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2021 DIGILAW 443 (ORI)

Ranjan Kumar Pattnaik v. State Of Odisha

2021-10-28

B.P.ROUTRAY, S.MURALIDHAR

body2021
ORDER Dr. S. Muralidhar, CJ. - The challenge in the present petition is to an order dated 24th March 2021 passed by the Collector, Cuttack (Opposite Party No.2) cancelling the lease of a sand sairat source of Subhadrapur Mouza in Kathajodi river in favour of the present Petitioner. 2. The background facts are that an auction notice for grant of the aforementioned lease was published on 8th January 2018. Clause-5 of the auction notice stated that the bidder should submit a solvency certificate from the Revenue Officer which amount should not be less than the royalty and the additional charges fixed for the source. The bidder was also required to furnish the details of the movable properties. The auction notice itself referred to the Orissa Minor Minerals Concession Rules, 2016 (OMMC Rules, 2016) and the requirement of having to fill up Form-M thereunder. 3. At this stage, it is necessary to refer to Rule 27 of the OMMC Rules, 2016 which talks of grant of a quarry lease. Rules 27 (4) states that the intending applicant may apply to the "Competent Authority" in a sealed cover for grant of quarry lease for such area or areas in Form-M in triplicate accompanied by the documents mentioned in sub-Rule (i) to (iv). Rule 27 (4) (iv) refers to a solvency certificate or bank guarantee valid for a period of eighteen months for an amount not less than the amount of additional charge offered and the royalty payable for the minimum guaranteed quantity for one whole year and a list of immovable properties from the Revenue Authority. 4. The Petitioner participated in the tender process and submitted his application along with a solvency certificate dated 7th December 2017 issued by the Tahasildar, Narasinghpur. It later transpired that the above solvency certificate was issued on the basis of an order passed by the Sub-Collector, Athgarh on 6th December, 2017. That order referred to the land standing in the name of "Gurukrupa Charitable Trust" of which the present Petitioner was the Chairman. The order specifically stated that the solvency certificate might be issued "in favour of Gurukrupa Charitable Trust, Chairman of village Kendupali instead of Ranjan Kumar Pattnaik, S/o-Late Dhruba Charan Behera of village Kendupali on production of original documents before you for verification." 5. The order specifically stated that the solvency certificate might be issued "in favour of Gurukrupa Charitable Trust, Chairman of village Kendupali instead of Ranjan Kumar Pattnaik, S/o-Late Dhruba Charan Behera of village Kendupali on production of original documents before you for verification." 5. Despite the above order requiring the solvency certificate to be issued in favour of the Trust, it was in fact issued in favour of the present Petitioner on 7th December, 2017 and it is this solvency certificate that was enclosed with the Petitioner's bid. 6. When bids were opened, the highest bid was of one Sukanti Sahoo. The Petitioner was the second highest bidder. Opposite Party No.5, Debidutta Mohanty, was the third highest bidder. It is an admitted position that Sukanti Sahoo was issued a show cause notice dated 19th February, 2018 stating that in respect of the Naranpur sand quarry under Baranga Tahasil, she had unauthorizedly excavated sand beyond the permissible limit i.e. beyond the boundary of the sairat encroaching upon the Cuttack Sadar Tahasil area. It is stated that admitting the said conduct, Sukanti Sahoo deposited Rs.10 lakh out of the demand raised based on the joint enquiry conducted on 17th April, 2018. A subsequent notice was issued on 6th July 2018 asking Sukanti Sahoo to deposit the residual default amount of Rs.32,18,750/- . Reminders were sent on 3rd April, 2019 and 9th April, 2019. A further demand was raised on 16th April 2019 noting that she was a defaulter regarding deposit of penalty for extraction of excess sand quantity. With the failure of Sukanti Sahoo to deposit the entire demand within the stipulated time, a letter dated 7th May 2019 was issued to her by the Tahasildar, Sadar, Cuttack cancelling her selection as the highest bidder. 7. Since the Petitioner was the second highest bidder, a letter dated 8th May 2019 was issued to him asking him to communicate his willingness to operate the sand sairat @ Rs.142 per cubic meter which was the rate quoted by the highest bidder. On the same date, the Petitioner is stated to have submitted his willingness. He was then asked by a letter dated 9th May 2019 to execute a lease deed. The Petitioner then deposited Rs.26,28,450/- and complied with the requirements. On the same date, the Petitioner is stated to have submitted his willingness. He was then asked by a letter dated 9th May 2019 to execute a lease deed. The Petitioner then deposited Rs.26,28,450/- and complied with the requirements. It is stated that the environment clearance issued by the State Environment Impact Assessment Authority (SEIAA) was also transferred in the name of the Petitioner by a letter dated 31st May, 2019 of the SEIAA. 