JSW INFRASTRUCTURE LIMITED AND ANR.versusKAKINADA SEAPORTS LIMITED AND ORS.

                         [2017] 2 S.C.R. 41


         JSW INFRASTRUCTURE LIMITED AND ANR.                              A
                                  v.
         KAKINADA SEAPORTS LIMITED AND ORS.
                   (Civil Appeal No.3422 of2017)
                         MARCH 01, 2017                                   B
      [MADAN B. LOKUR AND DEEPAK GUPTA, JJ.]
      Contract:
       Award of contract - By Port Trust - For operating berth
cargo - To the appellant-Consortium of companies - Challenged
by the respondent-Consortium of companies (unsuccessful bidders),
on the ground that in terms of Policy clause against creation of
monopoly, appellants were not entitled to participate in the bidding
process as they were already operating a berth for dry cargo -
High Court set aside the contract - On appeal, held: The manner in
                                                                          D
which the High Court interpreted the Policy clause is erroneous -
Reading the entire clause as a whole in the context of the purpose
of the policy, it has to be interpreted that the clause will apply only
when there is single private operator operating a single berth - If
there are more than one private operators, then the clause will
not apply - Award of contract upheld.                                     E
      Deeds and Documents:
      Interpretation of - Words used in documents cannot be treated
to be surplusage or superfluous and redundant and must be given
some meaning and weightage.
                                                                          F
      Judicial Review:
      Scope ofjudicial review - In contractual matters - Held: Writ
courts should not interfere with contractual matters, unless the
decision taken is totally arbitrary, perverse or mala fide - There .
should be judicial restraint in review of administrative action -    G
Judicial Restraint.
      Allowing the appeals, the Court
      HELD: 1.1 The words used in documents cannot be treated.
to be surplusage or superfluous or redundant and mnst be given
some meaning and weightage. [Para 7] [46-D)                               H
                               41
42            SUPREME COURT REPORTS                      (2017] 2 S.C.R.


A          Ramana Dayaram Shetty v. International Airport
           Authority of India (1979) 3 SCC 489: [1979) 3 SCR
           1014; Central Coal Fields Limited and Another v. SLL-
           SML (Joint Venture Consortium and Others) (2016) 8
           sec 622 - relied on.
B           1.2 The High Court erred in interpreting the Clause in the
      manner which it is done. On a bare reading of the Policy Clause
      some weightage and meaning has to be given not only to the
      word "next" as done by the High Court but also to the words
      "only one private operator" appearing in the opening part of the
      Clause. The words "only one private operator" cannot be treated
c     as surplusage. The entire clause has to be read as a whole in the
      context of the purpose of the policy which is to avoid and restrict
      monopoly. This Clause will apply only when there is one single
      private operator in a port. If this single private operator is
      operating a berth, dealing with one specific cargo then alone will
D     he not be allowed to bid for next berth for handling the same
      specific cargo. The High Court erred in interpreting the clause
      only in the context of the word "next" and ignored the opening
      part of the Clause. The intention is that when a port is started, if
      the first berth for a specific cargo is awarded in favour of'. one
      private operator then he cannot be permitted to bid for the next
E     berth for the same type of cargo. However, once there are more
      than one private operators operating in the port then any one of
      them can be permitted to bid even for successive berths. In the
      present case, there are already 5 private operators other than
      the first consortium. The decision taken by the Port Trust could
F     not be termed to be arbitrary, perverse or ma/a fide. {Paras 8,
      13) [46-G-H; 47-A-D; 49-C]
            APM Terminals B. V. v. Union ofIndia and Another (2011)
            6 SCC 756 : [2011) 8 SCR 600 - distinguished.
             2. In contractual matters, the Writ Courts should not
G      interfere unless the decision taken is totally arbitrary, perverse
     · or ma/a fide. Superior courts while exercising their power of
       judicial review must act with restraint while dealing with
       contractual matters. There should be judicial restraint in review
       of administrative action. The court should not act like court of
H
JSW INFRASTRUCTURE LIMITED AND ANR. v. KAKINADA                            43
           SEAPORTS LIMITED AND ORS.

