M/S Alpine Recourses L.L.P Madhya ... vs State Of U.P. Thru. Its Secy. ...
2023 Latest Caselaw 2286 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

									A.F.R.
 
Court No. - 7
 
Case :- WRIT - C No. - 5636 of 2022
 
Petitioner :- M/S Alpine Recourses L.L.P Madhya Pradesh Thru. Its Authorized Representative Jitendra Pratap Singh
 
Respondent :- State Of U.P. Thru. Its Secy. Deptt. Of Geology And Mining Lko. And Others
 
Counsel for Petitioner :- Rahul Srivastava
 
Counsel for Respondent :- C.S.C.
 

 
Hon'ble Abdul Moin,J.

1. Heard Shri Rahul Srivastava, learned counsel for the petitioner and Dr. Uday Veer Singh, learned Additional Chief Standing Counsel for the respondents no. 1 to 4.

2. The instant petition has been filed praying for the following main reliefs:

"1. Issue a writ, order or direction in the nature of certiorari quashing the order dated 29.06.2022 passed by the Respondent no. 1 / State Government in revision No. 36 (R) / S.M of 2022 "M/S Alpine Resources LLP vs Commissioner Chitrakoot Dham Mandal Banda & others" contained as Annexure no. 1.

2. Issue a writ, order or direction in the nature of certiorari quashing the order dated 30.04.2022 passed by the Commissioner Chitrakoot Dham Mandal Banda in appeal no. 00132 / 2020, order dated 08.01.2020 passed by the District Magistrate, Hamirpur, contained as Annexure No. 2 & 3 respectively.

3. Direct the respondents to refund the security amount + first quarterly installment of lease amount deposited by the revisionist along with the 18% of interest from the date of the deposit to the date of the refund.

or

Direct the respondents to execute the mining lease in favour of the revisionist for the area in question at the present available and assessed quantity of the mineral i.e. 2,59,104 cubic meter / year and accordingly issue amended letter of intent to the revisionist."

3. The case set forth by the petitioner is that on 14.08.2017 a Government Order had been issued by the State Government providing that henceforth mining leases were to be granted by e-tender-cum-e-auction under Chapter IV of the U.P. Minor Minerals (Concession) Rules, 1963 (hereinafter referred to as the Rules 1963). In pursuance to the said government order a notice / advertisement dated 09.05.2018, a copy of which is annexure 5 to the petition, was issued by the District Magistrate, Hamirpur for settlement of mining leases of sand / mourram under the Rules 1963 in District Hamirpur for several mining blocks by e-tendering. As per the Condition no. 13(6) of the Government Order the applicants had to deposit Rs 15,000/- as application fee and 25% of the bid amount as earnest money for each area separately.

4. In pursuance to the said advertisement the petitioner claims to have participated in the auction proceedings for grant of the mining lease situated in the area in Tehsil Sarila, Village Bheri Kharka, Khand No. 23/21 total area 24.291 hectares for the assessed quantity of mineral of 3,88,608/- cubic meter per year. In the second round of bidding the bid of the petitioner @ Rs 302 per cubic meter was declared highest and an e-mail to the said effect had been sent to the petitioner by the auctioning authority. The petitioner claims to have completed the formalities and on 07.06.2018 a letter of intent had also been issued to the petitioner requiring him to deposit the amount of Rs 2,93,44,704/- i.e. security deposit equal to one quarterly installment of lease amount for first year and Rs 2,93,44,704/- for the first quarterly installment of lease amount of first year totaling Rs 5,86,89,408. The aforesaid amount was deposited by the petitioner. Subsequent thereto an environment clearance certificate was also issued to petitioner on 31.01.2019, a copy of which is annexure 7 to the petition.

