Supreme Court Dismisses Plea to Preserve INS Viraat: Envitech Marine Consultants vs. Union of India (2021)

Date of the Judgment: April 12, 2021

Citation: 2021 INSC 210

Judges: S.A. Bobde, CJI, A.S. Bopanna, J., V. Ramasubramanian, J.

Can a public interest plea to preserve a decommissioned warship be entertained after the government has already sold it for scrap? The Supreme Court of India recently addressed this question in a case involving the INS Viraat. The court considered the plea of a group seeking to convert the warship into a museum, but ultimately dismissed their petition, citing the advanced stage of the dismantling process and the lack of a necessary No Objection Certificate from the Ministry of Defence. The judgment was delivered by a three-judge bench comprising Chief Justice S.A. Bobde, Justice A.S. Bopanna, and Justice V. Ramasubramanian.

Case Background

The case revolves around the INS Viraat, a warship that previously served in the British Navy as HMS Hermes before being commissioned into the Indian Navy in 1987. The Indian government decided to scrap the INS Viraat due to the high cost of its upkeep and the lack of interest from state governments in taking over the vessel. The ship was put up for sale through a public auction via Metal Scrap Trade Corporation Limited (MSTC Ltd.).

M/s Envitech Marine Consultants Private Limited and others (the petitioners) wanted to preserve the INS Viraat as a memorial and approached various corporate houses for a public-private partnership. They received a Letter of Interest from Blackstone Corporation, Canada. The petitioners then sought advice from the government on converting the warship into a maritime museum and adventure center. While the government acknowledged their proposal, they also sought a No Objection Certificate (NOC) from the Government of Goa. The Chief Minister of Goa stated that they would issue an NOC only if the Ministry of Defence agreed and no financial burden fell on the state.

Meanwhile, fresh tenders were opened, and the second respondent became the highest bidder. A letter of acceptance was issued on August 13, 2020, and the second respondent made a payment of approximately Rs. 38.54 crores. The delivery order was issued on October 22, 2020. The ship was permanently beached on September 30, 2020. The petitioners then approached the second respondent, who advised them to obtain an NOC from the Government of India, along with other conditions, which the petitioners could not meet.

Timeline

Course of Proceedings

The petitioners initially filed a writ petition before the High Court of Bombay, seeking a direction to the Union of India to grant them a No Objection Certificate (NOC) to convert the INS Viraat into a museum. The High Court disposed of the petition on November 3, 2020, without commenting on the merits, and directed the Union of India to decide on the petitioners’ representation. The High Court clarified that it had not recognized any right in favor of the petitioners.

Dissatisfied with the High Court’s order, the petitioners filed Special Leave Petitions before the Supreme Court. The Supreme Court initially granted an interim order to maintain the status quo regarding the dismantling of the ship. However, after the second respondent filed applications for urgent hearing and vacating the status quo order, the Supreme Court took up the matter for consideration.

Legal Framework

The judgment primarily revolves around the administrative process of government auctions and the requirement of obtaining a No Objection Certificate (NOC) from the Ministry of Defence for any alterations or use of a decommissioned warship. There are no specific statutes or sections of law discussed in the judgment.

Arguments

Arguments of the Petitioners:

• The petitioners argued that they wanted to preserve INS Viraat as a memorial to strengthen Indian and British Navy traditions, history, and heritage.
• They had approached various corporate houses to make the project a public-private partnership.
• They had a Letter of Interest from Blackstone Corporation, Canada, to support their project.
• They sought advice on converting the warship into a maritime museum and adventure center.

Arguments of the Union of India:

• The government had taken a decision to scrap INS Viraat in consultation with the Navy due to the high cost of upkeep.
• No State Government was willing to take the ship due to financial liability.
• The sale of the decommissioned vessel through public auction was arranged through MSTC Ltd.
• The Ministry of Defence had rejected the petitioners’ representation on November 27, 2020, and this order was not challenged by the petitioners.

Arguments of the Second Respondent:

• The second respondent was the highest bidder in the public auction and had made the full payment for the ship.
• They had already started the dismantling/recycling work, with about 35 to 40% of the work completed.
• The ship was in a “grounded condition” and could be called a “dead structure” due to severe hull damage during the embarkation of loose parts and equipment.
• The second respondent had initially shown willingness to consider the petitioners’ proposal but the petitioners could not comply with the conditions.

