The Lieutenant Governor And ORS. v. Capt. Alaguraj And ORS.

IN THE HIGH COURT AT CALCUTTA

CIVIL APPELLATE JURISDICTION [CIRCUIT BENCH AT PORT BLAIR] APPELLATE SIDE Before: Hon'ble Justice Shampa Sarkar and Hon'ble Justice Ananda Kumar Mukherjee MA/34/2020 The Lieutenant Governor and others Vs.

Capt. Alaguraj & Others For the appellants : Mr. Shatadru Chakraborty, Mr. Ramendu Agarwal.

For the respondents/writ petitioners : Mrs. Anjili Nag. For the respondent Nos. 7 & 8 : Mr. Tulsi Lall. For the respondent No. 9 : Mr. A. Peter. Hearing concluded on: 25.04.2022 Judgment on: 29.07.2022 Shampa Sarkar, J.:- 1.

This appeal is directed against the Judgment and Order dated February 10, 2020 passed in WP No. 101 of 2018. By the impugned judgment, the learned Single Judge set aside and quashed the order dated June 29, 2012 (wrongly mentioned as June 29, 2014) and the communication dated January 24, 2017 (wrongly mentioned as order). The learned Judge further directed implementation of the direction of the Hon'ble Lieutenant Governor (HLG), for direct manning of officers at all levels, as per the news published in "The Daily Telegrams" on May 28, 2014. The approval, accorded by the HLG for extension of the contract with

the then existing contractor, namely M/s. ABS Marine Services Pvt. Ltd. (hereinafter referred to as 'ABS'), for a period of one year was upheld. 2.

The grounds of appeal are that the judgment amounted to interference with the policy of outsourcing. The policy was beyond the scope of judicial review. The direction of the HLG upon the Directorate of Shipping Services (DSS), to gear up and undertake manning of foreshore sector vessels, through in-house efforts, had been reviewed by the DSS. Due to practical difficulties which would be faced by the DSS in order to implement such direction, the prevailing system of outsourcing was decided to be continued. That being the policy adopted by the DSS and subsequently approved by the HLG, the Court did not have any authority to set aside such decision.

Moreover, although junior level officers in the rank of second officers and third engineers were available locally, availability of senior officers in the rank of Master, Chief Officer, Chief Engineer and Second Engineer were inadequate and those officers were required to be engaged from the main land. It was urged that reasons supplied by the DSS for not implementing the direction of the then HLG, had not been considered by the Learned Single Judge. Evaluation of all the pros and cons by the experts, led to the conclusion that engagement of officers from the mainland would involve payments for advance booking of air tickets, hotel accommodation etc. With the variation in the hotel tariffs and air ticket prices, it would not be possible to effectively handle such aspects of advance payment.

Fluctuating salaries of such officers, based on market availability and demand, was a further impediment.

approval of the competent authority at every stage, would paralyse the whole system. It was also found that local officers formed associations and unions, which would lead to agitations, protests and disruption. It was apprehended that there were chances of more interference and undue influence by the unions in the decision making process, which would not be in the interest of the administration, in the long run. Chances of litigation would also increase. According to the appellants, these aspects had not been considered by the learned Single Judge.

3.

It was urged by Mr. Chakraborty, learned Advocate for the appellants that the Learned Judge failed to appreciate that the HLG had agreed to the suggestions given by the DSS, to continue outsourcing of manning of officers. The direction to start in-house manning, had been reviewed and found to be unworkable. The recommendations were placed before the Commissioner-cumSecretary Shipping, for administrative approval of the HLG. The HLG gave his approval to the recommendations, on October 29, 2016. All the difficulties were placed before the HLG in the form of inter-departmental notes. The HLG agreed to the proposal for manning of foreshore sector vessels by outsourced agents, appointed through competitive tendering. As outsourcing of such services through qualified and authorized manning agents, was the trend followed worldwide, it was urged that the decision of the Administration being in consonance with the universally accepted policy, could not be interfered with, by the writ court.

4.

Mr. Chakraborty urged that, the Learned Judge had misconstrued the approval note of the HLG. Option (a) which had been approved by the HLG was the suggestion to continue outsourcing of manning contracts, but the learned Judge wrongly held that option 'a' was the suggestion to extend the existing contract with ABS. It was further urged that the Learned Judge erred in holding that the Administration was favouring the contractor, whereas, attempts at etendering had failed on two occasions. It was pointed out that when the judgment was delivered, the extended period of one year was already over, and the finding of favouring ABS was erroneous and not based on the records. Learned Advocate submitted that the learned Judge failed to consider that the agreement between ABS and the department, contained a clause, which mandated that the manning agents should employ local manpower with requisite qualifications to the maximum and candidates from outside should be considered only in case suitable local candidates were not locally available. 5.

Learned advocate went on to argue that manning arrangements had thereafter been entrusted to the Shipping Corporation of India (SCI), on a government to government, nomination basis. The execution of the formal agreement with SCI was under process and had not been finalized. He emphasized that the petitioner could not seek an affirmative action for creation of a berth, as a matter of right. The petitioners being high ranking merchant navy officers with very high salary did not require rostering for the purpose of securing their employment in the foreshore sector vessels.

6.

