The Jammu & Kashmir High Court opined that the letter of intent is just an indication to the person to whom it is issued that if he completes the necessary formalities and obtains all NOCs from the concerned authorities, the mining license may be granted. Further, the High Court expounded that the Letter of intent is in the form of an invitation to offer and is provisional. It only conveys that the offer has been accepted and that the person is under statutory and contractual obligations to fulfill the requisite conditions before he becomes entitled to the grant of a mining lease.
Brief Facts:
An agreement was alleged to have been entered by Petitioner and Respondent No. 3. Respondent No.3 transferred the leasehold rights in favour of the Petitioner under the misconception of law.
The Petitioner argued that the leasehold rights have been transferred to him by Respondent No.3 and therefore, the Department can only enter into a lease deed with the Petitioner. Respondent No.3 will have no right whatsoever to continue based on the lease. The right to execute the lease deed exists with the Petitioner.
It was contended that Respondent No.2 was under a legal obligation qua the Petitioner to decide the representation in accordance with the Rules. Since Respondent No.2 did not do so, the Petitioner had to approach the Court and hence, the present petition.
Contentions of the Petitioner:
The Petitioner prayed for a writ of Mandamus to be issued against Respondent No.2 to transfer the mining lease in favour of the Petitioner and to not allow the Respondent to undertake mining in the mineral block.
The Petitioner relied on the deed of the agreement and argued that Respondent No.3 has created prospective/futuristic rights in favour of the Petitioner and therefore, has surrendered rights to continue with the Department. It was contended that merely because the agreement is questioned by the Competent Court, the agreement does not lose its significance if it is not set aside by the Court.
It was argued that the letter of intent is a step forward in executing the lease deed and hence, there are no rights whatsoever available to Respondent No.3 to continue based on the lease as rights have already been surrendered by Respondent No.3
Contentions of the Respondent No. 3:
It was argued that the agreement is fraud and sub judice before the Court. The Department will come into the picture only when the lease deed is executed and not before that. The Petitioner approached the Court based on an Agreement when there was only a letter of intent and rights were yet to be created. It was argued that the agreement lost its value as the letter of intent culminated in the execution of the lease deed.
It was also contended that the Petitioner is a stranger to the lease deed and hence, has no locus standi to file the present writ petition.
Contentions of the Respondent No.1 and 2:
It was argued that a letter of intent is only a formality of the initiation of the process which ultimately culminates in the execution of the lease deed and the right is created in favour of a person only in eventuality if the lease deed is executed. The agreement relied on by the Petitioner was at a stage when only the letter of intent was there and hence, the same does not have any value in the eyes of law. Therefore, the Department had no obligation to act on an agreement that has no sanctity in the eyes of law.
Observations of the Court:
It was noted that based on the agreement, the Petitioner contended that he has acquired the right to license, lease and lease deed.
The Court observed that there can be no transfer, sub-letting, or partnership in the mining license and hence, the agreement is void ab initio. Respondent No.3 cannot create or assure any legally enforceable right or obligation for any of the parties for this very reason.
The Bench opined that the letter of intent is just an indication to the person to whom it is issued that if he completes the necessary formalities and obtains all NOCs from the concerned authorities, the mining license may be granted. Merely based on the letter of intent, a person does not acquire the right to the mining license and the Respondent can even refuse the license if conditions are not met after the issuance of the letter of intent.
In the present case, since Respondent No.3 has no authority to transfer the lease deed based on the letter of intent, the claims of the Petitioner are found to be based on void documents having no legal sanctity.
The High Court also noted that since the Petitioner is a stranger to the Department, the Department was not under any legal obligation to decide the complaint which has no legal sanctity.
The Court opined that when the Petitioner is a stranger to the Department and has no lease deed in his favour, he would not get any rights to run the affairs of the mining business.
Further, the High Court expounded that the Letter of intent is in the form of an invitation to offer and is provisional. It only conveys that the offer has been accepted and that the person is under statutory and contractual obligations to fulfil the requisite conditions before he becomes entitled to the grant of a mining lease.
The decision of the Court:
Based on the reasons, the High Court accordingly dismissed the petition.
Case Title: Kanwarjit Singh v. UT of J&K & Ors.
Coram: Hon’ble Mr. Justice Wasim Sadiq Nargal
Case No.: WP (C) No. 25552/2022
Advocates for Petitioner: Advs. Mr. Sunil Sethi, Mr. Ravi Abrol
Advocates for Respondents: Advs. Mr. Ravinder Gupta, Mr. R.S. Thakur, Mr. Varshan Thakur
Read Judgment @LatestLaws.com
Picture Source :
