Judgment:
S.K. Chattopadhyaya, J.
1. Heard the teamed counsel for the parties and with their consent this application is being disposed of at the stage of admission itself.
2. Learned counsel for the parties agree that the facts leading to the decision of the case on the point of taw arc only required to be dealt with without going into other controversial factual position.
3. In order to settle 19 Sand Ghat at a time, a tender notice was published, which is Annexure -1, by the Collector, Bhojpur. Three dates for -holding auction were mentioned as 15-12-2000, 22-12-2000, and 29-12-2000 indicating therein that if for any reason the auction could not be held on 15-12-2000, the same would be held on the next date. Similarly, if even on the next date auction is not held, the same would be held on 29-12-2000. Time was also mentioned as 11 a.m. Some conditions have been laid down in the auction notice itself, which were required to be fulfilled by the prospective tenderers. There is no dispute that on 15-12-2000 and on 22-12-2000 due to pre-occupation of the Collector the bid could not be held and the same was held on 29-12-2000. The offer of the Bihar State Mineral Development Corporation Limited (hereinafter to be referred as 'respondent No. 4) for Rs. 5,30,00,000/- was accepted but the petitioner, it is stated intervened and offered more bid money. The Collector in order to augment the State finance called for respondent No. 4 but he was not found in the office of the Collector. The Collector thus deferred the bid for the next date i.e. 30-12-2000 and directed to Intimate all concerned. Notice for this fresh date was alleged to be served on respondent No, 4 but it appears from the record (Annexure 4B and 4C) that the office of respondent No. 4 was found closed and no other of its employee was ready to accept the notice. The Collector was of the view that respondent No. 4 deliberately refused to accept the notice/ information of the next date of bidding i.e. 30-12-2000. The petitioner offered a sum of Rs. 5,90,00.000/- as against the offer of respondent No, 4 of Rs. 5,30.00,000/- and the Collector having found the petitioner as highest bidder accepted his bid. By his letter dated 30-12-2000, accepted the bid of the petitioner, the Collector sent the same for formal approval of the Secretary-cum-Commissioner (respondent No. 1). This letter is Annexure-4 which reveals the facts and circumstances under which the Collector had accepted the bid of the petitioner. However, by the Impugned order dated 30-12-2000 (Annexure 5) respondent No. 1, instead of either accepting or rejecting the proposal of the Collector for settlement in favour of the petitioner, cancelled the said settlement and granted the lease in favour of respondent No. 4 on the ground that respondent No. 4 was ready to give fifty thousand more bid money against the offer given by the petitioner before the Collector on 30-12-2000 , He further directed that from the mid night of 30-12-2000 possession should be given to respondent No. 4. This order of respondent No. 1 dated 30-12-2000 . as contained in Annexure-5 is under challenge.
4. Learned Senior Counsel Mr. Mahto has contended that the Collector of a district is the sole authority to grant this type of lease in favour of a bidder and there is no statutory obligation for getting any approval from the State Government. However, he accepts that in view of some circulars the Collector is required to have formal approval before finally settling the Ghat. He further submits that respondent No, 1 has acted beyond his jurisdiction by cancelling the bid in favour of the petitioner and granting the same to the respondent No. 4 because respondent No. 4 did not challenge the order of the Collector before the authority by filing revision application . His contention is that under Rule 46 of the Bihar Minor Mineral Concession Rules. 1972 (hereinafter to be referred as 'the Rules, 1972'), the Commissioner is empowered to entertain revision application of an aggrieved party and pass necessary orders in accordance with law. In this case, learned counsel continues, the Commissioner, before annulling the order of the Collector did not even issue any notice to the petitioner, which amounts to flagrant violation of the principles of natural Justice. According to him if any opportunity would have been given by the Commissioner, the petitioner could have offered more amount than respondent No. 4 and this having not done, the order of the Commissioner is vitiated in law. Lastly, with reference to Rule 11A of the Rules 1972, Mr. Mahto submits that so far settlement of and is concerned, the Collector is the sole authority to settle the Sand Ghat and the Commissioner by no stretch of imagination could have cancelled the bid by granting the same in favour of respondent No. 4 . According to him any such negotiation , which is made in the chamber, in absence of the petitioner, is illegal and cannot be sustained in law,
5. The Commissioner as well as the Collector have filed two separate counter affidavits ventilating their stands in support of their respective orders.
