Jharkhand High Court
Union Of India Through The Secretary vs Jsw Steel Ltd on 13 October, 2025
Author: Sujit Narayan Prasad
Bench: Sujit Narayan Prasad
2025:JHHC:31616-DB
IN THE HIGH COURT OF JHARKHAND AT RANCHI
L.P.A. No.67 of 2023
------
1. Union of India through the Secretary, Ministry of Coal,
Government of India, having its office at 120, 1st floor, F-wing,
Shahstri Bhawan, P.O. & P.S.-New Delhi, District-New Delhi
2. The Nominated Authority, Ministry of Coal, Government of
India, having its office at 120, 1st floor F-wing, Shahstri Bhawan, P.O.
& P.S.-Shastri Bhawan, District-New Delhi
.... .... Respondents/Appellants
Versus
1. JSW Steel Ltd., a Company Incorporated under the Companies
Act, 1956, having its registered office at JSW Center, Bandra
Kurla Complex, P.O. & P.S. Bandra East District Mumbai, and it's
Project Office at B-236, Ground Floor, Road No.3, Ashok Nagar,
P.O. Ashok Nagar, P.S. Argora, District-Ranchi, through its
authorized representative and Associate Vice President-Projects,
Sri Dhananjay Kumar Sinha, son of Sri Upendra Nath Sinha, aged
about 55 years, resident of Flat No.201, Shakti Apartment,
Ashokpuram, P.O. Ashok Nagar, P.S. Argora, District Ranchi.
2. Dhananjay Kumar Sinha, son of Sri Upendra Nath Sinha, aged
about 55 years, resident of Flat No.201, Shakti Apartment,
Ashokpuram, P.O. Ashok Nagar, P.S. Argora, District Ranchi.
.... .... Petitioners/Respondents
With
L.P.A. No.61 of 2023
------
1. Union of India through the Secretary, Ministry of Coal,
Government of India, having its office at 120, 1st floor, F-wing,
Shahstri Bhawan, P.O. & P.S.-New Delhi, District-New Delhi
2. Nominated Authority, Ministry of Coal, Government of India,
having its office at 120, 1st floor F-wing, Shahstri Bhawan, P.O. &
P.S.-Shastri Bhawan, District-New Delhi
.... .... Respondents/Appellants
Versus
1
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1. JSW Steel Ltd., a Company Incorporated under the Companies
Act, 1956, having its registered office at JSW Center, Bandra
Kurla Complex, P.O. & P.S. Bandra East District Mumbai, and it's
Project Office at B-236, Ground Floor, Road No.3, Ashok Nagar,
P.O. Ashok Nagar, P.S. Argora, District-Ranchi, through its
authorized representative and Associate Vice President-Projects,
Sri Dhananjay Kumar Sinha, son of Sri Upendra Nath Sinha, aged
about 55 years, resident of Flat No.201, Shakti Apartment,
Ashokpuram, P.O. Ashok Nagar, P.S. Argora, District Ranchi.
2. Dhananjay Kumar Sinha, son of Sri Upendra Nath Sinha, aged
about 55 years, resident of Flat No.201, Shakti Apartment,
Ashokpuram, P.O. Ashok Nagar, P.S. Argora, District Ranchi.
.... .... Petitioners/Respondents
CORAM : HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
HON'BLE MR. JUSTICE ARUN KUMAR RAI
------
For the Appellants : Mr. Prashant Pallav, DSGI
Ms. Shivani Jaluka, Advocate
For the Respondents : Mr. Indrajit Sinha, Advocate
Mr. Rohitashya Roy, Advocate
Mr. Vibhor Mayank, Advocate
Mr. Shivam Kumar, Advocate
Ms. Oishi Das, Advocate
------
C.A.V. on 23.09.2025 Pronounced on 13/10/2025
Per Sujit Narayan Prasad, J.
Prayer
1. Both these appeals, preferred by the Union of India under
Clause-10 of the Letters Patent, are directed against the common
order/judgment dated 06.12.2022 passed in W.P.(C) No.1128 of
2020 (impugned in L.P.A. No.67 of 2023) and W.P.(C) No.1126 of
2020 (impugned in L.P.A. No.61 of 2023), whereby and
whereunder, the writ petitions have been disposed of by quashing
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the show cause notices issued by the Deputy Secretary being the
Nominated Authority, Ministry of Coal, Govt. of India with a liberty
to pass order afresh.
Factual Matrix
2. Since, similar facts and prayers have been made in both the
cases as such for the sake of convenience, the brief facts of one
of the cases, i.e., L.P.A. No.67 of 2020 arising out of W.P.(C)
No.1128/2020, is being referred hereinbelow.
3. The brief facts of the case, as per the pleading made in the writ
petition [W.P.(C) No.1128/2020], requires to be enumerated,
which read as under: -
(i) It is the case of the writ petitioner that the petitioner is
a company registered under the Companies Act, 1956.
