CENTRAL WAREHOUSING CORPORATIONversusADANI PORTS SPECIAL ECONOMIC ZONE LIMITED (APSEZL) AND OTHERS

                          [2022] 9 S.C.R. 1003                           1003


          CENTRAL WAREHOUSING CORPORATION                                A
                                  v.
    ADANI PORTS SPECIAL ECONOMIC ZONE LIMITED
                     (APSEZL) AND OTHERS
                (Civil Appeal Nos.7277-7278 of 2022)                     B
                        OCTOBER 13, 2022
          [B. R. GAVAI AND C. T. RAVIKUMAR, JJ.]
        Infrastructure Project – Special Economic Zone – Gujrat
Maritime Board (GMB) executed Lease and Possession Agreement             C
thereby granting lease of undeveloped land to Gujarat Adani Port
Limited (GAPL) for 30 years – GMB also granted development rights
under a Concession Agreement to GAPL to develop port and other
facilities – GAPL vide agreement dated 2nd June, 2004 sub-leased a
plot of land admeasuring about 34 acres to appellant-CWC, a
                                                                         D
statutory Corporation under the 1962 Act, for setting up a warehouse
for storage and handling of foodgrains, notified commodities and
related activities – CWC set up two Godowns and also made
payments for development of infrastructure – Meanwhile, the
Special Economic Zones Act, 2005 came into force and vast area of
the leased land came to be notified as a Special Economic Zone           E
(SEZ) vide notification issued by Ministry of Commerce and Industry,
Government of India (Ministry of C & I) – Appellant-CWC made
representation to Ministry of C & I for de-notification of said 34
acres of land from the SEZ – Meanwhile, respondent no.1-Adani
Ports Special Economic Zone Limited (APSEZL) addressed
                                                                         F
communication to appellant-CWC informing that it would not permit
the latter to continue warehouse activities and declined to issue
gate pass for transportation stating that it had violated conditions
enumerated in agreement dated 2 nd June, 2004 – CWC filed writ
petition – Single Judge of the High Court did not grant interim
relief while issuing notice – CWC filed LPA – Division Bench granted     G
ad-interim relief and directed respondents to allow CWC to carry
out activities and to issue gate pass for transportation – In the
meantime, request of CWC for delineation / de-notification of 34
acres of land rejected by Ministry of C & I – Appellant filed another
writ petition – Attempts made by parties to amicably settle the matter
                                                                         H
                                1003
1004            SUPREME COURT REPORTS                       [2022] 9 S.C.R.


 A     – Proposal for settlement made by APSEZL that equivalent plot of
       land outside the SEZ zone would be earmarked, whereupon a
       godown of similar size would be constructed – Board of Directors
       of CWC accepted the settlement proposal on three conditions –
       APSEZL agreed on all the three conditions – However, it unilaterally
       resiled from the 3rd condition subsequently – Both parties thereafter
 B
       informed the High Court that settlement was not possible – High
       Court held that though CWC was bound by the first two conditions
       as agreed between the parties, the second respondent was not bound
       by the 3rd condition offered by APSEZL and subsequently retracted
       by it – High Court held that, since there was a consensus on the
 C     first two conditions and no consensus on the 3rd condition, CWC
       was bound by the first two conditions and insofar as the 3rd
       condition was concerned, it was open for the parties to settle the
       same amicably between themselves or through mediation – On
       appeal, held: Approach adopted by High Court was not tenable –
       Offer given by respondent no.1-APSEZL was a composite one so
 D
       also acceptance thereof by appellant-CWC was also composite –
       Acceptance of the first two conditions was also dependent upon the
       third condition – If High Court was so concerned about settlement
       of the dispute, then, while compelling appellant-CWC to accept the
       first two conditions, it also ought to have compelled respondent
 E     no.1-APSEZL to accept the third condition – 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
       balanced – The High Court ought to have taken into consideration
       that, unless all the three conditions were complied with, the interest
       of appellant-CWC, which is a statutory Corporation, could not have
 F
       been safeguarded – Judgment of High Court not sustainable –
       Warehousing Corporation Act, 1962.
             Statutory Corporation – Dispute between statutory
       corporation and a private entity – Settlement – Effect of – Held:
       Unless the settlement arrived is found to be in the interest of both
 G     the parties, it cannot be thrust upon a statutory Corporation to its
       detriment and to the advantage of a private entity.
             Government litigation – Two departments of the Union of
       India cannot be permitted to take stands which are diagonally
       opposite – Union of India to evolve a mechanism to ensure that
 H
   CENTRAL WAREHOUSING CORP. v. ADANI PORTS SPECIAL                    1005
            ECONOMIC ZONE LTD. (APSEZL)

whenever conflicting stands are taken by different departments, they   A
should be resolved at the governmental level itself.
      Allowing the appeals, the Court
      HELD:1. The present case, rather than being decided on
law, requires to be decided on the factual position as emerges
from the record. The appellant-CWC is a statutory corporation.         B
It cannot act as per the independent decisions of any officer and
has to act in accordance with the resolution of the Board of
Directors. [Paras 26 and 29][1016-G; 1019-F-G]
       2.1. Vide the impugned judgment and order, the Division
Bench of High Court, in fact, held that though the appellant-CWC       C
was bound by the first two conditions as agreed between the
parties, the second respondent was not bound by the 3rd condition
as was offered by respondent no.1-APSEZL on 9th March 2019
and subsequently retracted on 10th June 2019. The Division
Bench went on to hold that, since there was a consensus on the         D
first two conditions and no consensus on the third condition, the
appellant-CWC was bound by the first two conditions and insofar
as the third condition is concerned, it was open for the parties to
settle the same amicably between themselves or through
mediation. The Division Bench further observed that though
APSEZL had initially proposed the 3rd condition, it had                E
immediately explained and clarified the same in its next letter
dated 10th June 2019. In the view of the Division Bench, a period
of three months is ‘immediate’. The said approach is wholly
untenable. [Paras 41 and 43][1026-D-G]
       2.2 The approach adopted by the Division Bench was, in          F
fact, forcing the appellant-CWC, which is a statutory body, to
accept the settlement. The High Court, in effect, forced the MD
of the appellant CWC, which is a statutory body, to accept the
first two conditions and leave the third condition to be settled
mutually through mediation. The offer given by respondent no.1-        G
APSEZL on 9th March 2019 was a composite one so also the
acceptance thereof by the appellant-CWC was a composite one.
The acceptance of the first two conditions was also dependent
upon the third condition. If the Division Bench was so concerned

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1006            SUPREME COURT REPORTS                      [2022] 9 S.C.R.


