Judgment:
H.S. Bedi, J.
1. On 25.4.1996 an auction notice was issued by the State of Haryana for the extraction of sand from the Khatkar zone comprising 27 villages in district Sonepat although by virtue of Clause 3A of this notice sand was to be extracted at only 4 villages at one given time. The auction was. actually held on 28.5.1996 and the petitioners' bid for Rs. 2,46,63,000/- per year was accepted being the highest. This information was conveyed to the petitioner-company on 30.5.1996. On that very day the petitioner-company deposited a sum of Rs. 20,55,250/- towards the first monthly instalment and a further sum of Rs. 61,65,750/- as security making a total of Rs. 82,21,000/-. The petitioner also deposited a sum of Rs. 24,66,300/- on 26.7.1996 as 10% of the tentative compensation to be paid to the land owners in terms of Clause 27 of the Contract and Rule 61 of Punjab Minor Mineral Concession Rules, 1964, (hereinafter called the Rules) as applicable to Haryana. A formal contract was also entered into between the parties, on 9.8.1996 for the period 29.6.1996 to 31.3.1999. It is the admitted case that as of now the petitioner-company has deposited almost Rs. 1.7 crores with the respondent-State. It appears from the. facts given in the petition that the petitioner-company thereafter sought to extract sand from villages Jatti Khurd, Sarsa and Nangal Kalan but faced some obstacles at the hands of the land owners. The petitioner-company then wrote to the Geologist (Jr) Minor & Geology Deptt. Sonepat with a copy to the Commissioner,. Mines and Geology, Haryana, Chandigarh for information that as they had already deposited an sum of Rs. 24,66,300/- as 10% tentative compensation for the land owners an obligation rested with the State Government to make available the land for extraction, A copy of this letter dated 13.8.1996 has been put on record as Annexure P-2. As nothing came out of this letter, the petitioner-company wrote another letter dated 22.8.1996, Annexure P-3, to the same officials reiterating the contents of the letter, Annexure P-2, but once again to no avail. The petitioner-company than wrote another letter dated 2.9.1996, Annexure P-4, to the same officials pointing out that they had already deposited approximately Rs. One crore with the department as security, monthly instalment and compensation amount and as they were paying interest on this amount, they were being put to a big loss due to non-settlement of compensation to the land owners by the department and that the Geology department was responsible for this situation. It was again pointed out, that as physical possession of the land for extraction of sand from the Khatkar zone had still not been given to them so the question of deposit of any further monthly instalment would not arise. By communications dated 11.9.1996 and 14.9.19%, Annexure P-5 and P-6 to the petition, it was again reiterated that until the possession was given to the petitioner-company, it was not liable to make the payment of any further monthly instalment.
2. As the petitioner-company had refused to pay the monthly instalment the Director, Mines and Geology, Haryana, Chandigarh, vide his notice dated 13.9.1996, Annexure P-1, informed it that as various sums were due from it on the basis of the contract that had been signed on 9.8.1996 and that as condition No.15 thereof requiring the submission of a production report had been breached, it was called upon to show cause as to why the Contract be not cancelled? The petitioner-company was however given a period of one month to rectify the default. Aggrieved by the issuance of the notice the petitioner-company has filed the present petition. This case first came up for hearing on 17.10.1996 before a Division Bench of this Court and notice of motion was issued for 29.10.1996. It was further directed that in the meantime the contract would not be given to any other person. The case was thereafter adjourned time and again and ultimately admitted on 17.12.1996 with the observations that the nature of the controversy involved required that the main case be listed for hearing on 13.1.1997, high-up in the list. It is in that situation that the case has been listed before me.