(ii) The petitioner proposes to set up an integrated steel
plant in Jharkhand. The State of Jharkhand and the petitioner had
entered into a Memorandum of Understanding on 09.11.2005 in
terms of which the Government of Jharkhand had assured to
provide all assistance to the petitioner inter alia in acquiring land,
getting mining lease etc.
(iii) The Hon'ble Apex Court vide its judgment dated
25.08.2014 and 24.09.2014 passed in Manohar Lal Sharma vs.
The Principal Secretary & Ors., (2014) 9 SCC 516, had de-
allocated 214 Coal Blocks which were previously allocated by the
Ministry of Coal, Government of India including the Moitra Coal
Block which allocated to the prior allottee.
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(iv) Subsequent to the aforesaid judgment, an ordinance
was promulgated by his Excellency the President of India, being
Coal Mines (Special Provisions) Ordinance, 2014.Thereafter, the
Coal Mines (Special Provisions) Act, 2015 was brought into force
retrospectively from 21.10.2014 and in terms thereof the Central
Government has also framed Coal Mines (Special Provisions)
Rules, 2014.
(v) After passing of the Act by the Parliament, fresh
bidding was conducted for allocation of the different Coal Blocks
in which the petitioner had also participated. In the auction, Moitra
Coal Block was allocated to the petitioner.
(vi) Pursuant thereof, an agreement was executed
between His Excellency the President of India, acting through the
Central Government represented by the Nominated Authority and
the petitioner on 17.03.2015 in terms of Rule- 13(5) of the Coal
Mines (Special Provisions) Rules, 2014 and the said agreement
is termed as "Coal Mines and Development and Protection
Agreement".
(vii) Pursuant to the aforesaid agreement, the petitioner
was required to furnish a bank guarantee of Rs.
1,715,803,210.00 in terms of Clause 6.1 of the agreement, the
petitioner accordingly furnished a bank guarantee of Rs.
1,715,803,210.00 dated 26.03.2015.
(viii) The Government of India through Office of Nominated
Authority, Ministry of Coal, issued a vesting order no.
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104/21/2015/NA dated 22.04.2015 in terms of Section 8(4) of the
Act of 2015, read with Rule 7(2)(b) and Rule 13(1) of the Rules of
2014, in favour of the petitioner by virtue of which all rights, title
and interest of the prior allottee in and over the land (including
land compensatory afforestation) and mine infrastructure of the
prior allottee vested in the petitioner free from all encumbrances.
(ix) The Moitra Coal Block was earlier allocated to M/s
Jayaswal Neco Industries Ltd. For the purpose of working the
coal block, the prior allottee had purportedly acquired 242.55
acres of land within the coal block area comprised within 10
villages in the District of Hazaribagh within the State of
Jharkhand.
(x) The prior allottee had also acquired a total area of
266.17 acres of land in the district of Dhanbad, Garhwa, Gumla
and Palamau for the purpose of Compensatory Afforestation.
(xi) The said CMDPA was amended on 06.05.2015
whereby the efficiency parameter was rescheduled.
(xii) In terms of the provisions of Section 8(4) of the Act of
2015, once a vesting order is issued in terms of Rule 7(2)(b) and
Rule 13(1) of the Rules of 2014, all the rights, title and interest of
the prior allottee in an over the land and mining infrastructure
stand fully and absolutely transferred and vested in the
successful bidder, i.e., the petitioner free from all encumbrances.
(xiii) Therefore, the land purchased by the prior allottee in
connection to Moitra Coal Project stood statutorily transferred by
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way of legal fiction in favour of the petitioner.
(xiv) The respondent No. 1 vide its letter dated 19.05.2015
had categorically directed the Chief Secretary, Government of
Jharkhand for transfer of all licenses of the prior allottee in favour
of the successful bidder including mutation of the land without
any delay and with no extra liability.
(xv) After the issuance of the vesting order, the petitioner
made several representations before the concerned respondent
authorities through its letters dated 03.06.2015 and 10.07.2015
requesting the respondent authorities to transfer and mutate the
land held by the prior allottee both within the mining lease area
and land for compensatory afforestation, in favour of the
petitioners, otherwise the petitioner will be rendered incapacitated
to comply with the efficiency parameter contained in Schedule-E
of the CMDPA.
(xvi) The State of Jharkhand in order to resolve the issue
relating to transfer and mutation of the vested land, constituted a
committee headed by the Chief Secretary of the State, which in a
meeting held on 10.08.2015 had proposed to realize stamp duty
and registration charges by executing a registered deed of
transfer.
(xvii) While the decision regarding payment of registration
fee and stamp duty was pending, the petitioner vide its letter
dated 04.09.2015 had apprised the State of Jharkhand that the
vesting order is issued in terms of Rule-7(2)(b) and Rule-13(1) of
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the Coal Mines (Special Provision) Rules, 2014 as per which the
land and mining infrastructure stand fully and absolutely
transferred and vested in favour of the successful bidder, i.e., the
petitioner.
