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2013 DIGILAW 209 (PAT)

Royal Enterprises v. State Of Bihar

2013-02-13

JAYANANDAN SINGH

body2013
ORDER Petitioner, a proprietorship firm, has filed this writ application for quashing the order dated 31.12.2012 of the Mines Commissioner, as contained in Annexure-6, by which the representation of the petitioner, filed pursuant to the orders of this Court dated 18.12.2012 (Annexure-4) passed in its earlier writ application, has been rejected. 2. Matter relates to settlement of sand ghats by the State Government. As per case of the petitioner, prior to 2007 sand ghats were used to be settled on year to year basis. However, since 2007, system changed and settlements started being made for three years at a time. In 2009, a Notification was issued by the Mines and Geology Department, Govt. of Bihar, vide Annexure-1, in which manner and mode of settlement of sand ghats for three years i.e. for the period 2010-2012 was laid down. According to this procedure, sand ghats of District of Aurangabad and Rohtas settled by auction for a period of three years in terms of the said Notification expired on 31.12.2012. According to the provisions of the said Notification, respondents were required to take steps for fresh settlement of sand ghats through public notice and auction for another three years i.e. for a period from 1.1.2013 to 31.12.2015. Petitioner has placed an example on record in respect of District Jamui to show that even for short period sand ghats were settled by public notice and auction, vide Annexure-2. However, instead of taking steps for fresh settlement of the sand ghats in terms of the provisions of the said Notification, all the Collectors of the State were informed by the Department through letter no.3158 dated 30.11.2012 (Annexure-3) that a new Sand Policy was being prepared by a Group of Ministers under the chairmanship of Deputy Chief Minister which would take some time. Hence, the Group of Ministers in the meeting dated 23.11.2012 had decided that the sand ghats, settlement of which were going to expire on 31.12.2012, were to be managed by the existing settlees for the period 1.1.2013 to 31.3.2013 on deposit of 20% over and above the settlement amount of 2012 subject to compliance of the Bihar Minor Mineral Concession Rules, 1972. 3. 3. Petitioner came to this Court challenging the said letter in C.W.J.C.No.23104 of 2012 on the ground that the said instruction was contrary to Rule 11A(3) of the Minor Mineral Concession Rules and also contrary to the said Notification of the State Government bearing no.2438 dated 31.12.2009 and some earlier notice dated 19.11.2012. However, this Court did not go into the merits of the challenge by the petitioner to the said letter and disposed of the writ application by order dated 18.12.2012, vide Annexure-4, permitting the petitioner to invite the attention of the State Government through respondent no.2 by filing a representation raising the submissions the very next day so as to enable the State Government to take appropriate decision in the matter on or before 31.12.2012, if possible. 4. Petitioner accordingly filed its representation before respondent no.2 and the matter was heard on 24th, 26th and 28th of December, 2012 in presence of the petitioner and respondent no.8, the existing settlee. It is pleaded that on 28th of December, 2012 respondent Commissioner asked the petitioner as to whether it was ready to deposit 50% more amount than the settlement amount of the year 2012 or not observing that then only its case could be considered. It is stated that the petitioner became ready and then it was orally asked to submit an affidavit in this regard which it submitted on that very day, vide Annexure-5. However, on 31st of December, 2012 orders were passed by the respondent Commissioner by which representation of the petitioner was rejected, vide impugned order as contained in Annexure-6. It is pleaded in the writ application that the petitioner is ready to deposit 30% more amount than the settlement amount of 2012 on proportionate basis even now for settlement of sand ghats of Aurangabad and Rohtas for these months. 5. This writ application was filed on 10.1.2013. When the matter was taken up on 14.1.2013, learned counsel appeared for respondent no.8 and undertook to file his power in the office of this Court in course of the day. Accordingly, learned counsel for the petitioner was directed to serve a copy of the writ application, along with I.A. filed for interim relief, on learned counsel appearing for respondent no.8 in course of the day. Accordingly, learned counsel for the petitioner was directed to serve a copy of the writ application, along with I.A. filed for interim relief, on learned counsel appearing for respondent no.8 in course of the day. Matter was thereafter taken up on 15.1.2013 and learned counsel appearing for the official respondents was requested by this Court to find out whether the new Policy was likely to be finalized and made effective in the month of March of this year or not and the matter was adjourned for a week. Finally matter was heard on 28.1.2013. 