Supreme Court Suggests Constitution Of Expert Appellate Body Against Orders Passed By Tariff Authority For Major Ports

The Supreme Court has suggested the constitution of an expert appellate body to hear Appeals against the Orders passed by the adjudicatory board or Tariff Authority for Major Ports (TAMP).

The Court was deciding Civil Appeals in which the issue pertained to fixation of tariff by the Paradip Port Authority.

The two-Judge Bench of Justice M.M. Sundresh and Justice Rajesh Bindal observed, “In view of our above observations, we recommend to make the remedy of appeal more effective and meaningful without disrespect to any authority. It would be appropriate if an expert appellate body is constituted to hear appeals against the orders passed by the adjudicatory board/TAMP.”

The Bench noted that there are expert bodies which are headed by technically qualified persons along with persons with knowledge of accounting and economics and specialised expert appellate body has also been constituted to entertain Appeal against orders of such expert bodies.

Senior Advocate Jaideep Gupta appeared for the Appellants while Senior Advocate Shyam Divan appeared for the Respondents.

Case Background

There were two Writ Petitions decided by the High Court by a common Order. Both were filed by the Appellant herein and though the period involved was different, the High Court had decided both the Writ Petitions by a common Order. For this reason, both the Appeals were taken up and decided together by the Apex Court. The Appellant was aggrieved by the Order passed by the Appellate Authority in an issue related to arbitration. The Appellate Authority had rejected the Appeal filed by the Appellant against the award of the Arbitrator. As the High Court upheld the award and decision of the Appellate Authority, the case was before the Apex Court.

Reasoning

The Supreme Court in the above regard, said, “It looks a little surprising that TAMP did not find any justification for revision of tariff even for a time gap of more than 10 years. The costs, overheads on many aspects must have increased manifold during the interregnum. … Insofar as the opportunity of hearing is concerned, the High Court has also failed to appreciate this aspect of the matter while referring that both the parties underwent a process of mutual agreement, hence it cannot be said to be a case of non-affording of opportunity of hearing.”

The Court added that the High Court lost sight of the fact that TAMP was called upon to decide the dispute as the parties had failed to agree to any terms and in that eventuality, on the basis of the material placed on record of both parties, an opportunity of hearing was required to be given, where complicated issues of facts were involved, which could be explained by the parties at the time of hearing.

“It is a clear case of violation of principles of natural justice. … One of the reasons assigned was that the basis for fixation of tariff at the time of entering into the initial agreement could not be deciphered. The same, in our opinion, prima facie was not the material fact for consideration for revision of tariff. The tariff was to be revised keeping in view the base point and not the basis for fixation thereof”, it remarked.

The Court further noted that even under the normal tariff fixation regime, the cost-plus return approach is the principle to be followed.

“Further, once we have set aside the award of the Arbitrator, order of the Appellate Court and also of the High Court pertaining to the revision of the tariff for the period from October 1993 to 31.03.1999, and remitted the matter to be decided by TAMP, in our opinion, even the order pertaining to the period in question also deserves to be set aside as the base for revision of tariff for subsequent periods is yet to be determined”, it observed.

The Court also emphasised that the workload of Major Ports in India has doubled, registering a 7.5% Compound Annual Growth Rate over 10 years and handled 819.227 million tonnes of cargo in Financial Year 2023-24 and when the Major Port Trusts Act, 1963 was first enacted in the year 1964, there were 7 major ports in the country.

“With the growth in business, 5 more major ports have been created. … Recently, in 2024, Union Cabinet approved setting up of another major port at Vadhavan, Maharashtra. Considering the rise in business at the major ports, the importance of the TAMP in resolving the equally rising number of disputes cannot be undermined. Disputes related to such a technical area of importance can be better dealt with by a specialised expert body. Appeals therefrom should also be maintainable before specialised appellate body”, it added.

Accordingly, the Apex Court set aside the impugned Orders, remitted the case to TAMP for decision afresh, and directed the Registry to forthwith send a copy of the Order to the Secretary, Legislative Department, Ministry of Law and Justice, Government of India to examine the issue and take appropriate steps.

Cause Title- Paradip Port Authority v. Paradeep Phosphates Ltd. (Neutral Citation: 2025 INSC 971)

Appearance:

Appellants: Senior Advocate Jaideep Gupta, AOR Dipak Kumar Jena, Advocates Pramod Kumar, Smita Kumari, Pradeep Kumar Verma, Sandip Munian, Ayushi Goyal, Ashutosh Singhdeo, and Raj Shekhar Jena.

Respondents: Senior Advocate Shyam Divan, Advocates Anushka Sharda, and Raveena Rai.

Click here to read/download the Judgment