 A     about settlement of the dispute, then, while compelling the
       appellant-CWC to accept the first two conditions, it also ought to
       have compelled respondent no.1-APSEZL to accept the third
       condition. [Paras 44 and 45][1026-G; 1027-D-E]
             3. The High Court ought to have taken into consideration
 B     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 CVC
       had also observed that there was also a possibility of losing
 C     business. Further, the Division Bench totally ignored the stand
       taken by the Ministry of CAF&PD, which too had opposed such
       a swapping. 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
 D     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. 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
 E     and to the advantage of a private entity. [Para 47][1028-C-F]
             4. The stands taken by two ministries of the Union of India
       are diagonally opposite to each other. On one hand, the Ministry
       of C&I has held that the delineation/denotification as sought by
       the appellant-CWC is not permissible in law. On the other hand,
 F     the Ministry of CAF&PD has taken a stand that such a
       delineation/denotification is permissible in law and has also stated
       that there are precedents for doing so. It is also a stand of the
       Ministry of CAF&PD that shifting of the warehouses to the
       alternate locations would be against the interest of the appellant-
 G     CWC as well as public revenue. 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 is impressed upon the


 H
   CENTRAL WAREHOUSING CORP. v. ADANI PORTS SPECIAL                          1007
            ECONOMIC ZONE LTD. (APSEZL)

Union of India to evolve a mechanism to ensure that whenever                 A
such conflicting stands are taken by different departments, they
should be resolved at the governmental level itself. [Paras 50-
53][1029-B, D, F-G; 1030-C]
      Lloyd Electric and Engineering Limited v. State of
      Himachal Pradesh and Others (2016) 1 SCC 560 :                         B
      [2015] 10 SCR 362 – referred to.
       5.1. The best course available with the Division Bench was to
direct the Single Judge to decide the petition on its merits. The impugned
judgment and order of the Division Bench dated 30th June 2021 is not
sustainable in law. [Paras 48 and 49]                                        C
       5.2. Until further orders are passed by the learned Judge, the
interim order dated 26th April 2019 passed by the Division Bench shall
continue to operate. This order would not come in the way of the parties
in arriving at a settlement which would be acceptable to both the parties.
[Paras 56 and 57]                                                            D
      Krishnadevi Malchand Kamathia and Others v. Bombay
      Environmental Action Group and Others (2011) 3 SCC
      363 : [2011] 3 SCR 291 and Ratnagiri Nagar Parishad
      v. Gangaram Narayan Ambekar and Others (2020) 7
      SCC 275 : [2020] 6 SCR 303 – referred to.                              E
                        Case Law Reference
[2011] 3 SCR 291              referred to                  Para 25
[2020] 6 SCR 303              referred to                  Para 25
[2015] 10 SCR 362             referred to                  Para 52           F
      CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.7277-
7278 of 2022.
      From the Judgment and Order dated 30.06.2021 of the High Court
of Gujarat at Ahmedabad in Letters Patent Appeal No.22 of 2017 and
Order dated 26.08.2021 in Misc. Civil Application No.01 of 2021 in Letters   G
Patent Appeal No.22 of 2017.
      Maninder Singh, Sr. Adv., Amarjeet Singh, Adv. for the Appellant.
     Vikramjit Banerjee, ASG, Shyam Divan, Sr. Adv., Mahesh
Agarwal, Rishi Agrawala, Ankur Saigal, Anshuman Srivastava, Ms.
                                                                             H
1008            SUPREME COURT REPORTS                            [2022] 9 S.C.R.


 A     Kamakshi Sehgal, Ms. Geetika Sharma, E. C. Agrawala, Ms. Alka
       Agarwal, Rajan Kr. Chourasia, Navanjay Mahapatra, Ms. Preeti Rani,
       Raj Bahadur Yadav, Amrish Kumar, Advs. for the Respondents.
             The Judgment of the Court was delivered by
             B. R. GAVAI, J.
 B
             1. Leave granted.
              2. The appeals challenge the judgment and order dated 30th June
       2021 passed by the High Court of Gujarat at Ahmedabad in Letters
       Patent Appeal (LPA) No. 22 of 2017 in Special Civil Application (SCA)
 C     No. 184 of 2017 with SCA No. 5816 of 2017, and Miscellaneous Civil
       Application No. 1 of 2021 in the above LPA, vide which the Division
       Bench of the High Court has issued the following directions:
             “(i) That Appellant – CWC is allowed three months time from
             today either:-
 D              (a) to seek and obtain approval as a SEZ compliant Unit from
                the competent authority under the SEZ Act in respect of its
                Warehouse facility situated in 34 acres of land in question within
                SEZ Area developed by Respondent – APSEZL;
                or
 E              (b) to obtain a waiver of the conditions to comply with the
                provisions of SEZ Act as a SEZ Unit and the Competent
                Authority while considering any such application of CWC, if
                any filed by it, will provide opportunity of hearing to both the
                parties;
 F           (ii) If CWC fails to get such approval as a SEZ compliant Unit or
             waiver as aforesaid within aforesaid period of three months, the
             Respondent - APSEZL may acquire the land of the same size of
             approximately 34 Acres outside SEZ area as already identified
             and selected by CWC, for the construction of a Warehouse facility
 G           for the Appellant – CWC of approximately same size as agreed
             between the parties under Proposal Nos.1 and 2 in the letter dated
             9.3.2019 and affirmed by subsequent correspondence and Board
             Resolution dated 12.6.2019 of CWC and the Affidavits of the
             parties filed in this Court. Such acquisition of land and construction
             of warehouse by the Respondent - APSEZL may be completed
 H
CENTRAL WAREHOUSING CORP. v. ADANI PORTS SPECIAL                         1009
   ECONOMIC ZONE LTD. (APSEZL) [B. R. GAVAI, J.]

  within a period of one year after the expiry of aforesaid period of    A
  three months in Clause (i) above and same may be offered to
  CWC to be occupied by the Appellant - CWC on such terms and
  conditions in consonance with the previous Agreement between
  the parties vide Lease Agreement dated 2.6.2004 or under such
  mutually agreed terms as may be agreed afresh between the
                                                                         B
  parties.
  (iii) Once the completed construction on the land outside the SEZ
  Area, already identified and selected by CWC, is offered to the
  Appellant - CWC, the Appellant - CWC shall vacate the existing
  premises of the warehousing facility on the said 34 acres of land
  situated within SEZ area within three months of such                   C
  communication of the Respondent - APSEZL and the Appellant -
  CWC shall be bound to hand over the peaceful and vacant
  possession of existing warehousing facility and land of 34 Acres
  in question to the Respondent - APSEZL within such period of
  three months of the communication of the Respondent - APSEZL           D
  that new warehousing facility on the land situated outside the SEZ
  area is ready to be taken in possession and occupied by CWC.
  (iv) If the Appellant – CWC fails to hand over the vacant and
  peaceful possession to the Respondent, even thereafter, the
  Respondent - APSEZL shall be free to approach this Court or the        E
  concerned Development Commissioner or the learned Single Judge
  or other authorities of the State for appropriate execution of these
  directions of this Court.
  (v) That regarding Proposal No.3 about underwriting of the future
  business loss of CWC on the basis of published tariffs or market       F
  tariffs or otherwise, the parties are left free to make efforts for
  amicable settlement of this issue between themselves with the
  help of Development Commissioner or the Mediation process
  under Section 89 of Civil Procedure Code in the High Court
  annexed Mediation Centre, where services of Senior Trained
  Mediators can be made available to the parties at the appropriate      G
  point of time.
  (vi) For the aforesaid period of 18 months of timeline involved in
  the aforesaid directions namely, three months under Clause (i)
  and one year or 12 months under Clause (ii) and three months for
  handing over the vacant possession under Clause (iii) aforesaid,       H
  the interim order granted by the coordinate bench of this Court on
1010            SUPREME COURT REPORTS                          [2022] 9 S.C.R.


