The main legal point established in the judgment is that the procedure for cancellation of a lease under Rule 51 (7) of the OMMC Rules must be followed, and the competent authority's power cannot be exercised by another authority in the first instance.

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. 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