Case Law Details
Setting aside the judgment of the Bombay high court in the dispute over bids for the fourth container terminal in Jawaharlal Nehru Port, the Supreme Court has upheld the government policy in the judgment, APM Terminals vs Union of India. The court observed: “The Central government was within its powers to adopt a policy to prevent the port facilities from being concentrated in the hands of one private group or consortium which could have complete control over the use of the facilities of the ports to the detriment of the shipping industry as a whole,” It directed the government to allow Danish-based AP Moller-Maersk Group (APM Terminals) to bid for the fourth container terminal. The order asked the port authorities to allow the Dutch firm to participate in the tender process . The company had challenged the government policy of not allowing existing operators to bid for the immediate next terminals. According to the policy, The court asserted that the government has the right to make a policy to prevent companies from bidding for the immediate next terminals so that no monopoly of cargo firm is created. The court upheld the policy. It had tagged another case of PSA Sical Terminals’ bid for the eighth berth container terminal at Tuticorin Port with that of AP Moller-Maersk Group’s case. It, however, upheld a decision to exclude the bids of PSA Sical Terminals.
Full text of the Supreme Court Judgment is as follows
APM Terminals B.V. Vs. Union of India & ANR. (Supreme Court -11.05.2011)
ALTAMAS KABIR, J.
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In a way the decision cannot be faulted and there are inherent dangers in letting few people holding on to basic facilities like ports etc.; but this reduces revenue-returns for the Government. The Government could have imposed certain special conditions by which the bidders cannot misuse the monopolistic-advantage that may accrue to the party; even the government could have gone to the extent of retaining the power to terminate the agreement and right to take over the property, if the situation warranted. Today with the growth of private terminals and port at a close distance would naturally can put the competition in place.