 A            11.1.2017 shall continue to operate between both the parties.
              (vii) That if the extension of the aforesaid time period(s) becomes
              very necessary for compelling reasons, both the parties shall be
              at liberty to apply to the learned Single Judge in the pending Writ
              Petition; being Special Civil Application No.184 of 2017 and the
 B            learned Single Judge keeping in view the conduct of the applicant-
              party may grant such further time as may be considered expedient
              and necessary by the learned Single Judge.”
              3. By an order dated 26th August 2021, the impugned judgment
       and order came to be modified as under:
 C            “3. In place of the words “already identified and selected by CWC”,
              the following words will be substituted in paragraph 33(ii) & (iii)
              of the Judgment dated 30.06.2021:
                  “identified and proposed by the Respondent APSEZL and finally
                  selected by CWC subject to the time-frame prescribed in the
                  present Judgment.””
 D
              4. Being aggrieved by the aforesaid directions, the appellant-
       Central Warehousing Corporation (for short, “CWC”) has approached
       this Court.
              5. The facts in brief giving rise to the present appeals are as
       under:
 E
              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. In the
       year 1962, the Warehousing Corporation Act, 1962 (for short, “1962
       Act”) came to be enacted. As such, the appellant-CWC became a
 F     statutory Corporation under the 1962 Act. In the year 2000-2001, the
       Gujarat Maritime Board (for short, “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 short,
       “GAPL”). The said lease was granted for a period of 30 years. Vide the
       said agreement, GMB also granted development rights under a
 G     Concession Agreement dated 17th February 2001 to GAPL to develop
       the port and other facilities.
              6. By an agreement dated 2nd June 2004, GAPL sub-leased a plot
       of land admeasuring about 34 acres to the appellant-CWC for the purpose
       of setting up a warehouse to be used for storage and handling of
 H
   CENTRAL WAREHOUSING CORP. v. ADANI PORTS SPECIAL                           1011
      ECONOMIC ZONE LTD. (APSEZL) [B. R. GAVAI, J.]

foodgrains, notified commodities and related activities. The lease of the     A
land was for a term up to 16th February 2031. After the said agreement
was executed and the possession of the said land was handed over to
the appellant-CWC on 1st October 2004, the appellant-CWC set up two
Godowns each with a capacity of 33,000 MT. The appellant-CWC also
made payments at the rate of Rs.603 per sq. metre, i.e., about Rs.8.29
                                                                              B
crores for the development of infrastructure in the year 2005.
       7. The Special Economic Zones Act, 2005 (for short, “SEZ Act”)
came into force on 23rd June 2005. The Special Economic Zones Rules,
2006 (for short, “SEZ Rules”) were also notified on 10th February 2006.
Vide notification dated 23rd June 2006 issued by the Ministry of Commerce
and Industry, Government of India (for short, “Ministry of C & I), a vast     C
area came to be notified as a Special Economic Zone (for short, “SEZ”).
The appellant-CWC made a representation dated 10th April 2015 to the
Ministry of C & I for delineation/denotification of the said 34 acres of
land from the SEZ. Till the year 2017, there was no obstruction to the
appellant-CWC in utilizing the said area.                                     D
                                                        th
        8. A communication came to be addressed on 5 January 2017 by
the respondent No.1-Adani Ports Special Economic Zone Limited
(hereinafter referred to as “APSEZL”) to the appellant-CWC stating
therein that, the appellant-CWC had violated Clause 4.2.3 of the
agreement dated 2nd June 2004, which required the appellant-CWC to            E
obtain and comply with all approvals, consent and permits under the
applicable law pertaining to the sub-leased premises and activities
proposed to be carried out by the appellant-CWC. Vide the said
communication, 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        F
activities.
       9. Being aggrieved by the communication dated 5th January 2017
and alleging that the same was causing obstruction in free movement of
vehicles and transportation of foodgrains etc. to be stored at the
warehousing facility, the appellant-CWC filed the first writ petition being   G
SCA No. 184 of 2017 before the High Court. Since the learned Single
Judge of the High Court did not grant an interim relief while issuing
notice, the appellant-CWC filed LPA No. 22 of 2017. In the said LPA,
vide order dated 11th January 2017, the Division Bench of the High Court
had granted an ad-interim relief and directed the respondents to allow
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1012             SUPREME COURT REPORTS                            [2022] 9 S.C.R.


 A     the appellant-CWC to carry out the activities of storing and transportation
       of its commodities to and from the warehouse. The respondents were
       also directed to issue gate passes for transportation till the next date of
       hearing.
             10. It further appears from the record that, in the meantime, the
 B     request of the appellant-CWC for delineation/denotification of the 34
       acres of land in its possession from the SEZ area, which was pending
       consideration, was considered by the Ministry of C & I in its meeting
       held on 17th January 2017, wherein it was decided to reject the said
       request of the appellant-CWC to delineate/denotify the said land. The
       said communication was communicated to the appellant-CWC on 25th
 C     January 2017. Being aggrieved thereby, the appellant-CWC filed the
       second writ petition being SCA No. 5816 of 2017 before the High Court.
              11. It appears that thereafter, the said LPA came up for hearing
       before the Division Bench on various occasions. It further appears that
       there were also attempts to settle the issues amicably. A perusal of the
 D     order dated 26th April 2019 passed by the Division Bench would reveal
       that an offer was made by APSEZL that an equivalent plot of land outside
       the limit of SEZ would be earmarked, whereupon a Godown of similar
       size would be constructed at the expense of APSEZL within a period of
       twelve months from the said date. Till then, the appellant-CWC was to
 E     be permitted to carry on its activities as per the terms and conditions of
       the agreement dated 2nd June 2004. The said proposal of APSEZL was
       placed before the Board of Directors of the appellant-CWC (hereinafter
       referred to as the “BoD”) on 12th June 2019. The BoD accepted the
       said proposal in principle.

 F            12. Thereafter, the matter was again listed before the Division
       Bench on certain dates. On 28th January 2021, an adjournment was
       again sought on behalf of the appellant-CWC to take instructions from
       the Managing Director (for short, “MD”) of the appellant-CWC. Vide
       order of the said date, the Division Bench granted time as a last chance
       and the matter was directed to be posted on 9th February 2021. On 9th
 G     February 2021, the matter was adjourned for 18th February 2021. Since
       both the parties informed the High Court that the settlement is not possible,
       the High Court directed the matter to be kept on 17th March 2021.
       Thereafter, due to COVID, the matter could not be listed and finally, it
       was listed on 30th June 2021, on which date the impugned judgment and
 H     order was passed.
   CENTRAL WAREHOUSING CORP. v. ADANI PORTS SPECIAL                            1013
      ECONOMIC ZONE LTD. (APSEZL) [B. R. GAVAI, J.]

      13. We have heard Shri Maninder Singh, learned Senior Counsel            A
appearing on behalf of the appellant-CWC and Shri Shyam Divan, learned
Senior Counsel appearing on behalf of the respondents.
        14. Shri Maninder Singh submitted that the Division Bench has
failed to take into consideration that the area admeasuring 34 acres in
possession of the appellant-CWC could not have been included in the            B
SEZ areas. He submitted that as per Rule 7 of the SEZ Rules, the
developer is required to furnish to the Central Government, particulars
required under sub-section (1) of Section 4 with regard to the area referred
to in sub-section (2) or sub-section (4) of Section 3 of the SEZ Act. He
submitted that, along with the said information, the developer is also
required to submit a proof of legal right and possession and a certificate     C
from the State Government or the authorized agency that the said area
is free from all encumbrances. It is submitted that, as per sub-rule (2) of
Rule 7 of the SEZ Rules, the identified area is required to be contiguous
and vacant. He submitted that APSEZL has suppressed the material
fact that the possession of the said area of 34 acres was not with it but      D
with the appellant-CWC. He submitted that, had this fact been brought
to the notice of the authorities, the area in possession of the appellant-
CWC could not have been included in the SEZ areas.
       15. Shri Maninder Singh submitted that from Clause 2.1 of the
agreement dated 2nd June 2004 itself, it is clear that the warehousing         E
infrastructure and the leased premises was required to be set up by the
appellant-CWC in accordance with the plan as approved by APSEZL
(then GAPL). It is submitted that, in accordance with the said clause,
the appellant-CWC had submitted plans on 25 th July 2006. The said
plans were duly approved by the then GAPL. It is submitted that, in
addition to the aforesaid, the then GAPL has itself been using the             F
warehousing facilities provided by the appellant-CWC from the year
2006 onwards.
       16. Shri Singh further submitted that the Ministry of Consumer
Affairs, Food and Public Distribution, Government of India (hereinafter
referred to as the “Ministry of CAF&PD”), which is the controlling             G
Ministry of the appellant-CWC, has also been supporting the stand of
the appellant-CWC. It is submitted that however, the Ministry of C&I
has been, on an untenable ground, refusing the request of the appellant-
CWC for delineation/denotification of the land occupied by it. It is
submitted that, though the Ministry of C&I has taken a stand in case of        H
1014             SUPREME COURT REPORTS                            [2022] 9 S.C.R.


