HON’BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.23094 of 2007 Date: February , 2008 Between: Vadapalli Boatmen Cooperative Society, Vadapalli, Kovvur Mandal, West Godavari District, rep. by its President, P. Nageswara Rao. ...Petitioner And 1. The Government of Andhra Pradesh, Rep. by its Secretary, Mines and Geology Dept. Secretariat, Hyderabad and 5 others. ... Respondents * * * ORDER: Heard Sri N. Subba Rao, learned counsel representing the writ petitioner, learned Government Pleader for Mines and Geology, representing R-1 to R-5 and learned counsel representing R-6 Sri C.V.R. Rudra Prasad. 2. The writ petition is filed for a writ of Mandamus declaring action of the second respondent in issuing the impugned proceedings No.2873/Q/2007, dated 27.10.2007 according permission for right of quarrying the ordinary sand to Sri Venkateswara Boatsmen Sand Workers Labour Contract Cooperative Society, Reach No.7 of AGRB from 4.750 Km. to 7.300 Km. as illegal, arbitrary and violative of Rule 9-C of the A.P. Minor Mineral Concession Rules, 1966(hereinafter in short referred to as ‘the Rules’ for the purpose of convenience) and consequently direct the respondents to confirm the lease hold rights in favour of the petitioner society with regard to Reach No.7 of ABRD from 4.750 Km. to 7.300 Km. at Aurangabad, pursuant to the auction notice No.866/Q/2007, dated 28.6.2007 and to the auction held on 19.7.2007 and to issue work permits to the petitioner to enable the petitioner to mine the sand and pass such other suitable orders. 3. Counter affidavits had been filed by respondents 1 to 5 and also respondent No.6 as well. This Court ordered rule nisi on 02.11.2007 and granted status quo to be maintained for a limited period which is being extended from time to time. 4. Sri N. Subba Rao, learned counsel representing the writ petitioner would maintain that in the light of Rule 9-C of the Rules, the writ petitioner is bound to succeed. The application itself is not made in accordance with Rule 9-C of the Rules aforesaid. Hence, the impugned proceedings dated 27.10.2007 is liable to be set aside. The learned counsel also would submit that inasmuch as the same is mandatory and since the local certificate to claim the benefit under the Rule had not been produced, the impugned order to be set aside. 5. On the contrary, learned Government Pleader for Mines and Geology had taken this court through the counter-affidavit and pointed out that Sri Venkateswara Boatsmen and Sand Workers Labour Contract Cooperative Society and Vadapalli Boatsmen Cooperative Society, Vadapalli, Kovvur Mandal, West Godavari District had not submitted certificates from the Divisional Cooperative Officer concerned to the effect that it was a local society to a particular Reach which was to be submitted at the time of filing their applications as required under 9 (C)(1) of the Rules. But, however the learned Government Pleader for Industries would maintain that this Court in W.P.No.15564 of 2007 dated 29.8.2007 directed respondents 2 and 3 to consider the representation of the petitioner society dated 19.7.2007 and pass appropriate orders in accordance with law after giving an opportunity to the petitioner’s society. Thus the 6th respondent in Lr.No.2873/Q/2007, dated 26.9.2007 requested the petitioner’s society to submit local certificate obtained from the Deputy Registrar of Cooperative Societies, Kovvuru, required under Rule 9 (C)(1) of the Rules within five days from the date of receipt of the letter as per the directions of this Court for taking necessary action. Further it is stated that the 6th respondent vide Lr.No.2873/Q/2007, dated 26.9.2007 requested the petitioner society to submit local certificate obtained from the Deputy Registrar of Cooperative Societies to consider their request. The petitioner’s society vide letter dated 05.10.2007 requested the 6th respondent to consider their objections and give permits immediately by disallowing the claim of M/s Sri Venkateswara Boatsmen L.C.C. Society. But as per the registration certificate submitted by the petitioner’s society, the area of operation is confined to only Vadapalli village. Hence, the representation of the petitioner’s society was not considered. Further, the learned Government Pleader for Industries would submit that the petitioner’s society can file an appeal before the Government under Rule 35 B of the Rules and on the ground of availability of alternative remedy also the writ petition to be dismissed. 