LexRISHI KIRAN LOGISTICS PVT. LTD. versus BOARD OF TRUSTEES OF KANDLA PORT TRUST & ORS.
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[2014] 5 S.C.R. 411 RISH! KIRAN LOGISTICS PVT. LTD. '· A v. BOARD OF TRUSTEES OF KANDLA PORT TRUST & ORS. (Civil Appeal No. 4655 of 2014) APRIL 21, 2014 [SURINDER SINGH NIJJAR AND A.K. SIKRI, JJ.] Contract: B c Allotment of plots by Port Trust on lease hold basis - Letters of intent issued to prospective allottee, subject to CRZ cleara11ce - It took 5 years in getting CRZ clearance - Neither possession of plots given, nor payments received - Meanwhile price of property shot up - Port Trust cancelling D the tender process started 5 years ago - Held: A letter of intent is not intended to bind either party ultimately to enter into any contract - The question whether the letter of intent is merely ah expression of an intention to place an order in future or whether there is a final acceptance of the offer thereby leading E to a contract, is a matter that has to be decided with reference to the terms of the letter - When the LOI is itself hedged with the condition that final allotment would be made later after obtaining CRZ and other clearances, it may depict an intention to enter into contract at a later stage and the process F had not resulted in a concluded contract. Constitution of India, 1950: . Art. 226 - Port Trust - Proposal to allot plots on lease- hold basis cancelled - Cancellation challenged - Held: By G way of writ petition under Art. 226 only public/aw remedy can be,invoked - As far as contractual dispute is concerned that is outside the power of judicial review under Art. 226 with th~ sole exception in those cases where such a contractual 411 H 412 SUPREME COURT REPORTS [2014] 5 S.C.R .. A dispute has a public law element - The issue of there being a concluded contract is raised in a petition filed under Art. 226 and not by way of suit - In such proceedings main aspect which has to be considered is as to whether impugned · decision of Port Trust was arbitrary or unreasonable - In the B . instant case, the impugned decision of the Port Trust was not arbitrary, unreasonable or malafide, but was based on valid consideration, as larger public interest demanded fresh tender process in order to receive maximum amount. c D Administrative Law: Public property - Disposal of - Held: In auction of public property, it has to be ensured that public assets were not disposed of except for a fair price and in a fair and transparent manner. Promissory estoppels - Letters of intent (LOI) issued for allotment of plots on leasehold basis, subject to CRZ clearance - CRZ clearance received after 5 years - Tender process started 5 years back cancelled - Held: An LOI merely E indicates a party's intention to enter into a contract with the other party in future - It is not intended to bind either party ultimately to enter into any contract - LOI clearly mentioned that total premium amount in respect of each of the three plots (which runs into several crores in each case) was not to be F paid on the issuance of said LOI, since formal LOI or lease documents were to be executed only after CRZ clearance - High Court has, therefore, rightly observed that appellants did not alter its position to its prejudice pursuant to LOI to such an extent which could inspire the cowt to take the decision that holding the promisor to its representation is necessary G to do justice between the parties - Besides, specific r:learances on individual basis in this behalf were also to be obtained-· Doctrine of promissory estoppel has no application in the fact situation. H Pursuant to the notice inviting tenders (NIT) dated RISH! KIRAN LOGISTICS PVT. LTD. v. BOARD OF 413 TRUSTEES OF KANDLA PORT TRUST 12.3.2005, the appellant being one of the successful A bidders, was issued a letter of intent (LOI) stating that leasehold rights in respect of plot Nos. 14,15 and 17 were given for a premium of Rs.3,200/- per sq. mtr., Rs.3, 150/- per sq. mtr., and Rs.3,120/- per sq. mtr. respectively. The letter further mentioned that formal letter would be issued B after receipt of CRZ clearance in general. CRZ clearance was ultimately received on 16.8.2010. The Board of trustees of the Port-Trust, on 9.12.2010 decided to cancel the tender process started in 2005. The appellant and other tenderers were informed accordingly. Writ petitions c filed by the tenderers challenging•the decision dated 9.12.2010 of the Port Trust were dismissed. Dismissing the appeal, the Court HELD: WHETH
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