That neither the Merchant Shipping Act nor the Rules, cast any obligation upon the DSS to maintain a roster for the officers. The Merchant Shipping (Seamen's Employment Office) Rules, 1986, did not apply in this case. That the government had altogether done away with the system of rostering. Reliance was placed on the DGS Order 1 of 2001. It was argued that in the preliberalisation era, rosters were maintained only for crew members and petty officers, but not for officers such as Captains, Masters, Chief Officers, First, Second and Third Officers and Engineers. The impugned judgment offended the economic policy of liberalisation. Rostering in the present case would unfairly restrict access to the employment of eligible officers from the main land and would also exclude competent officers from being engaged. Mr Chakraborty relied on the following decisions:- a) Small Scale Industrial Manufactures Associate (Registered) vs. Union of India & Ors. reported in (2021) 8 SCC 511.

b) Andhra Pradesh Public Service Commission vs. Baloji Badhavath & Ors. reported in (2009) 5 SCC 1.

c) Bir Singh vs. Delhi Jal Board & Ors. reported in (2018) 10 SCC 312. 7.

Mrs. Nag, learned advocate for the writ petitioners submitted that the authorities had decided to comply with the direction of the HLG, dated May 28, 2014. On the basis of such direction of the HLG, the department undertook the exercise for creation of infrastructure for direct manning of officers for foreshore sector vessels. WP 520 of 2012 had been disposed of by this Court with the

observation that the grievance of the petitioners had been met as the HLG had already directed in-house manning. This gave rise to a legitimate expectation that the petitioners would be rostered and in-house manning of the officers would be implemented. Therefore, subsequent review of the direction of the HLG, by the DSS, was not permissible and the learned Judge had rightly directed implementation of the direction dated May 28, 2014. 8.

Learned Advocate went on to urge that the authorities decided to form a suitable cell to undertake the process for preparation of the roster of officers, for the foreshore sector vessels. Thereafter, false circumstances were created in order to abandon the process, based on extraneous considerations and in order to favour the existing contractor. The note sheets which had been annexed to affidavit-in-opposition indicated that the authorities tried to frustrate the direction of the HLG. The communication of the Deputy Director (Shipping) dated January 24, 2017, was issued pursuant to a review of the earlier direction of the HLG. According to the writ petitioners, the question of review of the direction of the HLG could not arise as the highest authority in the Administration had already directed direct manning.

Moreover, the contention of the appellant that the HLG had reviewed his own decision was not available from the records. It was urged by Mrs. Nag, that once a writ petition had been disposed of on the basis of the direction of the HLG to start direct manning of the officers, by maintaining a roster, the authorities could not frustrate the claims of the writ petitioners, by going back on such a decision.

9.

According to Mrs. Nag, the petitioners had a legitimate expectation that manning would be done directly by the DSS and a proper roster would be maintained, for the said purpose.

Mrs.

Nag submitted that the authorities/appellants were estopped from reviewing the direction of the HLG, with regard to in-house manning of officers. Mrs. Nag vehemently contended that the Merchant Shipping (Seamen Employment Office) Rules 1986 provided that a general roster as also a company roster should be maintained. The general roster was to be prepared in consultation with the Seamen Employment Board and the company roster was to be prepared by the Shipping Company. She urged that even if the Seamen Employment Office had been done away with, by the order of the Director General of Shipping No. 1 of 2001 dated 27.03.2001, the rules with regard to maintenance of roster could not be either changed or abrogated.

Reference was made to the orders dated December 14, 2017, December 22, 2003, June 13, 2003, June 18, 2003, February 10, 2003 passed in WP No. 25683(W) of 2017 [Capt. S. Saravanan & Others vs. The Union of India & Others], WP No. 190 of 2002 [Partha Saha & Others vs. the Union of India & Others], WP No. 144 of 2002 [National Union of Seafarers Union vs. the Union of India & Others], WP No. 40 of 2003 [Forward Seamen Union of India & Anr. vs. Union of India & Others] and WP no. 18 of 2002 [Dharmender Lall vs. Union of India & Others] respectively, passed by the High Court, in support of her contention that the maintenance of roster had always been the practice since long, so that all the seamen could be engaged on rotational basis. The officers were also covered by the definition of "seamen''.

10.

According to Mrs. Nag, even if exemptions were given to the applicability of Section 456 of the Marine Services Act 1958, in respect of Mumbai, Chennai and Kolkata, the independence granted to the Indian shipping companies to employ qualified seafarers from the open market, would not mean that the company was not required to prepare a roster. The roster was to be prepared on the basis of a selection process.

11.

Mrs. Nag refuted the contentions of Mr. Chakraborty, with regard to interference of the learned Judge in a policy matter and submitted that the policy decision could not contravene the provisions of the Merchant Shipping (Seamen Employment Office) Rules 1986.

12.

According to Mrs. Nag, the provisions of Merchant Shipping (Seamen Employment Office) Rules 1986, clearly envisaged preparation of roster and therefore, the authorities could not ignore the same for the foreshore sector. She urged that the authorities were maintaining a roster for the Mainland Island Sector. That there were enough materials on record which would demonstrate that senior level officers were available locally in the market, and as such, the question of outsourcing would not arise at all. The records and the note sheets also did not reveal that the HLG had approved the recommendation of the DSS, to the effect that manning of foreshore sector vessels should continue to be outsourced.

13.

Before dealing with the rival contentions of the parties, the facts which led to the present proceedings are required to be discussed. Some Navigational Watch Keeping Officers, including some of the writ petitioners, being residents of

Port Blair, filed a writ petition. They apprehended that upon attaining the higher qualification of Navigational Watch Keeping Officers, they would be derostered. They had been rostered earlier, as crew members. The writ petition was registered as WP no. 201 of 2011. They prayed for a direction upon the DSS to be continued in a roster, to be prepared for officers. Their prayer was that work should be allocated to them in terms of such roster, so that continuity in their appointment on rotational basis was maintained. This court disposed of the writ petition with a direction upon the Director General of Shipping, to consider their cases sympathetically and decide whether maintenance of a roster was permissible under the Merchant Shipping Act, 1958 or under any other directive or instruction of the Director General of Shipping.