Submissions Table

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was whether the petitioners’ plea to preserve INS Viraat could be entertained at this stage, considering that:

1. The second respondent had already purchased the ship through a public auction.
2. The Ministry of Defence had rejected the petitioners’ representation.
3. The dismantling process had already commenced.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

No specific cases, books, or legal provisions were cited by the court in this judgment.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

There were no authorities cited in the judgment.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The second respondent had already purchased the ship through a public auction.
• The Ministry of Defence had rejected the petitioners’ representation.
• The dismantling process had already commenced, with 35-40% of the work completed.
• The ship was in a “grounded condition” and was severely damaged.

The Court acknowledged the sentiments of the petitioners but stated that it could not interfere at this stage due to the factual circumstances.

Fact:Law Ratio

The court’s decision was heavily influenced by the factual aspects of the case, such as the sale of the ship, the commencement of dismantling, and the rejection of the petitioners’ representation by the Ministry of Defence. The legal principles were secondary in this case.

Logical Reasoning

Judgment

The Supreme Court dismissed the Special Leave Petitions, stating that it could not do anything at this stage due to the factual circumstances. The Court acknowledged the sentiments of the petitioners but emphasized that the second respondent had already purchased the ship, the Ministry of Defence had rejected the petitioners’ representation, and the dismantling process had already commenced. The Court noted that the ship was severely damaged and in a “grounded condition.”

The Court observed:

“Three factual aspects clinch the issue arising for our consideration. The first is that the second respondent was willing to subscribe to the sentiments of the petitioners, subject to certain conditions stipulated in the E­Mail dated 6.10.2020, but the petitioners could not comply with those conditions.”

“The second is that subsequent to the disposal of the writ petition by Order dated 3.11.2020, the Ministry of Defence passed an Order dated 27.11.2020 rejecting the representation of the petitioners. This order has not been challenged by petitioners.”

“Thirdly, the second respondent claims to have started the dismantling/recycling work three months ago and according to the certificate issued by the Marine Surveyors, about 35 to 40% work of dismantling had already been completed.”

There were no dissenting opinions in this case.

Key Takeaways

• Once a government auction is complete and the dismantling process has commenced, it becomes difficult to reverse the decision, even if there are public interest considerations.
• A No Objection Certificate (NOC) from the relevant authorities is crucial for any alterations or use of a decommissioned government asset.
• The courts may not interfere with government decisions if the process is followed and the factual circumstances do not warrant intervention.

Directions

No specific directions were given by the Supreme Court in this judgment.

Development of Law

The ratio decidendi of the case is that once a government asset has been sold through a public auction, and the dismantling process has commenced, the courts will be hesitant to interfere, even if there are public interest considerations. There was no change in the previous position of law.

Conclusion

The Supreme Court dismissed the plea to preserve INS Viraat, emphasizing the importance of adhering to established procedures and the practical difficulties of reversing a decision once the dismantling process has begun. The court acknowledged the petitioners’ sentiments but ultimately ruled in favor of the government’s decision to scrap the warship.

Category

Parent Category: Government Auctions

Child Category: Decommissioned Warships

Child Category: Public Interest Litigation

Parent Category: Contract Law

Child Category: Government Contracts

FAQ

Q: What was the case about?

A: The case was about a plea to preserve the decommissioned warship INS Viraat as a museum after the government had already sold it for scrap through a public auction.

Q: Why did the Supreme Court dismiss the plea?

A: The Supreme Court dismissed the plea because the ship had already been sold, the dismantling process had commenced, and the Ministry of Defence had rejected the petitioners’ representation. The court also noted that the ship was severely damaged.

Q: What is a No Objection Certificate (NOC)?

A: A No Objection Certificate (NOC) is a document issued by a government authority, stating that they have no objection to a particular action or project. In this case, an NOC from the Ministry of Defence was required to convert the warship into a museum.

Q: What does this judgment mean for future cases?

A: This judgment indicates that courts will be hesitant to interfere with government decisions related to the sale and disposal of assets, especially after the sale process is complete and dismantling has commenced. It also highlights the importance of obtaining necessary approvals and NOCs before proceeding with any project involving government assets.