5. When the petitioner visited the allotted mining site he found certain mining activities taking place on his allocated area. This fact was also admitted as per the letter dated 21.02.2019 sent by the District Magistrate, Hamirpur to the Director, Geology and Mining of the U.P. Government, a copy of which is annexure 8 to the petition. In the said letter various areas were mentioned but so far as the area of the petitioner was concerned, which was 23/21, it was indicated that a person to whom an area namely 23/12 had been allocated namely M/s Yadav and Sons and to whom a lease deed has been executed on 11.12.2018, was found to be working in the area of the petitioner. The letter also stated that the demarcation which had been carried out by the authorities has not been correctly done. Consequently, the District Magistrate required a fresh demarcation to be carried out for all the areas as indicated in the said letter including the area of the petitioner and the area allocated to M/s Yadav and Sons namely areas numbers 23/21 and 23/12 respectively. Through a letter dated 09.03.2019, a copy of which annexure 9 to the petition, which is a letter issued to all the leaseholders, it was indicated that the demarcation work has been carried out.

6. As the case of the petitioner was that in terms of the letter issued by the District Magistrate dated 21.02.2019 the area allocated to the petitioner was also overlapping with the area allotted to M/s Yadav and Sons and as the lease deed had been executed on 11.12.2018 to M/s Yadav and Sons as such certain extractions must have taken place, consequently, the petitioner through his letter dated 23.12.2019, a copy of which is annexure 11 to the petition, approached the District Magistrate for reassessment of the quantity of minerals.

7. No heed was paid to the said letter rather a notice was issued to the petitioner by the District Magistrate on 26.12.2019, a copy of which is annexure 14 to the petition, contending that as per the notification, a particular quantity of the mineral had been indicated and on the basis of the bid of the petitioner, the letter of intent had been issued as such the petitioner was required to have the lease deed executed failing which the letter of intent shall be cancelled and the amount deposited shall be forfeited.

8. Considering the aforesaid peculiar situation that had arisen, the lease deed was not executed by the petitioner which resulted in the amount deposited by the petitioner of Rs 5,86,89,408/- being forfeited vide impugned order dated 08.01.2020.

9. Being aggrieved the petitioner filed an appeal which was rejected vide the impugned order dated 30.04.2022, a copy of which is annexure 2 to the petition. Still being aggrieved the petitioner filed a revision before the State government which has also been rejected by the order dated 29.06.2022, a copy of which is annexure 1 to the petition. Still being aggrieved the instant petition has been filed.

10. The contention of learned counsel for the petitioner is that when the respondents had issued the bid inviting applications and the estimated quantity of mineral was specified in the said notice as 3,88,608 cubic meter per year so far as it pertained to the area of the petitioner and as per the letter dated 21.02.2019 issued by the District Magistrate to the Director, Geology and mining it emerged that the area of the petitioner namely the area no. 23/21 was overlapping with the area of M/s Yadav and Sons whose area was 23/12 to whom the lease deed had already been executed on 11.12.2018 i.e. two months earlier to the said letter as such certain extractions must have already been made by M/s Yadav and Sons which thus reduced the quantity of mineral for which the petitioner had bid and had also deposited the royalty amount which fact should have been considered by the authorities while compelling the petitioner to execute the lease deed.

11. Elaborating the same, learned counsel for the petitioner contends that the initial e-bid had been issued on 09.05.2018 in which the petitioner had participated per which the estimated mineral quantity of area namely 23/21 was 3,88,604 cubic meter per year. Subsequent thereto the respondents have issued an e-bid on 21.04.2022, a copy of which is annexure 16 to the petition, per which, so far as the area of the petitioner namely 23/21 is concerned, the estimated quantity of mineral had been indicated as 2,59,104 cubic meter per year which itself is indicative of the fact that the estimated quantity of mineral has reduced.

12. He also contends that it is amply clear from the fact that once the petitioner did not execute any lease deed and the said area namely 23/21 was never put to e-bid or e-auction and there was no other person who mined the said area barring M/s Yadav & Sons whose area was overlapping with the area of the petitioner as such the reduction of quantity from 3,88,604 cubic meter per year to 2,59,104 cubic meter per year over a period of almost 4 years is indicative of the fact that mining activity had taken place clandestinely or otherwise which has resulted in reduction of the estimated quantity of mineral which fact has not been considered by the authorities while passing the impugned orders and as such on this ground alone the impugned orders merit to be quashed and the respondents be directed to return the amount forfeited by the authorities alongwith interest to the petitioner.

13. In this regard reliance has been placed on the judgment of Hon'ble the Apex Court passed in Special Leave to Appeal (C) Nos. 19619-19620 of 2017 in re: M/s Planet Steel Pvt Ltd vs The State of Haryana & ors decided on 10.04.2018.