The Secretary of Shipping, Andaman and Nicobar Administration, in compliance with the order of the High Court passed in WP no 201 of 2011, called the petitioners for a hearing and by order dated June 29, 2012, rejected the claim of the petitioners for maintenance of a separate roster on the ground that the manning contract agreement, which had been signed by the Administration and ABS, (the then manning contractor), provided adequate opportunity and priority for employment of locally available manpower.

14.

It was also stated in the order dated June 29, 2012 passed by the Secretary (shipping) that the matter should be taken up with ABS and the SCI so that the cases of the petitioners therein and other locally qualified officers, would be given a preference in respect of their engagement on the foreshore sector vessels and

also in the Mainland Island sector. Challenging the above-mentioned order, W.P 520 of 2012 was filed.

15.

In WP 520 of 2012, the petitioners contended that they were residents of Port Blair and had been serving as a roster crew, under DSS. As crew members, they were employed in various vessels in the Andaman and Nicobar Islands. When they became certified officers, the authority had decided to delete their names from the roster as they ceased to be crews, upon attaining the status of officers. The petitioners were aggrieved by such derostering. The petitioners prayed for a direction upon the DSS to maintain a roster and ensure direct employment of the petitioners, without engaging manning agents. According to the petitioners, manning of officers through manning contractors for foreshore sector vessels deprived the inhabitants of the island. 16.

During the pendency of the writ petition, a news item was published in "The Daily Telegrams" on May 28, 2014. The press note stated that, while approving further outsourcing for a period of 2 years, the HLG had directed that in the interest of the locally available candidates, direct manning of officers must be undertaken by the department. The said writ petition was disposed of, upon noting the submission of the learned Advocate for the petitioners that their grievances had been met, in view of the direction of the HLG to undertake direct manning of officers, for the foreshore sector vessels. 17.

The direction of the HLG had been taken up internally by the DSS. The direction for in-house manning was evaluated. The actions which were decided to

be taken, in order to accomplish the task, as per the direction of the HLG, were as follows: - "a) Setting up of a suitable cell under the DSS for contracting and regulating the officers required for manning of foreshore sector vessels. b) The appointment of a suitable consultant/staff required for control and manning of the above cell, if required on contract basis for efficient running of vessels.

c) Collection and maintenance of data base on NCV officers required for manning the foreshore vessels, and their availability in the market including within the Islands and Mainland."

18.

The department set up a separate cell for undertaking in-house manning of the foreshore sector vessels. The cell was to be manned by such qualified mariners who are well versed with the maritime rules as also qualified and competent, to run the manning cell. Thus, the department undertook the exercise for appointment of master mariners/consultants so that the matter relating to inhouse manning could be suitably assigned to the appropriately qualified person/team, so appointed. In the first call for the interview, the turnout was inadequate and suitable master mariners were not available. The process was decided to be repeated once again, in order to obtain larger participation of suitable master mariners/consultants.

The assessment as to the availability of locally qualified officers and all other cadres for manning the 17 foreshore sector vessels was undertaken by way of a market survey. It was decided that a survey would be made to ascertain whether suitably qualified officers as per manning requirements, were available locally for in-house manning of the foreshore sector vessels. A data base was to be prepared as per the result of the survey.

19.

For preparation of the database and survey, an insertion was put in "The Daily Telegrams" inviting applications from qualified local officers in different grades and categories. The personnel department of the Administration was also requested to post one head clerk and two LGCs for manning the new cell, but no clerical staff could be posted due to shortage of staff. By a letter dated January 24, 2017, the Deputy Secretary of Shipping, A&N Administration intimated the General Secretary, Seafarers Confederation of India, that upon collecting the data on the availability of officers locally for in-house manning of foreshore sector vessels, it was found that junior level officers in the rank of Second Officers and Third Officers were available in adequate numbers, but senior officers in the rank of Masters, Chief Officers, Chief Engineers, Second Engineers, etc were inadequate. Such officers were required to be engaged from the mainland. Inhouse manning of the vessels was not found to be practical for the reasons, which were elaborately discussed in the said letter. 20.

In order to keep pace with the worldwide trend of outsourcing of manning services through qualified and authorized manning agents, and upon review of the decision of the HLG, the DSS had ultimately arrived at a conclusion that manning of the vessels may be continued to be outsourced through competitive bidding/tendering. The existing contract was proposed to be extended for a further period of one year, till a fresh tender was finalised on the same terms and conditions. Their suggestions were approved by the HLG by his note. An e-tender notice dated 25th/28th August 2017, was floated. Clause 2.6 of the earlier

agreement with the manning contractor was sought to be replaced by clause 2.1.6.

Clause 2.6 read as follows:- "2.6- The Manning Agent should employ local manpower with requisite qualification to the maximum. Candidates from outside should be considered only in case suitable local candidates are not available." Clause 2.1.6 read as follows:- "2.1.6- Preference to be given to suitably qualified candidates available locally."

21.

The inclusion of clause 2.1.6 by replacing clause 2.6 was challenged in WP 25683(W) of 2017. The inaction of the respondent authorities in not maintaining a proper roster, despite the direction of the HLG on May 28, 2014 was also challenged. The issue with regard to non-preparation of the officer's roster by the DSS was not decided by the Court. The said point was left open to be decided in an appropriate proceeding. However, the writ petition was disposed of by an order dated November 14, 2017, with a direction that clause 2.6 as quoted herein above, should be retained and the newly inserted clause 2.1.6 should be replaced to that extent. The e-tender notice was set aside. The said order was passed to grant preference to the locally qualified candidates and to balance the socioeconomic condition of the islanders. 22.