6. In the counter affidavit filed on behalf of official respondents, it is contended that in respect of settlement of natural resources, one Public Interest Litigation was entertained by the Apex Court in the case of Deepak Kumar etc. Vs. State of Haryana and Others etc. The Apex Court considered the matter from different angles and the ecological and environmental effect of exploitation of natural resources, considered the report of the Core Group, set up by the Ministry of Environment and Forest, and its recommendations and directed all the State Governments, vide its order dated 27.2.2012, to come out with a comprehensive Mines Plan and to frame rules in this regard giving effect to the recommendations of the Core Group contained in its report of March 2010 and accepted by the Ministry of Environment and Forest, as also taking into account the guidelines framed by the Ministry of Mines. The Apex Court directed all the State Governments to complete the exercise within a period of six months from the date of the order and submit compliance report. A copy of the said order of the Apex Court has been annexed with the counter affidavit as Annexure- R/1. It is contended that to comply these directions of the Apex Court, a Group of Ministers under the chairmanship of the Deputy Chief Minister has been set up to work out the modalities and frame rules for giving effect to the said recommendations of the said Core Group and in accordance with the guidelines of the Ministry of Mines and come out with a new Policy for settlement of minor minerals including sand ghats. Successive deliberations have already been held by the Group of Ministers in this respect. Successive deliberations have already been held by the Group of Ministers in this respect. Meanwhile, finding that the settlement of sand ghats in the State was going to expire on 31st of December, 2012, the Group of Ministers considered that, as the new Policy in respect of settlement of sand ghats was likely to come soon, it would not be proper to settle the sand ghats afresh in terms of the said Notification of 2009 for another three years. Hence, it decided to allow the existing settlees to continue for another three months at an enhanced fee of 20% over and above the settlement amount of the last year. It is stated in the counter affidavit that for the new Policy, to be drawn in terms of the orders of the Apex Court, a new map of the course of the rivers had to be prepared as the old map was of the year 1908. It is stated that steps will be taken in the matter and as and when a new Policy is in place, an advertisement will be issued for auction of sand ghats as per the terms and conditions and procedure laid down therein. 7. Official respondents have filed a supplementary counter affidavit also in response to the earlier query of this Court, in which it is stated that the Government of Bihar is attempting to put in place the guidelines as early as possible and preferably within 5 to 6 months. 8. Respondent no.8 also filed counter affidavit in which it is stated that Rule 11A, 11B and 11D of the Bihar Minor Mineral Concession Rules, 1972 has been amended on 2.12.2006, a copy of which is annexed with the counter affidavit as Annexure-A. It is stated that the petitioner is not the existing lessee, hence, it has no case for consideration in view of the decision of the Group of Ministers communicated through the said letter dated 30.11.2012. 9. Respondent no.8 has also filed a supplementary counter affidavit in which it is stated that the case of Jamui, as reflected from Annexure-2 with the writ application, was a special case as the existing lessee had abandoned the sand ghats of the district before expiry of settlement on 31.12.2012. Hence, for the remaining period of calendar year 2012 sand ghats were settled through advertisement, vide Annexure-2. Hence, for the remaining period of calendar year 2012 sand ghats were settled through advertisement, vide Annexure-2. It is contended that it is not unusual for the departments of the State Government to extend the settlements and licences for short periods to save the revenue as appearing from Annexure- C and C/1. It is stated in the supplementary counter affidavit that the respondent has already deposited Rs.7 crores. 10. Mr. Vinod Kanth, learned senior counsel appeared for the petitioner. He submitted that framing of new Policy in terms of the orders of the Apex Court is an exercise by the State Government in the right direction. However, he submitted that this did not mean that till new Policy came into effect, respondents had any liberty to totally abandon and bypass the provisions of law and decision of the Government laying down mode and manner of settlement of sand ghats. He submitted that the settlement of sand ghats is controlled and governed by the provisions of the Bihar Minor Mineral Concession Rules, 1972. He submitted that Rule 11A specifically provides that the settlement of sand ghats as minor mineral had to be done by the Collector through auction to the highest bidder on annual basis. He submitted that though in terms of the Notification of 2009 this period of one year has been extended to three years, but the provisions for settlement through public auction has not been diluted. He submitted that in the amendment introduced in 2006 Rules, provision for settlement through auction/tender has been retained. He submitted that, the only significant change by this amendment, which has been introduced in the original Rule 11A, is that whereas in the original Rule, by way of explanation it was totally prohibited to renew or grant fresh lease/permit to the existing lessees, in the amendment the same has been omitted. Therefore, in terms of amendment, settlement could be made to the existing lessee also. But no where and in no manner, even after the amendment, the settlement in favour of the existing lessee has been made possible without holding any auction and/or inviting tender. Hence, he submitted that the settlement of ghats in question with Respondent No.8 was totally against the provisions of law. But no where and in no manner, even after the amendment, the settlement in favour of the existing lessee has been made possible without