In his counter affidavit respondent No. 1, the Commissioner has asserted some facts, which have been controverted by the petitioner. Moreover, those facts are not specifically supported by the Collector of the district (respondent No. 2). Respondent No. 1 did not controvert the factual position that as on 30-12-2000 the petitioner was the only participant, the representative of the respondent No, 4 being not represented at the time of auction the petitoner's highest bid offer of Rs. 5, 90.00,000/- was accepted by the Collector and was sent for approval to the Government in view of the circular dated 27-11-2000. He has admitted that in the meantime respondent No. 4 filed a petition before the Government intimating that on 29-12-2000 the auction was held and concluded and. as such, the decision taken by the Collector on 30th Dec. 2000, accepting the bid money of the petitioner was not valid. Respondent No. 4 also offered more than 10% amount of the auction held on 29th Dec. 2000 . It is asserted that the Government considering the facts that Bhojpur Sand Ghats are biggest and highest revenue earning Ghats of Bihar and keeping in mind that in absence of any decision after 1st Jan. 2001. confusion may prevail and problems of law and order may arise, it decided to settle the bid in favour of respondent No. 4 which not only offered higher amount but also a Government organisation. In reply to the statement of the petitioner that the auction notice Itself Indicates that one of the important three conditions required to be fulfilled was to submit 'No Dues Certificate' from the office of the District Mining Officer and 10% earnest money was also required to be deposited by way of demand draft before the auction, the Commissioner has merely stated that the same was not pointed out by the Collector by his letter dated 30-12-2000. Even specific averments of the petitioner in paragraph 7 that he was the only qualified person to participate in the auction as he fulfiled all the criteria but he was prevented to enter Into the chamber of the Collector in time on 29-12-2000 to take part in auction have merely denied by the Commissioner as not correct but without Indicating his source of Information. The Commissioner, however, has not averred as to how he could settle the Sand Ghats with respondent No. 4 accepting its offer in his chamber. It is to be pointed out that the affidavit of the Commissioner has been sworn in by the District Mining Officer Mr. Anand Vardhan, said to have been authorised by respondent No. 1 to swear the affidavit.
On the other hand, the Collector of the District of Bhojpur, Sri Sudhir Kumar. has sworn the affidavit himself by defending his action In accepting the bid of the petitioner being the highest bidder on 30-12-2000. He has categorically stated that respondent No.4 did not submit 'No Dues Clearance Certificate' as required under Rule 9{4) of the Rules, 1972 on or before 29th of December. 2000, nor did he file any affidavit to that effect. However countering the allegations of the petitioner that on 29-12-2000 he was prevented from entering into his office, the Collector has asserted that when the auction was conducted on 29-12-2000 the petitioner failed to appear though some other supporters were present. But as those supporters were not bidders, they were not allowed to participate. However, the petitioner turned up five minutes late after the bid was over, which was accepted in favour of respondent No.4. But the petitioner explained in details the reasons for his delay. The Collector realising that uncontested bid was not justified from the revenue point of view and accepting the reasons given by the petitioner for his delay, deferred the bid to 30-12-2000. To that effect a notice was Issued Immediately and respondent No.4 also was informed. He contacted on telephone but no one responded and the Koilwar camp office of respondent No.4 refused to accept the notice. All these have been detailed in the letter addressed to respondent No. 1 on 30-12-2000.