6. Sri C.V.R. Rudra Prasad, learned counsel representing 6th respondent had taken this Court through the contents of the counter- affidavit filed by 6th respondent and would maintain that in pursuance of the directions made by this Court only proper decision had been taken. 7. Heard the counsel. 8. The proceedings No.2873/Q/2007, dated 27.10.2007 commences as hereunder: “Sub:-Mines and Minerals- Leasing out the right of Quarrying for ordinary Sand in Godavari River of Reach No.7 of AGRB from 4.750 KM to 7.300 KM Ramp point at 5/800 KM to 6/000 KM (By Boats) near Aurangabad village, Kovvuru Mandal of West Godavari District- Public Auction-cum-Sealed Tender system conducted on 19.7.2007 for about 2 years up to 31.3.2009- Duly fixing Minimum Bid Amount of Rs.17,54,000/-- Highest bid/sealed tender/knocked down in favour of Sri Venkateswara Boatsman and Sand Workers Labour Contract Co-Operative Society, for an amount of Rs.20,07,999/- Confirmation- Orders- Issued. Ref:- 1. G.O.Ms.No.84, Ind & Com (M.I) Department dated 10.4.2007. 2. Asst. Director of Mines and Geology, Eluru, Auction Notice No.866/Q/2007 dt.28.6.2007. 3. Auction Proceedings dt.19.7.2007 in Form-S6 of the Joint Collector, W.G. Dist, Eluru. 4. Lr. Dated 19.7.2007 of Sri P. Srinivas President of Venkateswara Boatsmen and Sand Workers LCC Society. 5. Hon’ble High Court orders dt.29.8.2007 in W.P.No.15564/2007. 6. Lr. Dated 25.9.2007 of Sri P. Srinivas, president of Venkateswara Boatsmen and Sand Workers LCC Society. 7.This office Lr.No.2873/Q/2007, dt.26.9.2007 addressed to the Vadapalli Boatsmen LCC Society. 8.Lr. Dated 8.10.2007 of Sri P. Nageswara Rao president of Vadapalli Boatsmen LCC Society. 9.Asst. Director of Mines and Geology, Eluru U.O. Note No.2873/Q/2007 dt.9.10.2007.” The Reach was knocked down in favour of The Vadapalli Boatsmen Labour Contract Co-Operative Society Ltd., President Sri P. Nageswara Rao. But the 2nd applicant Sri P. Srinivas, President of Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society, Aurangabad at the time of auction has requested the auctioning authority to confirm the said Reach in their favour for the same amount duly giving 10% concession on the knocked down amount under Rule 9 C of A.P.M.M.C. Rules 1966 claiming that they are local society. But the request of Sri Venkateswara Boatsmen and Sand Workers Society was rejected on that day since they could not produce local certificate. Therefore the auctioning authority has issued the auctioning proceedings in Form-6 under Rule 9-H of A.P.M.M.C. Rules 1966 in favour of the 1st Highest Bidder The Vadapalli Boatsmen Labour Contract Co-Operative Society Ltd., President Sri P. Nageswara Rao. On this, Sri P. Srinivas, President of Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society has submitted a representation on 19.7.2007 vide reference 4th cited, to the auctioning authority for giving them preference on the Bid stating that, all the society members in their society are eking out their livelihood by Sand Quarrying by boats as local Society and they are prepared to pay the highest knocked down amount on the said auction under Rule 9-C of A.P.M.M.C. Rules 1966. Further Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society have approached the Hon’ble High Court in W.P.No.15564/2007 vide reference 5th cited. The Hon’ble High Court have disposed the writ petition No.15564/2007, dt.29.8.2007 with a direction to the respondents 2 & 3 i.e., the District Level Committee for sand auction, W.G. Dist represented by its member convener-cum-Assistant Director of Mines and Geology, Eluru and the Chairman, District Level Committee for sand auctions, W.G. Dist, Eluru-cum-Joint Collector, W.G. Dist. To consider the representation of the petitioner society dt.19.7.2007 and pass appropriate orders in accordance with law after giving an opportunity to the 5th respondent society to raise its objection, if any. Such exercise shall be completed as expeditiously as possible, preferably within a period of two weeks from the date of receipt of a copy of this order till such time the auction conducted on 19.7.2007 shall not be confirmed. In accordance with the Hon’ble High Court orders dt.29.8.2007 in W.P.No.15564/2007 the Assistant Director of Mines and