Thereafter, challenging the order dated June 29, 2012, issued by the Secretary (Shipping) in compliance with the direction passed by the High Court in WP 201 of 2011, by which the claim for rostering had been rejected and the

communication dated January 24, 2017, made by the Deputy Secretary, A&N Administration to the General Secretary, Seafarers Confederation of India, WP no. 101 of 2018 was filed. The writ petitioners urged that the decisions of the authority dated June 29, 2012 and January 24, 2017 were illegal and arbitrary. Once the High Court had disposed of the earlier writ petition being WP 520 of 2012 on June 30, 2014, with the observation that the grievances of the petitioners therein, had been met, in view of the direction of the HLG for direct manning, the authorities were under an obligation to comply with the direction of the HLG dated May 28, 2014. It was urged that 32 candidates had applied for the post of Master, 24 for the Chief Officer, 23 for Chief Engineer and 42 for the Second Engineer.

In order to maintain a roster, the number of candidates should be 140 percent more than the available posts. There were 17 posts and 140 percent of 17 were 23.8. The data collected by the appellants indicated that adequate number of officers of different grades, including high ranking officers, were locally available. Thus, the question of outsourcing of manning contract did not arise.

23.

It was the stand of the appellants before the learned Single Judge, that the direction of the HLG dated May 28, 2014 was evaluated for the purpose of implementation. On review, it was found that in-house manning of foreshore sector vessels by the department would not be practical. Suggestions were made by the DSS in the note sheet to continue with the practice of outsourcing, which was placed before the HLG, for approval.

24.

It was urged by the appellants before the Learned Single Judge that due to non-availability of adequate number of in-house officers of senior rank and given the worldwide trend of liberalization of the economy, it was decided by the DSS that the policy to outsource manning of officers, would be a better option. The suggestion was accepted by the HLG and the earlier direction for in-house manning was reviewed.

25.

According to the appellants, the direction of the HLG was assessed and evaluated. Finding the said direction to be impractical and difficult to implement, recommendations were made. By a note dated October 29, 2016, the HLG approved the proposal for extension of the tenure of the existing manning contract with ABS, for a further period of one year. The suggestion to continue outsourcing of manning for the foreshore sector vessels, through competitive tendering (option 'a') was also approved by the HLG. 26.

The Learned Single Judge upon considering all the issues and the fact that ABS had been permitted to continue as the manning agent allowed the writ petition, by making observations of favouritism and deprivation. The order dated June 29, 2012 and the communication dated January 24, 2017, were quashed. The approval given for extension of the manning contract with ABS for a period of one year was upheld. The learned Judge held that the direction of HLG published on May 28, 2014 in "The Daily Telegrams" must be implemented without further delay and within a period of six weeks from the date of the judgment. 27.

The Learned Single Judge arrived at a conclusion that it was a matter of record that adequate local senior officers of the rank of Masters, Chief Officers,

Chief Engineers and Second Engineers were available. Outsourcing of manning contract by the department was not required in view of such availability. If upon floating the tenders for engagement of officers of the rank of Masters, Chief Officers, Chief Engineers and Second officers, adequately qualified in-house candidates were not available, the department could undertake the recourse of outsourcing. This appeal has been filed challenging the order of the learned Single Judge, dated February 10, 2020.

28.

Being conscious of the scope for interference in an intra-court appeal, we are now to analyse whether the impugned judgment calls for any interference or not. The learned Judge directed implementation of the press note. The press note stated that the HLG was of the opinion that qualified officers, especially in the 'junior cadres', were available within the island, and the DSS must "gear up" and "undertake" direct manning of officers for the foreshore sector vessels. Such direction was given, while approving the policy of outsourcing for a further period of two years.

29.

Outsourcing of manning contracts to outside agents had been undertaken since the very inception, when the vessels had been commissioned in 2001-2002. Such policy had been followed by the Administration, all along. This fact finds reference in the press note itself. As per the appellants such policy had been resorted to, due to non-availability of qualified officers in the island and also owing to lack of suitable infrastructure in the department. 30.

The HLG was aware that the said proposal for direct manning could not be implemented instantly, as such he also decided to permit continuation of the

policy of outsourcing for a period of two years. The direction of the HLG for direct manning was found to be neither feasible nor practical. 31.

By a communication dated October 21, 2016, the Officer-in-Charge (planning) DSS intimated the Deputy Secretary (Shipping) Andaman and Nicobar Administration, about the difficulties which would be faced. Proper review of the situation was made. Efforts to implement the direction of the HLG dated May 28, 2014, were carried out. The entire details of the exercise that was undertaken in order to explore the possibility of direct manning had been explained in the said letter. The letter is quoted below:- "To.

The Deputy Secretary (Shipping) A&N Administration Port Blair Sub: Manning of 17 foreshore sector vessels-reg 1 am directed to refer to the A & N Admin's letter No. 49-268/2014-TR(Vol. III) dated 13 October, 2016 and the Manning Contract dated 16.02.2015 concluded between the A & N Administration and M/s ABS Marine Services Pvt. Ltd., Chennai for manning of the 17 foreshore sector vessels which is valid till 30.11 2016 and submit the following for consideration: a) An exercise was carried out by the Directorate for gathering data regarding locally available officers to ascertain feasibility to undertake inhouse manning of the foreshore vessels. It is observed that although the lower rank officers viz. 3 Engineer and 2nd Officer are available in adequate numbers senior officers such as Masters, Chief Officers, Chief Engineers and 24 Engineers who are crucial part of the crew are not available locally in adequate numbers to cater for all ships of the Foreshore sector needing therefore engagement of such senior officers from the Mainland.

b) Engagement of Marine officers from mainland will involve payments for advance booking of airline tickets, hotel accommodations etc which the Department/ A & N Administration may not be able to undertake

effectively, as the rates for these vary almost on daily basis, and advance payments are not permitted.

c) Salaries of the merchant navy officers are also not fixed and fluctuate (increase/decrease) regularly based on the market availability/ demand. As a Govt. organization, however, the Directorate of Shipping Services would not be able to keep up with so frequently fluctuating wages, which would require continuous approvals.

d) The trend in the recent times has been that the local officers have formed various unions and have been on one pretext or the other forwarding various representations. In case the in-house manning is implemented there are chances more unions interfering and trying unduly to influence the decision making process of the A & N Admn/DSS which may not be in the overall interest of the organization in the long run. e) A case against the engagement of local officers only for such works is also pending before the Hon'ble High Court bench of Calcutta at Port Blair. In case of an adverse judgement/order in the case, we may have to give equal opportunity to all qualifying candidates including the ones from mainland.