6. Respondent No. 4 in his counter affidavit has taken a technical plea to the effect that the petitioner having moved the government In this regard by filing representation, the present writ application is premature. Criticising the order of the Collector dated 30-12-2000 respondent No.4 has asserted that when general public was informed by the auction notice that the last date of the bid was 29-12-2000 and respondent No.4 having participated on that date as the sole bidder, there is no earthly reason for the Collector to defer the date of auction any further to 30-12-2000. This step, according to respondent No.4, of the Collector was Illegal inasmuch as on 30-12-2000 the bid of the petitioner was accepted behind its back resulting in violation of principles of natural justice. It continues to allege that purported notice sent to respondent No-4 on 29-12-2000 informing it the next date of auction after the office hours at 6.10 P.M. and thereafter at 8.15 P.M., when admittedly the security guards personnel only were there and the office was closed. The guards had nothing to do with the business affair of respondent No.4 and they were not supposed to accept the notice said to have been issued by the Collector after the office was closed. Respondent No.4 has further stated that the petitioner was also not eligible to participate in the auction as he did not deposit the draft of the required amount on or before 30-12-2000 and also did not produce other required documents. Highlighting its status as a Government Agency, respondent No.4 has tried to defend the action of the Commissioner in accepting its bid in the chamber. However, respondent No.4 has not categorically denied the assertions of the Collector that it did not submit 'No Dues Clearance Certificate' on or before 29th of December, 2000. According to It since it is a regular lessee in respect of the areas in question since 1992 and has paid all the dues to the Government, rather paid dividend of rupees one crore the respondent No.4 was rightly accepted as the best bidder by the Commissioner because amount itself is not the sole or dominant factor rather suitability emerges from other factors also.
7. From different stands taken by the parties it is evident that whereas the petitioner challenges the order of respondent No. 1 on the ground of violation of principles of natural Justice and fair play, respondent No.4 also alleges that the order of the Collector (respondent No.2) was bad in law being taken at the back of its representative. So far question of eligibility of these two contested bidders is concerned, the petitioner's assertion is that he fulfilled all the criteria but respondent No.4 failed to fulfil the same. The stand of respondent No.4 is just vice versa. However, asssertion of the Collector of the district that respondent No.4 did not submit clearance certificate on or before 29-12-2000 remains unchallenged, but in my view, without going into these factual controversy at present the legality or otherwise of the orders passed by the Collector as well as Commissioner is to be looked into in the background of relevant rules and principles laid down by the Hon'ble Supreme Court from time to time.
8. Chapter III of the Bihar Minor Mineral Concession Rules, 1972 ('Rules 1972' in short) deals with grant of mining lease. Rule 9 deals with application for grant of mining lease. Rule 10 talks about acknowledgement of application and Rule 11 deals with the manner in which application for mining lease should be disposed of.
Rule 11A. which is relevant for consideration, reads as follows :
'11 A. Notwithstanding anything contained in these rules the settlement of sand as minor mineral will be done by public auction by the Collector to the highest bidder on annual basis.
Before the auction, the bidders shall produce royalty clearance certificate required under Rule 9(4) or an affidavit to the effect that he is /was not a lessee or permit-holder and that he does not owe any mining dues.
Explanation - Existing leases shall not be renewed nor fresh lease/permits for sand shall be granted.
Provided that in isolated and far flung areas of sand deposits which reasonably and conveniently cannot be settled by auction shall be Identified by the Collector and on their being approved as such by the Commissioner the competent officer may Issue permits for removal of sand from such areas for such period not exceeding one year in respect of any one individual permit-holder.
Provided further that such isolated and far flung areas can also be settled through public auction as and when so declared by the Commissioner.
Provided further that anything contained herein before in this rule shall not prevent the Collector from exercising his power u/r 9 in cases covered by Rule 12(i) hereinafter.'
This rule begins with a non obstante clause meaning thereby that no other rule of Rules 1972 will prevail over the provisions of Rule 11 A. This rule postulates that settlement of sand will be done by public auction and by the Collector. Secondly, the settlement is to be made with the highest bidder on annual basis. Under this rule the role of the Commissioner comes on two occasions. First proviso to this Rule indicates that when Isolated and far flung areas of sand deposits which reasonably and conveniently cannot be settled by auction shall be identified by the Collector and on their being approved as such by the Commissioner the competent officer may issue permits for removal of sand from such areas for such period not exceeding one year in respect of any one individual permit-holder. Second proviso contemplates that such isolated and far flung areas can also be settled through public auction as and when so declared by the Commissioner. Last proviso to Rule 11A gives an absolute power to the Collector from exercising his power to grant lease in cases covered by Rule 12(1).