14. On the other hand, Dr. Uday Veer Singh, learned Additional Chief Standing Counsel appearing for the respondents, on the basis of the averments contained in the counter affidavit, argues that the terms and conditions of the auction itself stipulated that the petitioner was required to deposit the security amount as well as the first quarterly installment of the yearly royalty based on the estimate of mineral as was specified in the notice which in fact was deposited by the petitioner. However, subsequently it is the petitioner who refused to have the lease deed executed which entailed forfeiture of the deposited amount in order to prevent loss of revenue to the State and consequently the petitioner is not entitled for refund of the security amount and royalty amount which has been deposited as it is on account of his lapse that the aforesaid area allocated to the petitioner could not be put to another auction and the State Government having suffered a loss, the authority has correctly proceed to forfeit the amount through the impugned orders and which also conforms to Rule 59 of the Rules 1963.

15. So far as the overlapping of the area of the petitioner vis a vis M/s Yadav and Sons is concerned, placing reliance on the averments contained in paragraphs 12 and 13 of the counter affidavit learned Additional Chief Standing Counsel argues that the directorate has done the demarcation subsequently and all the lease holders have been put in their respective allocated areas.

16. So far as substantial reduction in quantity of mineral is concerned, reliance has been placed on the averments made in paragraph 26 of the counter affidavit to argue that the estimated quantity of minerals got reduced on account of heavy rain.

17. Heard learned counsel for the parties and perused the record.

18. From a perusal of the record it emerges that bids were invited by the State Government through notice dated 09.05.2018 for the purpose of mining for various areas. So far as the present controversy is concerned it pertains to area no. 23/21 situated in Tehsil Sarila, Village Bheri Kharka. As per the notice dated 09.05.2018 the estimated quantity of mineral was specified as 3,88,604 cubic meter per year. The security deposit and the first quarterly installment of yearly royalty was to be paid by the successful bidders, in this case the petitioner, which the petitioner deposited for a total amount of Rs 5,86,89,408/-. The petitioner also got an environment clearance certificate for mining the said area. The controversy arose when the District Magistrate sent a letter to the Directorate, Geology and Mining on 21.02.2019 indicating that there was overlapping in various allotted areas. So far as the present controversy is concerned, the area of the petitioner namely area no 23/21 was found to be overlapping with area allocated to one M/s Yadav and Sons whose area was 23/12. The said letter also indicated that the lease deed with respect to M/s Yadav and Sons has been executed on 11th December 2018. The letter having been sent on 21.02.2019 meaning thereby that substantial period of time had already lapsed as lease deed of M/s Yadav & Sons had already been executed and there was overlapping of areas so far as it pertained to M/s Yadav and Sons and as such the natural assumption was that M/s Yadav and Sons must have mined the area of the petitioner which was overlapping with their own area. Though the respondents have carried out a demarcation of the respective areas, as was required in the order of the District Magistrate dated 21.02.2019 and as would be apparent from the perusal of the letter dated 09.03.2019, a copy of which is annexure 9 to the petition yet the controversy which remained was that once the area of the petitioner was overlapping with the area for which the lease deed had been executed to M/s Yadav and Sons much earlier as such the estimated quantity of minerals, as found place in the notice dated 09.05.2018 and for which the petitioner had bid and had also deposited the security amount and installment of royalty would have reduced. Keeping this into consideration the petitioner made various requests for reassessment of the estimated quantity of minerals but to no avail. The respondents compelled the petitioner to execute the lease deed which, taking into consideration the aforesaid facts, the petitioner refused to do so. After sending of a notice to the petitioner by the District Magistrate on 26.12.2019 and the petitioner having refused to have the lease deed executed, the impugned order dated 08.09.2020 was passed by the District Magistrate forfeiting the amount of security deposit and the quarterly installment of the royalty amounting to Rs 5,86,89,408/-. The appeal and the revision filed by the petitioner indicating the aforesaid facts and grounds were also rejected by means of the orders dated 30.04.2022 and 29.06.2022 and hence the instant petition.

