LONDON: A nearly 10-year-long legal wrangle over the development of Puducherry port has reached a denouement in favour of the Government. In its ruling, an arbitration tribunal constituted under the Supreme Court Judges-D.P. Wadhwa and Doraiswamy Raju and former judge Allahabad High Court, I.P. Vasishth, spared the Government of paying over Rs.1,700 crore as compensation to the private company following the annulment of agreement in controversial circumstances.
The history of the Puducherry Port, which is a minor port, dates back to 10{+t}{+h}century. Situated at Ariyankuppam river mouth on the east coast of Bay of Bengal, the port was once a centre of international trade of commerce and lost it prominence at the end of French rule and for want of upgradation of facilities and infrastructure, compared to Chennai and Tuticorin Ports.
The Union Territory government represented by its Department of Ports entered into a concession agreement dated January 21, 2006 with Subhash Projects and Marketing Limited and Om Metals Limited, the consortium partners of Pondicherry Port Limited, a special purpose vehicle for the development of the Puducherry Port on BOT basis (Build, Operate, Transfer). The lease was executed and possession agreements were obtained on February 4 of the year.
Immediately, two public interest litigations were filed in the High Court by C.H. Balamohanan and Villianur Iyarkai Padukappu Maiyam represented by its secretary C. Sactivel seeking to quash the agreement and lease. They contended that it was only a real estate project in the name of port developer and the entire project was without any environmental clearance.
A Division Bench of Madras High Court, while disposing the writ petition, ordered that further development of the port by the private developer should be based upon the environmental clearance (EC) to be given by Ministry of Environment and Forests (MOEF). It also said the consortium should not indulge any real estate activity.
