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IN THE HIGH COURT OF DELHI
Yashwant Varma, J.
ESL Steel Limited - Appellant
Versus
Union of India - Respondent
W.P.(C) 10860 of 2022, CM Appl. 31607 of 2022
Decided On : 01-08-2022
The court held that fixed costs for coal auction do not need final determination prior to bidding, as long as tender disclosures maintain legal certainty.
Headnote:(A) Coal Mines (Special Provisions) Act, 2015 - Section 16 - Coal Mines (Special Provisions) Rules, 2015 - Writ petition seeking mandamus for determination of fixed cost before conducting the 13th tranche auction - Petitioner's claim of fixed amount determination not being legally enforceable prior to auction process based on tender document disclosures. (Paras 1-9)
(B) Judicial Review - Tender Conditions - The principles of legal certainty in tendering are emphasized - Terms must be clear and not vague to prevent arbitrariness; the auction process should not lead to surprise for bidders as reiterated by past judgments. (Paras 6-11)
Facts of the case:
The writ petition filed by a company for determining the fixed cost prior to a coal mine auction after the prior allottee submitted claims for substantial amounts. The Nominated Authority disclosed the fixed amount based on available data, with a distinct indication of variability post-bid submission. (Paras 2-4)
Findings of Court:
The court found no legal obligation to fix the amount prior to auction. Proper disclosures were made in the NIT, hence the petition was dismissed. (Paras 9-13)
Issues: The court addressed whether the fixed cost determination could be assured prior to the auction and if the tender terms met legal standards of clarity as per constitutional provisions. (Paras 5, 10)
Ratio Decidendi: The court concluded that determining the fixed amount post-auction is inherently linked to the ongoing assessment process, emphasizing that transparency in the tendering norms must be maintained to uphold the principles of law. (Paras 6, 8)
Result: Writ petition dismissed.
| Table of Content |
|---|
| 1. petition seeks specific writs for auction process. (Para 1) |
| 2. background on coal mine allocation and prior claimant. (Para 2 , 3 , 4) |
| 3. arguments regarding fixed amount certainty and prior allottee. (Para 5 , 6 , 7 , 8 , 12) |
| 4. court's observations emphasize on variable fixed amount. (Para 9 , 10 , 11) |
| 5. writ petition is dismissed. (Para 13) |
ORDER
1. This writ petition has been preferred seeking the following reliefs:
"a. Issue a writ or order in the nature of mandamus to the Respondent No. 2 to determine the fixed cost under Rule 14 of the Coal Mines (Special Provisions) Rules, 2015 before conducting the 13th tranche of auction under the Coal Mines (Special Provisions) Act, 2015 for Block No. 2 at Parbatpur, Jharkhand;
b. Issue a writ or order in the nature of mandamus to the Respondent No. 1 and 2 to defer the bidding for the 13th auction until a determination of the fixed cost;
c. Ad interim ex parte relief in terms of prayer clause (b);
d. Order as to costs; and"
2. The petition itself has come to be instituted in the backdrop of a process initiated by the Nominated Authority for allotment of the Parbatpur Central Coal Mine. The aforesaid coal mine which was initially allotted to the Steel Authority of India Limited ["SAIL"] has come to be included in a tendering process initiated by the respondents consequent to SAIL having submitted a request for surrender of the coal mine. That request, which was submitted by SAIL, ultimately came to be accepted by the Nominated Authority on 05 December 2019 and a further decision taken to initiate the process of allocation in accordance with the procedure prescribed in the Coal Mines (Special Provisions) Act, 2015 ["the Act"].
3. A Notice Inviting Tenders ["NIT"] was thereafter issued. The petitioner desirous of seeking certain clarifications with respect to the "Fixed Amount" payable to the prior allottee appears to have addressed a letter to the respondents. Having failed to receive a satisfactory response, the present writ petition has come to be instituted. The last date for submission of bids stands extended upto 03 August 2022 as was noticed by the Court in its order of 19 July 2022. The NIT while setting out the payments required to be made by the successful bidder makes the following provisions:
"On signing the Agreement, the Successful Bidder, within such period as prescribed in Clause 3.8, shall, to the Nominated Authority:
(i) furnish the Performance Security as specified in Clause 7;
(ii) pay a fixed amount for the compensation for land and mine infrastructure; cost borne by the Prior Allottee for the preparation of geological report; cost borne by the Prior Allottee for obtaining all statutory licenses, permits, permissions, approvals, clearances or consents relevant to the mining operations; cost incurred by CMPDIL for preparation of the mine dossier including block boundary and financial valuation along with applicable taxes; (collectively the "Fixed Amount"). If the Successful Bidder is a Prior Allottee, then, the compensation payable to such Successful Bidder shall be set off or adjusted against the Fixed Amount payable by such Successful Bidder. The Fixed Amount is required to be deposited by the Successful Bidder in accordance with the relevant provisions of the Act and the Rules and as provided in the Agreement. The Fixed Amount payable is based on the available information and the assessment made by the competent authority and will be uploaded as a part of this Tender Document. Any upward revision in the Fixed Amount on a subsequent date by the Government or the Nominated Authority consequent to any process or on the orders of any competent court of law, shall also be payable by the Successful Bidder. Additionally, in case of any downward revision in the Fixed Amount on a subsequent date by the Government or the Nominated Authority, the same would be refunded by the Nominated Authority to the Successful Bidder;
(iii) For Fully Explored Mines,
