Ajay Rastogi Vs. State of Jharkhand Through Secretary Department of Mines and Geology and Ors - Court Judgment

1 IN THE HIGH COURT OF JHARKHAND AT RANCHI    W.P.(C) No. 1968 of 2015 ­­­­­­­ Ajay Rastogi, son of Girish Nandan Rastogi, resident of A­E3,  Ram Ganga Vihar, Muradabad, PO, PS & Dist. Muradabad,  Uttar Pradesh ...   ...  Petitioner Versus 1. State of Jharkhand through Secretary, Department of Mines &  Geology, having its office at Nepal House, PO & PS Doranda, Dist.  Ranchi 2.  Deputy Commissioner, Ranchi,having its office at Kutchery Road,  PO GPO, PS Kotwali, Dist. Ranchi 3.  District Mining Officer, Ranchi, having its office at Kutchery Road,  PO GPO, PS Kotwali, Dist. Ranchi 4.  Assistant Mining Officer, Ranchi having its office at Kutchery Road  PO GPO, PS Kotwali, Dist. Ranchi 5.  Rajesh Kumar Ranjan S/O Jitendra Singh, R/O Ketari Bagan,  PO+PS Lower Chutia, Ranchi 6.  Murlidhar Prasad S/O Thakur Das Koinoi, R/O P/O Tendra  Mahatu PS Sonahatu, PO Sonahatu Dist. Ranchi 7.  Sanjay Kumar Modak, S/O A. Modak, At PO+PS Tamar, Dist.  Ranchi 8.  Nakul Mahato S/O Late R.K. Mahto R/P Chota Mouri, PO+PS  Silli, Dist. Ranchi 9.  Pankaj Kumar S/O Madan Prasad R/O Hesanhag PO+PS  Macluskiganj, Dist. Ranchi            …  ... Respondents With W.P.(C) No. 1969 of 2015 ­­­­­­­ Dev Kumar, son of Shri Damodar Prasad resident of 94 Sanjay  Colony, ward no. 34, Shri Ganganagar, PO, PS & Dist. Shri  Ganganagar, (Rajshtan) ...   ...  Petitioners Versus 1. State of Jharkhand through Secretary, Department of Mines &  Geology, having its office at Nepal House, PO & PS Doranda, Dist.  Ranchi 2.  Deputy Commissioner, Ranchi,having its office at Kutchery Road,  PO GPO, PS Kotwali, Dist. Ranchi 3.  District Mining Officer, Ranchi, having its office at Kutchery Road,  PO GPO, PS Kotwali, Dist. Ranchi 2 4.  Assistant Mining Officer, Ranchi having its office at Kutchery Road  PO GPO, PS Kotwali, Dist. Ranchi 5.  Rajesh Kumar Ranjan S/O Jitendra Singh, R/O Ketari Bagan,  PO+PS Lower Chutia, Ranchi            …  ... Respondents ­­­­­­­ CORAM: HON'BLE MR. JUSTICE SHREE CHANDRASHEKHAR ­­­­­­­ For the Petitioners        : Mr. Indrajit Sinha, Advocate (In both cases)  For the Respondent­State: Mr. Ajit Kumar, A.A.G. (In both cases) ­­­­­­­ 06/10.07.2015 Challenging condition contained in Clause 16 of auction  notice   dated   15.04.2015,   both   the   writ   petitions   have   been   filed.  Mr. Indrajit Sinha, the learned counsel for the petitioner states that  issues involved in both the writ petitions are common.   In both the  writ   petitions   validity   of   Clause   16   in   auction   notice   has   been  challenged.   It is stated that facts in both the cases are also similar.  Mr. Indrajit Sinha, the learned counsel for the petitioner advanced his  arguments referring to facts in W.P.(C) No.1969 of 2015.

2. Briefly   stated,   the   facts   of   the   case   are   that,   the  petitioner   who   intended   to   offer   bids   in   response   to   notice   dated  15.04.2015 for settlement of Sand Ghats in Ranchi district got 17  demand drafts prepared from HDFC Bank, Banka Branch.  A bidder  was required to deposit 10% of the reserve price as earnest money  deposit  and  the  intending  bidder   was also  required  to  obtain  and  submit   “no   objection   certificate”   from   Gram   Sabha/Mukhia/Gram  Panchayat/Authorized   Officer.   The   petitioner   approached  Mukhia/Gram Pradhan of respective Gram Panchayats however, they  declined   to   grant   “no   objection   certificate”   to   the   petitioner,   as   a  consequence of which the petitioner was debarred from participating  in the auction.   It is stated that several intending bidders were also  prevented from participating in the auction only because they could  not obtain “no objection certificate” from Gram Sabha/Mukhia/Gram  Panchayat/Authorised Officer.

