'Local authority' status for major ports under review

With disputes over the applicability of local laws to port areas becoming frequent, the status of major ports as 'local authorities', as stated in section 3(31) of the General Clauses Act, 1897, might get reviewed soon. It was likely major ports would approach the shipping ministry to secure a notification under Article 364(1) to protect ports from local laws, document reviewed by Business Standard showed.

On many occasions, there have been disagreements over approval of building plans and levy of property tax or cess under municipal laws, as it was questioned whether these were applicable to township land owned by port trusts.

According to section 3(31) of the General Clauses Act, 1897, a 'local authority' includes the body of port commissioners entrusted by the government with the control or management of a municipal or local fund. Major ports, however, a 'local administrator' is elected by the inhabitants of the area they control, adding the administrator can levy taxes to provide and maintain municipal services.

To strengthen their case, major ports are relying on the judgment in a previous case--one fought between the Centre, and R C Jain & others. The judgment elucidated the attributes of what constituted a 'local authority'. One of these was the condition that a local authority must be entrusted with governmental functions and duties usually entrusted to a municipal body for providing amenities such as health and education services, water and sewerage, town planning & development, roads, markets and transportation to inhabitants.

Article 364(1) of the Constitution, under which ports plan to secure a notification from the ministry, posits the exemption, partial or complete, of major ports from any law made by Parliament or the legislature of a state.

Major ports controlled by the Centre together own 250,000 acres across cities. A senior central government official said the applicability of both municipal rules and port norms often led to conflicts. He added the issue would assume greater importance if these ports were corporatised.

Cyril C George, deputy chairman and acting chairman of Mormugao Port Trust, Goa, told Business Standard the port would hold talks with the Goa government in this regard.

Earlier, the government had introduced various guidelines related to the land policy at major ports. These guidelines were applicable to all the 12 major ports in India; the land pertaining to township areas in Mumbai and Kolkata were excluded.

The Union Cabinet has already approved the conversion of leasehold land to freehold land for about 1,200 acres of residential land at Gandhidham and contiguous areas, leased or sub-leased by Kandla Port Trust, Gujarat. One of the major factors behind this was residents of the township land, owned by major port trusts, faced difficulties due to multiple taxes levied by various organisations.