In view of the situation explained above and also the fact that outsourcing of such services through a qualified and authorized Manning Agent is the trend followed world over due to ease of implementation, the following options are available/recommended:

a) Inviting a fresh tender for manning the 17 foreshore vessels in which case extension of the current contract till finalization of the new contract could be accorded since conclusion of fresh tender is likely to take some time.

b) Handing over of officer manning of these vessels to the Shipping Corporation of India at the prevailing rates of current contract in which case also extension of the current Manning contract will need to be extended till finalization of the contract with SCI since the same is likely to take some time after obtaining their concurrence. c) Extension of the current manning contract on the same terms and conditions with the existing Manning Agent for a further period of 1 year wel. 01.12.2016 in accordance with Clause 3.14 of the agreement which provides for such extension.

In view of the circumstances explained above, approval may kindly be accorded for extension of the current Manning contract either for a period of one year as explained at (c) above or till the time fresh tender is invited/Manning Agreement is finalized with SCI as explained at (a) & (b) above respectively.

Yours faithfully, Officer-in-Charge (Plg.)"

32.

Having gone through the entire process and having made several attempts at trying out the prospect of direct manning, severe difficulties were faced. Such difficulties were as follows:- "(i) Engagement of officers from mainland will involve payments for advance booking of air tickets, hotel accommodation etc., which the department may not be able to undertake effectively as the air fare varies on daily basis and advance payment is not permitted.

(ii) Salaries of Merchant Navy Officers also fluctuate regularly based on market availability/demand and as a Government organization, the department may not be able to keep up with so fluctuating wages without approval of the competent authority on each occasion. (iii) The local officers have formed different Associations and have been submitting representations on one or the other pretext. In case the department undertake the in-house manning, it is apprehended that there are chances of more interference and unduly influence in the decision making process, which may not be in the interest of the Administration in long run.

(iv) The Non-local officers have filed separate petitions before the Hon'ble High Court against the provision of the existing agreement relating to giving preference to local officers and these cases are pending adjudication." 33.

As already discussed earlier, outsourcing of manning contract was prevalent since 2000-2001, when the foreshore sector vessels started operating. This was the existing policy which was sought to be reviewed by the Administration and the HLG had directed the department to 'gear up' and 'undertake' direct manning. Such direction was given, while approving the system of outsourcing of manning of the foreshore sector vessels for a further period of two years from May 28, 2014. Thus, the period of two years was available to the

department, to explore the system of direct manning, by altering the earlier system/policy. The HLG was also conscious that considerable time and effort would be required for implementation of such direction. That was why outsourcing had been approved by the HLG, for a further period of two years. The prospects of implementation of the direction for direct manning, was analyzed, evaluated and considered. Several steps were also undertaken for such purpose. Having found serious bottle necks and the impediments, including threats of litigations, union problems, financial constraints etc., the DSS informed the Administration, about such problems and gave its suggestions as follows:- "(a) The manning of these vessels may continue to be outsource through competitive tendering, as hitherto, since outsource of such services through qualified and authorized Manning Agent is the trend followed worldwide;

OR (b) Handing over the manning of these vessels to SCI on the existing manning fee; and (c) Extension of the existing manning contract with M/S AB Marine Service Pvt. Ltd., Chennai on the existing manning fee, terms & conditions, for a further period of one year accordance with clause 3.14 of the contract agreement or the alternative arrangement is made, whichever is earlier." 34.

The note sheet was placed before the HLG and HLG approved the suggestion for outsourcing and also approved the proposal at c(Z), which was for extending the existing contract with ABS for one year. 35.

It appears that the Learned Judge was persuaded to pass the impugned judgment on the ground that the direction of the HLG dated May 28, 2014 could not be reviewed by the DSS. According to the Learned Single Judge, the HLG had

only approved the recommendation for extension of the manning contract of ABS for a further period of one year in terms of clause 3.14 of the contract. These findings of the Learned Single Judge are beyond the records placed by the appellants. The HLG had directed the department to 'gear up' and 'undertake' direct manning of officers, in view of the availability of junior officers, locally. Such direction, was given while approving the system of outsourcing of manning contract for a further period of two years. Such direction was published in the new paper on May 28, 2014. When the department found several difficulties in direct manning, notes were placed before the HLG. On October 29, 2016, the HLG himself had written a note which read as follows:- "Option (a) is recommended. Further the existing contract which is due to expire on 30.11.2016 needs to be extended. Hence 'Z' at para 59 may be approved."

The options 'a' is quoted below:- (a) The manning of these vessels may continue to be outsource through competitive tendering, as hitherto, since outsource of such services through qualified and authorized Manning Agent is the trend followed worldwide;

However the learned Judge mistook option 'c' as option 'a'. Option 'c' is quoted below:- (c) Extension of the existing manning contract with M/S AB Marine Service Pvt. Ltd., Chennai on the existing manning fee, terms & conditions, for a further period of one year accordance with clause 3.14 of the contract agreement or the alternative arrangement is made, whichever is earlier.