9. On a bare perusal of the aforesaid provisions it is clear that so far settlement of sand by public auction is concerned, the Collector of the district is the sole authority and the Commissioner has no role to play in respect of such settlement except as indicated in the proviso. It is true that there is a circular of the Government that before settling a Sand Ghat in respect of the highest bidder the same should be sent for approval to the Government. The said circular is dated 27-11-2000, as contained in Annexure-A to the counter affidavit of respondent No. 1. Though much emphasis has been laid by respondent No.l as well as respondent No.4 on this circular while asserting that the decision of the Government is final in respect of settlement of Sand Ghats but on scrutinising the circular it could not be found that the Collector is any way obliged to get the final permission of the Government before executing the lease. This circular, in my view, is only a guideline to the Collectors of the districts for observing certain norms before settling the Sand Ghats. Neither of the counsel for the respondents 1 and 4 could lay his finger on any of the paragraphs of the circular which remotely suggests that the Government is the final authority in settling the Sand Ghats with any bidder. Apart from that, no provision of law has brought to the notice of the Court by any of the counsel as to under which law this circular has been Issued by the Government, which, according to respondents No.l and 4, suggests that approval must be given by the Government. If in view of this circular the Government is considered to be the sole authority to grant mining lease in respect of Sand Ghats as sought to be argued by these two respondents, in my view, the very intention of the legislature in enacting Rule 11A with a non obstante clause will be frustrated.
10. Even assuming for the sake of argument that the Collector is obliged to send his proposal for formal approval of the Government under this circular but by no stretch of Imagination it can be said that the Government is the absolute authority to cancel the bid of a highest bidder and to grant the same in favour of a person in closed chamber and that too behind the back of the highest bidder whose bid has already been accepted by the Collector. Without detaining myself any longer on this point. I may straight way come to the orders passed by the Collector and the Commissioner.
11. There is no dispute that on 29-12-2000 the bid of respondent No.4 was accepted by the Collector at the first Instance when the petitioner was not present. This fact finds support from Annexure-2 which Indicates that the petitioner. Roza Hussain, was absent. However, the petitioner appeared five minutes late and he explained grounds for such dely. The Collector made a note that he was stranded in the way. Hence in the interest of Govt. revenue re-bid is necessary. Representative of BSMDC has disappeared and is not traceable. Hence the todays bid is cancelled. It is fixed at 30-12-2000 11 A.M. Inform all concerned.' This note of the Collector was made at 12.50 noon on 29-12-2000. However, this document does not reveal that at what time on 29-12-2000 the bid of respondent No.4 was accepted and the process of auction was closed. Though the Collector has tried to emphasise that information regarding holding of auction on 30-12-2000 was sent to respondent No.4 but neither this document nor Annexure-4, letter to the Commissioner, indicates as to at what time the employees of respondent No.4 refused to accept the notice. It is specific case of resondent No.4 that after close of the office the notices were sought to be served at 6.10 P.M. and 8.15 P.M. when only guards were present and no employee of the office remained present. The opinion of the Collector in the letter that respondent No.4 or its employee refused to accept the notice deliberately, in my view, cannot be said to be correct. After its bid was accepted at the first instance by the Collector respondent No.4 was not required to wait in his office to see as to whether any other competitor cornes to the Collector for giving highest bid. Record does not show as to why the Collector instead of fixing the very next date i.e. 30-12-2000. as the date of next auction, did not adjourn the same for 31-12-2000. Once accepting the bid of respondent No.4, in all fairness the Collector ought to have given a reasonable opportunity to respondent No.4 to give his last offer. This having not done, in my view, the Collector has committed an Illegality by violating the principles of natural justice and fair play. Thus, his order as contained in Annexure-4 cannot be sustained in law.
Secondly, there is another Impropriety in the order of the Collector, which is apparent from his letter dated 30-12-2000 (Annexure-4). The auction notice was Issued for holding auction of Individual Sand Ghat of 19 ghats and appendix to the notice (Annexure-1) shows the names of different Ghats for which different reserved Jama was fixed. His letter further reveals that one Suresh Prasad deposited security amount for single ghat at Serial No. 11 and another Rajesh Kumar deposited security amount for ghat at Serial No. 13. Their applications with bank draft were in order. But for the reasons best known to the Collector, on 30-12-2000,he suo motu amalgamated all the 19 Ghats for one time auction without even any notice to those two persons who offered for Serials No.11 and 13. This, in my view is in utter disregard to the auction notice itself and for this reason also, the order of the Collector can not be sustained.