appeal; it cannot review the decision but can only review the              A
decision-making process. The court does not usually have the
necessary expertise to correct such technical decisions. [Paras
9, 11) 147-E-F; 48-G)
      Tata Cellular vs. Union of India (1994) 6 SCC 651:
      [1994) 2 Suppl. SCR 122; Jagdish Manda/ v. State of                  B
      Orissa (2007) 14 SCC 517: [2006) 10 Suppl. SCR 606;
      Afcons Infrastructure Ltd. v. Nagpur Metro Rail
      Corporation Ltd. & Anr. 2016 SCC Online SC 940;
      Monte Carlo Ltd. v. NTPC Ltd. 2016 SCC Online SC
      1149 - relied on.
                                                                           c
                        Case Law Reference
[19791 3 SCR 1014               relied on                Para7
c2916) s sec 622                relied on                Para 7
11994) 2 Suppl. SCR 122         relied on                Para9             D
[2006) 10 Suppl. SCR 606        relied on                Para 10
12Qlll 8 SCR 600                distinguished            Para 12
     CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3422
OF 2017.
                                                                           E
     From the Judgment and Order dated 14.07.2016 of the High Court
ofOrissa at Cuttack in WPC No. 4895 of2016
                             WITH
     C. A. NO. 3424 OF 2017.
      A. N. S. Nadkarni, ASG, Kapil Sibal, Dr. A.M. Singhvi, Joy Basu,      F
Gopal Subramanian, Harin P. Raval, Sr. Advs., Mahesh Agarwal,
Ms. Neeha Nagpal, Himanshu Satija, Rishabh Parikh, E. C. Agrawala,
Merusagar Samantaray, Ms. Lhingneivah, Ms. Viddusshi, S.S. Rebello,
Jai Dehadrai, Ms. Sneha Tendulker, Ajit Yadav, G Bhaskar, Parijat Sinha,
Pratik Jalan, C. K. Jain, Ms. Reshmi Rea Sinha, Zulnoor Ali Ahmed,         G
Gaurav Ghosh, Rudra Dutta, Advs. for the appearing parties.
      The Judgment of the Court was delivered by
      DEEPAK GUPTA, J. I. Leave granted.

                                                                            H
44             SUPREME COURT REPORTS                           [2017].2 S.C.R.


A           2. These two Civil Appeals are directed against the judgment of
     the Division Bench of the Orissa High Court dated 14'h July, 2016,
     whereby Writ Petition No.4895 of 2016, filed by the consortium
     comprising of Mis Kakinada Seaports Limited, Mis Bothra Shipping
     Service Pvt. Ltd.,M/s MBG Commodities Pvt. Ltd., (hereinafter referred
     to as the ,second consortium) Respondent Nos. 1-3 herein, was allowed
B
     and the High Court held that the consortium of the appellants JSW
     Infrastructure Limited and South West Port Limited, (hereinafter referred
     to as the first consortium) was not entitled to take part in the bid and,
     therefore, the acceptance of its bid was also held to be illegal and set
     aside.
c           3. The facts necessary for decision of these appeals are that the
     Paradip Port Trust, issued Request For Qualification (RFQ) on 31.l 0.2015
     inviting global invitations for Mechanisation ofEQ-1-2 and EQ-3 berths
     at Paradip Port Trust of 30 MTPS Capacity on BOT basis under PPP
     mode for concession period of Thirty (30) years. It is not disputed that
D    in response to the said RFQ, 4 parties including the first and second
     consortium, submitted their bids. All the four parties were duly qualified
     and were asked to participate in the next stage of bid, that is, Request
     For Proposal (RFP) and submit their offers with regard to revenue
     sharing. Only two parties, i.e., the first consortium and the second
     consortium submitted the RFP. The bid quoted by the first consortium
E
     was 31. 70% as against 28. 70% bid quoted by the second consortium.
     Since the first consortium were the highest bidders their proposal was
     recommended for acceptance by the tender committee of the Paradip
     Port Trust on 26.02.2016. At this stage, on 27 .02.16 the second consortium
     submitted objections to the consideration of the application of the first
F    consortium on the ground that in terms of the Policy Clause against
     creation of monopoly the appellants were not entitled to take part in this
     entire bidding process since they were already operating one berth for
     dry cargo. The Clause which is subject matter of interpretation reads as
     follows:-

G            "Policy
             If there is only one private terminal/berth operator in a port for a
             specific cargo, the operator of that berth or his associates shall
             not be allowed to bid for the next terminal/berth for handling the
             same cargo in the same port."
H
 JSW INFRASTRUCTURE LIMITED AND ANR. v. KAKINADA                               45
    SEAPORTS LIMITED AND ORS. [DEEPAK GUPTA, J.]

