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Jharkhand High Court · body

2012 DIGILAW 1531 (JHR)

DTC Securities Limited v. Jharkhand State Mineral Development Corpn.

2012-10-06

N.N.TIWARI

body2012
Order In this writ petition, the petitioner has prayed for quashing the letter no.134 dated 17.01.2012, issued by respondent no.2, whereby Agreement No.20 of 2011 dated 04.05.2011 with regard to the mining of Bishrampur-Mahugain-Tulbula Graphite mines has been terminated with immediate effect and the earnest money deposited by the petitioner was directed to be refunded. The petitioner has also prayed for a direction on the respondent nos. 1 & 2 to expedite the forest clearance/permission of Stage I & II and to complete other required legal formalities, so that the petitioner may be able to start mining work in accordance with the terms of the Agreement no.20 of 2011. 2. The case of the petitioner, in brief, is that Jharkhand State Mineral Development Corporation Limited(JSMDC for short) invited tender from reputed concern for hiring of equipment for mining of minimum 2000 tonnes of Graphite lumps per month from its Mahugain-Tulbula lease hold area and purchasing the same. The petitioner, who is well established in the field of mining, beneficiation and marketing of Graphite, submitted tender with all the relevant documents. Respondent no.3 was also one of the participants in the tender process. After scrutiny, the petitioner was declared successful and was allotted the work. The petitioner was then asked to enter into an agreement. Accordingly, Agreement dated 04.05.2011 was executed in between the petitioner and the Managing Director of respondent-JSMDC. 3. Clause-14(1) of the Agreement provided that the work of mining is to be started within 30 days from issuance of work order or singing of the agreement after forest clearance of Stage I & II from the Forest Department, whichever is later. The forest clearance was to be obtained by the respondents. In the said clause, it was clearly provided that Gestation period would start after 30 days of commencement of work. 4. According to the petitioner, forest clearance of Stage I & II from the Forest Department was not obtained by the respondents. Since there was clear condition for commencement of work after forest clearance of Stage I & II by the Forest Department, the petitioner could not commence the work and waited for the certificate of the forest clearance. 4. According to the petitioner, forest clearance of Stage I & II from the Forest Department was not obtained by the respondents. Since there was clear condition for commencement of work after forest clearance of Stage I & II by the Forest Department, the petitioner could not commence the work and waited for the certificate of the forest clearance. Instead of obtaining forest clearance and allowing the petitioner to commence the work, the respondent-JSMDC arbitrarily terminated the petitioner's agreement no.20 of 2011 dated 04.05.2011 and communicated the same to the petitioner by letter no.134 dated 17.01.2012 signed by the General Manager(Mines). 5. It has been submitted that the petitioner's agreement has been terminated falsely alleging that the petitioner has failed to discharge the obligation and responsibilities, as envisaged in the NIT and Clause-4 of the Agreement no.20 of 2011 dated 04.05.2011 and violated the term of the letter issued by the respondent-JSMDC. All the letters relating to commencement of the work without obtaining forest clearance of Stage I & II were frivolous and unfounded and the termination is malicious and illegal and the same are liable to be quashed. The malafide is apparent from the fact that immediately after termination of the petitioner's agreement, the work has been allotted to respondent no.3, who was L-II and whose earnest money was already refunded. Agreement has been also signed even without obtaining forest clearance, which is one of the conditions for commencement of work. The said respondent no.3 has been allowed to commence the work even without taking forest and environment clearance. 6. The petitioner has also prayed for cancellation of agreement with respondent no.3. 7. The petition has been contested by respondent no.1-JSMDC as well as respondent no.3 in whose favour work has been allotted after termination of the petitioner's agreement. 8. Learned counsel, appearing on behalf of JSMDC, opposed the petitioner's prayer on the ground that there is alternative remedy of filing appeal against the order and in view thereof, this writ petition is not maintainable. The petitioner has alleged breach of agreement, which is a question of fact and that cannot be adjudicated upon and decided in the writ jurisdiction. It has been also stated that the petitioner failed to discharge his contractual liability as per Clause-4 of the Agreement and also did not fulfill its promises, as would be evident from its letters. The petitioner has alleged breach of agreement, which is a question of fact and that cannot be adjudicated upon and decided in the writ jurisdiction. It has been also stated that the petitioner failed to discharge his contractual liability as per Clause-4 of the Agreement and also did not fulfill its promises, as would be evident from its letters. There is no arbitrariness or illegality in the impugned termination order issued by JSMDC. It has been also stated that the agency shall carry out mining operation as per the requirements of Metalliferous Mines Regulation and shall abide by all the Acts, Rules, Regulations including Indian Mines Act, Payment of Wages Act etc. The petitioner has not produced the certificates and has not fulfilled the requirement of the relevant rules and regulations. The petitioner also failed to render assistance in obtaining forest clearance. There was no alternative before JSMDC than to terminate the petitioner's agreement and allot the same to respondent no.3, which is L-II. 9. Respondent no.3 has also raised almost the same points to contest the petitioner's petition. He submitted that he is not at fault and he has been allotted the work as he was L-II. He has vast experience in the mining field. He has been allotted work on the same terms and conditions and he has made heavy investment. He is not at fault. 