3. In the written statement filed by the respondents, the preliminary objection taken is that during the pendency of the writ petition at the motion stage the respondents had made the order, Annexure R-l, dated 23.10.1996 whereby they had terminated the contract and that the security amount of Rs. 61,65,750/- had been ordered to be forfeited, that the order was appealable under Rule 47 of the Rules and as an alternative remedy was provided the writ petition was premature. It was further pleaded that petitioner-company was itself at fault as it had failed to extract the sand despite the fact that every necessary help had rendered as and when required. It was further alleged that despite communications, Annexures R-III and R-IV dated 1.8.1996 and 26.8.1996 respectively, from the Geologists office in Sonepat, to the petitioner-company no effort had been made by it to approach the Collector, Sonepat so that the question of compensation to the land owners could be settled so as to enable the respondents to handover the possession of land for extraction of sand. It was additionally argued by the State counsel that the obligation lay on the petitioner-company being the Contractor and the lessee of the land to approach the Collector of the District under Rule 61 of the Rules and as they had not done so, no fault could be fastened on the respondents.
4. Mr. R.K. Chhibbar, the learned counsel appeared in support of the petitioner has urged that Clause 27 of the Contract when read alongwith Rule 61 of the Rules provided that in case a contractor/lessee faced any difficulty in getting the possession of the land from which sand was to be extracted, a statutory obligation lay on the Collector of the District to ensure that the possession was delivered to it and the only obligation that lay on the former was to deposit 10% of the compensation money that was to be paid to the objecting land owners and as 10% of the bid money had been deposited as compensation on 26.7.1996, the petitioner-company had completed its part of the contract. In this connection the learned counsel has referred to Clause 27 of the agreement and Rule 61 of the Rules which are reproduced below :-
'CLAUSE 27: ACQUISITION OF LAND OF THIRD PARTIES AND COMPENSATION THEREOF :
In accordance with provisions of Clause 9 of this agreement, the contractor shall offer to pay compensation to an occupier or owner of the surface of the land where from the minor mineral will be raised, including the land required for use as access to the quarry/mine, stoking of minerals and purposes subsidiary thereto for any damage or injury which may arise from the purposed mining operation of the contractor and in case the said occupier or owner refuses his consent to the exercise of the rights and power reserved to the Government and demised to the contractor under these presents, the contractor shall report the matter to the Assistant Mining Engineer/Mining Officer posted in the district who shall request the Collector of the District concerned to direct the occupier or the owner to allow the contractor to enter the said land and to carry on such mining/quarrying operation as may be necessary for the working of the mine/quarry, on deposit with the Collector in advance, of the following amount as tentative compensation to the occupier or the owner by the contractor subject to its final fixation by the Collector under the Land Acquisition Act, 1894.
RULE 61: ACQUISITION OF LAND OF THIRD PARTIES AND COMPENSATION THEREOF:
In case of a land in respect of which minor mineral rights vest in the Government, the contractor/lessee shall offer to pay compensation to an occupier or owner of the surface of the land wherefrom the minor mineral will be raised, as also the land required for use as access to the mine/quarry, stacking of minerals and purposes subsidiary thereto, for any damage or injury which may arise from the proposed mining or quarrying operations of the contractor/lessee, and if the said occupier or owner refuses his consent to the exercise of the rights and powers reserved to the Government and demised to the contractor/lessee, the contractor/lessee shall report the matter to the General Manager District Industries Centre posted in the District concerned who shall request the collector of the district concerned to direct the occupier or the owner to allow the contractor/lessee, to enter the said land and to carry on such mining or quarrying operations as may be necessary for the working of the mine/quarry, on deposit with the Collector in advance, of the following amount as tentative compensation subject to its final fixation by the Collector in accordance with the principles of the Land Acquisition Act, 1894:-
a) ten percent of the annual contract/lease money for the land comprising the mine/quarry; and
b) a sum at the rate of one rupee per square yard in the case of arable land and ten paise square yard in the case of waste land, per year for the land to be used for access to the quarry/mine, stacking of minerals and other subsidiary purposes. The contractor/lessee shall use the shortest possible route for access to the quarry/mine. If the amount of final compensation works out to be more than the tentative amount of compensation already deposited, the contractor/lessee shall deposit immediately on demand by the Collector, the additional amount of compensation. If however the amount of final compensation works out to be less than the amount already deposited by the contractor/lessee, the excess amount shall be refunded to him.'