It would also be pertinent to mention that specific cargo in this very ·A
Policy has. been defined to be (i) containers, (ii) liquid, (iii)dry bulk. Letter
of Award was issued in favour of the appellant of the first Consortium ·
by the Paradip Port Trust on 29 .02.20 I 6.
       4. Aggrieved by this action, the second consortium filed a writ
petition before the Orissa High Court. The submission of unsuccessful ·B
bidders was that since the first consortiUl]l was already operating a bert.h
for dry cargo it could not have submitted its application to bid for the
berth in question which is also admittedly meant for dry cargo. It was
contended that as per the policy quoted above, if a private operator is
operating a berth he cannot be allowed to bid for the next berth for
handling the same cargo in the same port. This contention of the original c
writ petitioners was accepted by the Orissa High Court which interpreted
the Policy clause by holding that the word "next" in the Clause indicated
that a private operator cannot take part or bid for next successive berth
for the same cargo. The High Court, therefore, held that the application
for the first consortium JSW Infrastructure Limited, was "wrongly
considered and consequently set aside the award of Letter of Award in
favour of the first consortium and further directed that the Paradip Port
Trust may either accept the single remaining bid of the second consortium
of Respondent Nos. 1-3 after negotiating the price which should not be
less than the price offered by the consortium of JSW Infrastructure, or
it may invite fresh bids for the berth in question.                          E

      5. Aggrieved by the judgment of the High Court the first·
consortium and the Paradip Sea Port have filed the two appeals.
         6. We have heard learned senior counsi:I for the appearing parties.
  The contention of Mr. Kap ii Sibal, learned senior counsel appearing for     F
  first consortium is that the High Court has misinterpreted the Clause in
  question. According to him a plain and simple reading of the Clause
  clearly indicates that this Clause will only apply wheffa single private
  berth in port for a specific cargo is being tun by a private operator. He
  submi~ed that in the present case there are as many as 16 berths in
.-Paradip Port Trust, out of which 8 are being run by the Paradip Port         G
 Trust. One dry cargo berth is being run by the Indian Oil Corporation, a
 Public Sector Undertaking, 5 are being run by private operators and one
  was being run by the appellant. Letter of Award for another berth was
  issued in favour of the first consortium, which is the subject matter of
  dispute. He submitted that the purpose of this clause is to avoid monopoly
                                                                               H
46             SUPREME COURT REPORTS                             [2017] 2 S.C.R.



A    and the judgi;nent of the High Court is erroneous because it does not do
     away with the monopoly but only restricts a private operator from bidding
     in the next successive berth for the same type of cargo. Dr. A.M.
     Singhvi, learned senior counsel appearing on behalf of Paradip Port Trust
     submitted that the employer i.e., Paradip Port Trust is best qualified to
     interpret the terms and meaning of the terms of the tender and the High
B
     Court should not have interfered in the decision taken by the Paradip
     Port Trust. On the other hand, Mr. Gopal Subramaniam, learned senior
     counsel forthe second consortium submitted that the word "next" in the
     Clause cannot be treated to be superfluous and, according to him, the
     clause which. is the subject matter of interpretation in this case clearly
c    envisages that the private operator operating a berth cannot bid for the
     next successful berth for similar type of cargo.
           7. We have given our careful consideration to the arguments. This
     Court in Ramana Dayaram S/1etty vs. International Airport Autliority
     ofIndia' held that the words used in documents cannot be treated to be
D    surplusage or.superfluous or redundant and must be given some meaning
     and weightage. It was held as follows:-
             " ..... .It is a well-settled rule of interpretation applicable alike to
             documents as to statutes that, save for compelling necessity, the
             Court should be prompt to ascribe superfluity to the language of
E            a document "and should be rather at the outset inclined to suppose
             every word intended to have some effect or be of some use".
             To reject words as insensible should be the last resort ofjudicial
             interpretation, for it is an elementary rule based on common sense
             that no author of a formal document intended to be acted upon
             by the others should be presumed to use words without a meaning.
F            The court must, as far as possible, avoid a construction which
             would render the words used by the author of the document
             meaningless and futile or reduce to silence any part of the
             document and make it altogether inapplicable."
     This view has consistently held the field and was recently reiterated in
G    Central Coal Fields Limited and Anotlier vs. SLL-SML (Joint
     Venture Consortium and Ot/iers)1.
            8. On a bare reading of the Policy Clause some weightage and

     ' ( 1979) 3 sec 489
     ' (2016) s sec 622
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 JSW INFRASTRUCTURE LIMITED AND ANR. v. KAKINADA                                 47
    SEAPORTS LIMITED AND ORS. [DEEPAK GUPTA, J.]