3. The   learned   counsel   for   the   petitioner   has   submitted  3 that, Clause 16 creates a disqualification for a bidder who may be  otherwise qualified still, he would not be permitted to participate in  auction if he fails to produce “no objection certificate”.  The learned  counsel for the respondents has referred to Rule 11 and Rule 34 (4)  of  the   amended  Rules and  submitted  that,  besides Rule  5  (4)  the  aforesaid Rules also make it mandatory that “no objection certificate”  of     Gram   Sabha   must   be   obtained.   Before   dealing   with   the   rival  contentions, Rule 5 (4) of the Jharkhand Minor Mineral Concessions  Rules,   2004   needs   to   be   noticed.   The   unamended   Rule   5   (4)   of  Jharkhand Minor Mineral Concession Rules, 2004 reads as under; fu;e&5 (4 ): vuqlwfpr {ks=ksa esa lacaf/kr xzke lHkk vFkok leqfpr iapk;r Lrj dh iwoZ laLrqfr ds fcuk y?kq [kfut dk dksbZ [kuu iV~Vk vFkok [kqyh [kku vuqefr i= fuxZr ugha fd;k tk,xkA (English   translation   of   Rule   5   (4)   of   Jharkhand  Minor Mineral Concession Rules, 2004)  Rule 5 (4): “No permission for mining lease or   prospecting license for Minor Mineral shall be issued, in   the   Schedule   areas   without   prior   approval   from   the   concerned   Gram   Sabha   or   at   appropriate   Panchayat   level.”

4. Vide   notification   dated   30.05.2014   published   in  Jharkhand   Gazette,   Rule   5   (4)   was   amended   to   the   extent   that  expression   “prior   approval”   has   been   substituted   by   “no   objection  certificate”.   In my opinion, the amendment in Rule 5 (4) does not  change the prohibition contained under the said Rule.   Rule 5 (4)  mandates   that   no   mining   lease   or   prospecting   license   for   Minor  Mineral in the schedule area would be issued without “no objection  certificate” of the concerned Gram Sabha or appropriate Panchayat  authority.  Clause 16 provides that a bidder would not be permitted  to   participate   in   auction   if   “no   objection   certificate”   from  Gram  Sabha/Mukhia/Gram   Panchayat/Authorized   Officer   is   not  obtained.   In  my  opinion,   the   prohibition  contained  in   Rule   5  (4),  which mandates prior approval/“no objection certificate” from Gram  Sabha/Mukhia/Gram   Panchayat/Authorised   Officer,   has   been  4 mistaken   by   the   petitioner   as   a   disqualification   to   an   intending  tenderer.     In   view   of   specific   prohibition   contained   under   various  provisions of 2004 Rules, Clause 16 has been incorporated in auction  notice   dated   15.04.2015.     A   bare   reading   of   Clause   16   would  indicate   that   Gram   Sabha/Mukhia/Gram   Panchayat/Authorised  Officer   is   not   required   to   assess   the   eligibility   of   an   intending  tenderer   rather,   in   view   of   the   bar   imposed   by   2004   Rules,   a  condition to obtain “no objection certificate” has been incorporated  in   Clause   16.     Though,   at   the   first   glance   condition   incorporated  under   Clause   16   may   give   an   impression   of   a   disqualification  however, when viewed in the context of bar under Jharkhand Minor  Mineral Concession Rules, 2004, Clause 16 cannot be construed as a  disqualification.  Moreover,     the   terms   of   tender   are   not   open   to  judicial   scrutiny,   the   same   being   in   the   realm   of   contract.   The  Government must have a free hand in setting the terms of tender.  In  “Jagdish Mandal vs. State of Orissa” reported in (2007) 14 SCC 517,  the   Hon'ble  Supreme  Court  has observed,  “evaluating tenders  and  awarding contracts are essentially commercial functions.”  5. It is submitted that, the auction notice dated 15.04.2015  has been issued under Rule 12 (2) of the Jharkhand Minor Mineral  Concession   Rules,   2004   and   in   terms   of   the   guidelines   dated  17.03.2015 for settlement of Sand Ghats however, Rule 12 (2) of the  Jharkhand Minor Mineral Concession Rules, 2004 has already been  amended.  