12. Similarly, the order of the Commissioner, respondent No.1, is liable to be set aside because he has also failed to observe the principles of natural Justice and fair play. As noticed above in view of some circulars the Collector while accepting the tender of the petitioner, sent the same for formal approval. The Commissioner could have either approved the proposal or rejected the same directing the Collector to hold a fresh auction in accordance with law if there was any departure from the guidelines of the Government. This is not the case here. Though from the impugned order of the Commissioner it does not appear that respondent No.4 had filed any revision under Rule 46 of the Rules 1972 but in its counter affidavit respondent No.4 has stated that against the order of the Collector they preferred revision as well as objection/representation before the Government on 30-12-2000.From this statement it appears that being aggrieved by the order of the Collector granting lease to the petitioner, respondent No.4 moved the State Government by way of representation and not by way of revision. If revision would have been preferred then the petitioner ought to have been made a party including the Collector and it was obligatory for the Commissioner to issue notice to the Collector as well as the petitioner Admittedly, that has not been done. From the order of the Commissioner it appears that respondent No.4 made an offer before him in his chamber showing his willingness to offer 51 thousand more against the offer made by the petitioner. The Commissioner without asking any comment from the petitioner accepted the said offer and directed that the possession to be handed over to respondent No.4 from the mid night of 31st of December, 2000. This order not only cancelled the lease granted in favour of the petitioner by the Collector but also granted lease in favour of respondent No.4. Learned counsel for respondent No. 1 failed to point out any provision of law under which the Commissioner can settle/ grant lease of Sand Ghats in favour of a person on the basis of his representation. Under circular the Commissioner was only required to see as to whether while granting lease, the Collector has violated any of the guidelines or not Rule 46(3) contemplates that after going through the records the Commissioner may confirm, modify or set aside the order or pass such other order in relation thereto as the Commissioner may deem just and proper and this order shall be final. This power, in my view, does not vest with the Commissioner to settle the Sand Ghats with a particular person and that too without hearing the aggrieved party.
13. In the instant case admittedly the offer of the petitioner was accepted by the Collector, but the lease was not executed because formal approval of the State Government was required to be obtained. Even assuming that respondent No.4 had filed any representation and offered some more money, in all fairness the Commissioner ought to have given an opportunity to the petitioner in respect of the offer of respondent No.4.
14. In the case of Ram and Shyam Company v. State of Haryana reported in AIR 1985 SC 1147 almost in similar circumstances their Lordships have observed that '........acceptance of an offer secretly made and sought to be substantiated on the allegations without the verification of their truth, which was not under taken, would certainly amount to arbitrary action in the matter of distribution of the State largesse which by the decisions of this Court is impermissible.'
Paragraph 13 of the judgment may be usefully reproduced :
'13. Approching the matter from this angle, can there be any doubt that the appellant whose highest bid was rejected by the Government should have no opportunity improve upon his bid more so when his bid was rejected on the ground that it did not represent adequate market consideration for the consession to extract minor mineral. A unilateral offer, secretly made, not correlated to any reserved price made by the fourth respondent after making false statement in the latter was accepted without giving any opportunity to the appellant either to raise the bid or to point out the falsity of the allegations made by the fourth respondent In the letter as also the inadequacy of his bid. The appellant suffered an unfair treatment by the State in discharging its administrative functions thereby violating the fundamental principle of fairplay in action. When he gave the highest bid, he could not have been expected to raise his own bid in the absence of a competitor. Any expectation to the contrary betrays a woeful lack of knowledge of acuction process. And then some one surreptitiously by a secret offer scored a march over him, No opportunity was given to him either to raise the bid or to controvert and correct the erroneous statement.'
15. On the aforesaid analogy and the principles laid down by the Supreme Court it is clear that the order of Commissioner violates the principle of natural justice variously described as fairplay in action and, as such, the order of the Commissioner dated 30-12-2000 (Annexure-5) cannot be sustained.
16. In the result, this application is disposed of by setting aside both the orders of the Collector dated 30-12-2000 and the Commissioner dated 30-12-2000 as contained in Annexures 4 and 5 respectively. The Collector is directed to hold a fresh auction of all the Ghats as per the notification as contained in Annexure-1. He will immediately notify further date of auction and will see that the date is known to all the intending bidders and thereafter finalise the same within six weeks from the date of receipt/ production of a copy of this order.