8. Meanwhile, Sukanti Sahoo filed writ petition i.e. W.P.(C) No.9023 of 2019 in this Court questioning the cancellation of her bid and the selection of the present Petitioner. While issuing notice in the said writ petition, this Court directed by an order dated 15th May, 2019 that status quo should be maintained by the parties. On 15th October 2019, after hearing the present Petitioner, who had filed an intervention application in the said writ petition, this Court vacated the interim order and disposed of the application filed by the present Petitioner for that relief. 9. The present Petitioner thereafter filed W.P.(C) No.22660 of 2019 in this Court for a direction to the competent authority i.e. the Tahasildar, Sadar for execution of the lease deed in his favour. Thereafter on 1st January 2020, a lease deed was executed in favour of the present Petitioner in respect of the aforementioned sand sairat. 10. A second petition was filed by Sukanti Sahoo being W.P.(C) No.951 of 2020 in which while issuing notice this Court on 14th January 2020 stayed the operation of the lease deed executed in favour of the Petitioner. The Petitioner then applied for vacation of the said stay. On 11th January 2021, this Court by a detailed order vacated the interim order dated 14th January, 2020 clarifying that the operation of the lease by the present Petitioner would be subject to the final outcome of the said writ petition i.e. W.P.(C) No.951 of 2020 and two other petitions pending i.e. W.P.(C) Nos.9023 and 22660 of 2019. 11. On 22nd March 2021, in W.P. (C) No. 951 of 2020 the Court noted that the order dated 7th May 2019 passed by the Tahasildar cancelling Sukanti Sahoo's bid was an appealable order and accordingly disposed of the petition relegating Sukanti Sahoo to the remedy of an appeal. It is stated that the appeal filed by Sukanti Sahoo before the Sub-Collector, as a result thereof, is still pending. It is stated that the appeal filed by Sukanti Sahoo before the Sub-Collector, as a result thereof, is still pending. On the same day, W.P.(C) No.9023 and 22660 of 2019 were disposed of by this Court as having been rendered infructuous. 12. Opposite Party No.5, Debidutta Mohanty filed the writ petition i.e. W.P.(C) No.3326 of 2021 in this Court questioning the solvency certificate issued in favour of the present Petitioner. The said petition was disposed of by this Court on 4th February 2021 directing the Collector, Cuttack to consider the representation of Opposite Party No.5. While the matter was pending with the Collector, Opposite Party No.5 filed W.P.(C) No. 14241 of 2021 which came to be disposed of on 19th April, 2021. In the said order, it was noted that on 8th March 2021, the Tahasildar, Narasinghpur had cancelled the solvency certificate produced by the present Petitioner with his bid and that against the said cancellation order, an appeal had been filed before the Collector. A direction was issued to the Collector to also dispose of the representation of Opposite Party No.5 not later than 12th May, 2021. 13. It appears that in the meanwhile, the Petitioner was permitted to operate the sand sairat and then it was stopped at the instance of the Tahasildar. On 2nd March 2021, a letter was written by the Tahasildar, Narasinghpur to the Sub-Collector, Athagarh stating that the present Petitioner was the Chairman of one Gurukrupa Charitable Trust and referring to the fact that apart from the fact that the present Petitioner had filed an application for issuing of a solvency certificate in his own name, but since he was the Chairman of Guru Krupa Charitable Trust the solvency certificate that had to be issued in the name if the Trust was issued in his name. It was stated therein that notice had been issued to the party and necessary steps had been taken for correction of the said certificate. 14. Subsequently, another letter was sent by the Tahasildar on 8th March 2021 to the Collector, Cuttack stating that the earlier solvency certificate issued in favour of the present Petitioner stood cancelled and another certificate was asked to be issued in favour of the 'Guru Krupa Charitable Trust, Chairman of village Kendupali.' 15. 14. Subsequently, another letter was sent by the Tahasildar on 8th March 2021 to the Collector, Cuttack stating that the earlier solvency certificate issued in favour of the present Petitioner stood cancelled and another certificate was asked to be issued in favour of the 'Guru Krupa Charitable Trust, Chairman of village Kendupali.' 