19. The crux of the issue is that when the respondents through the e-bid dated 09.05.2018 had invited applications for various areas including the area of the petitioner and the estimated quantity of mineral was indicated as 3,88,604 cubic meter per year and admittedly the said area of the petitioner namely area no. 23/21 was found overlapping with the area allotted to M/s Yadav and Sons which was area no. 23/12 and admittedly M/s Yadav and Sons was already having lease deed in their favour and this fact was discovered after a period of almost two months as would be apparent from the letter of the District Magistrate dated 21.02.2019 consequently whether the estimated quantity of minerals should have been re-estimated by the respondents prior to compelling the petitioner to execute the lease deed?

20. The amount of mineral having reduced substantially would be apparent from the fact that the date of earlier application inviting e-bid was 09.05.2018 so far as it pertained to area of the petitioner namely area no. 23/21 and when the respondents have invited the fresh e bids as would be apparent from perusal of notice dated 21.04.2022, it is apparent that the estimated quantity of minerals stood reduced from 3,88,604 cubic meter per year to 2,59,104 cubic meter per year which is a reduction of approximately 33%. Admittedly the said area had not been put to auction subsequent to the notice dated 09.05.2018 rather it was only sought to be done on 21.04.2022. Admittedly, the lease of the area of the petitioner was overlapping with the area of M/s Yadav & Sons for the period from 11.12.2018 till the re-demarcation of the areas was done on 01.03.2019 as would be apparent from a perusal of letters issued by the District Magistrate, Hamirpur and Mining Officer dated 28.02.2019 and 09.03.2019 respectively. It is not that the petitioner was not willing to have the lease deed executed rather all along he was calling upon the respondents to re-estimate the quantity of mineral so as to have the lease deed executed as the petitioner was already having an environment clearance certificate in his favour. However the insistence on the part of the respondents was for execution of the lease deed (despite the estimated mineral deposits having reduced substantially, in this case, by approximately 33% as emerged subsequently). Thus, by no stretch of imagination or law the order dated 08.01.2020 issued by the District Magistrate, a copy of which is annexure 3 to the petition, forfeiting the amount under deposit by the petitioner can be appreciated. On the same analogy the orders impugned dated 30.04.2022 whereby the appeal has been rejected and the order dated 29.06.2022 whereby the revision of the petitioner are also not legally sustainable in the eyes of law.

21. In this regard, the Court may refer to judgment of Hon'ble the Apex Court in the case of M/s Planet Steel (Supra) wherein the Apex Court, considering similar circumstances, was of the view that the entire amount merits to be refunded alongwith 9% interest from the date of deposit till the date of payment.

22. For the sake of convenience, the judgement of Hon'ble the Apex Court in the case of M/s Planet Steel (Supra) is reproduced below:

"It is submitted by learned counsel appearing on behalf of the State of Haryana that the area auctioned for mining purposes was 558.53 hectares. Actually, what was available for mining was 141.76 hectares. He says that on the basis of instructions given to him by Mr. R.K. Sharma, Mining Engineer of the Government of Haryana.

This submission is also confirmed from the response given to an application made under the Right to Information Act, which appears on pages 531 to 535 of the paper book.

It is under these circumstances that the petitioner refused to take possession of the area sought to be auctioned.

Learned counsel for the State of Haryana refers to Clause 5 of the terms and conditions of the auction and submits that it was the duty of the petitioner to ascertain whether the land was actually 558.53 hectares or not. Clause 5 of the terms and conditions reads as follows:

"5. All prospective bidders are expected and presumed to have surveyed the areas to make their own assessment for the potential of the areas for which bids are to be offered. The State Government shall not be responsible for any kind of loss to the bidders/contractors at any point of time (before or after grant of contract). Further the bidders are also expected to have gone through the terms and conditions of auction notice and also the applicable Acts and Rules for undertaking mining."

On a plain reading of Clause 5, it is quite clear that there is no requirement on the prospective bidder to survey the area for the purpose of measurement. The prospective bidder can make an assessment for the potential of the area for which bids are to be offered.

It is the duty and responsibility of the State to ensure that the area sought to be auctioned for mining purposes is as per the advertisement.

This view has also been taken by the Punjab and Haryana High Court in the case of M/s. Haryana Royalty Company Vs. State of Haryana & Anr. [CWP No.15431 of 2014] decided on 15th January, 2015. The admitted position is that this decision of the Punjab and Haryana High Court has attained finality.