(xviii) The respondent No. 1 once again through its letter
being letter No. F. No. 13016/36/2015-CA-III dated 13.10.2015
clarified that the entire land owned by the prior allottee whether
the same was previously owned and/or acquired by the
government and transferred to the prior allottee or purchased by
the prior allottee have directly vested in favour of successful
bidder, i.e., the petitioner in the present case as per Section 8(4)
read with Section 3(1)(p) of the Act of 2015 and the same is
required to be transferred and mutated in favour of the successful
allottee without any extra liability.
(xix) In the said letter dated 13.10.2015, the respondent
No. 1 had specifically mentioned that any guideline which
stipulates payment of sum to the Government on the basis of
assessment of present value of land are not applicable in the
case of vesting done under the Coal Mines Special Provision Act.
It was also stated that the special act has an overriding effect on
any other law which is inconsistent with or in contravention to the
provision of the Coal Mines Special Provision Act as such the
same will prevail over any rules or guidelines.
(xx) The petitioner made a representation dated
24.11.2015 before the Ministry of Coal, Government of India that
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the Government of Jharkhand is intending to take a decision to
charge stamp duty and registration fee for the transfer of land
from the prior allottee to the petitioner ignoring the fact that the
same has already been vested upon the petitioner by legal fiction
and an Act of legislature, as such the decision to that effect will be
totally inconsistent and contrary to the notification issued by the
Ministry of Coal.
(xxi) The Govt. of Jharkhand through Department of Land
Revenue, Registration and Land Reforms issued notification
no.5281 dated 26.11.2015 specifying that the land owned by the
prior allottee will be transferred and mutated in favour of the
successful bidder, i.e., the petitioner on payment of registration
fee and stamp duty over the present valuation of the land.
(xxii) The petitioner made a representation dated
10.03.2016 requesting the concerned respondent for their
intervention and support on expeditious transfer and mutation of
the land in favour of the petitioner. The petitioner has specifically
informed that delay in transfer and mutation of the vested land
will adversely affect in achieving the milestone.
(xxiii) It is the case of the petitioner that the respondents
have not responded to the representations made by the
petitioner. In spite of repeated requests and representations
made by the petitioner, the Govt. of Jharkhand failed to take any
positive step for complying with the clarification issued by the
Ministry of Coal, Govt. of India and the petitioner did not receive
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any favourable response from the State of Jharkhand till
25.05.2016.
(xxiv) The State of Jharkhand vide its letter dated
25.05.2016 issued the direction after notification dated
26.11.2015 directing the petitioner to get the vested land
transferred by way of a registered transfer deed and on payment
of requisite stamp duty.
(xxv) In order to avoid any further delay, the petitioner was
compelled and constrained to enter into transfer of land vide 10
deeds of transfer executed on payment of the demanded stamp
duty and registration charges. Therefore, the transfer of vested
land within the mining lease area was affected by executing
registered transfer deeds on 30.05.2016 on payment of stamp
duty and registration fee.
(xxvi) Meanwhile, the Deputy Commissioner, Hazaribagh
has issued a communication dated 02.01.2016 wherein the
petitioner has been informed that prior to mutation of the vested
land, a permission under Section 49 of the CNT Act is required to
be obtained and a proceeding under Section 49 of the CNT Act
will be initiated with respect to the vested land and in this regard,
the Circle Officer, Barkagaon, Hazaribagh had issued notice(s) to
several persons who were the original owners of the land.
(xxvii) The transfer and mutation of land for compensatory
afforestation being major pre-requisite for achieving Stage-II
Forest Clearances and subsequent execution of mining lease, the
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petitioner made several representations before the concerned
authorities for expediting the matter of transfer and mutation.
However, the petitioner failed to fetch any favourable response
from the concerned respondents.
(xxviii) The petitioner had also represented before the
concerned respondent for their intervention and support in
achieving the Efficiency Parameter No.9, i.e., Forest Clerance
and subsequent achievement of Efficiency Parameter No.12, i.e.,
Grant of Mining Lease well before eleven months from the
schedule date of completion, i.e., on 24.03.2016. However, the
concerned respondents never replied to the same.
(xxix) The mining lease thereafter granted to the petitioner
on 31.10.2019 but the same has not been executed. However,
the respondents in their endeavour to shift the entire blame upon
the petitioner started issuing show cause notices to the petitioner
for not meeting the time schedule as provided under the
efficiency parameter.
(xxx) In this regard, the respondent nos.1 and 2 issued the
first show cause notice dated 21.03.2017 for not meeting the
timeline with respect to Forest Clerance. The said show cause
notice was replied by the petitioner.
(xxxi) Without considering the aforesaid reply of the
petitioner, respondent nos.1 and 2 had again issued a show
cause notice dated 19.02.2018 for not meeting the time schedule.