15. Meanwhile, on 29th January 2021, the Petitioner appears to have written to the Tahasildar, Sadar Cuttack to substitute/exchange the solvency certificate given with his bid with another one in the value of Rs.4.6 crores which had been issued on 27th January, 2021. A copy of the said solvency certificate was attached. 16. On 24th March 2021, pursuant to the order passed by the this Court on 4th February 2021 in W.P.(C) No.3326 of 2021, the representation of Opposite Party No. 5 was taken up by the Collector. The Collector noted in his order the allegation of Opposite Party No. 5 the solvency certificate submitted by the present Petitioner "has been forged many times earlier" and that the lease executed in favour of the present Petitioner should be cancelled and further that Debidutta Mohanty being the second highest bidder, the lease deed of Subhadrapur sand sairat should be executed in his favour. 17. The Collector in his order dated 24th March 2021 noted that contrary to the order of the Sub-Collector dated 6th December 2017 where the solvency certificate had been asked to be issued in favour of the 'Gurukrupa Charitable Trust Chairman of village Kendupali,' it was issued in favour of the present Petitioner. The Collector accordingly concluded that the said solvency certificate "has not been issued following the stipulated provisions of law and hence utilization of the same by Sri Pattnaik in auction of the sairat in the Kathajodi River in Mouza-Subhadrapur is illegal". Accordingly, the said lease in favour of the present Petitioner was cancelled. It is against the said order of the Collector, that the resent petition has been filed. 18. On 7th May 2021 while issuing notice in the present petition, it was directed that all actions taken in the meanwhile pursuant to the impugned order would be subject to the outcome of the writ petition. 19. An intervention application being I.A. No. 11956 of 2021 has been filed by Sukanti Sahoo seeking to intervene in the present proceedings. 20. This Court has heard the submissions of Mr. 19. An intervention application being I.A. No. 11956 of 2021 has been filed by Sukanti Sahoo seeking to intervene in the present proceedings. 20. This Court has heard the submissions of Mr. P. K. Rath, learned counsel for the Petitioner, Ms. Deepali Mohapatra, learned counsel appearing for Opposite Party No.5, Mr. Soumya Ranjan Mohanty, learned counsel appearing for the Intervenor-Sukanti Sahoo and Mr. Debakanta Mohanty, learned Additional Government Advocate (AGA) for the State. 21. Mr. Rath, learned counsel for the Petitioner points out that the procedure for cancellation of a lease is provided under Rule 51 (7) of the OMMC Rules, 2016 which reads as under: 51. Penalties:- xxx xxx xxx (7) In case of breach of any condition of the lease deed, the Competent Authority may give notice of sixty days to the lessee to rectify the defects within the time specified and if the lessee fails to rectify the defects within the specified time, the Competent Authority may cancel the lease and/or levy a penalty not exceeding rupees fifty thousand." 22. Mr. Rath submits that in terms of Schedule IV to the OMMC Rules, 2016, the Competent Authority in regard to minor minerals other than specified minor minerals in a quarry lease within a village boundary is the 'Tahasildar'. His contention, therefore, is that in the present case the lease deed could not have been cancelled by the Collector. Accordingly, on that short ground, it is contended that the impugned order should be set aside. 23. Mr. Rath further submits that in any event, the Petitioner has rectified the defect of not furnishing a solvency certificate in his own name. He does not dispute that the earlier solvency certificate should have been issued in the name of the Trust of which he was the Chairman. He pointed out that on 29th January 2021 itself, he had written to the Tahasildar for substituting the solvency certificate submitted with the bid with another issued in his own name and, therefore, even this defect stood cured. Mr. Rath submits that without taking note of this, the Collector has exceeded his jurisdiction and cancelled the lease. Thirdly, he submits that Opposite Party No. 5 being the third highest bidder it did not have the locus standi to question the lease executed in favour of the Petitioner. Mr. Rath submits that without taking note of this, the Collector has exceeded his jurisdiction and cancelled the lease. Thirdly, he submits that Opposite Party No. 5 being the third highest bidder it did not have the locus standi to question the lease executed in favour of the Petitioner. Till such time the lease was actually cancelled, the question of Opposite Party No.5 having any right to ask that the lease should be executed in his favour did not arise. As far as the Intervenor Sukanti Sahoo is concerned, Mr. Rath submits that with her failing to pay the requisite penalty despite several opportunities her bid already stood cancelled and, therefore, there is no question of reviving it at this stage. 