Guidelines issued on 17.03.2015 has been challenged on  the ground that it has no statutory force in as much as, it has not  been   issued   by   the   order   of   the   Governor,   State   of   Jharkhand.  Referring   to   decision   in  “Global   Energy   Limited   and   Another   Vs.   Central Electricity Regulatory Commission” reported in (2009) 15 SCC   570, the learned counsel for the petitioner submits that, power to  provide   qualification   or   disqualification   is   essentially   a   legislative  function   and   such   legislative   function   cannot   be   delegated.   It   is  further   submitted   that,   neither   the   Jharkhand   Minor   Mineral  5 Concession Rules, 2014 (as amended upto 2014) nor any other law,  creates a disqualification to an intending tenderer who fails to submit  “no objection certificate” and thus, Clause 16 of auction notice dated  15.04.2015   is   ultra­vires   to   2004   Rules.     The   power   to   impose  restriction   or   condition   which   creates   a   disqualification   must   be  provided specifically in the statute and a right to participate in tender  cannot   be   taken   away   by   an   administrative   action.   It   is   further  submitted   that,   by   executive   order   substantive   Rule   cannot   be  supplanted   and   thus,   no   disqualification   can   be   prescribed   by   an  executive   instruction.     The   learned   counsel   for   the   petitioner   has  relied on judgments in  “Manohar Lal Sharma Vs. Principal Secretary   and Others”  reported in  (2014) 9 SCC 516  and  “Gulf Goans Hotels   Company Limited and Another Vs. Union of India and Others” reported  in (2014) 10 SCC 673.   6. Section 15 of the Mines and Minerals (Development and  Regulation) Act, 1957 confers power upon the State Governments to  make   Rules   in   respect   of   Minor   Minerals.     Section   15(1A)   (d)  provides that the State Government may make Rules providing the  terms   on   which,   and   the   conditions   subject   to   which   and   the  authority   by   which   quarry   leases,   mining   leases   or   other   mineral  concessions may be granted or renewed.  Section 15 (1A) (o) confers  further power on the State Governments for making Rules on any  other matter which is to be, or may be prescribed.  As noticed above,  Rule 5 (4) of the Jharkhand Minor Mineral Concession Rules, 2004  imposes a restriction on settlement of Sand Ghats and, accordingly  Clause 16 has been inserted in auction notice dated 15.04.2015. It is  well settled that as long as power in the authority is traceable mere  absence of the provision or mention of a wrong provision would not  be   a   ground   on   which   action   taken   by   the   authority   can   be  questioned.  The Deputy Commissioner of the district is authorised to  issue   auction   notices   and   the   Deputy   Commissioner   is   the   person  under   whose   control   auction   is   conducted.   Neither   under   the  6 M.M.D.R.   Act,   1957   nor   under   the   Jharkhand   Minor   Mineral  Concession Rules, 2004 an authority has been prescribed to conduct  auction for Minor Minerals and thus, if by executive instruction, the  Deputy Commissioner has been authorised to conduct auction and  Mukhiya,   Gram   Sabha   etc.   have   been   authorised   to   issue   “no  objection certificate”, the said execution instructions cannot be said  to     supplant   the   statutory   provision.    The   learned   counsel   has  referred to Sections 10, 73 and 75 of the Jharkhand Panchayati Raj  Act, 2001 to demonstrate that function of Mukhia, Gram Panchayat  etc.   does   not   contemplate   issuing   “no   objection   certificate”.     The  learned counsel referred to Section 4 of the Panchayat (Extension of  Schedule Area) Act, 1996 to submit that, it is an enabling provision,  in terms thereof Rule 11 of the Jharkhand Minor Mineral Concession  Rules, 2004 has been amended however, the said provision also does  not prescribe production of “no objection certificate” as a condition  precedent for participating in the auction.