The respondent nos.1 and 2 further informed the petitioner that
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the petitioner is liable for an appropriation of 5 per cent of bank
guarantee constituting performance security as per clause 6.3
and 10.3 of the CMDPA. The said cause notice was again replied
by the petitioner vide its letter dated 03.08.2019.
(xxxii) Thereafter, petitioner state that the aforesaid show
cause notices is illegal and without jurisdiction. The petitioner has
challenged the aforesaid show cause notices in the separate writ
proceedings.
(xxxiii) The petitioner has been served with another show
cause notice dated 24.07.2019 blaming the petitioner for not
being able to meet the time schedule as provided under the
efficiency parameter contained in CMDPA. Consequently, the
respondents have arbitrarily and unreasonable informed the
petitioner that the petitioner is liable for an appropriation of 17 per
cent of the bank guarantee constituting performance security as
per clause 6.3 and 10.3 of the CMDPA.
(xxxiv) Being aggrieved with the aforesaid, writ petitions
being W.P.(C) Nos.1126, 1127 and 1128 of 2020 have been filed
and the same have been allowed by the learned Single Judge of
this Court, which is the subject matter of the instant appeals.
Submissions of the learned counsel for the Appellants-U.O.I.
4. Mr. Prashant Pallav, learned counsel for the appellants-U.O.I. has
taken the following grounds in assailing the impugned judgment: -
(i) Learned Single Judge has not taken into
consideration the fact that the terms and
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conditions as referred under Clause 6.2 of the
Coal Mine Development and Production
Agreement (in short 'CMPDA') for Moitra Coal
Mine has not properly been appreciated, reason
being that, due show cause notice has been
issued as required to be issued under Clause 6.3
of the Agreement and as such, there was no
need to have an opportunity at the stage of
determination, as referred under Clause 6.2 of
the Agreement.
(ii) It has been contended that the writ petitioners
have submitted to the jurisdiction of the
Nominated Authority, in pursuance to the show
cause notice issued in the light of Clause 6.3 of
the Agreement without raising the issue of non-
compliance of the issue of determination, as
referred under Clause 6.2 of the Agreement.
(iii) The ground has been taken that once the
respondents-writ petitioners have submitted to
the jurisdiction of the concerned authority, it is not
available for the respondents-writ petitioners to
take the ground that merely because the
determination is not there, as required to be there
under Clause 6.2 of the Agreement, the decision
so taken by the authority, suffers from infirmity.
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(iv) The ground has been taken that the authority
while considering the response furnished on
behalf of the writ petitioners in pursuance to the
show cause notice issued in terms of Clause 6.3
of the Agreement, has taken into consideration
the issue of waiver or appropriation depending
upon the factual aspect, as also, depending upon
the said response. Therefore, the issue is still left
open by the authority and after getting the report
from the State, the issue either of waiver or
appropriation is to be considered and in case, the
State will not forward its report, then, the
Nominated authority will decide the issue of
waiver or appropriation of amount, therefore, it
cannot be said that any prejudice has been
caused to the writ petitioner.
(v) Learned counsel for the appellant, based upon
the aforesaid grounds, has submitted that the
learned Single Judge since has not taken into
consideration these aspects of the matter, hence,
the impugned order requires interference.
Submissions of the learned counsel for the Respondents-writ
petitioners
5. Per contra, Mr. Indrajit Sinha, learned counsel for the
respondents-writ petitioners has submitted that it is a case where
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the terms and conditions of the bilateral contract in pursuance to
the Coal Mine Development and Production Agreement has not
been complied with, which aspect of the matter has been taken
into consideration by the learned Single Judge and based upon
the same, the order impugned passed by the authority, has been
interfered with.
6. The contention which has been raised of no prejudice having
been caused to the writ petitioners, cannot be said to be
acceptable and it is not acceptable at all, reason being that, when
the terms and conditions of the contract is available, then, it is the
bounden duty of the parties to comply with the terms and
conditions of the contract, there cannot be any go-by to the terms
and conditions of the agreement.
7. It has been contended that in the agreement, it has been taken
care of, the opportunity is to be provided to the respondents-writ
petitioners before taking the decision of the appropriation of the
performance security at two stages, i.e., at the stage of condition
stipulated under Clause 6.2 and 6.3 of the Agreement. Clause 6.2
provides the issue of determination of the laches committed on
the part of the respondents-writ petitioners and on the basis of
such determination, the penal action is required to be taken in
view of the terms and conditions stipulated under Clause 6.3 of
the Agreement.
8. The argument therefore has been advanced that directly taking
action in view of the provision of Clause 6.3 after issuance of
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show cause notice to the writ petitioners, the vital right of the
issue of determination as required to be there in view of Clause
6.2 of the Agreement, has been taken away and thereby, the
petitioners have been deprived to have one opportunity to put
their defence.
9. Learned counsel, based upon the aforesaid grounds, has
submitted that if the learned Single Judge after taking into
consideration these issues, has interfered with the impugned
judgment by passing the judgment dated 06.12.2022 (impugned
in the instant memo of appeals), the same cannot be said to
suffer from an error.