meaning has to be given not only to the word "next" as done by the High          A
Court but also to the words "only one private operator" appearing in the
opening part ofthe Clause. The words "only one private operator" cannot
be treated as surplusage. The entire clause has to be read as a whole in
the context of the purpose of the policy which is to avoid and restrict
monopoly. In our opinion, this Clause will apply only when there is one
                                                                                 B
single private operator in a port. Ifthis single private operator is operating
a berth, dealing with one specific cargo then alone will he not be allowed
to bid for next berth for handling the same specific cargo. The High
Court erred in interpreting the clause only in the context of the word
"next" and ignored the opening part of the Clause which clearly indicates
that the Clause is only applicable when there is only one private berth          c
operator. It appears to us that the intention is that when a port is started,
 if the first berth for a specific cargo is awarded in favour of one private
operator then he cannot be permitted to bid for the next berth for the
 same type of cargo. However, once there are more than one private
 operators operating in the port then any one of them can be permitted to
                                                                                 D
 bid even for successive berths. In the present case, as pointed out above
 there already 5 private operators other than the first consortium.
       9. We may also add that the law is well settled that superior
courts while exercisin·g their power of judicial review must act with
restraint while dealing with contractual matters. A Three Judge Bench
of this Court in Tata Cellular vs. Union of India 3 held that (i) there          E
should be judicial restraint in review of administrative action; (ii) the
court should not act like court of appeal; it cannot review the decision
but can only review the decision making process (iii) the court does not
usually have the necessary expertise to correct such technical decisions.;
(iv) the employer must have play in the joints i.e., necessary freedom to         F
take administrative decisions within certain boundaries.
       10. In Jagdisfl Manda/ vs. State of Orissa' this Court held
that evaluation of tenders and awarding contracts are essentially
commercial functions and if the decision is bonafide and taken in the
public interest the superior courts should refrain from exercising their          G
power ofjudicial review. In the present case there are no allegations of
mala fides and the appellant consortium has offered better revenue sharing
to the employer.
3
    (1994)6SCC651
'   (2007) 14SCC517                                                              H



                                                                                      •
48             SUPREME COURT REPORTS                             [2017] 2 S.C.R.


A         11. In A/cons Infrastructure Ltd. Vs. Nagpur Metro Rail
     Corporation Ltd. & Anr. 5 This Court held as follows :-
              "14 ..... a mere disagreement with the decision making process
              or the decision of the administrative authority is no reason for a
              constitutional Court to interfere. The threshold of mala tides,
B             intention to favour someone or arbitrariness, irrationality or
              perversity must be met before the constitutional Court interferes
              with the decision making process or the decision.
                 xxx                     xxx                        xxx
                 16. We may add that the owner or the employer of a project,
c             having authored the tender documents, is the best person to
              understand and appreciate its requirements and interpret its
              documents. The constitutional Courts must defer to this
              understanding and appreciation of the tender documents, unless
              there is mala fide or perversity in the understanding or appreciation
D             or in the application of the terms of the tender conditions. It is
              possible that the owner or employer of a project may give an
              interpretation to the tender documents that is not acceptable to
              the constitutional Courts but that by itself is not a reason for
              interfering with the interpretation given.

E             17. In the present appeals, although there does not appear to be
              any ambiguity or doubt about the interpretation given by NMRCL
              to the tender conditions, we are of the view that even if there
              was such an ambiguity pr doubt, the High Court ought to have
              refrained from giving its own interpretation unless it had come to
              a clear conclusion that the interpretation given by NMRCL was
F             perverse or mala fide or intended to favour one of the bidders.
              This was certainly not the case either before the High Court or
              before this Court ...."
     The view taken in A/cons (supra) was followed in Monte Carlo Ltd.
     Vs. NTPC Ltd. 6 • Thus it is apparent that in contractual matters, the
G    Writ Courts should not interfere unless the decision taken is totally
     arbitrary, perverse or mala fide.
             12. Strong reliance has been placed on behalf of the second
     '   2016 SCC Online SC 940
     '   2016 SCC Online SC 1149
H
 JSW INFRASTRUCTURE LIMITED AND ANR. v. KAKINADA                                 49
    SEAPORTS LIMITED AND ORS. [DEEPAK GUPTA, J.]

consortium on the judgment rendered in APM Terminals B. V. vs. Union             A
of India and Another'. We are of the considered view that the said
judgment cannot be applied to the present case because in that case this
court considered the clauses of the contract. The policy which was
applicable inAPM Terminal, was notthe policy of2010 butthe policy of
2007, the wording of which is totally different. True it is, that in the said
                                                                                 B
judgment reference has also been made to the new policy but that was
not specifically dealt with by the Court, and the matter was decided on
an interpretation of the terms of the contract and the policy of2007.
        13. In view of the above discussion we are clearly of the view
that the High Court erred in interpreting the Clause in the manner which
it is done. As explained above, the Clause will apply only when there is         c
single private operator operating a single berth. Once there are more
than one private operators then the Clause will not apply. The decision
taken by Paradip Port Trust could not be termed to be arbitrary, perverse
or mala fide. Therefore, the High Court was not justified in setting aside
the same. In this view of the matter, both the Civil Appeals are allowed.        D
The Judgment of the High Court is set aside and the writ petition filed by
the second consortium before the High Court is dismissed.


Kalpana K. Tripathy                                           Appeals allowed.




'(2011 J 6 sec 756