7. There   is   no   dispute   that   Panchayat   (Extension   to  Schedule   Area)   Act,   1996   is   a   Central   Legislation   and   Jharkhand  Minor Mineral Concession Rules, 2004 has been enacted by the State  Government   in   exercise   of   power   under   Section   15   of   M.M.D.R.  Act, 1957.  In the present proceeding the petitioner has not made a  specific challenge to validity of Rule 5 (4) and only during the course  of argument the learned counsel for the petitioner has made serious  attempts to challenge the validity of Rule 5 (4)  on the ground that it  is   ultra­vires   M.M.D.R.   Act,   1957.   In  “Doiwala   Sehkari   Shram   Samvida Samiti Ltd. Vs. State of Uttaranchal and Others” reported in  (2007) 11 SCC 641   it has been held by the Hon'ble Supreme Court  that in so far as Minor Minerals are concerned, Section 15 confers  power upon the State Government to make Rules.   The contention  raised on behalf of the petitioner that disqualification on the ground  of “no objection certificate” must find place in M.M.D.R. Act, 1957 is  fallacious.   The State Government is competent to frame Rules for  7 regulation of Minor Minerals.  8.  The learned counsel for the petitioner submits that, in so  far   as,   requirement   for   submitting   “no   objection   certificate”   is  concerned,   it   is   applicable   only   in   the   districts   of   Ranchi,   Khunti,  Seraikella­Kharsawan,   Simdega,   Gumla   and   East   Singhbhum  whereas,   in   14   other   districts   no   such   requirement   has   been   laid  down.     Referring   to   office   order   dated   05.05.2015,   the   learned  counsel   further   submits   that,   authorization   to   Block   Development  Officer and Assistant Mining Officer to issue “no objection certificate”  is confined to few districts only.  The respondent­State of Jharkhand  has   not   taken   a   policy   decision   authorizing   Block   Development  Officer   and   Assistant   Mining   Officers   to   issue   “no   objection  certificate”   to   intending   tenderers   for   settlement   of   Sand   Ghats  rather,   only   few   Deputy   Commissioners   have   issued   office   orders  similar   to   office   order   dated   05.05.2015   issued   by   the   Deputy  Commissioner, Ranchi. The learned counsel for the petitioner submits  that,   procedure   adopted   for   settlement   of   Sand   Ghats   is   arbitrary,  unguided and intended at favouring a handful of tenderers.      9.  In   so   far   as,   contention   that   the   concerned   Mukhiya  arbitrarily refused to issue “no objection certificate” is concerned, I  find   that   as   a   temporary   measure   the   Deputy   Commissioner   has  issued   office   order   dated   05.05.2015,   authorizing   the   Block  Development Officer and the  Assistant Mining Officer  to issue “no  objection certificate”.  By authorizing two other officers of the State  Government,   the   possibility   of   arbitrary   refusal   by   Gram  Sabha/Mukhia/Gram Panchayat/Authorized Officer has been sought  to be minimised. The auction notice was issued on 15.04.2015 and  the petitioner allegedly approached the  Block Development Officer  on 05.05.2015 and the Assistant Mining Officer on 06.05.2014.  The  petitioner has alleged that the concerned Gram Sabha/Mukhia/Gram  Panchayat has arbitrarily refused to issue “no objection certificate” to  him however, no detail has been provided in the writ petition.  When  8 and to whom the petitioner approached for “no objection certificate”  have not been pleaded in the writ petition.   Petitioner had 20 days  after auction notice dated 15.04.2015 was published, to obtain “no  objection   certificate”   however,   he   made   a   complain   to   the   Deputy  Commissioner   only   on   06.05.2015.     The   fact   that   the   petitioner  approached the Block Development Officer on 05.05.2015 would go  to show that the petitioner had the knowledge of office order dated  05.05.2015.  Merely because office order dated 05.05.2015 was not  given wide publicity, it cannot be presumed that it was intended at  favouring a few.  No doubt, all participating tenderers are entitled to  a   fair,   equal   and   non   discriminatory   treatment   in   the   matter   of  evaluation of their bids however, a condition cannot be struck down  on   mere   allegation   that   the   same   was   tailor­made   to   benefit   a  particular tenders or class of tenderers. In “Michigan Rubber (India)   Limited vs. State of Karnataka and others” reported in (2012) 8 SCC   216, it has been held that, “if the State or its instrumentalities act  reasonably, fairly and in public interest in awarding contract, here  again, interference by court is very restrictive since no person can  claim   a   fundamental   right   to   carry   on   business   with   the  Government.” The petitioner has failed to name a tenderer who was  benefited by office order dated 05.05.2015.  