36.

The Learned Judge had come to a finding that the writ petitioners who were local officers were being deprived from being employed as the manning

contractor did not give any preference to them. However, no such case was made out in the writ petition and there was no evidence on record which would show that the petitioners were suffering from unemployment, on account of such outsourcing. The writ petitioners did not produce any document or evidence in this regard. These issues were neither pleaded nor argued. The finding that the Administration wanted to favour the private manning contractor is also erroneous and not based on materials available before the learned Judge. It appears that open tenders were called, but the tender processes were cancelled due to irregularities. When the judgment was delivered the extended period of the contract with ABS had also expired. The learned Judge travelled beyond the pleadings and the records.

37.

The other finding that adequate number of senior officers in the rank of masters, chief officers, chief engineers, and second engineers were available locally, and as such direct manning could be easily implemented, is also incorrect. Technically qualified experts who were involved in the operation of the vessels were better equipped to understand whether the existing policy should be changed or not. They came to a conclusion that not enough officers were available locally and engagement of officers directly from the mainland would give rise to further problems. Whether the profile of the officers who had responded to the advertisement would match with the requirements of the industry was a vital consideration and the Court should not have ignored such aspect. The DSS was better equipped and they were experts to decide on the issue of non-availability of eligible officers, locally. The numbers which were collected by the writ petitioner

to demonstrate availability of local officers, could not be an indicator of the efficiency of such officers. Moreover, neither from the writ petition nor from the judgment impugned, does it appear that the Administration was under a legal or statutory obligation to start direct manning. Outsourcing of manning contracts was the existing norm. The same was revisited and reviewed. Possibility of alteration was explored. Ultimately, the practical problems which were expected to surface were discussed and the HLG was approached once again with suggestions. The existing policy was found to be more convenient and workable. It was made clear by the Administration that the existing policy of outsourcing of manning contract, through open competitive tender, would continue.

This decision was taken as a matter of policy and the learned Judge erred in directing direct manning, without considering that judicial review of this policy decision was not permissible. The learned Judge did not come to any finding of arbitrariness or illegality in the policy decision. The constant policy of the Administration had been that local persons should be given preference and only when the local persons were not available, should the contractor appoint officers from the mainland or outside the island. Thus in every manning contract, a clause to that effect had been incorporated, in order to protect the islanders. 38.

This approval of the HLG and the opinion of the administration was intimated to the DSS by the Deputy Secretary of Shipping by a communication dated November 9, 2016, which read as follows:- "To The Director of Shipping Services,

A&N Islands, Port Blair.

Sub: Manning of 17 foreshore sector vessels - Regarding. Sir, I am directed to refer to your letter No. 1-12/DSS/PLG/ABS/ Manning/Corr/2016/2560 dated 21st October, 2016 on the above subject and to convey the approval of the Competent Authority to the following proposals:

(a) To continue the outsourcing of officer manning of 17 Nos.75/100/150 pax foreshore vessels through competitive bidding, as hitherto; and (b) To extend the manning contract in respect of these vessels with M/s ABS Marine Services Pvt. Ltd., Chennai on the same manning fee and terms & conditions, as stipulated under the existing contract agreement, for a further period of one year with effect from 01.12.2016 or till fresh contract is finalized/alternative arrangement is made, whichever is earlier. Yours faithfully, (S. Subhakar Rao) Deputy Secretary (Shipping)"

39.

The decisions which were relied upon by Mrs. Nag indicate that the system of rostering of crew had been prevalent. Those decisions do not reflect that officers were also rostered. Their manning was always done through the outsourced agents. It appears that the DSS endeavoured to initiate the direction of in-house manning and proposed setting up of a separate cell, for undertaking such in-house manning. The crew cell of the department was entrusted with the task of conducting a market survey. The said survey was undertaken to verify the quality of locally available cadres of every rank for foreshore sector vessels. The Learned Judge failed to appreciate that upon undertaking the exercise to explore the possibility of in-house manning as per the decision of the HLG, it was found

by the DSS that the proposal for direct manning was not feasible, especially with the policy of liberalization and with the changing market conditions and fluctuating wages/salaries of the officers. The DSS not only lacked the competence and wherewithal, but also the infrastructural facility to man the vessels, directly. Upon reviewing all these aspects, it was decided that manning of vessels must be continued to be outsourced through competitive bidding/tendering. The HLG agreed with the suggestions made by the department.

40.

The claims of the writ petitioners were founded only on the press note. Such press note did not create a vested right. The Learned Judge also did not take into consideration whether any particular law was being violated by the authorities. It was not the case of the writ petitioners that they were either deprived of being engaged or any wrong had been caused to them by preferring outsiders. In the absence of any specific plea that the petitioners were not given a preferential treatment in their employment over similarly qualified officers from the mainland, this bench is of the view that the Learned Judge had erred in directing direct manning, inter alia, holding that the petitioners were deprived from employment. Such conclusion is neither backed by any data nor by any evidence. None of the problems which had been enumerated by the DSS in their communications have been discussed in the judgment. The note of the HLG was misconstrued.

41.

There is no quarrel with the proposition of law that a policy once formulated may not be good forever and the authority was perfectly competent to

explore the possibility of starting in-house manning, by changing the existing policy according to the changing circumstances and availability of officers within the island. The decision of the HLG to 'gear up' and 'undertake' manning of officers directly was in the nature of a proposed alternation to the existing policy. The HLG himself thereafter perused the notes prepared by the DSS indicating the difficulties and being so convinced, approved the recommendation of outsourcing and also the recommendation to extend the existing contract for a further period. This was entirely a policy matter which was neither found to be arbitrary nor irrational, by the learned Judge.

42.