 A     the appellant-CWC that there is no provision in the SEZ Act and Rules
       which empowers the authorities to grant a waiver as requested, the
       Ministry of CAF&PD, vide communication dated 13th September 2013,
       has informed the Chief Secretaries of all the States that in certain cases,
       such request could be accepted. It is submitted that, not only this, but
       vide notifications dated 31st May 2013 and 4th July 2019, certain areas
 B
       have been delineated/denotified from the said SEZ areas at the request
       of APSEZL. It is submitted that when such a request could be allowed
       at the behest of APSEZL, there is no rhyme or reason as to why the
       request of the appellant-CWC could not be considered by the Ministry
       of C&I.
 C             17. Shri Singh further submitted that the High Court has totally
       erred in castigating the appellant-CWC. It is submitted that the
       observations of the High Court that the appellant-CWC was having an
       ego in the matter and was not reasonable are totally unwarranted. He
       submitted that the impugned judgment and order of the High Court is
 D     almost thrusting a part of the settlement on the appellant-CWC. He
       submitted that the relocation of the warehouse to a new location on rent
       as per the published tariff of the appellant-CWC is not the solitary decision
       of an individual. It is submitted that the BoD has accepted the proposal
       for settlement on three conditions. As a matter of fact, APSEZL itself
       had agreed on all the three conditions vide its communication dated 9th
 E     March 2017. However, it unilaterally, vide communication dated 10th
       June 2019, resiled from the 3rd condition. Though the High Court has
       directed the appellant-CWC to abide by the first two conditions, it has
       failed to direct APSEZL to abide by the 3rd condition.
              18. Shri Singh submitted that the conduct of the Ministry of C&I
 F     in rejecting the proposal of the appellant-CWC for delineation/
       denotification of the said land from SEZ areas vide its order dated 17th
       January 2017 is itself under a cloud of doubt. He submitted that, in SCA
       No. 184 of 2017, the notice was issued on 10th January 2017 returnable
       on 17th January 2017. However, by the Minutes of the Meeting of the
 G     Ministry of C&I passed on the very same day, the said proposal was
       rejected. It is seen that the conduct of the Ministry of C&I in deciding
       the matter on the very same day on which notice was made returnable,
       speaks volumes of its conduct.
              19. Shri Divan, on the contrary, submitted that insofar as the writ
 H     petition being SCA No. 184 of 2017 is concerned, the same is not at all
   CENTRAL WAREHOUSING CORP. v. ADANI PORTS SPECIAL                          1015
      ECONOMIC ZONE LTD. (APSEZL) [B. R. GAVAI, J.]

tenable. He submitted that APSEZL is not a public body and as such, a        A
writ against it would not be tenable. It is submitted that insofar as the
second writ petition being SCA No. 5816 of 2017 is concerned, no
effective hearing has taken place in the said proceedings. Shri Divan
further submitted that there is no challenge made by the appellant-CWC
to the notification dated 23rd June 2006. The said notification has been
                                                                             B
issued in accordance with the provisions of the SEZ Act. He submitted
that the appellant-CWC, having not challenged the validity of the said
notification dated 23rd June 2006, no relief could be granted in the said
writ petition filed by it, contrary to the statutory provisions.
       20. Shri Divan submitted that, as early as on 26th March 2007,
APSEZL had given the proposal to the appellant-CWC to allot an               C
equivalent plot at an alternative location. The said proposal was further
reiterated by APSEZL on 23rd May 2007. Vide another communication
dated 31st August 2007, APSEZL has proposed to utilize the warehousing
facility to be constructed on the sub-leased area for a minimum period
of three years. However, the same was not positively responded to by         D
the appellant-CWC. As such, APSEZL was required to issue a
communication dated 5th January 2017 inasmuch as the continuation of
the warehousing facility was in contravention of the SEZ Act.
       21. Shri Divan submitted that a perusal of Rule 17 of the SEZ
Rules would reveal that a proposal has to be submitted for approval to       E
the Development Commissioner for setting up of a Unit in SEZ. Under
Rule 18 (2)(i) of the SEZ Rules, it is required that the proposal meets
with the positive net foreign exchange earning requirement. Under Rule
19 of the SEZ Rules, unless the proposal is approved by the Approval
Committee and unless the Development Commissioner issues a letter of
approval in Form G, no Unit can be established. Shri Divan has submitted     F
that sub-rule (v) of Rule 11 would make the position clear. Shri Divan
has further submitted that the communication dated 13th September 2013
issued by the Ministry of C&I clearly provides that a proposal for seeking
delineation/denotification cannot be considered unless such a proposal
has an unambiguous ‘No Objection Certificate’ from the State                 G
Government concerned.
      22. Shri Divan further submitted that in view of the provisions of
Section 51 of the SEZ Act, the provisions of the said Act will have an
overriding effect. He has further submitted that various documents have
been placed on record by the appellant-CWC which were not placed             H
1016               SUPREME COURT REPORTS                         [2022] 9 S.C.R.


 A     before the High Court and as such, the same cannot be taken into
       consideration.
              23. Shri Divan further submitted that, as a matter of fact, after
       the order was passed by the High Court, the appellant-CWC had made
       a representation to the Development Commissioner on 17th August 2021
 B     requesting for delineation/denotification of the plot in question. The same
       has already been rejected by the Development Commissioner by its order
       dated 7th September 2021. He therefore submitted that, as a matter of
       fact, nothing survives in the present proceedings.
              24. Insofar as the contention of the appellant-CWC with regard
 C     to non-compliance with the provisions of Rule 7 of the SEZ Rules, it is
       submitted that the application was made by the then GAPL under the
       old regime on 9th January 2004. The same was approved on 12th February
       2004. The notification was issued on 5th July 2004. As such, the SEZ
       Act, which has come into effect in the year 2005 and the SEZ Rules in
       the year 2006, would not be applicable. It is therefore submitted that the
 D     arguments advanced on that behalf are without substance.
               25. Shri Divan submitted that, though APSEZL was not duty bound
       to provide an alternate site to the appellant-CWC, it gratuitously agreed
       to give to the appellant-CWC an alternate site of the same size. Not only
       that, it also agreed to construct the Godowns of the same size as were in
 E     existence. As such, the directions, which were issued are, in fact, for the
       benefit of the appellant-CWC and there is no reason as to why the
       appellant-CWC should have challenged the same. Shri Divan relies on
       the judgments of this Court in the cases of Krishnadevi Malchand
       Kamathia and Others v. Bombay Environmental Action Group and
 F     Others 1 and Ratnagiri Nagar Parishad v. Gangaram Narayan
       Ambekar and Others2 in support of the proposition that the appellant-
       CWC, having not challenged the notification dated 5th July 2004, is
       estopped from arguing contrary thereto.
             26. In our considered view, the present case, rather than being
       decided on law, requires to be decided on the factual position as emerges
 G
       from the record. It is not in dispute that, after the land was leased to the
       then GAPL by the GMB in the year 2000-2001, it entered into an
       agreement with the appellant-CWC on 2nd June 2004 with regard to the
       1
           (2011) 3 SCC 363
       2
 H         (2020) 7 SCC 275
   CENTRAL WAREHOUSING CORP. v. ADANI PORTS SPECIAL                            1017
      ECONOMIC ZONE LTD. (APSEZL) [B. R. GAVAI, J.]