24. Mr. Mohanty, learned AGA, points out that the bid submitted by the Petitioner was not accompanied by a solvency certificate which was correctly issued in his name. It transpired that it was wrongly issued in his name when in fact it should have been issued in the name of the Trust. Therefore, the lease deed was liable to be cancelled on that ground. However, Mr. Mohanty was unable to dispute the legal proposition that the procedure for cancellation of the lease under Rule 51 (7) of the OMMC Rules was not complied with in the present case. 25. Ms. Deepali Mohapatra, learned counsel appearing for Opposite Party No.5, maintains that the bid submitted by the Petitioner was ab initio void and could never have been accepted since it was not accompanied by a valid solvency certificate in the name of the Petitioner. The document that was enclosed as a solvency certificate was in fact not correctly issued and was contrary to the express order of the Sub-Collector. According to her, if the bid was ab initio illegal then Opposite Party No. 5 would be automatically become the second highest bidder would therefore have the locus standi to ask the lease to be granted in his favour. 26. Mr. Soumya Ranjan Mohanty, learned counsel for the Intervener, sought to advance the submission that Rule 51 (7) only talks of "breach of any condition of the lease deed" whereas according to him it was Rule 27 (4) (iv) that was breached and, therefore, Rule 51 (7) of the OMMC Rules, 2016 may not strictly apply to the facts of the present case. Although he did not dispute that the appeal filed by the Petitioner against the order dated 7th May 2019 of the Tahasildar is pending before the Sub-Collector, his ground for challenging the grant of the lease in favour of the Petitioner was no different from the ground urged by Opposite Party No.5. He also referred to Rule 59, which states that any mining lease or quarry lease granted, renewed or acquired in contravention of the provisions of the Act or any rules or orders made thereunder shall be void and of no effect. 27. The above submissions have been considered. It is plain that as far as Sukanti Sahoo is concerned, despite adequate opportunities, she failed to deposit the penalty amount and, therefore, was declared as defaulter. A letter dated 7th May 2019 was issued cancelling her bid. The appeal filed by Sukanti Sahoo against this order of the Tahasildar is stated to be pending before the Sub-Collector. While this Court is not called upon to express any view on the merits of that appeal, which should be decided in accordance with law, as far as the intervention of Sukanti Sahoo in the present petition is concerned, it appears to be on a misconception that the expression "breach of any condition of the lease deed" is different from violation of the OMMC Rules, 2016. The lease deed itself is executed only in terms of the OMMC Rules, 2016. The Form-M, which is required to be filled by a bidder is also prescribed only under the OMMC Rules, 2016. In other words, there would be no question of a lease deed prescribing conditions separate from the conditions prescribed under the OMMC Rules, 2016. Therefore, the requirement of fulfilling Rule 27 (4) (iv) of the OMMC Rules, 2016 is very much a condition of the lease deed itself, which is why Clause-5 of the bid documents incorporates this very requirement of furnishing a solvency certificate. 28. Although the allegation on the basis of which Opposite Party No. 5 submitted a representation seeking cancellation of the lease was that the solvency certificate was a fake document or a forged document, the impugned order dated 24th March 2021 of the Collector, Cuttack renders no such finding. Interestingly, a letter was issued on 2nd March 2021 by the Tahasildar, Narasinghpur to the Sub-Collector, Athagarh confirming that the solvency certificate issued was 'a genuine one.' 29. Interestingly, a letter was issued on 2nd March 2021 by the Tahasildar, Narasinghpur to the Sub-Collector, Athagarh confirming that the solvency certificate issued was 'a genuine one.' 29. The fact of the matter is that solvency certificate which was enclosed with the Petitioner's bid in the first place ought to have been issued in the name of Gurukrupa Charitable Trust, Chairman village Kendupali and not in the name of the Petitioner himself. It is possible that the confusion arose because the Petitioner was in fact the Chairman of the said Trust. This mistake does not appear to be a deliberate one. It clearly was a rectifiable one. Therefore, by the letter dated 8th March 2021, the Tahasildar, Narasinghpur confirmed to the Collector, Cuttack that the solvency certificate issued in the name of the present Petitioner stood cancelled and was being issued in favour of the Trust i.e. "Gurukrupa Charitable Trust, Chairman of village Kendupali." The fact also remains that the Petitioner has sought to substitute the said solvency certificate furnished by him with another issued in his own name on 27th January, 2021. 