It is nobody's case that the policy of outsourcing of manning of the officers, which had continued for so long, was either arbitrary or based on extraneous considerations or was in violation of the Constitution of India. The writ petition did not indicate as to how, the hitherto existing policy had worn out its utility and was required to be changed.

43.

The scope of judicial review of governmental policy is now well defined. Courts do not and cannot act as appellate authorities by examining the correctness, suitability and appropriateness of a policy. Nor are the courts advisors to the executive on matters of policy, which the executive is entitled to formulate. The scope of judicial review while examining a policy of the government, is to check whether it violates the fundamental rights of the citizens or in violation of the fundamental rights guaranteed by Constitution or opposed to any statutory provision or is manifestly arbitrary. Courts cannot interfere with the policy either on the ground that it is erroneous or on the ground that a better,

fairer or wiser alternative is available. Legality of the policy, and not the wisdom or soundness of the policy, is subject to judicial review. 44.

A policy once formulated is not good for ever. It was perfectly within the competence of the Andaman Administration to explore the possibility of direct manning by altering the earlier policy as per the direction of the HLG. However, the compulsions of circumstances and the imperatives of economic considerations, led to the final decision to continue with the existing system of outsourcing. The learned Judge could not issue directives as to how the Administration should function. The Court could only see that the Administration did not act arbitrarily and did not discriminate amongst the officers. It was entirely within the reasonable discretion of the Administration, to formulate its own policy to outsource manning of foreshore sector vessels, at the officer level. While doing so, the Administration could also stick to the earlier policy. Reference is made to the decision of the Hon'ble Apex Court in the matter of Col. A.S. Sangwan v. Union of India reported in 1980 Supp SCC 559. 45.

The Court cannot ordinarily interfere, since these policy matters are based on expert knowledge. The Courts are not equipped to question the correctness of a policy decision. This, however, does not mean that the courts have to abdicate their right to scrutinize whether the policy in question, has been formulated, keeping in mind all the relevant factors and the said policy is free from irrationality, arbitrariness and unreasonableness. The materials on record should have been analysed by the learned Single Judge to ascertain the fairness and legality of the policy.

46.

Any decision, be it a simple administrative decision or a policy decision, if taken without considering the relevant factors, can be termed as an arbitrary decision. Such policy can be struck down being violative of the mandate of Article 14 of the Constitution of India. Judicial review is permissible in such cases. Thus, the position of law is that, even if the decision taken by the government does not appear to be agreeable to the Court, it cannot be interfered with. In this case, all the factors were taken into consideration by the DSS and thereafter the decision was taken to stick to the policy of outsourcing. 47.

In Balco Employees' Union (Regd.) v. Union of India, reported in (2002) 2 SCC 333, the Hon'ble Apex Court held that the function of the Court was to see that lawful authority was not abused, but not to appropriate to itself, the task entrusted to that authority.

48.

It is well settled that a public body invested with statutory powers, must take care not to exceed or abuse its power. It must act in good faith and it must act reasonably. Courts are not to interfere with the policy which is the function of experts. It is not the function of the courts to sit in judgment over matters, of economic policy and this must necessarily be left to the expert bodies. 49.

It is evident from the above, that it was neither within the domain of the learned Judge nor within the scope of judicial review, to embark upon an enquiry as to whether the particular policy of outsourcing was correct or not or whether a better public policy could be evolved by practicing direct manning. Moreover, the Finance Rules of the Government of India permit outsourcing.

50.

The Hon'ble Apex Court in Small Scale Industrial Manufactures Association(Registered) vs. Union of India and Others reported in 1980 (2021) 8 SCC 511, held that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. When government forms its policy, it is based on a number of circumstances on facts and law, including constraints based on its resources. 51.

At present, the Shipping Corporation of India is working as the manning agent and the contract is yet to be finalized. The writ petitioners have not been able to substantiate that the erstwhile manning agent had acted with bias and malice towards them. It is not for the writ petitioners to suggest what policy must be adopted. When they had challenged the existing policy of outsourcing, the onus was upon them to prove that the policy was either irrational or arbitrary or in violation of the Constitution and the laws. Moreover, it has also been the consistent policy of the Administration, that locally available suitable officers must be appointed to the maximum and only if they were not available, could outsiders be appointed. The interest of the locals/islanders had been protected so far.

We also direct that a similar clause shall be inserted in every contract with the manning agents hence forth, even with Shipping Corporation of India which is a Government of India undertaking and State under Article 12 of the Constitution of India. The rights of the islanders (writ petitioners and officers), must be protected to that extent.

52.

In Laxmi Prasad Dubey & Others vs. Union of India & Others decided in Writ Petition No. 22083/2012 the Madhya Pradesh High Court held that the

concept of legitimate expectation had no role to play in cases where state actions were in the nature of public policy. The court must allow fair play to the authority. Thus the contentions of Mrs. Nag with regard to legitimate expectation of the writ petitioners cannot be accepted.

53.

The legal position with regard to legitimate expectation in similar situations was laid down by the Apex Court as hereunder:- In the matter of Sethi Auto Service Station v. DDA, reported in (2009) 1 SCC 180, the Hon'ble Apex Court held as follows:- "28. The concept of legitimate expectation again came up for consideration in Union of India v. Hindustan Development Corpn. [(1993) 3 SCC 499] Referring to a large number of foreign and Indian decisions, including in Council of Civil Service Unions [1985 AC 374 : (1984) 3 WLR 1174 : (1984) 3 All ER 935 (HL)] and Kamdhenu Cattle Feed Industries [(1993) 1 SCC 71] and elaborately explaining the concept of legitimate expectation, it was observed as under: (Hindustan Development Corpn. case [(1993) 3 SCC 499] , SCC p. 549, para 35) "35.

