IMPORTANT POINTS
(1) Government Contract – Tender – State Government is assumed to know commercial value of natural resources tendered/auctioned, along with commercial propensity to earn in a future point of time.
(2) Annulment of auction – Fresh auction – Directions issued in writ jurisdiction ought not to become a substitute to executive discretion of authorities.

JUDGMENT :

S.V.N. BHATTI, J.

1. The Civil Appeal arises from the Judgment dated 24.08.2022 in L.P.A. No. 165 of 2022 in the High Court of Jharkhand at Ranchi. The State of Jharkhand and the Director of Mines and Geology, Ranchi/Respondents in the L.P.A are the Appellants herein.

2. SOCIEDADE DE FOMENTO Industrial Private Limited, Margao, Goa/the Respondent herein filed Writ Petition (C) No. 5152/2021 praying for an appropriate writ directing the first Appellant to proceed with the second round of auction as per Sub-Rules (10) to (12) of Rule 9 of the Mineral (Auction) Rules, 2015, as amended by Mineral (Auction) Amendment Rules, 2017^*[M(A) Rules] and for a further direction restraining the Appellants herein from taking any action to defeat the rights of the Respondent in the subject tender process. In the given circumstances, on 22.04.2022, the Writ Petition was dismissed by holding that the Respondent’s technical bid even if found to be compliant, the bid cannot be taken to the next stage of the tender process. The Respondent, hence, filed L.P.A No. 165/2022 and by the Impugned Judgment, the L.P.A was allowed. The Impugned Judgment, among other reasons, held that the Appellants are bound by the statutory obligation under the second proviso to Sub-Rule (12) of Rule 9 of M(A) Rules and the bid of the Respondent is considered further. The Division Bench held that the decision-making process of the Appellants to annul tender no. MSTC/RNC/DEPARTMENT OF MINES AND GEOLOGY/42/RANCHI/19-20/35661, and the auction notice dated 28.01.2020, is vitiated. Hence, the Civil Appeal at the instance of the State and the Director of Mines and Geology.

3. We have perused the record and the judgments in Writ Petition No. 5152/2021 and L.P.A. No. 165/2022. We are of the view that to appreciate the contentions canvassed by the Appellants in the Civil Appeal, a chronology of the admitted circumstances is prefaced.

4. The first Appellant, on 25.10.2019, issued a notice inviting tender^*[NIT.] to allocate and grant mining lease through e-auction of bauxite mineral located in Lodhapat, Jobhipat and Hethilodha blocks over an area of 75.193 hectares^*[The Subject Mining Lease.]. The last date for submission of the technical bid and IPO was 16.12.2019. The NIT dated 25.10.2019 specifically invited the expression of interest through the digital platform on the MSTC website and submission of a physical copy of the uploaded bid documents at the office of the second Appellant. It is admitted by the parties that in response to tender notice 25.10.2019, the Respondent has not uploaded the technical bid and IPO through the digital platform of MSTC. The Respondent, however, submitted the bid letter dated 13.12.2019, which was acknowledged by the MSTC by e-mail dated 16.12.2019.

5. As per the applicable format of evaluation of the bid documents, the Tender Evaluation Committee^*[TEC.] was constituted. In the meeting dated 17.12.2019, the TEC in evaluation recorded that the Respondent submitted the technical bid physically at the Department. The Respondent did not submit the technical bid on the electronic platform – MSTC website. The TEC, referring to clause 13.1.2 of the tender document, stated that the technical bid must have been submitted electronically, and physical copies have been filed by the deadline. The minutes of the even date also mention the consequences of not communicating the expression of interest in the way the tender document specified, meaning that if the mode and the manner of the communication of the expression of interest are not followed, the technical bid will be deemed not received. The TEC in the meeting of the even date recommended annulment of the auction initiated through auction notice dated 25.10.2019.

5.1 The Appellants, following the recommendations of the minutes of the meeting dated 17.12.2019, issued a notification dated 28.01.2020, inviting bids for the subject mine blocks. This is referred to as second attempt of auction in the pleading