Response of the learned counsel for the appellants-U.O.I.
10. Learned counsel for the appellants has submitted, in response to
the argument, that once the respondents-writ petitioners have
submitted to the jurisdiction of the authority, the issue of non-
compliance of the condition stipulated under Clause 6.2 is not
available to be agitated and the same is not having force, reason
being that, even if the response has been given but the terms and
conditions of the contract, cannot be diluted merely on account of
furnishing the reply in terms of Clause 6.3 of the Agreement.
Analysis
11. We have heard the learned counsel for the parties and gone
through the finding recorded by the learned Single Judge in the
impugned judgment.
12. This Court, on consideration of the arguments advanced on
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behalf of the parties and the pleading as available in the paper
book as also the finding recorded by the learned Single Judge,
needs to consider the following issues;
(i) Whether merely because the respondents-writ
petitioners have submitted to the jurisdiction of the
authority in terms of the show cause notice issued
under Clause 6.3, they are seized to agitate the
deprivation of their right to be heard at the time of
determination, as required to be there under Clause
6.2 of the Agreement.
(ii) Whether skipping from the consideration of the issue
of determination as per the condition stipulated under
Clause 6.2 of the Agreement, if the appellants
straightaway take the recourse of Clause 6.3, will it be
said to be proper on the part of the appellants and in
these circumstances, will it not be said to cause the
prejudice to the writ petitioners.
13. Both the issues are interlinked and as such, the same are being
taken up together.
14. But, before considering the aforesaid issues, this Court is of the
view that the settled position of law on the issue of deviation from
the terms and conditions of the Contract, needs to be referred
herein.
15. It is the settled position of law that terms and condition of the
contract is strictly to be adhered to and any condition contained
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therein, if allowed to be flouted, the same to be contrary to the
terms and conditions and will amount to re-writing the terms and
conditions of the contract.
16. The Hon'ble Apex Court in the case of Rakesh Kumar Verma
Vrs. HDFC Bank Ltd., 2025 INSC 473 has categorically
observed that a concluded contract pre supposes the
existence of at least two parties with mutual rights and
obligations and once a concluded contract comes into
existence, it is axiomatic that such rights and obligations of the
parties are governed by the terms and conditions thereof.
17. Further, it requires to refer herein the settled position of law
that once the parties have accepted the terms and conditions
of lease or any agreement, it binds the parties and there
cannot be any breach of terms and conditions. Reference in
this regard may be made to the judgment rendered by the
Hon'ble Apex Court in the case of Tamil Nadu Electricity
Board and Another vs. N. Raju Reddiar and Another,
reported in (1996) 4 SCC 551 wherein it has been held that it
must be borne in mind that the agreement between the parties
was a written agreement and therefore the parties are bound
by the terms and conditions of the agreement.
18. Further, the law is well settled that once the terms and
conditions of the agreement have been accepted by the
parties, it is not available to them to assail the same, reference
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in this regard may be made to the judgment rendered by
Hon'ble Apex Court in the case of Panna Lal and Others v.
State of Rajasthan and Others, reported in (1975) 2 SCC
633 wherein it has been held that the licensee having
voluntarily accepted the contract and after having fully
exploited to its advantage the contract to the exclusion of
other, cannot resile from the contract and cannot challenge the
terms either on the ground of inconvenient
19. It requires to refer herein the settled position of law that if any
terms and conditions have been agreed upon by the parties
the same cannot be relaxed by the High Court sitting
under Article 226 of the Constitution of India otherwise it will
amount to re-write the terms and conditions of contract as has
been held in the case of Union Territory of Pondicherry and
Ors Vs. P.V. Suresh and Ors., reported in (1994) 2 SCC 70
wherein at paragraph 11 it has been held that the Court has no
jurisdiction to alter the terms or rewrite the contract between
the parties, for ready reference the same is being quoted as
under:
"11. In the circumstances of this case,
.......................... Otherwise, the Court has no
jurisdiction to alter the terms or rewrite the
contract between the parties."
20. In the case of Polymat India (P) Ltd. and Anr. Vs. National
Insurance Co. Ltd. and Ors., reported in (2005) 9 SCC 174
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wherein, the Hon'ble Apex Court by taking aid of the judgment
rendered in the case of United India Insurance Co. Ltd. Vs.
M.K.J. Corp., reported in (1996) 6 SCC 428 has been pleased
to observe that "after the completion of the contract, no
material alteration can be made in its terms except by mutual
consent".