10. I have heard the parties and considered the facts and materials on record. It is an admitted position that the petitioner was successful bidder and was declared L I. It is also admitted that Agreement no.20 of 2011 dated 04.05.2011 was entered into between the parties with terms and conditions. 11. Clause-14(i) of the said Agreement provides for commencement of work, which runs as follows: “14(i)-Commencement of work: Work will have to be started within 30 days of issuance of work order or signing of the agreement which ever is later after forest clearance of Stage I & II from the Forest Department. Gestation period will start after 30 days of commencement of work as stated above.” 12. Clause-4 of the said Agreement specifically provides that the Corporation shall obtain forest clearance(Stage I & II) from Forest Department as well as Ministry of Environment and Forest (MOEF for short), Government of India for diversion of forest. Gestation period will start after 30 days of commencement of work as stated above.” 12. Clause-4 of the said Agreement specifically provides that the Corporation shall obtain forest clearance(Stage I & II) from Forest Department as well as Ministry of Environment and Forest (MOEF for short), Government of India for diversion of forest. It further provides that the agency shall assist the Corporation in obtaining forest clearance required for smooth operation of mines. 13. The petitioner's agreement has been terminated for violation of the said Clause-4 of the Agreement dated 04.05.2011 as also for his failure in discharge of obligation and responsibilities, as envisaged in the NIT dated 30.11.2010, letter no.320 dated 14.02.2011 of JSMDC and the petitioner's letter dated 24.02.2011. 14. Much emphasis has been laid by learned counsel for the respondents on the violation of Clause-4 of the Agreement by the petitioner, which clearly provides for requirement of forest clearance of Stage I & II from Forest Department by JSMDC as well as MOEF. Though JSMDC is required to get forest clearance as aforesaid, it is admitted that no such forest clearance from the Forest Department as well as MOEF, Government of India has been obtained till date. 15. It has been argued on behalf of the respondents that agency has to assist the Corporation in obtaining forest clearance required for smooth operation of mines, but the petitioner has not assisted in obtaining forest clearance for operation of mines, which would be evident from the letter dated 14.02.2011 and the petitioner's letter dated 24.02.2011. 16. On perusal of the said letters/communication between the parties, I find that there was no violation of Clause 4 by the petitioner. 17. Clause-4 runs as follows: “The corporation is required forest clearance (Stage I & II) from Forest Department as well as MOEF, Government of India for diversion of forest. The agency shall assist Corporation in obtaining various clearances required for smooth operation of mine.” 18. It is clear from Clause-4 that the corporation has to obtain forest clearance and the agency has to assist Corporation in obtaining further clearance required for smooth operation of mines. It is an admitted position that the operation could not be commenced as the Corporation has not obtained forest clearance from Forest Department as well as MOEF, Government of India. When the operation has not commenced, there is no question of smooth operation of mines. It is an admitted position that the operation could not be commenced as the Corporation has not obtained forest clearance from Forest Department as well as MOEF, Government of India. When the operation has not commenced, there is no question of smooth operation of mines. At this stage, there was no role of the petitioner to play in obtaining various clearance as provided in Clause-4. 19. Since the work was to be started after forest clearance, which was to be obtained by the Corporation, the petitioner cannot be said to be at fault for not commencing the work. There is nothing on the record to show that the petitioner has violated Clause-4 or any term of NIT, which is said to be the ground for termination of agreement dated 04.05.2011 executed in favour of the petitioner. The ground on which the petitioner's agreement has been terminated is, thus, baseless, frivolous and unfounded. 20. The order based on such frivolous ground is nonest and no further adjudication is required in view of admitted factual position. 21. Alternative remedy does not create an absolute bar for invoking writ jurisdiction of this Court in striking down an order causing injustice. Reference can be made to the latest decision of Hon'ble Supreme Court in 'Union of India & Others Vrs. Tantia Construction Private Limited'[(2011)5 SCC697]. The Hon'ble Apex Court has reiterated that injustice, whenever and wherever it takes place, has to be struck down as an anathema to the rule of law and the provisions of the Constitution. 22. Since the impugned order is wholly arbitrary and perverse, the same is not sustainable. Such illegal order cannot be a basis for creating any right to any party. 23. In the instant case, it is an admitted fact that forest clearance of Stage I & II has not been obtained, which was the precondition of commencement of work. On that frivolous ground, the petitioner's agreement has been terminated and the work has been allotted to respondent no.3 in a most arbitrary manner just the next day i.e. on 18.01.2012 and agreement was also entered into on 20.01.2012. The respondent no.3 has been allowed to start work, though forest clearance for the same is yet to be obtained as per the requirement of law. 24. The respondent no.3 has been allowed to start work, though forest clearance for the same is yet to be obtained as per the requirement of law. 24. Since the subsequent agreement said to be entered into between respondent no.3 and respondent no.1 dated 20.01.2012 on the basis of the said illegal order of termination of agreement of the petitioner, the said colourable act and agreement does not give any right to respondent no.3. 25. In view of above discussion, this writ petition is allowed. The termination order dated 17.01.2012(Annexure-17) is quashed. 26. Any subsequent order, agreement etc. as a consequence, stands abrogated. 27. Since there was already enormous delay, respondent no.1 is directed to expedite the process of obtaining forest clearance and MOEF in terms of Clause-4 of the agreement to enable the petitioner to commence work.