Summary
CWC, a statutory corporation, ran a warehouse on 34 acres sub-leased to it at Mundra in 2004. The land was later included in APSEZL's notified SEZ, and in 2017 APSEZL stopped gate passes. CWC filed two writ petitions, one against that action and one against the Commerce Ministry's refusal to delineate the land. APSEZL had offered an alternative site, a new godown and underwriting of CWC's revenue at its published tariff. CWC's Board accepted all three terms, but APSEZL then withdrew the third. Deciding the LPA, the Division Bench made CWC accept the first two terms or obtain SEZ approval, and left the third to mediation. The Supreme Court held that a composite settlement could not be split and forced on a statutory body for a private party's benefit. It set the order aside and remitted the writ petitions.
Issues
- Whether the High Court in an intra-court appeal could compel a statutory corporation to accept part of a composite settlement offer the private party had partly withdrawn
- Whether the High Court's adverse remarks about CWC were justified
- Whether two Ministries of the Union may take contradictory stands on delineation of the land from the SEZ
Provisions considered
- Delineation or denotification of SEZ area; approval as an SEZ unit, Special Economic Zones Act, 2005 and SEZ Rules, 2006The Court did not decide whether delineation or waiver was permissible, as that question lay in the pending second writ petition, but noted the Ministries' conflicting stands. (¶¶ 50, 51)
- Status of CWC as a statutory corporation, Warehousing Corporations Act, 1962As a statutory corporation acting through its Board, CWC could not have a settlement detrimental to it imposed by the court. (¶¶ 29, 47)
Held
- APSEZL's offer of alternative land, a new godown and underwriting of revenue at CWC's published tariff was composite, and the Board's acceptance was equally composite. The High Court could not bind CWC to the first two terms while freeing APSEZL from the third it had withdrawn. (¶¶ 36, 37, 38, 40, 45)
- Forcing a settlement on a statutory corporation to its detriment and to a private entity's advantage was untenable. The High Court ignored the 2010 CVC observations on financial loss and possible vested interests in shifting the warehouse, and the supporting stand of the Food and Public Distribution Ministry. (¶¶ 30, 31, 44, 47)
- The High Court's remarks attributing 'ego' and a non-compliant attitude to CWC were unwarranted. (¶¶ 46, 47)
- The impugned directions left nothing for the pending writ petitions; the second petition, against statutory authorities, was plainly maintainable, and the maintainability of the first was for the Single Judge to decide. (¶ 48)
- The Union of India cannot speak in two contradictory voices through different Ministries. It should evolve a mechanism to resolve such conflicts at government level, and a copy of the judgment was sent to the Attorney General. (¶¶ 52, 53, 54)
Result
Appeals allowed. The Division Bench judgment was set aside and both writ petitions remitted to the Single Judge for decision, preferably within six months. The Division Bench's interim order continues until then, and the parties remain free to settle.