area admeasuring 34 acres. It is also not in dispute that the appellant-       A
CWC was put in possession of the said plot and has constructed the
warehouse on the same. It is also not in dispute that after the construction
of the warehouse, the storage facilities were being utilized by the then
GAPL. However, it appears that in the year 2007, for the first time, the
then GAPL made a proposal for swapping the land and construction of
                                                                               B
the warehouse on the swapped land. It further appears that, though
certain communications were addressed, there was no hindrance on the
operations of the appellant-CWC till 5th January 2017. From a perusal of
the communication dated 5th January 2017, it is seen that the appellant-
CWC was restrained from continuing with the activities in the said
premises. It further states that the appellant-CWC would not be able to        C
get gate passes for the SEZ until the appellant-CWC either (a) obtains a
Letter of Approval (LOA) from Development Commissioner (DC) as a
SEZ Unit in compliance with the provisions of SEZ Act/Rules; or, (b)
obtains specific permission from DC to carry out the activities of
warehousing & stuffing etc. in the said premises in the SEZ by waiving
                                                                               D
the requirement of being approved as an SEZ-compliant Unit.
       27. A perusal of the record would reveal that, immediately after
the said communication dated 5th January 2017 was passed, the appellant-
CWC filed SCA No. 184 of 2017. In the said writ petition, vide order
dated 10th January 2017, notice was issued returnable on 17th January
2017. Since the interim relief was not granted in the said writ petition,      E
the appellant-CWC preferred LPA No. 22 of 2017, wherein the Division
Bench has passed the order dated 11th January 2017, which reads thus:
      “4. In the communication dated 5th January 2007, reference is
      made to Rule 11(5) and Rule 11(7) of the SEZ Rules, applicability
      or otherwise of the said Rules is a matter which is required to be       F
      considered in the petition pending before the learned single Judge.
      As it is the case of the appellant that since 2005, the
      appellantCorporation is using the leased area after making
      constructions for storage and for transportation of food grains, if
      abruptly they are stopped from using the same, public interest will      G
      suffer. In view of the same, by way of ad-interim relief, the
      respondents are directed to allow the appellant-Corporation to
      carry out the activity of storing and transportation of their
      commodities in and from the warehouse. The respondents are
      further directed to issue necessary gate passes for transportation
      till the next date of hearing.”                                          H
1018            SUPREME COURT REPORTS                         [2022] 9 S.C.R.


 A            28. It appears that after the notice was issued in SCA No. 184 of
       2017 which was returnable on 17th January 2017, a meeting was held
       between the Development Commissioner, MD of the appellant-CWC
       and the President of APSEZL. It will be relevant to refer to the Minutes
       of the said Meeting dated 17th January 2017, which read thus:
 B           “2. Explaining the background, DC, APSEZ informed that in Dec
             2002, CWC has entered into MoU with APSEZ for two plots in
             the SEZ measuring 40 acres and 34 acres. Lease agreement for
             the plot for 34 acres, which is now in dispute, was signed in June
             2004. CWC took possession of the same but did not get the
             agreement registered with the Revenue authorities. He informed
 C           that subsequently, on 23.06.2006, Mundra SEZL, now APSEZL,
             was notified which included the 34 acres with CWC. CWC
             constructed its warehouse on the piece of land. In September
             2008, DC, APSEZ issued notice to CWC for non-compliance of
             provisions of SEZ Act and Rules and requested APSEZL to initiate
 D           action to exclude the plots with CWC from SEZ limits. CWC, on
             14.10.2008, requested APSEZ Ltd. to initiate action to exclude its
             both plots from the SEZ limits. Although EGoM, in Oct 2008, had
             decided to delineate pre-existing structures in the port area built
             prior to the notification of 23.06.2006, the plot with CWC were
             not delineated as perhaps the CWC Godown had come up after
 E           23.06.2006. He mentioned that CWC is carrying out container
             stuffing in its Godown which was against the provision of SEZ
             Act and Rules. The developer, on 19.03.2015, asked CWC to
             discontinue all activities from the Godown. Thereafter, on
             10.04.2015, CWC approached DoC for delineating the warehouse
 F           from the SEZ. In Oct 2015, the developer offered an alternative
             site to CWC, which was rejected by CWC. It was also stated
             that on 05.01.2017, the developer wrote to CWC to stop its
             operation and that CWC obtained a stay against this letter from
             the Hon’ble High Court of Gujarat.
 G           3. The representatives from CWC informed that they have entered
             into the agreement with APSEZL in 2004 for a period of 30 years.
             APSEZ had not informed CWC that the land in question was
             included in the proposed SEZ which was notified in June, 2006. It
             was also stated that since CWC had made investment of Rs. 60
             crores in construction of the warehouse, the CVC had advised it
 H
   CENTRAL WAREHOUSING CORP. v. ADANI PORTS SPECIAL                            1019
      ECONOMIC ZONE LTD. (APSEZL) [B. R. GAVAI, J.]

      that it should not move out without proper arrangement. It was           A
      also stated that presently MMTC was storing 26,000 tonnes of
      imported pulses as buffer stock for the GoI. Since APSEZL had
      arbitrarily stopped this storage and therefore CWC had to
      approach Hon’ble High Court for stay. CWC representatives
      therefore reiterated that since they are having an agreement of
                                                                               B
      30 years lease from APSEZ, they are a Central Government PSU,
      they have already invested more than Rs. 60 cr. in warehouse
      and they are operating peacefully, they should be allowed to do
      business from the warehouse within the SEZ.
      4. The representatives of APSEZL informed that as per the
      agreement entered with the CWC, 30 year agreement had to be              C
      registered within four months without penalty and within 8 months
      with penalty. CWC had not taken any action for getting the
      agreement registered within the said period and therefore the
      agreement had become null and void. It was stated that APSEZ
      was willing to give alternative plot to CWC for creating a new           D
      warehouse and also that it had explored the possibility of delineation
      and de-notification of the area in possession with CWC. However
      the same was not feasible.
      5. It was made clear that there was no possibility of any delineation
      as there was no provision in the SEZ Act or SEZ Rules for such           E
      delineation. It was, therefore, advised representatives of CWC to
      amicably sort out the issue with APSEZL by either becoming a
      SEZ Unit in the SEZ or become a do-developer in the SEZ after
      ascertaining the provisions and requirements under SEZ Unit Act,
      2005 and SEZ Rules, 2006. If required, the matter may be put up
      before the BoA for its consideration.”                                   F

      29. It is to be noted that the appellant-CWC is a statutory
corporation. It cannot act as per the independent decisions of any officer
and has to act in accordance with the resolution of the BoD.
       30. In this background, it will be relevant to note that, as early as   G
in the year 2010, there was a complaint against one of the Directors of
the appellant-CWC before the Central Vigilance Commission (for short,
“CVC”). The CVC issued an office memorandum on 12th January 2010.
The relevant part of the said office memorandum reads thus:
      “2……
                                                                               H
1020             SUPREME COURT REPORTS                           [2022] 9 S.C.R.


