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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
S.J. VAZIFDAR, ANUPINDER SINGH GREWAL, JJ.
M/s Sunder Marketing Associates – Petitioners
Versus
State of Haryana and others – Respondents
Civil Writ Petition No. 20986 of 2016
Decided On : 01-06-2017
The Court held that the agreement between the petitioners and the official respondents was contrary to the provisions of the Mines and Minerals (Development and Regulation) Act, 1957, the Haryana Minor Mineral Concession, Stocking, Transportation of Minerals & Prevention of Illegal Mining Rules, 2012, and the terms and conditions of the notice inviting tenders. The Court also held that the agreement was contrary to the principles of public law and that the petitioners were not entitled to specific performance of the agreement.
Fact of the Case:
The petitioners, a joint venture (JV) between two companies, were pre-qualified to participate in an auction for the mining rights on terms and conditions stipulated in a public notice. The JV was the highest bidder and was issued a letter of intent (LoI). However, one of the JV partners decided to rescind the contract and sought a refund of the amount deposited by the JV. The petitioners then approached the official respondents and sought permission to transfer the share of their joint venture partner to themselves. The official respondents agreed to the transfer and a lease/agreement was executed between the official respondents and the petitioners. The private respondents, who were not participants in the auction, challenged the transfer of the lease and the agreement by filing a writ petition. The Court disposed of the writ petition by an order and judgment dated 04.03.2015, holding that the lease in favor of HSIIDC was illegal being contrary to Rule 9 of the 2012 Rules.
Finding of the Court:
The Court held that the agreement between the petitioners and the official respondents was contrary to the provisions of the Mines and Minerals (Development and Regulation) Act, 1957, the Haryana Minor Mineral Concession, Stocking, Transportation of Minerals & Prevention of Illegal Mining Rules, 2012, and the terms and conditions of the notice inviting tenders. The Court also held that the agreement was contrary to the principles of public law and that the petitioners were not entitled to specific performance of the agreement.
Issues: Whether the agreement between the petitioners and the official respondents was contrary to the provisions of the Mines and Minerals (Development and Regulation) Act, 1957, the Haryana Minor Mineral Concession, Stocking, Transportation of Minerals & Prevention of Illegal Mining Rules, 2012, and the terms and conditions of the notice inviting tenders.
Ratio Decidendi: The Court held that the agreement between the petitioners and the official respondents was contrary to the provisions of the Mines and Minerals (Development and Regulation) Act, 1957, the Haryana Minor Mineral Concession, Stocking, Transportation of Minerals & Prevention of Illegal Mining Rules, 2012, and the terms and conditions of the notice inviting tenders. The Court also held that the agreement was contrary to the principles of public law and that the petitioners were not entitled to specific performance of the agreement.
Final Decision: The Court disposed of the petition by rejecting the reliefs claimed by the petitioners. The Court also directed the petitioners to pay the difference between the higher bid, if any, submitted by the party to whom the mining rights are granted and Rs.115 crores for the period 06.10.2016 till possession of the site is handed over by the petitioners together with interest thereon at the rate of 15% per annum from the date of the interim order i.e. 06.10.2016 till payment and/or realization.
S.J. VAZIFDAR, J.
Respondent Nos.1 to 4 are the official respondents. Respondent No.2 is the Additional Chief Secretary and Principal Secretary to the Government of Haryana, Department of Mines & Geology; respondent No.3 is the Director General of Mines & Geology, Haryana and respondent No.4 is the Mining Officer, Haryana. Respondent Nos. 5 and 6 are the private respondents who though not participants in the auction held by the official respondents claim to be interested in participating in the auction proposed to be held by the official respondents.
2. The petitioners seek a writ of certiorari to quash a show cause notice dated 09.08.2016 and an order dated 29.09.2016 by which respondent No.3 withdrew the permission granted in favour of the petitioners by the official respondents to transfer the share of their joint venture partner M/s Karamjeet Singh & Company Ltd. to the petitioners and declared a lease-deed executed on 05.08.2015 in favour of the petitioners by the official respondents to be void. The petitioners have also sought a writ of mandamus directing respondent Nos.1 to 4 to allow them to perform their obligations in accordance with the mining lease dated 05.08.2015.
3. It would be convenient to preface this judgment with a summary of the case.
The official respondents put to auction the mining rights on terms and conditions stipulated in a public notice. Transfer of the lease was not permissible for the first five years. However, the official respondents were entitled to permit the induction of a partner/share holder to the extent of 49% of the total share holding of the original lease holder in accordance with the provisions of the 2012 Rules. The official respondents invited bids only from pre-qualified agencies. A detailed criteria for eligibility was stipulated. A bidder was required to obtain 60 out of 100 points to qualify for the bidding process. The eligibility was to be assessed by a committee of experts. The petitioners by themselves were admittedly not qualified. In order to meet the eligibility criteria, they formed a joint venture (JV) with M/s Karamjeet Singh & Company Pvt. Ltd. M/s Karamjeet Singh & Company Pvt. Ltd. had 51% share in the JV. A letter of intent/acceptance was issued by the official respondents in favour of the JV. It was not issued in favour of the petitioners in their independent capacity. For reasons which we will enumerate later, the JV was given an option to rescind the contract. M/s Karamjeet Singh and Company Ltd. decided to rescind the contract and sought a refund of the amount deposited by the JV. The petitioners, however, wanted to implement the contract either by themselves or by the induction of another partner. The official respondents and the JV partners entered into correspondence and after following a considerably detailed procedure including obtaining an opinion of the Advocate General of the State of Haryana, the official respondents agreed to M/s Karamjeet Singh and Company Ltd. transferring their entire 51% shares in favour of the petitioners and a lease/agreement dated 05.08.2015 was entered into between the official respondents and the petitioners. It is this agreement that the petitioners in effect seek enforcement of in this writ petition. The private respondents challenged the same by filing a writ petition. It was not necessary to decide this writ petition as in the meantime the official respondents cancelled the permission to transfer the lease and the lease agreement dated 05.08.2015. It is this decision to cancel the permission and the agreement that is challenged in this writ petition.
This therefore is not a matter merely between the petitioners and the official respondents which can be decided only considering whether the official respondents having entered into the agreement were entitled to cancel it. The rights and contentions of responden
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