New Delhi: The Supreme Court Thursday took a grim view of the contradictory stand taken by two central government ministries in a matter related to a warehouse facility of the Central Warehousing Corporation (CWC) on 34 acres of land within the SEZ area developed by Adani Ports Special Economic Zone Limited (APSEZL).
A bench comprising Justices B R Gavai and C T Ravikumar set aside a verdict of the Gujarat High Court which had issued directions including that the CWC, a government body, will have to agree to the proposal for swapping its warehousing facility with another outside the Special Economic Zone (SEZ), as offered by the Adani firm.
CWC was set up by the Government of India in 1957 to provide support to the agricultural sector by operating warehouses and container freight stations across the country and warehouse facilities were built near the Mundra port which later became part of APSEZL. The 44-page verdict, penned by Justice Gavai, took note of the diametrically opposite stands of the Ministry of Commerce and Industry and the Ministry of Consumer Affairs, Food and Public Distribution in the matter and advised the Centre to resolve such differences at the government level itself.
While, the Ministry of Commerce and Industry had held that the delineation/denotification as sought by the CWC is not permissible in law, the Consumer Affairs ministry took a stand that such a denotification is permissible in law. We are of the considered view that 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, it said. We, therefore, impress upon the Union of India to evolve a mechanism to ensure that whenever such conflicting stands are taken by different departments, they should be resolved at the governmental level itself, it said.
The bench said a copy of the judgement be provided to the office of the attorney general for necessary remedial action. The verdict came on an appeal by the CWC against the June 30, 2021 judgement of the high court. The high court verdict had said,APSEZ may provide a suitable alternative land of the same size as the existing one as selected by CWC outside the SEZ area at Mundra Port.
The high court had also said that a godown of 66,000 MT may be created by APSEZ as per the specification of CWC within the period of 12 months. The high court ordered settlement through mediation on the third term to which the Adani firm did not agree at a later stage. The third term read: APSEZ shall take the whole covered space so created along with remaining open area at CWC's existing public tariff with 6% annual escalation (compoundable) on dedicated warehousing basis for entire period of lease i.e. till 16.2.2031, underwriting the business and other risks of the Corporation and shall sign an agreement, giving suitable amount of bank guarantee to this effect.
Setting aside the verdict, the top court said, We find the said approach of the Division Bench wholly untenable... We are of the view that the approach adopted by the Division Bench was, in fact, forcing the appellant-CWC, which is a statutory body, to accept the settlement. As per the judgement, in 2000-2001, the Gujarat Maritime Board had executed a lease of an undeveloped land within the New Mundra Port Limits to Gujarat Adani Port Limited (GAPL) for 30 years.
GAPL, in 2004, sub-leased a 34 acre plot till February 16, 2031 to CWC for the purpose of setting up a warehouse to be used for storage and handling of foodgrains, notified commodities and related activities. CWC set up two Godowns each with a capacity of 33,000 MT on the land. Later, a communication was sent to CWC by Adani Ports Special Economic Zone Limited (APSEZL) stating that the CWC had violated the agreement clause as it did not obtain all approvals.
APSEZL then decided to discontinue issuing gatepasses to the CWC, declining permission to the government firm to continue the warehousing activities leading to a spate of litigations. Reversing the HC verdict, the top court said, The High Court, in effect, forces the MD of the appellant CWC, which is a statutory body, to accept the first two conditions and leave the 3rd condition to be settled mutually through mediation.
If the High Court was so concerned about settlement of the dispute, then, while compelling the appellant-CWC to accept the first two conditions, it also ought to have compelled APSEZL to accept the 3rd condition, it said. (PTI)