 A           (i)……….
             (ii) Further, it is observed that due to the presence of CWC
             warehouse (a Central Govt. PSU), various kinds of developmental
             activities has been undertaken by the other related Govt.
             undertaking like Railway etc. and due to which the importance/
 B           value of the land/area has now been greatly increased. By shifting
             this warehouse to another place, M/s GAPL will be unduly
             benefited and at the same time CWC will not only loose business
             but also have to struggle a fresh in creating the same kind of
             infrastructure in the new location with the help of other govt.
             agencies. In case in the vicinity of the area presently occupied by
 C           CWC, liquid cargo will be stored than even CWC can possibly
             think of developing liquid cargo storage facilities in the area
             presently occupied which can be used by M/s GAPL and others.
             Secondly, for the bulk cargo another location as offered by M/s
             GAPL can be freshly acquired by negotiating fresh terms &
 D           conditions.
             (iii) It is also requested to keep the Commission posted regarding
             the future developments in this regard.
             3. Commission has further observed that there may be vested
             interest in shifting of CWC warehouse-apart from the cost involved
 E           and possibility of loosing business by CWC, hence, it will be desirable
             to have a close check on the issue and monitor its progress/
             developments.”
              31. The CVC has clearly observed that due to the presence of
       CWC warehouse, various kinds of developmental activities have been
 F     undertaken by other related government undertakings like Railway etc.
       It has further been observed that by shifting the warehouse to another
       place, GAPL will be unduly benefited and at the same time, the appellant-
       CWC will not only lose business but will also have to struggle afresh in
       creating the same kind of infrastructure at the new location. The CVC
 G     further observed that there could be a vested interest in shifting of the
       CWC warehouse.
               32. It is further to be noted that, though the Ministry of C&I has
       been taking a stand that the delineation/denotification was not permissible,
       another Ministry of the Union of India has been taking a contrary stand.
       It will be relevant to refer to the communication addressed by the Ministry
 H
   CENTRAL WAREHOUSING CORP. v. ADANI PORTS SPECIAL                           1021
      ECONOMIC ZONE LTD. (APSEZL) [B. R. GAVAI, J.]

of CAF&PD dated 31st July 2017, thereby specifying the stand to be            A
taken on its behalf, as thus:
      “(i) With regard to non registration of the agreement dated
      02.06.2004 between GAPL and CWC, it has been informed by
      CWC that the land was physically banded over by GAPL to CWC
      on 01.10.2004 and thereafter, CWC started construction of               B
      warehouse on the land. CWC has been paying lease rent and
      GAPL has been accepting the same. Even GAPL has stored its
      cargo in the godowns of CWC on the same plot of land. Thus the
      lease has existed by virtue of the actions taken by both the parties.
      Moreover, GAPL has not denied signing the agreement Hence,
      the agreement cannot be treated as illegal.                             C

     (ii) With regard to obligations of CWC to obtain and comply with
     all approvals, consents and permits under the applicable law
     pertaining to the sub-leased premises and activities and the
     contention of APSEZL that CWC has failed to obtain necessary
     approvals under SEZ Act, it is informed that CWC has fulfilled its       D
     obligations as per the agreement dated 02.06.2004 for warehousing
     activities. CWC was not required to take any approval under SEZ
     Act since the area became SEZ later and CWC has no intention
     of becoming part of SEZ and also since APSEZL has included
     the sub-leased premises of CWC in the SEZ area by suppressing            E
     the facts. APSEZL should have included only those areas which
     it owned/ possessed at the time of submitting proposal for
     notification of SEZ. APSEZL should not have included the sub-
     leased premises of CWC for notification of SEZ without the
     consent of CWC, since CWC had already taken possession of
     the plot on l.l0.2004 i.e. much before the date of SEZ notification      F
     (23.06.2006). As per SEZ rules (Annexure-6) having a contiguous
     parcel of land is a primary requirement for the developer to apply
     for notification of any area as SEZ. It appears that APSEZL
     (formerly, GAPL) have suppressed information regarding the sub-
     leased premises, otherwise it would have not got the approval for        G
     declaring the area as SEZ. Thus, the whole contention of APSEZL
     is based on suppression of facts.
      (iii) With regard to the contention of APSEZL that CWC has failed
      to obtain necessary approvals under SEZ Act, it is further intimated
      that it is the obligation of APSEZL as the developer to de-lineate      H
1022      SUPREME COURT REPORTS                          [2022] 9 S.C.R.


 A     and de-notify the sub-leased premises of CWC from SEZ area.
       Since APSEZL did not take any action in this regard, CWC took
       up the matter with Ministry of Commerce on 10.04.2015 for de-
       lineation and de-notification of its plots. The Department of Food
       and Public Distribution also took up this matter on behalf of CWC
       before the Department of Commerce vide letters dated 17.07.2015
 B
       and 17.06.2016. (Annexure-2)
       (iv) With regard to minutes of meeting held on 17.01.2017 in
       Department of Commerce, wherein it has been stated that there
       was no possibility of de-lineation as there was no provision in
       SEZ Act and SEZ rules for such de-lineation, the Department of
 C     Food and PD is of the view that the stand of Department of
       Commerce is not correct. In fact, there are provisions for de-
       lineation/partial de-notification of areas within SEZ which have
       been circulated by Department of Commerce vide letter No. D.J2/
       4S/2009-SEZ dated 13.09.2013 (Annexure-3). However, as per
 D     these provisions, it is the responsibility of the developer i.e.
       APSEZL to take action for such de-lineation or partial de-
       notification. There is precedent for such partial de-notification,
       which has taken place in the SEZ at Jamnagar on the initiative of
       the Developer (M/s Reliance Industries) at that SEZ, as per
       newspaper report in The Hindu Business Line published on
 E     18.01.2013(Annexure-4). Thus, it is apparent that APSEZL first
       included the sub-leased premises of CWC in SEZ by suppressing
       the facts and now it is not taking action for de-notification of the
       same premises.
       Additional Point
 F
       APSEZL has not only suppressing the facts by including CWC’s
       premises in the SEZ Area, but also has attempted several times to
       take possession of CWC’s plot by offering CWC alternate land
       far away from Mundra port. The value of CWC’s plot has
       appreciated several times due to development around it and the
 G     alternate land is not only of low value but also less suitable from
       business point of view for CWC. CWC has not agreed to this
       proposal for alternate land due to serious financial implications.
       When the proposal of exchange of land was being examined by
       the management of CWC, a complaint was made against the then
 H     Director (Finance) of CWC before the Central Vigilance
   CENTRAL WAREHOUSING CORP. v. ADANI PORTS SPECIAL                           1023
      ECONOMIC ZONE LTD. (APSEZL) [B. R. GAVAI, J.]