If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased, gross abuse of power or violation of principles of natural justice, the same can be questioned on the well-known grounds attracting Article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. It can be one of the grounds to consider but the court must lift the veil and see whether the decision is violative of these principles warranting interference.

It depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action, must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case. It follows that the concept of legitimate expectation is 'not the key which unlocks the treasury of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits', particularly when the element of speculation and uncertainty is inherent in that very concept." Taking note of the observations of the Australian High Court in Attorney General for New South Wales v.

of an individual would be to set the courts adrift on a featureless sea of pragmatism", speaking for the Bench, K. Jayachandra Reddy, J. said that there are stronger reasons as to why the legitimate expectation should not be substantively protected than the reasons as to why it should be protected. The caution sounded in the said Australian case that the courts should restrain themselves and restrict such claims duly to the legal limitations was also endorsed.

29. Then again in National Buildings Construction Corpn. v. S.

Raghunathan [(1998) 7 SCC 66 : 1998 SCC (L&S) 1770] , a three-Judge Bench of this Court observed as under: (SCC p. 75, para 18) "18. The doctrine of 'legitimate expectation' has its genesis in the field of administrative law. The Government and its departments, in administering the affairs of the country, are expected to honour their statements of policy or intention and treat the citizens with full personal consideration without any iota of abuse of discretion. The policy statements cannot be disregarded unfairly or applied selectively. Unfairness in the form of unreasonableness is akin to violation of natural justice. It was in this context that the doctrine of 'legitimate expectation' was evolved which has today become a source of substantive as well as procedural rights. But claims based on 'legitimate expectation' have been held to require reliance on representations and resulting detriment to the claimant in the same way as claims based on promissory estoppel."

30. This Court in Punjab Communications Ltd. v. Union of India [(1999) 4 SCC 727] , referring to a large number of authorities on the question, observed that a change in policy can defeat a substantive legitimate expectation if it can be justified on "Wednesbury" reasonableness. The decision-maker has the choice in the balancing of the pros and cons relevant to the change in policy. Therefore, the choice of the policy is for the decision-maker and not for the court. The legitimate substantive expectation merely permits the court to find out if the change in policy which is the cause for defeating the legitimate expectation is irrational or perverse or one which no reasonable person could have made. (Also see Bannari Amman Sugars Ltd. v. CTO [(2005) 1 SCC 625] .)

31. Very recently in Jitendra Kumar v. State of Haryana [(2008) 2 SCC 161 : (2008) 1 SCC (L&S) 428] it has been reiterated that a legitimate expectation is not the same thing as an anticipation. It is distinct and different from a desire and hope. It is based on a right. It is grounded in the rule of law as requiring regularity, predictability and certainty in the Government's dealings with the public and the doctrine of legitimate expectation operates both in procedural and substantive matters.

32. An examination of the aforenoted few decisions shows that the golden thread running through all these decisions is that a case for applicability of the doctrine of legitimate expectation, now accepted in the subjective sense as part of our legal jurisprudence, arises when an administrative body by reason of a representation or by past practice or conduct aroused an expectation which it would be within its powers to fulfil unless some

overriding public interest comes in the way. However, a person who bases his claim on the doctrine of legitimate expectation, in the first instance, has to satisfy that he has relied on the said representation and the denial of that expectation has worked to his detriment. The Court could interfere only if the decision taken by the authority was found to be arbitrary, unreasonable or in gross abuse of power or in violation of principles of natural justice and not taken in public interest. But a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles.

33. It is well settled that the concept of legitimate expectation has no role to play where the State action is as a public policy or in the public interest unless the action taken amounts to an abuse of power. The court must not usurp the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply an objective standard which leaves to the deciding authority the full range of choice which the legislature is presumed to have intended. Even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is taken fairly and objectively, the court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be affected. Therefore, a legitimate expectation can at the most be one of the grounds which may give rise to judicial review but the granting of relief is very much limited. (Vide Hindustan Development Corpn. [(1993) 3 SCC 499] )"

54.

In the decision of Sethi Auto Service Station (Supra), the Hon'ble Apex Court was also of the view that departmental directions which were recorded in the file, did not have the sanction of law and were not effective orders. They were no more than opinions of the officer, meant for internal use and for consideration of others in the department. Notings in the departmental files were not executable orders, affecting the rights of the parties. Only when they reached the final decision upon approval from the competent authority and was communicated to the persons concerned, they became enforceable in law. In this case, the direction of HLG to undertake and gear up direct manning was published in the press note. It was an internal direction to the department. The

final approval was given by the HLG to continue outsourcing, upon considering the suggestions made by the department to continue with the existing policy in view of the difficulties that would arise if direct manning was to be undertaken. The final decision of the HLG was communicated to the concerned department on November 9, 2016.

55.

Outsourcing is a policy matter. The writ petitioners did not have a legal right to stop the DSS from outsourcing manning services of officers. In the interest of the economy, for further efficiency, and due to the problems arising out of infrastructural issues and limited resources, outsourcing was decided to be continued.

56.

The judgment and order dated February 10, 2020, is hereby set aside and quashed. The appeal is accordingly allowed and connected application if any, is disposed of. The appellants have already requested the SCI that a clause similar to clause 2.6 of the manning contract with ABS, must be included in its manning agreement in order to balance the socio-economic condition of the officers, within the island. Thus the interest of the writ petitioners and other similarly situated officers must be looked into and a similar clause must be incorporated in the manning contracts.

57. However, there will be no order as to costs.

58. Urgent photostat certified copy of this judgment, if applied for, be given to the parties, on priority basis.

I agree.

(Ananda Kumar Mukherjee, J.) (Shampa Sarkar, J.)