In the auction as many  as, 58 persons have participated and if few have been left out due to  lack of knowledge of office order dated 05.05.2015, on this ground  entire tender process cannot be cancelled.  The petitioner has failed  to   challenge   exercise   of   power   by   Deputy   Commissioner   on   the  ground   of   mala­fide.     The   person   holding   the   charge   of   Deputy  Commissioner has not been made party respondent in his personal  capacity.     The   petitioner   has   also   failed   to   indicate   how   public  interest would suffer if the finalisation of tender pursuant to tender  notice dated 15.04.2015 is not cancelled.   10. In   so   far   as,   contention   that   Clause   16   confers  unguided   and   arbitrary   power   on   Gram   Sabha/Mukhia/Gram  9 Panchayat/Authorised   Officer   to   issue   “no   objection   certificate”   is  concerned,  I find  considerable  force  in  the   contention  however, at  this stage I am not inclined to adjudicate the issue.   Challenge to  Clause 16 of auction notice dated 15.04.2015 is inter­linked with the  prayer of the petitioner to direct the respondents to permit him to  participate   in   auction   for   settlement   of   Sand   Ghats.     Though,   the  delay   in   challenging   Clause   16   may   not   be   a   ground   for   refusing  relief   to   the   petitioner   however,   the   Court   is   required   to   see   the  motive behind the challenge, at such belated stage.   Moreover, the  petitioner has failed to establish arbitrary exercise of power by Gram  Sabha/Mukhia/Gram   Panchayat/Authorised   Officer   in   not   issuing  “no objection certificate” to him.  The petitioner has given description  of demand drafts prepared for 20 Sand Ghats, however, “when” those  demand   drafts   were   prepared   has   not   been   disclosed   by   the  petitioner.   Considering   the   aforesaid   facts   and   the   totality   of  circumstances,   I   am   not   inclined   to   interfere   in   the   matter   and  accordingly, the writ petition fails.  However, to avoid litigation of the  nature like the present one founded on arbitrary exercise of power by  the authority in granting or not granting “no objection certificate”, I  am of the  opinion  that it is desirable that the respondent­State of  Jharkhand formulates necessary guidelines in this regard.  I find that  respondents'   counter­affidavit   is   conveniently   silent   on   this   issue.  The   “possibility”   of   arbitrary   exercise   of   power   by  Gram   Sabha/Mukhia/Gram   Panchayat/Authorised   Officer   has   not  been denied by the respondent­State of Jharkhand.   It is submitted  that office order dated 05.05.2015 issued by Deputy Commissioner,  Ranchi leaves no room for doubt that several intending bidders were  deprived of an opportunity to participate in the tender because Gram  Sabha/Mukhia/Gram   Panchayat   arbitrarily   declined   to   issue   “no  objection certificate”  to them. In “Natural Resources Allocation, in RE,   Special   Reference   No.   1   of   2012”  (2012)   10   SCC   1,   the   Hon'ble  Supreme Court has held that, the question of unfettered discretion in  10 an   executive   authority,   just   does   not   arise.   It   has   been   mandated  thus,  184.    “............The   fetters   on   discretion   are   clear,   transparent   and   objective   criteria   or   procedure   which   promotes   public   interest,   public   purpose   and   public   good. A public authority is ordained, therefore to act,   reasonably   and   in   good   faith   and   upon   lawful   and   relevant grounds of public interest.”  11. Mr. Indrajit Sinha, the learned counsel for the petitioner  has   suggested   that   the   requirement   of   proceeding   “no   objection  certificate” by individual intending tenderer is, infact, unnecessary  and   it   can   be   avoided   if   before   issuing   tender   notice,   the   State  Government   itself   seeks   opinion   of   the   concerned   Gram  Sabha/Mukhia/Gram   Panchayat   and   takes   their   permission.     The  learned counsel has urged that till the time necessary guidelines are  issued,   a   direction   may   be   issued   to   the   respondent­State   of  Jharkhand   not   to   conduct   further   auction   for   settlement   of   Sand  Ghats.     Without   commenting   upon   the   suggestion   of   the   learned  counsel for the petitioner, I hereby direct the Registry to transmit a  copy of the order to the Chief Secretary, Government of Jharkhand so  that, the Government may take appropriate decision in the matter.    12. I.   A.   Nos.   2788   of   2015   and   3324   of   2015   in   W.P.(C)  No. 1968 of 2015 and I.A. Nos.   2787 of 2015, 3323 of 2015 and  3326 of 2015  in W.P (C) No. 1969 of 2015 stand dismissed.    (Shree Chandrashekhar, J.)  Amit/Tanuj A.F.R.