      Commission (CVC). While disposing of this complaint, CVC                A
      observed vide OM No. 008/FUD/017170378 dated 12.01.2010
      (Annexure-S) that “by shifting CWC warehouses to another place,
      M/s GAPL will be unduly benefited and at the same time CWC
      will not only loose business but also have to struggle a fresh in
      creating the same kind of infrastructure in the new location with
                                                                              B
      the help of other govt. agencies”. CVC has further observed that
      “there may be vested interest in shifting of CWC warehouse apart
      from the cost involved and possibility of losing business by CWC,
      hence, it will be desirable to have a close check on the issue and
      monitor its progress/developments”. CVC has also requested the
      Department of Food and PD to keep the Commission posted                 C
      regarding the future developments in this regard. In view of these
      observations of CVC, since CVC’s instructions are applicable to
      all Departments of Govt. of India, it is responsibility of Department
      of Commerce to accept the request of CWC for de-notification
      of its premises.”
                                                                              D
        33. A perusal of the said communication dated 31st July 2017 would
reveal that, as per the Ministry of CAF&PD, the appellant-CWC has
fulfilled its obligations as per the agreement dated 2nd June 2004 for
warehousing activities. It is also the stand of the said Ministry that
APSEZL has included the sub-leased premises of the appellant-CWC in
the SEZ areas by suppressing the facts. It is stated that, since the          E
appellant-CWC has already taken possession of the plot on 1st August
2004, i.e., much before the date of SEZ notification dated 23rd June
2006, the said area could not have been included in the SEZ areas. It is
stated that, since it was the obligation of APSEZL to take action to
delineate/denotify the sub-leased area, and since it has taken no such        F
steps, the appellant-CWC was required to take up the matter with the
Ministry of C&I. The said communication clearly states that the view of
the Ministry of C&I that there was no possibility of delineation/
denotification was not a correct stand. It is also stated that there are
also precedents of such partial denotifications taking place. It has been
stated that the value of the plot of the appellant-CWC has appreciated        G
several times due to development around it and the alternate land is not
only of low value but also less suitable from a business point of view. It
is stated that the appellant-CWC has also not agreed to this proposal for
alternate land due to serious financial implications. A reference has also
                                                                              H
1024             SUPREME COURT REPORTS                           [2022] 9 S.C.R.


 A     been made to the office memorandum of the CVC dated 12th January
       2010 referred to hereinabove.
              34. It is further pertinent to note that, in the meantime, being
       aggrieved by the Minutes of the Meeting dated 17th January 2017, the
       appellant-CWC had preferred the second writ petition being SCA No.
 B     5816 of 2017 before the High Court. The prayers of the said writ petition
       read thus:
             “(a) To issue a writ of certiorari or a writ, order or direction in the
             nature of certiorari quashing and setting aside the decision taken
             by the Ministry of Commerce in a meeting held on 17.01.2017, as
 C           communicated to the petitioner Corporation under letter dated
             25.01.2017, as being illegal, arbitrary and bad in law;
             (b) To issue a writ of mandamus, or a writ, order or direction in
             the nature of mandamus directing the Ministry of Commerce,
             Government of India to consider the request of the Corporation
 D           for denotifying the area of land leased to it in the year 2004 and
             over which it has constructed a warehouse in light of the report of
             the Central Vigilance Commission, correspondence exchanged
             between the Corporation, Ministry of Consumer Affairs, Food
             and Public Distribution and the Developer, and in accordance with
             law;”
 E
            35. Vide order dated 26th April 2019 in SCA No. 5816 of 2017, the
       same was directed to be placed along with LPA No. 22 of 2017.
              36. It appears that during the pendency of the said LPA, there
       were proposals and counter proposals. It is relevant to note that a proposal
 F     was submitted by APSEZL on 9th March 2019. The salient features of
       the said proposal read thus:
             •      “APSEZ to offer alternate location in Non-SEZ area of
                    Mundra Industrial Estate is of the same size i.e. approx. 34
                    acres.
 G           •      APSEZ will construct the warehouse as per the existing
                    dimensions of the existing warehouse after discussing the
                    same with you.
             •      To give comfort to CWC, APSEZ is willing to underwrite
                    the revenue risk for CWC by taking the warehouse at new
 H
   CENTRAL WAREHOUSING CORP. v. ADANI PORTS SPECIAL                         1025
      ECONOMIC ZONE LTD. (APSEZL) [B. R. GAVAI, J.]

            location on rent as per your published tariff for the balance   A
            period of lease.”
       37. The said proposal was put up for consideration before the
BoD. The BoD, in principle, accepted the said proposal on the following
conditions:
      “(i) M/s. APSEZ may provide a suitable alternative land of            B
      the same size as the existing one as selected by CWC outside
      the SEZ area at Mundra Port.
      (ii) A godown of 66000 MT (as per existing) may be created
      by M/s. APSEZ as per the specification of CWC, within the
      period of twelve (12) months.                                         C

      (iii) M/s. 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                      D
      Corporation and shall sign an agreement, giving suitable
      amount of bank guarantee to this effect.”
      38. It could thus be clear that APSEZL, in its proposal dated 9th
March 2019, had agreed to underwrite the revenue risk of the appellant-
CWC by taking the warehouse to a new location on rent as per the            E
published tariff of the appellant-CWC for the balance period of lease,
and the same was accepted by the appellant-CWC only with a rider that
APSEZL shall sign an agreement giving a suitable amount of bank
guarantee to the said effect.
       39. However, after a period of almost three months, APSEZL           F
retracted from its proposal dated 9th March 2019 vide its communication
dated 10th June 2019, which reads thus:
      “Dear Sir,
      This has reference to our letter dated March 9, 2019 and
      your reply dated April 4, 2019, subsequently our teams have           G
      been working together for last 3 months in order to arrive at a
      mutually beneficial solution.
      With reference to our letter dated March 9,2019 wherein, along
      with offering an alternate location for relocation of your existing
                                                                            H
1026            SUPREME COURT REPORTS                          [2022] 9 S.C.R.


 A           facility we had suggested to underwrite the revenue risk
             for CWC for the warehouse at new location on rent. We
             would like to clarify that such underwriting of revenue risk
             should be done based on Market rates which can be
             mutually worked out as the existing published tariff is too
             high when compared to the market rates of similar type of
 B
             warehouses.
             Further as discussed during the meeting with your Director
             (M&CP), CWC we would like to work out a One Time
             Settlement (OTS), which we believe would be the most efficient
             and quick resolution of this issue and we are awaiting your proposal
 C           and response in this regard.”
              40. It could thus be seen that, though all the three conditions as
       stated in the proposal of APSEZL dated 9th March 2019 were accepted
       by the BoD in its meeting dated 12th June 2019, in the meantime, APSEZL
       unilaterally retracted from the 3rd condition.
 D
              41. Vide the impugned judgment and order, the High Court has, in
       fact, held that though the appellant-CWC was bound by the first two
       conditions as agreed between the parties, the second respondent was
       not bound by the 3rd condition as was offered by APSEZL on 9th March
       2019 and subsequently retracted on 10th June 2019.
 E
               42. The Division Bench goes on to hold that, since there was a
       consensus on the first two conditions and no consensus on the 3rd
       condition, the appellant-CWC was bound by the first two conditions and
       insofar as the 3rd condition is concerned, it was open for the parties to
       settle the same amicably between themselves or through mediation. The
 F     Division Bench further observed that though APSEZL had initially
       proposed the 3rd condition, it had immediately explained and clarified the
       same in its next letter dated 10th June 2019. In the view of the High
       Court, a period of three months is ‘immediate’.
             43. We find the said approach of the Division Bench wholly
 G     untenable.
             44. 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. Vide order dated 28th January 2021, the
       Division Bench goes on to observe that they were prima facie of the
 H     opinion that, while the first two conditions taken by the appellant-CWC
   CENTRAL WAREHOUSING CORP. v. ADANI PORTS SPECIAL                           1027
      ECONOMIC ZONE LTD. (APSEZL) [B. R. GAVAI, J.]