holding any auction and/or inviting tender. Hence, he submitted that the settlement of ghats in question with Respondent No.8 was totally against the provisions of law. He submitted that the Mines Commissioner by the impugned order rejected the representation of the petitioner mainly on the ground that a new Sand Policy was almost at the final stage and hence the State Government had rightly decided to extend the lease of the existing lessees for three months on payment of 20% extra over and above the lease amount of previous year. He submitted that during the hearing, respondent Commissioner had asked the petitioner to file an affidavit as to whether it was ready to pay 50% more or not and it had filed the affidavit in this regard. Since this amounted to an offer by the Mines Commissioner to the petitioner, which it accepted, the Mines Commissioner ought to have honoured his offer and ought to have passed orders for settlement of the sand ghats of two districts in favour of the petitioner. 11. Apart from this, Mr. Kanth also challenged the order of the Mines Commissioner on the ground of competence. He submitted that earlier order of this Court clearly mentioned that the petitioner was to invite attention of the Government through respondent no.2, i.e. the Mines Commissioner, by filing representation, to enable the State Government to take appropriate decision in the matter. But contrary to the said specific direction of this Court, the Mines Commissioner did not refer the matter to the Government and heard and decided the matter himself, for which he lacked competence in view of the orders of this Court. He also submitted that since the stand of the official respondents has now come on record that new Policy is likely to come in 5 to 6 months, it is clear that the extension of lease of the existing lessees was not a stop gap arrangement and in fact they were being illegally benefited by the respondents in complete violation of the Rules and the procedure laid down by the said Notification of 2009. He submitted that the petitioner is ready to pay 50% more even today on proportionate basis for the remaining period and therefore, in the interest of revenue of the State, this Court should direct the respondents to grant lease of the sand ghats in favour of the petitioner for the remaining period. He submitted that now it is settled by successive authoritative pronouncements of the Apex Court as well as this Court that for grant of lease/licence for exploitation of natural resources, preferred mode is auction/tender. Courts have held that any other mode, without any reasonable justification, has to be looked down upon as malafide, favoritism and violative of Article 14 of the Constitution of India. 12. Mr. Y. V. Giri, learned senior counsel appeared for respondent no.8. He submitted that as the petitioner was not a lessee from before and had no experience of managing sand ghats, it has no locus to challenge the decision of the Government. He submitted that the petitioner in this writ application has confined its prayer to challenge the rejection of its representation by the Mines Commissioner only. It has not questioned the decision of the Group of Ministers, as contained in Annexure-3 in respect of mode and manner of settlement of sand ghats pending framing and implementation of new Sand Policy. He submitted that as long as the said decision of the Group of Ministers remains operative, action of the official respondents in settling the sand ghats of the two districts with the respondent no.8 on payment of 20% extra cannot be questioned. He submitted that on the representation of the petitioner filed in terms of earlier orders passed by this Court, hearing was held by the Mines Commissioner on successive dates. Petitioner appeared and participated in the hearing on each date but it never took objection that the Commissioner had no competence to hear the matter and the same should be referred to the Government i.e. the Minister of the Department. Hence, he submitted that petitioner had consciously waived its right to get its representation considered by the Government only and had acceded to the authority of the Mines Commissioner. Hence, he submitted that petitioner had consciously waived its right to get its representation considered by the Government only and had acceded to the authority of the Mines Commissioner. He further submitted that, Rule 11A and the Notification of 2009 notwithstanding, Rule 36 of the 1972 Rules empowered the Government to grant mining lease or authorize grant of quarrying permit on any other terms and conditions than those prescribed in the Rules, if it was of the opinion that it was in public interest. He submitted that the Group of Ministers took the conscious policy decision to allow the existing lessees to carry on sand mining for another three months in exercise of this power as they were of the opinion that new settlement should be made only in terms of the new Policy, framed and implemented as per the directions of the Apex Court. He submitted that this exercise of power under the said Rule 36, as reflected from Annexure-3, has not been challenged by the petitioner in this writ application. Hence, no fault can be found in the order of the Mines Commissioner in rejecting the representation of the petitioner in the light of this Policy decision by the Group of Ministers. He referred to the Amendment Rules 2006 and particularly, the amendment incorporated in proviso to Rule 11B and submitted that by this amendment it has been incorporated in the Rules that in case of far flung areas where the available sand cannot be correctly and conveniently identified and estimated and hence settlement by auction was not possible, the Collector was empowered to identify such places and, after approval of the Mines Commissioner, grant lease for extraction of sand to one person for certain period not exceeding one year. He submitted that during the hearing Mines Commissioner had not made any promise to the petitioner to settle sand ghats with it if it was ready to pay 50% extra. 