21. Adverting to the factual aspect of the present case, in the
premises of the settled position of law that there cannot be any
deviation from the terms and conditions once the contract has
been entered in between the parties, the relevant conditions of
the agreement, which is relevant for the present lis require
reference in the present context are Clause 6.2 and Clause 6.3,
for ready reference, the same are being quoted as under:-
"6.2 Events for appropriation of the
Performance Security
6.2.1. The Performance Security may be
appropriated by the Nominated Authority upon
occurrence of any of the following events (the
"Appropriation Event"), to be determined by the
Nominated Authority in its sole discretion:
(a) failure of the Successful Bidder to provide
the duly acknowledged duplicate copy of the Vesting
Order as required under Clause 4.6;
(b) failure of the Successful Bidder to make
payment of the first instalment, second instalment or
the third instalment of the Upfront Amount within the
specified in Clause 3.1(b), Clause 5.2.2 or Clause
5.2.3, respectively;
(c) failure of submission of Commencement
Plan within the time specified in Clause 5.1.1.
(d) failure of the Successful Bidder to comply
with the Efficiency Parameters as required under
Clause 10;
(e) any change in Control or transfer of right, title
or interest in the Coal Mine which is not in conformity
with Clause 13;
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(f) failure to make payment of the Monthly
Payment in accordance with this Agreement;
(g) any utilization of coal which is in conformity
with Clause 8; or
(h) any other breach or non-compliance of any
of the provisions of this Agreement including in case of
the Warranties being untrue or misleading or incorrect
in any manner whatsoever.
6.2.2 Provided however that in the event an
Appropriation Even has occurred solely on account of
an Event of Force Majeure which could not have been
mitigated by the Successful Bidder through Good
Industry Practice as provided in Clause 23, then the
Performance Security shall not be appropriated for
such specific Appropriation Event.
6.3. Manner of appropriation of the
Performance Security
6.3.1 Upon occurrence of an Appropriation
Event, to be determined by the Nominated Authority,
the Nominated Authority shall have the unconditional
right to appropriate the Performance Security by
providing a written notice to the Successful Bidder in
the following proportion:
# Appropriation Event Amount of the
Performance
Security
appropriated
1. Failure of the Successful Bidder to Entire
provide the duly acknowledged Performance
duplicate copy of the Vesting Order Security.
as required under Clause 4.6
2. Failure of the Successful Bidder to An amount equal
make payment of the first instalment, to the first
second instalment or the third instalment, and/or
instalment of the Upfront Amount second
within the time specified in Clause instalment and/or
3.1(b), Clause 5.2.2 or Clause 5.2.3, third instalment of
respectively the Upfront
Amount together
with 12% per
annum simple
interest on such
amount starting
from the date on
which such
amount was due
and until the date
of appropriation
of the
Performance
Security.
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3. Failure of submission of An amount equal
Commencement Plan within the time to 10% of the
specified in Clause 5.1.1 Performance
Security
4. Failure of the Successful Bidder to Such Per cent of
comply with the Efficiency the Performance
Parameters as required under Clause Security for each
10 failure to comply
with the Efficiency
Parameters as
specified in
SCHEDULE E.
5. Any change in Control or transfer of Entire
right, title or interest in the Coal Mine Performance
which is not in conformity with Clause Security.
6. Any utilization of coal which is not in Entire
conformity with Clause 8 Performance
Security.
7. Failure of the Successful Bidder to The amount of
make payment of the Monthly Monthly Payment
Payment due and payable,
along with a
simple interest of
twelve per cent
per annum
starting from the
date on which
such amount was
due and until the
date of
appropriation of
the Performance
Security.
8. Any other breach or non-compliance Such proportion
with any of the provisions of this as may be
Agreement, including in case of the determined by the
Warranties being untrue or Nominated
misleading or incorrect in any manner Authority in its
whatsoever. sole discretion.
6.3.2 Any Appropriation Even resulting in
appropriation of the entire Performance Security shall be
Termination Event for the purposes of Clause 24
(EFFECTIVE DATE, TERM AND TERMINATION)
6.3.3 In the event of a part appropriation of the
Performance Security, the Successful Bidder shall be
required to: (i) rectify the Appropriation Event; and (ii) top-up
the bank guarantee constituting the Performance Security
within fifteen Business Days of receipt of a notice under
Clause 6.3.1, failure to do so shall be a Termination Event
for the purposes of Clause 24 (EFFECTIVE DATE, TERM
AND TERMINATION). Appropriation Event except as
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mentioned in clause 6.2.1 (d) shall be rectified within seven
Business Days of receipt of a notice under Clause 6.3.1.
Appropriation Event mentioned in clause 6.2.1 (d) shall be
rectified within the time specified in SCHEDULE E.
6.3.4 In the event that on account of one or more
Appropriation Events, an amount equal to hundred per cent
of the Performance Security is appropriated in aggregate in
one or more instances, the same shall be Termination Event
for the purposes of Clause 24 (EFFECTIVE DATE, TERM
AND TERMINATION)."
22. It is evident from the condition stipulated under Clause 6.2 that in
case of any lapses on the part of the second party, the Nominated
Authority is first to determine the liability.
23. Clause 6.3 stipulates that after such determination the initiation
will be taken for appropriation of the performance security.