in its meeting dated 12th June 2019 appeared to be fair and reasonable,       A
the 3rd condition which also takes into account the future working
escalation, costs etc. does not appear to be fair and may unnecessarily
make the dispute linger on. After observing this and granting a short
accommodation to the counsel for the appellant-CWC to take instructions
from the MD of the appellant-CWC, the Division Bench observed thus:
                                                                              B
      “9. We make it clear that any further delay in their decision-making
      will not be allowed and if the said settlement is not agreeable to
      the appellant – Central Warehousing Corporation, an Affidavit of
      the Managing Director of the appellant – Central Warehousing
      Corporation disclosing the reasons for the same may be submitted,
      on which, appropriate orders may be passed by this Court on next        C
      date.”
        45. 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. The
offer given by APSEZL on 9th March 2019 was a composite one so also           D
the acceptance thereof by the appellant-CWC was a composite one.
The acceptance of the first two conditions was also dependent upon the
3rd condition. 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        E
the 3rd condition.
      46. The Division Bench of the High Court, in paragraph (24),
observed thus:
      “24. We are little surprised and also pained at the reticent attitude
      of the Appellant - CWC, a Central Government Undertaking to             F
      have an insistent and persistent approach to remain non-compliant
      with law and trying to exert pressure on the private Respondent
      because of its own status. We fail to understand how a body
      corporate of the stature of CWC can have any ‘Ego’ which is a
      vice of a human being and a juristic person, of course managed          G
      by human beings, can definitely have a better democratic and
      consensual decision making process at its top level. The CWC in
      the present case, is not only in this spree of litigation against the
      private Respondent - APSEZL but also against its own parent,
      namely, the Central Government challenging its action of not
                                                                              H
1028             SUPREME COURT REPORTS                           [2022] 9 S.C.R.


 A           agreeing with the CWC to exclude its existing area of Warehouse
             from the SEZ Area, which was allotted to the private Respondent
             - APSEZL and is being developed by them in accordance with
             the provisions of SEZ Act, 2005 and Rules made thereunder just
             because under a sub-lease given by APSEZL to CWC, it had
             already constructed a Warehouse there, before a much larger
 B
             area of more than 5000 Acres including that warehouse area of
             34 Acres was declared as a SEZ area under the special and
             overriding law.”
              47. We find the said observations of the Division Bench totally
       unwarranted. The High Court ought to have taken into consideration
 C     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 CVC had also observed that
 D     there was also a possibility of losing business. Further, 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,
 E     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. If a
       settlement was to be arrived at, unless the same was found to be in the
 F     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.
              48. In any event, the writ petitions before the learned Single Judge
       are very much pending. If the impugned order of the High Court remains
       in force, there remains nothing to be decided in the said writ petitions.
 G     The question as to whether the first writ petition is tenable or not will be
       a question that will have to be decided by the learned Single Judge.
       Undisputedly, the second writ petition which seeks a relief against the
       statutory authorities is very much tenable in law. We are of the considered
       view that the best course available with the Division Bench was to direct
       the learned Single Judge to decide the petition on its merits.
 H
      CENTRAL WAREHOUSING CORP. v. ADANI PORTS SPECIAL                          1029
         ECONOMIC ZONE LTD. (APSEZL) [B. R. GAVAI, J.]

       49. We are therefore of the considered view that the impugned            A
judgment and order of the High Court dated 30th June 2021 is not
sustainable in law.
       50. Before we part with the judgment, an important issue has
invited our concern. The stands taken by two ministries of the Union of
India are diagonally opposite to each other. On one hand, the Ministry of       B
C&I has held that the delineation/denotification as sought by the appellant-
CWC is not permissible in law as could be seen from the Minutes of the
Meeting dated 17th January 2017. Not only that, after the order passed
by the High Court, the appellant-CWC had again applied on 17 th August
2021 for either delineating the area from APSEZL or, in the alternate, to
grant waiver/exemption to it from complying with the conditions/obligations     C
applicable to SEZ Units. However, the specified officer of APSEZL,
vide communication dated 7th September 2021, has rejected the said
prayer on the ground that there is no provision in the SEZ Act and Rules
which empowers the authority to grant such a waiver.
       51. On the other hand, the Ministry of CAF&PD has taken a                D
stand that such a delineation/denotification is permissible in law and has
also stated that there are precedents for doing so. The learned Senior
Counsel for the appellant-CWC has also placed on record certain
notifications vide which certain areas have been denotified at the instance
of APSEZL. We do not wish to dwell into that area inasmuch as it will           E
have a direct bearing on the second writ petition filed by the appellant-
CWC. We do not propose to prejudice the rights of either of the parties
by observing anything with regard to this. It is also a stand of the Ministry
of CAF&PD that shifting of the warehouses to the alternate locations
would be against the interest of the appellant-CWC as well as public
revenue.                                                                        F
      52. 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. We may gainfully refer to the following
observations made by a three-Judges Bench of this Court in the case of          G
Lloyd Electric and Engineering Limited v. State of Himachal
Pradesh and Others3:
         “14. The State Government cannot speak in two voices. Once
         the Cabinet takes a policy decision to extend its 2004 Industrial
3
    (2016) 1 SCC 560                                                            H
1030              SUPREME COURT REPORTS                         [2022] 9 S.C.R.


 A             Policy in the matter of CST concession to the eligible units beyond
               31-3-2009, up to 31-3-2013, and the Notification dated 29-5-2009,
               accordingly, having been issued by the Department concerned
               viz. Department of Industries, thereafter, the Excise and Taxation
               Department cannot take a different stand. What is given by the
               right hand cannot be taken by the left hand. The Government
 B
               shall speak only in one voice. It has only one policy. The
               departments are to implement the government policy and not their
               own policy……”
               53. We, therefore, impress upon the Union of India to evolve a
       mechanism to ensure that whenever such conflicting stands are taken
 C     by different departments, they should be resolved at the governmental
       level itself.
               54. We, therefore, direct the Registry to furnish a copy of this
       judgment to the learned Attorney General for India to use his good offices
       and do the needful.
 D             55. In the result, we pass the following order:
               (i)    The appeals are allowed;
               (ii) The judgment and order dated 30th June 2021 passed by
                      the Division Bench of the High Court in LPA No. 22 of
                      2017 in SCA No. 184 of 2017 with SCA No. 5816 of 2017
 E                    is quashed and set aside;
               (iii) The SCA Nos. 184 and 5816 of 2017 are remitted back to
                      the learned Single Judge of the High Court for consideration
                      afresh, to be decided as expeditiously as possible and
                      preferably within a period of six months from the date of
 F                    this judgment.
               56. Until further orders are passed by the learned Single Judge,
       the interim order dated 26th April 2019 passed by the Division Bench in
       LPA No. 22 of 2017 shall continue to operate.
               57. We clarify that our order would not come in the way of the
 G     parties in arriving at a settlement which would be acceptable to both the
       parties.
               58. Pending application(s), if any, shall stand disposed of in the
       above terms. No order as to costs.

       Bibhuti Bhushan Bose                                        Appeals allowed.
 H     (Assisted by : Shubhanshu Das, LCRA)