appellant-CWC filed the first writ petition.

The Gujarat High Court in its order stated that, if CWC fails to get such approval as a SEZ compliant unit or waiver within three months, the Respondent - APSEZL may acquire the land of the same size of approximately 34 Acres outside SEZ area for the construction of a Warehouse facility for the Appellant.

The Bench of the Supreme Court, therefore after considering the matter and the reasons relied upon by the Court, was of the opinion that, "the High Court ought to have taken into consideration that the appellant-CWC was a statutory body. There are already observations made by the CVC as early as in the year 2010 that the swapping of the warehousing facility from the present site to a changed site would cause serious financial implications and also that there could be various vested interests involved". The Court also noted a possibility of losing business.

The Court also noted the opposite stand by the two ministries of the Union of India. On one hand, the Ministry of C&I had held that the delineation/denotification as sought by the appellant-CWC is not permissible in law. While It the Ministry of Consumer Affairs, Food and Public Distribution had taken a stand that such delineation/denotification is permissible in law and has also stated that there are precedents for the same. Therefore the Court opined, "...it does not augur well for the Union of India to speak in two contradictory voices. The two departments of the Union of India cannot be permitted to take stands which are diagonally opposite".

Further, the Court was of the opinion that "the Division Bench totally ignored the stand taken by the Ministry of CAF&PD, which too had opposed such a swapping. Rather than the High Court being surprised with the conduct of the appellant-CWC, it is we who are surprised with the observations made by the High Court. When an issue involved the balancing of interests of a statutory Corporation and a private company, the approach of the High Court ought to have been a balanced one. The High Court ought to have taken into consideration that, unless all the three conditions were complied with, the interest of the appellant-CWC, which is a statutory Corporation, could not have been safeguarded".

Case Title: Central Warehousing Corporation vs Adani Ports Special Economic Zone Limited (APSEZL) and Ors