13. Mr. V.M.K. Sinha, learned counsel appearing for the official respondents adopted the arguments of Mr. Giri and submitted that the decision was taken by the Group of Ministers, as appearing from Annexure-3, in exercise of powers under said rule 36. He submitted that in terms of the Notification of 2009, as contained in Annexure-1, settlement by auction/tender had to be made for three years. Giri and submitted that the decision was taken by the Group of Ministers, as appearing from Annexure-3, in exercise of powers under said rule 36. He submitted that in terms of the Notification of 2009, as contained in Annexure-1, settlement by auction/tender had to be made for three years. Since a new Policy, in terms of the directions of the Apex Court was in offing, the Group of Ministers thought it proper to permit extension of lease of the existing lessees for three months more, as a stop gap arrangement, on payment of 20% extra. 14. Mr. Kanth, in reply, submitted that Rule 11A contained a non-obstante clause. Therefore it had overriding effect on all other Rules or law in respect of settlement of sand ghats. However, he admitted that, since Rule 36 had been incorporated in the Rules after Rule 11A, in certain contingencies, Rule 36 may not be circumscribed by the non-obstante clause in Rule 11A. But he submitted that Rule 36 lays down certain pre-conditions for exercise of power by the Government under the said Rule. He submitted that before resorting to the provisions of Rule 36, Government had to form a clear opinion that the exercise of power under this Rule was required in public interest. He submitted that the decision of the Group of Ministers, as reflected from Annexure-3, clearly fails to pass the tests of Rule 36. He submitted that the Group of Ministers, however powerful it may be, cannot be equated with the Government. Government is represented only by the Cabinet and not by any group of Ministers with whatever power it may have. He submitted that Annexure-3 does not show that the decision was taken by the Group of Ministers in public interest. He submitted that in fact decision was taken by the Group of Ministers to cover up their own laches as the Apex Court in its order dated 27.2.2012 had directed all the State Governments to comply with its directions as detailed in the order within six months and submit compliance report. Apparently, the State of Bihar has not done this within the time frame fixed by the Apex Court. Hence, they are already in contempt. Apparently, the State of Bihar has not done this within the time frame fixed by the Apex Court. Hence, they are already in contempt. In the circumstances, the decision by the Group of Ministers was not in public interest, rather to cover up their own laches and to bypass the provisions of law requiring settlement by holding auction and inviting tenders. He submitted that if the Sand Policy was likely to be finalized shortly, it could be accepted that the arrangement by annexure-3 was a stop gap arrangement. But now that it has come on affidavit that the same is likely to take 5 to 6 months more, clearly the arrangement by annexure-3 was neither in public interest nor in the interest of revenue of the Government nor was a stop gap arrangement. The same was in fact only to favour the existing lessees by allowing their settlement to continue on payment of 20% extra though petitioner is ready to pay 50% extra, for the same period and for the settlement of same sand ghats of the two districts. He submitted that participating in the hearing before the Mines Commissioner did not amount to waiver by the petitioner of its right to challenge the exercise of power by the Mines Commissioner. He submitted that there was no estoppel against law and in view of clear order of this Court in the earlier writ application, entire exercise by the Mines Commissioner was a nullity. He submitted that though it may be that in the present writ application petitioner has not challenged the said decision of the Group of Ministers specifically, but the said letter was specifically challenged by the petitioner in the earlier writ application, as evident from the order of this Court contained in Annexure-4. Representation was filed by the petitioner in the light of the said order which has been rejected by the impugned order. Hence, no specific prayer was needed in this writ application or in the representation challenging the said decision of the Group of Ministers reflected in Annexure-3. He submitted that, if necessary, petitioner may be allowed to amend its prayer in the present writ application at this stage even, by including a challenge to the said decision of the Group of Ministers for complete justice in the matter. 15. He submitted that, if necessary, petitioner may be allowed to amend its prayer in the present writ application at this stage even, by including a challenge to the said decision of the Group of Ministers for complete justice in the matter. 