24. This Court, after going through the condition stipulated under
Clause 6.2 and Clause 6.3, is of the view that both the Clauses
are to be read together, since, the condition stipulated under
Clause 6.3 is the consequence by taking action depending upon
the issue of determination of the liability, as per the condition
stipulated under Clause 6.2 of the Agreement.
25. The word "determined" under Clause 6.2 is having bearing which
means that the issue of liability of the second party is to be
decided for the purpose of taking initiation for appropriation of the
performance security as per the condition stipulated under
Clause 6.3.
26. It cannot be denied and also not disputed that when any liability
is being determined then incumbent upon the authority, would be
to call upon the party against whom any liability is being
determined so as to follow the principle of natural justice.
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27. At this juncture, Mr. Prashant Pallav, learned counsel appearing
for the appellants-U.O.I. has submitted that there is no reference
of following the principle of natural justice as under Clause 6.2.
28. But, this Court is not impressed with such argument, reason
being that, when the issue of liability is being determined then if
the same is going to lead the civil consequence, which cannot be
assessed at the initial stage, rather, the same can only be
assessed after considering the response of the party concerned
and for which, the mandatory requirement would be to call upon
such party to put-forth his defence.
29. It requires to refer herein that even if there is no statutory
provision requiring an opportunity to be given, in order to follow
the cardinal principle of natural justice, an opportunity of hearing
is to be given to the party concerned who is going to be adversely
affected, reference in this regard may be made to the judgment
rendered by the Hon'ble Apex Court in the case of Mrs. Maneka
Gandhi Vrs. Union of India and Anr., reported in (1978) 1 SCC
248, wherein, the proposition has been laid down that even if
there is no statutory provision requiring an opportunity to be
given, in order to follow the cardinal principle of natural justice, an
opportunity of hearing is to be given to the party concerned who
is going to be adversely affected.
30. Such decision has been given by the Hon'ble Apex Court while
dealing with Section 10(3) of the Indian Passport Act, wherein,
the validity of the said provision was challenged on the ground
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that there is no provision to provide an opportunity of hearing
before impounding the passport. However, the Hon'ble Apex
Court has upheld the constitutional validity of the said provision,
but has laid down the proposition that even if there is no provision
or stipulation made in the statutory provision, then also, it will be
the bounded duty of the concerned authority to provide
opportunity of hearing before taking any adverse decision, for
ready reference, the relevant paragraph of the said judgment
needs to be referred, which reads as under:-
"9. We may commence the discussion of this question with a
few general observations to emphasise the increasing
importance of natural justice in the field of administrative law.
Natural justice is a great humanising principle intended to
invest law with fairness and to secure justice and over the
years it has grown into a widely pervasive rule affecting large
areas of administrative action. Lord Morris of Borth-y-Gest
spoke of this rule in eloquent terms in his address before the
Bentham Club: "We can, I think, take pride in what has been
done in recent periods and particularly in the field of
administrative law by invoking and by applying these
principles which we broadly classify under the designation of
natural justice. Many testing problems as to their application
yet re-remain to be solved. But I affirm that the area of
administrative action is but one area in which the principles
are to be deployed. Nor are they to be invoked only when
procedural failures are shown. Does natural justice qualify to
be described as a 'majestic' conception? I believe it does. Is
it just a rhetorical but vague phrase which can be employed,
when needed, to give a gloss of assurance? I believe that it
is very much more. If it can be summarised as being fair-play
in action -- who could wish that it would ever be out of
action? It denotes that the law is not only to be guided by
reason and by logic but that its purpose will not be fulfilled; it
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lacks more exalted inspiration. And then again, in his speech
in the House of Lords in Wiseman v. Borneman, the learned
Law Lord said in words of inspired felicity: "... that the
conception of natural justice should at all stages guide those
who discharge judicial functions is not merely an acceptable
but is an essential part of the philosophy of the law. We often
speak of the rules of natural justice. But there is nothing rigid
or mechanical about them. What they comprehend has been
analysed and described in many authorities. But any analysis
must bring into relief rather their spirit and their inspiration
than any precision of definition or precision as to application.
We do not search for prescriptions which will lay down
exactly what must, in various divergent situations, be done.
The principles and procedures are to be applied which, in
any particular situation or set of circumstances, are right and
just and fair. Natural justice, it has been said, is only 'fair play
in action'. Nor do we wait for directions from Parliament. The
common law has abundant riches: there may we find what
Byles, J., called 'the justice of the common law' ". Thus, the
soul of natural justice is "fair-play in action" and that is why it
has received the widest recognition throughout the
democratic world. In the United States, the right to an
administrative hearing is regarded as essential requirement
of fundamental fairness. And in England too it has been held
that "fair-play in action" demands that before any prejudicial
or adverse action is taken against a person, he must be
given an opportunity to be heard. The rule was stated by
Lord Denning, MR in these terms in Schmidt v. Secretary of
State or Home Affairs -- "where a public officer has power to
deprive a person of his liberty or his property, the general
principle is that it has not to be done without his being given
an opportunity of being heard and of making representations
on his own behalf". The same rule also prevails in other
Commonwealth countries like Canada, Australia and New
Zealand. It has even gained access to the United Nations
(vide American Journal of International Law, Vol. 67, p. 479).