It is, therefore, incorrect to contend by the State that the sole responsibility for measuring the area sought to be auctioned for mining purposes was that of the petitioner.

Consequently, we are of the view that the decision of the High Court is required to be set aside and the petitioner is entitled to the refund of the deposited amount. This amount may be refunded to the petitioner within a period of four weeks from today along with interest at 9% per annum from the date of deposit till the date of payment in view of the vast discrepancy of the area of the land mentioned in the advertisement and the area made available.

The special leave petitions are disposed of. Pending application, if any, stands disposed of."

(emphasis by the Court)

23. A perusal of the judgement of Hon'ble the Apex Court in the case of M/s Planet Steel Pvt Ltd (Supra) would indicate that Hon'ble the Supreme Court in the aforesaid case was seized of a matter wherein the area auctioned for mining purpose was at variance to the actual area which was made available for mining i.e. the area had reduced substantially. The successful bidder refused to take possession of the area sought to be auctioned which resulted in forfeiture of the amount deposited by the successful bitter. The Apex Court held that the refusal by the successful bidder to take possession of the area sought to be auctioned was valid as the area had reduced and thus the successful bidder was entitled to refund of the deposited amount alongwith interest.

24. In the instant case also the area, as was allotted to the petitioner, was found overlapping with the area of another person to whom a lease deed had already been executed approximately two months prior. Considering this the petitioner requested for reassessment of the estimated minerals which was not acceded to by the authorities rather the insistence was for execution of the lease deed which the petitioner refused to execute. The stand of the petitioner for reassessment of the estimated mineral quantity on account of rejection stands fortified by the orders issued by the respondents themselves as would be apparent from the two e-bids dated 09.05.2018 vis a vis 21.04.2022 whereby the estimated quantity of mineral stood reduced by approximately 33%. Thus the insistence on the part of the respondents for execution of the lease deed by the petitioner and upon refusal of the petitioner, the forfeiture of the security deposit and the royalty amount, cannot be said to be legally sustainable in the eyes of law.

25. Taking into consideration the aforesaid discussion the writ petition is allowed. The orders impugned dated 29.06.2022, 30.04.2022 and 08.01.2022, copies of which are annexures 1, 2 & 3 respectively to the petition, are quashed. The respondents are directed to refund the amount of Rs.5,86,89,408/- alongwith interest @9% per annum from the date of deposit till the date of actual payment. While awarding interest @ 9% this Court is following the judgement of Hon'ble the Apex Court in the case M/s Planet Steel Pvt Ltd (Supra). Let the amount be refunded within a period of three months from the date of receipt of a certified copy of this order.

26. Before parting with the matter the Court may take judicial notice of the fact that the estimated mineral deposit for the area in question reduced by almost 33% from 2018 till 2022. Admittedly no mining activity took place over the said area as the petitioner failed to execute the lease deed and the said area was not allocated to any third person in the interregnum except for the period when the area of the petitioner overlapped with the area of M/s Yadav & Sons. The plea taken in the counter affidavit, more particularly, in paragraph 26 of the estimated mineral deposit having got reduced on account of heavy rains does not inspire confidence rather is laughable.

26. Be that as it may, the fact of the matter remains that valuable mineral deposits of the State have been allowed to be frittered away prima facie on account of inaction / connivance / collusion / carelessness of the authorities concerned vis a vis the persons who might have carried out the illegal mining over the aforesaid area. This being an important public issue, the Court requires the Chief Secretary of the State of U.P. to hold an inquiry into the matter as to how the valuable mineral deposits have frittered away and have reduced substantially over the aforesaid area over a period of four years. For the said purpose it is open for the Chief Secretary to either conduct the inquiry himself or form a three member committee of responsible senior officers of which one should be of the rank of Principal Secretary to hold the said inquiry.

27. Let an inquiry report be submitted to the Senior Registrar of this Court within three months from today.

28. This case shall be listed for the said purpose alone on 25.04.2023 before the appropriate Court.

29. Let a copy of the order be sent by the Office to the Chief Secretary of the State within 10 days.

Order Date :- 23.1.2023

J.K. Dinkar