15. It is true that in a writ proceeding, Courts often allow the parties to amend the prayer at any stage, if it finds it necessary in the facts and circumstances of the case. Hence, there was no technical bar in allowing the petitioner to include in the writ application a challenge to the decision of the Group of Ministers, as suggested by Mr. Kanth. However, since this request had come from the side of the petitioner after objection was raised by the respondents, allowing this request at this stage would have amounted to allow the petitioner to meet the challenge to its writ application by the respondents by removing the defect pointed out by them. More so, there is no averment in the writ application in respect of invalidity of the said policy decision or incompetence of the Group of Ministers in the matter. Verbal submissions made by Mr. Kanth, in reply, challenging the decision therefore could not be taken into consideration by the Court as it would have amounted to entertaining new plea and new challenge on behalf of the petitioner to the said decision of the Group of Ministers advanced in reply, without giving adequate and reasonable opportunity to the respondents to meet the same. Hence, in all fairness, this Court did not consider it appropriate to allow the said prayer of Mr. Kanth. 16. Now, in absence of said prayer in the writ application, it has to be considered whether mere challenge to the rejection of the representation of the petitioner by the Mines Commissioner is of any consequence or not. Offer of the petitioner in its representation before the Mines Commissioner of being ready to pay 30% more over the settlement amount of 2012 and subsequent offer to pay 50% more notwithstanding, the order of the Mines Commissioner clearly shows that he has rejected the representation of the petitioner solely on the ground that preparation of a new Sand Policy was almost at a final stage. Order shows that the Mines Commissioner did not go into the merits of the rival claims, provisions of law and procedure and mode and manner laid down in the Notification of 2009 for settlement of sand ghats. He has treated the decision of the Group of Ministers as a stop gap arrangement and therefore, did not consider it appropriate to entertain the representation of the petitioner. 17. From Annexure-3, prima facie, it appears that the decision taken by the Group of Ministers, to extend the lease of the existing lessees for another three months, was a stop gap arrangement. This Court was of the view that if the Policy was to be finalized very soon, it was not in public interest to settle the sand ghats for a short period by following the elaborate procedure laid down in the Rules read with the Notification of 2009. With this in mind, this Court had directed the respondents to inform this Court as to whether Policy was going to come into effect before 31st of March, 2013, or not. An affidavit has now been filed in which it is stated that the same is likely to be put in place as early as possible and preferably within 5 to 6 months. This shows that the matter is likely to be delayed indefinitely. State Government is already in contempt of the Apex Court, and how they will explain their conduct there is their concern. But it is clear that in spite of the time frame fixed by the Apex Court and directions to report compliance, the State Government is not expediting the matter to complete the exercise and come up with a new Policy and the Rules in near future. Question is, pending the said exercise, can the respondents be allowed to relax all Rules, regulations and settle the sand ghats successively without any auction or inviting tenders. There is nothing in the order of the Apex Court which may indicate that pending this exercise the State Government has the liberty to completely overlook the law which holds the field till new Policy comes into effect and new Rules are framed and notified. Estimate of time by the Group of Ministers apparently appears to be misplaced. There is nothing in the order of the Apex Court which may indicate that pending this exercise the State Government has the liberty to completely overlook the law which holds the field till new Policy comes into effect and new Rules are framed and notified. Estimate of time by the Group of Ministers apparently appears to be misplaced. Hence, in all propriety, they should have taken a decision to proceed with the fresh settlement of the sand ghats through auction and/or inviting tenders relaxing that part of the Rules and the Notification of 2009 by which it has been laid down that the settlement has to be made for three years at a time. This relaxation the State Government could come up with in exercise of its powers under the said Rule 36. 18. However, present settlement in favour of respondent no.8 is only till 31st of March, 2013. There is laches on the part of the petitioner also by not pressing its earlier writ application for a decision in respect of validity of the said decision of the Group of Ministers, as contained in Annexure-3, and to have accepted to file representation to the State Government through respondent no.2 for consideration. This led the authorities to act upon the said decision of the Group of Ministers, leading to the consequence of settlement of the sand ghats of two districts in question in favour of respondent no.8 till 31st of March, 2013. Hence, at this stage, this Court does not consider it proper and equitable to interfere with the said settlement which is admittedly going to expire shortly. 19. Writ application is accordingly disposed of, but with a direction to the official respondents to either seek a clear cut direction from the Apex Court for mode and method by which they are required to proceed in the matter of settlement of sand ghats pending compliance of its orders or to make settlement for a shorter period, as may be necessary, in terms of the Rules and Notification of 2009, as contained in Annexure-1, well in advance and in any case before 31st of March, 2013.