Odisha HC Quashes JM Baxi’s Paradip Container-Berth Bid Disqualification, Holding Monopoly Policy Treats Container And Multipurpose Cargo Separately

Paradip Port Authority disqualified petitioner No. 1 from bidding for a proposed dedicated south container berth, relying on Clause 2.26 of the request for qualification (RFQ) and the Ministry of Shipping’s policy dated 2 August 2010 against private-sector monopoly in major ports.

The Authority considered an associate of petitioner No. 1 to be the sole private operator handling container cargo at Paradip Port.

The associate, however, operated a multipurpose berth for clean cargo, which included containers.

The petitioners challenged the disqualification, and the High Court had restrained further proceedings under the RFQ pending determination of the writ petition.

The Supreme Court declined to interfere with that interim order and requested an expeditious disposal.

Paragraph 2 of the 2 August 2010 Ministry policy provides that, where a port has only one private terminal or berth operator for a “specific cargo,” that operator or its associates may not bid for the next terminal or berth for handling the same cargo at that port.

The policy defines “specific cargo” as containers, liquid bulk, dry bulk, or multipurpose/other general cargo, and defines “operator” and “associates” for its application.

Clause 2.26 of the RFQ incorporates the policy into the bidding process and authorises disqualification in accordance with it.

Judicial review of tender decisions is limited, and courts ordinarily defer to the tendering authority’s interpretation; however, interference is warranted where the decision-making process is arbitrary, irrational, mala fide, or founded on an erroneous interpretation of the governing terms.

The Court referred to Tata Cellular v. Union of India, (1994) 6 SCC 651; Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517; Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818; and Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489.

The Court read “same cargo” in the policy in light of its defined categories of “specific cargo.”

Containers and multipurpose/other general cargo are listed separately, indicating that they are distinct categories for applying the restriction.

The associate’s berth was developed as a multipurpose berth for clean cargo, of which containers were only one component; it was not an exclusive container terminal.

The RFQ, by contrast, sought bids for a dedicated container berth, and the Port’s own clarification described the need for such a dedicated facility.

The Authority therefore wrongly treated the handling of some container cargo at a multipurpose berth as operation of a container terminal for purposes of the policy.

Because that interpretation supplied the basis for disqualification, the decision was amenable to judicial review.

It directed the Authority to treat the bid as valid insofar as the policy’s applicability was concerned and to proceed with the RFQ, making efforts to complete the tender process promptly.

The interim order was vacated; there was no order as to costs.