Magarry, J., describes natural justice "as a distillate of due
process of law" (vide Fontaine v. Chastarton16). It is the
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quintessence of the process of justice inspired and guided by
"fair-play in action". If we look at the speeches of the various
Law Lords in Wiseman case it will be seen that each one of
them asked the question "whether in the particular
circumstances of the case, the Tribunal acted unfairly so that
it could be said that their procedure did not match with what
justice demanded", or, was the procedure adopted by the
Tribunal "in all the circumstances unfair?" The test adopted
by every Law Lord was whether the procedure followed was
fair in all the circumstances and "fair-play in action" required
that an opportunity should be given to the taxpayer "to see
and reply to the counter-statement of the Commissioners"
before reaching the conclusion that "there is a prima facie
case against him". The inquiry must, therefore, always be:
does fairness in action demand that an opportunity to be
heard should be given to the person affected?"
31. This Court, therefore, is of the view that merely because there is
no reference to provide an opportunity of hearing to the writ
petitioners under Clause 6.2, the vital right of putting their
defence at the stage of determination of liability cannot be taken
away, otherwise, the same will violate the principle of natural
justice.
32. Clause 6.3 is the consequence of the issue of determination
which is to be done as per the condition stipulated under Clause
6.2 of the Agreement.
33. Initiation which is to be taken under Clause 6.2 of the Agreement
is to be based upon the determination of the liability of
appropriation of the performance security and for which also,
depending upon the outcome of the issue of determination as per
Clause 6.2 of the Agreement, a fresh show cause notice is to be
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given to the party concerned.
34. However herein, show cause notice has been given in terms of
Clause 6.3 of the Agreement which has been responded by the
respondents-writ petitioners and for that reason, the ground has
been taken that the writ petitioners have submitted to the
jurisdiction of the authority concerned and hence, the writ
petitioners are seized to agitate the issue of non-compliance of
the condition stipulated under Clause 6.2 of the Agreement.
35. This Court, is of the view that merely because the petitioners
have responded to the response given in view of Clause 6.3, they
will not seize in agitating the issue of laches committed on the
part of the appellants in depriving the petitioners in providing the
opportunity of being heard by issuance of show cause notice at
the stage of determination.
36. The issue of natural justice has been held to be instinct and if not
followed, then the same will be said to be in the teeth of Article 14
of the Constitution of India and in that view of the matter, even if
the writ petitioners have submitted to the jurisdiction by
submitting response to show cause notice in terms of Clause 6.3,
the issue of having no opportunity of hearing at the stage of
determination is being in the teeth of Article 14 of the Constitution
of India and hence, the contention which has been raised that
merely because the writ petitioners have submitted to the
jurisdiction of the Nominated Authority in terms of show cause
notice issued under Clause 6.3, will seize to agitate the non-
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determination of the issue as required to be determined in view of
Clause 6.2 of the Agreement, is having no foundation. Hence,
such argument is hereby, rejected.
37. Further, if the stage of Clause 6.2 and Clause 6.3, the proceeding
is at two stages and if the petitioners will be deprived from their
right to have opportunity at the stage of Clause 6.2 of the
Agreement, then, petitioners will lose one opportunity and
straightaway, the party concerned will have to jump to the stage
of condition stipulated under Clause 6.3 of the Agreement.
38. The law is well settled that if the terms and conditions of the
agreement has been provided, the same are to be adhered to in
strict sense and there cannot be any deviation and if the deviation
will be permitted, then, the same will amount to re-writing the
terms of the Contract, which is not permissible. Otherwise also,
deviating from the terms and conditions will amount to relaxation
in the terms and conditions, which is also not permissible once
the agreement has been entered in between the parties.
39. Accordingly, both the issues are being answered.
40. This Court, adverting to the impugned judgment, has found that
the learned Single Judge has taken into consideration before the
recourse of Clause 6.3, it was mandatory requirement to follow
the condition required under Clause 6.2 with regard to the
performance security, the said consideration has been given in
terms of the condition stipulated in the Agreement.
41. This Court, considering the finding so recorded in the impugned
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judgment and based upon the discussions made hereinabove, is
of the view that the judgment impugned needs no interference.
42. Accordingly, the instant appeals fail and are, dismissed.
43. Pending interlocutory application(s), if any, stands disposed of.
(Sujit Narayan Prasad, J.)
I Agree
(Arun Kumar Rai, J.) (Arun Kumar Rai, J.)
13/10/2025
Rohit/-A.F.R.
Uploaded on 14.10.2025
LPA Nos.67 & 61 of 2023