5. On the joint reading of both these clauses it transpires that in case the occupier or the owner of the land refuses his consent to the extraction of the minor mineral, the Contractor was required to report the matter to the Assistant Mining Engineer or the Mining Officer posted in that district who would then request the Collector of the district concerned to direct the occupier, or the owner to allow the contractor to enter the said land and to carry on mining or quarrying operations, and that this direction would be issued only if compensation determined as 10% of the bid money had been deposited in advance as tentative compensation. It is the admitted position that the Assistant Mining Engineer/Mining Officer referred to in Clause 27 of the agreement is now the Geologist of the district. Equally it is the conceded case that as on the reorganisation of the industries department into two departments, one the Industries Department and the other the Department of Mines and Geology, the District Industries Officer has to be read as the District Geologist.
6. A bare look at Annexures P-2 to P-5 would indicate that the petitioner-company right from 13.8.1996 to 11.9.1996 had made all efforts to ensure that their part of the bargain was kept and it had also made a deposit of 10% of the tentative compensation to be paid to the owners as required under Rule 61 of the Rules which was a pre-condition before any action was to be taken by the Collector towards ensuring that the possession was handed over to the petitioner-company. These communications were addressed by the petitioner-company to the Geologist of the district with copies to the Director, Mines & Geology, Haryana and also in some cases to the Commissioner, Mines & Geology, Haryana.
7. The reliance of Mr. Bhinder learned counsel for the State, on Annexures R-III and R-IV is misplaced. The obligation was on the Collector as per Rule 61 of the Rules to ensure that the possession was handed over to the petitioner-company. It is the admitted case that even after the communications had been received by the Collector, he took absolutely on action by way of informing the petitioner-company that they were required to complete certain other formalities so that the possession of the land could be given to them. Mr. Bhinder has also urged that the obligation lay on the petitioner company to approach the Collector personally for redressal. To my mind this argument does not arise in this case as the statutory obligation lay on the Collector himself and even if it be assumed for a moment that some information was required by the Collector it was incumbent on him to send a notice to the petitioner-company so that they could appear before him. Admittedly, no such notice was ever issued to them. To my mind therefore the default in the execution of the work lay not with the petitioner-company but with the respondent-State of Haryana. In this view of the matter the plea of an alternative remedy has to be rejected and even more particularly as the order, Annexure R-1, has been passed during the pendency of this petition.
8. Mr. Bhinder has finally urged that in terms of Clause 18-A of the auction notice the contractor had no right to claim any relief in case the sand could not be extracted for whatsoever reason and as such the present writ petition was not maintainable. The Clause is reproduced below:-
' CLAUSE 18-A : The contractor shall have no right to seek any relief in payment of contract money on the plea that he was not able to extract sand from any village falling in the zone.'
To my mind this Clause would not be applicable to the facts of the present case. It cannot be ignored that all the terms of the contract have to be read together and the intention behind the contract has also to be noticed. Once a statutory obligation lay on the State Government to see that the possession was handed over to the petitioner-company in terms of Clause 27 of the contract and Rule 61 of the Rules and this obligation was not fulfilled, the petitioner would be liable to maintain a litigation for redress. Moreover this clause would apply only where the contractor could not extract the sand after possession was handed over to him, but not to a case where the working of the contract itself was frustrated as the State could not fulfil its statutory obligation in getting the possession of the land for the contractor.
9. I am therefore of the opinion that Annexure R-1 dated 23.10.1996 has to be quashed. Mr. R.K. Chibber, has further urged that though a period of two years still remained for the contract yet as per his information the respondents were not in a position to handover the possession of the villages comprising the Khatkar and zone to the petitioner for the purpose of extraction of the sand. I therfore deem it proper that in case the possession is not handed over to the petitioner-company in the maner required by Rule 61 and Clause 27-A of the contract within a period of 4 months from today for whatsoever reason, the money already deposited by them would be returned by the respondents with interest @ 10% from the date of receipt to the date of payment and in case the possession is handed over within this period, the contract would be deemed to commence from that day.
The writ petition is allowed in the above terms.