30. At this stage, it is necessary to note that under the OMMC Rules, the procedure for cancellation of a lease, in case of breach of any condition of the lease deed, is that the Competent Authority i.e. the Tahasildar has to give a notice of 60 days to the lessee "to rectify the defects within the time specified." Where the lessee fails to rectify the defects within the specified time, then the Tahasildar can cancel the lease and/or levy a penalty not exceeding rupees fifty thousand. 31. It is plain that in the present case this procedure was overlooked. There were two aspects of the matter. One was the representation by Opposite Party No. 5, which combined two or three prayers. One prayer was that the lease deed in favour of the present Petitioner should be cancelled. The second prayer was that the lease deed thereafter should be executed in favour of Opposite Party No.5. Since the representation had to be considered in accordance with the law, the proper course would have been for the Tahasildar as a competent authority to address the first part of the prayer i.e. cancellation of lease in favour of the present Petitioner. Since the representation had to be considered in accordance with the law, the proper course would have been for the Tahasildar as a competent authority to address the first part of the prayer i.e. cancellation of lease in favour of the present Petitioner. That would have been then required the Tahasildar to adhere to the procedure set out in Rule 51 (7) of the OMMC Rules, 2016. Till such time the lease deed in favour of the Petitioner was cancelled, the question of Opposite Party No. 5 becoming the second highest bidder would not even arise. It must be recalled that Opposite Party No. 5 was only a third bidder to begin with. This was perhaps overlooked when the Collector passed the impugned order dated 24th March, 2021. 32. Under the OMMC Rules, 2016, the competent authority in terms of the Schedule (IV) who can cancel the lease deed, is the Tahasildar. No doubt against an order of the Tahasildar an appeal can lie to the Sub-Collector. However, the competent authority's power under the OMMC Rules, 2016 cannot be straight away exercised by the Collector in the first instance. That being the legal position, in the present case in the impugned order dated 24th March 2021, the Collector could not have passed the order cancelling the lease in favour of the Petitioner. 33. Further, in terms of Rule 51 (7) where there is a defect on account of the breech of the condition of the lease, 60 days' time has to be given to the lease holder to cure the defect. With the lease already having been executed in favour of the Petitioner in the present case, the procedure for cancellation has undoubtedly to be only in accordance with Rule 51 (7) of the OMMC Rules, 2016 and not otherwise. If that procedure had been followed, and 60 days' time was given to the Petitioner, it was possible that he would have cured the defect within that time period. As it transpires the Petitioner on his own has in fact cured the defect and substituted the solvency certificate submitted by him in the first instance with another solvency certificate dated 27th January 2021 which was again issued in his own name. In that event, the question of cancellation of lease deed would not have been arisen. As it transpires the Petitioner on his own has in fact cured the defect and substituted the solvency certificate submitted by him in the first instance with another solvency certificate dated 27th January 2021 which was again issued in his own name. In that event, the question of cancellation of lease deed would not have been arisen. This is yet another ground in which the Court finds the impugned order dated 24th March 2021 to be unsustainable in law. 34. For the aforementioned reasons, the Court sets aside the impugned order dated 24th March 2021 of the Collector, Cuttack and as a result, the lease in favour of the present Petitioner stands revived. It is clarified that the Court has expressed no opinion on the merits of the pending appeal of the Intervener Sukanti Sahoo pending before the Sub-Collector, which would be decided in accordance with law. 35. The writ petition is allowed in the above terms with no order as to costs. 36. An urgent certified copy of this order be granted as per rules.