Geology, Eluru has requested the Vadapalli Boats Men Co-Operative Society, President Sri P. Nageswara Rao with a request to submit the local certificate obtained from the Divisional Co-Operative Officer, concerned under Rule 9-C of A.P.M.M.C. Rules 1966 and objections if any within 5 days from the date of receipt of this letter as directed by the Hon’ble High Court vide reference 7th cited and the same was acknowledged by the society president on 3.10.2007. Sri P. Nageswara Rao President of Vadapalli Boatsmen LCC Society has submitted their reply on 5.10.2007 vide reference 8th cited received in this office on 8.10.2007 stating that at the time of auctions three persons submitted tenders for the Aurangabad Reach No.7 one application belongs to them, one by Sri N.Hanumaiah and another by Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society, president Sri P. Srinivas Rs.17,55,000/- was quoted by Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society Rs.17,55,000/- was quoted by Sri N.Hanumaiah we quoted Rs.20,07,999/-. After receipt of Sealed Tenders, the auction authority put the auction in public and in that open auction Sri N. Hanumaiah and ourselves participated in the bid. The highest bid amount was offered by us. In the open auction Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society never raised any amount and not put any figure. After the bid was knocked down in their favour, subsequently only they offered to pay the highest bid knocked down amount claiming that there are the local society and they have to be given preference under the rules. Their claim was not accepted by the District Level Committee headed by the Joint Collector W.G. Dist. Whether the questioned society is local society or not does not arise at all and if they submitted any certificate showing that they are the local society no credence will be given to them. Further they have represented that when once the authority not accepted the claim raised by Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society after completion of Auction, they request if any may not be considered again. Rules 9-H(1) of A.P.M.M.C. Rules 1966 says only the preference shall be given to the local society. But the present society never raised any voice in the open auction before the completion of knocked down the Bid in our favour. They further stated that subsequently only they came to know that they requested the authority to consider that they are local society and the preference shall be given to them in order to cause financial loss to the Govt. and only to threaten the above participants. They have further stated that in this case when they never raised Bid amount in the open auction before completion, they not claim that they are local society. In this case Rule 9-H(1) of A.P.M.M.C. Rules, 1966 does not attract and apply to the present dispute. As they are also Boatsmen Co-Operative Society and Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society is not only local Society prior to its registration there is a Registered Kovvuru Boats Men Cooperative Society with Regd.No.WR479, Dt.24.12.1998. Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society was second Society its Regd. No.WR486, Dt.5.3.2001. Aurangabad is apart of Kovvuru Municipal Limits and it is 16th ward. They have also stated that as per Co-Operative Act provisions No 2nd society was registered in the same town and hence the existence of Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society was not under law and it was against to the provisions of Co-operative Act and had they not participated in the auction the Government should have lost amount of Rs.2,53,000/- They have further stated that the direction of A.P. High Court in W.P.15564/07 was also to decide the issue after considering the request, but the request was made only after completion of Highest Bid/knocked down never favour and that they have paid 1st quarter amount to the concerned authority. We paid an amount of Rs.4,38,500/- along with application and an amount of Rs.63,500/- after completion of auction and also income tax amount of Rs.11,345/- respectively on 20.7.2007 itself and prior to it and that except the issuance of permits, other proceedings were completed and requested that the authority to consider their objection and give permits immediately by dis-allowing the claim of Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society. As per the Rules 9-C of APMMC Rules 1966 this office has requested the Vadapalli Boatsmen LCC Society to submit the local certificate obtained from the Divisional Cooperative society and objections if any from their side. But the society have not submitted local certificate under Rule 9- C from the Divisional Cooperative officer. Further as per the bye laws of the society that their area of operation shall be confined to Vadapalli Village only. On the other hand, Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society President Sri P. Srinivas has submitted the copy of Hon’ble High Court order in W.P.No.15564/07, dt.29.8.07 along with certificate issued by the Divisional Cooperative officer vide his Lr.No.Roc.727/D- 2007, dt.6.9.2007 vide reference 6th cited as per the certificate of the Divisional Co-operative Officer that Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society at Aurangabad in Kovvuru (M) was registered under limited liability with Regd.No.W.R.486 on 5.3.2001 and the society conducting its activity Head Quarters at Aurangabad (V) and the working condition of the society is satisfactory. Further as per the Bye laws of the society that the area of operation shall be confined to Aurangabad and Srinivasapuram, hamlets of Kovvuru Nagar Panchayat. In view of the circumstances stated above, as per Rule 9-C of APMMC Rules 1966 and the certificate issued by the Divisional Cooperative Officer, Kovvuru vide his Lr.No.Roc.727/D-2007, dt.6.9.2007, the priority has to be given to the local society of Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society and hence the confirmation order for right of quarrying of sand in Reach No.7 of AGRB from 4.750 KM to 7.300 KM Ramp point at 5/800 KM to 6/000 KM (By Boats) near Aurangabad village, Kovvuru Mandal of West Godavari District for the highest knocked down amount of Rs.20,07,999/- for a period about 2 years i.e., up to 31.3.2009 by enhancement of 20% knocked down bid amount for the 2nd year and in accordance with the Hon’ble High Court orders dt.29.9.2007 as the society have already paid the E.M.D of Rs.4,40,000/- at the time of filing of application. In the above circumstances, and in view of the powers delegated under Rule 9-H(1) of APMMC Rules 1966 the confirmation is hereby accorded for right of quarrying of ordinary sand to Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society Reach No.7 of AGRB from 4.750 KM to 7.300 KM Ramp point at 5/800 KM to 6/000 KM (By Boats) near Aurangabad village, Kovvuru Mandal of West Godavari District for an amount of Rs.20,07,999/- for a period about 2 years i.e., up to 31.3.2009 subject to condition to pay the quarterly instalments 15 days before commencement of Each Quarter from the date of execution and by 20% hike on knocked down bid for the 2nd year in four quarterly instalments subject to satisfaction of APMMC rules 1966 and conditions laid down in appendix I appended to this order and the other conditions and amendments issued from time to time. The successful bidder should execute the lease deed within 7 days from the date of confirmation order duly following the conditions stipulated in the appendix.” 9. These are the relevant essential portions of the order which is called in question in the present writ petition. 10. It is averred in para 3 of the affidavit filed in support of the writ petition that it was not the case of Sri Venkateswara Boatsmen and Sand Workers Labour Contract Cooperative Society they submitted certificate indicating that it was a local society at the time of submitting the application. The second respondent having observed that the 6th respondent failed to produce the local certificate and also submitted the same only on 6.9.2007. As the application itself was not made as per the Rule 9(C) of the Rules, the impugned proceedings dt.27.10.2007 is liable to be set aside. It is also stated that Reach No.7 of Aurangabad from 4.750 KM to 7.300 KM was put to public auction for right of quarrying ordinary sand for a period of two years. The auction was held on 19.7.2007 and the petitioner became the successful bidder for an amount of Rs.20,79,901/-, whereas the 6th respondent submitted tenders quoting Rs.17,65,000/-. As on the date of auction, 6th respondent did not choose to participate in the auction except submitting an application. As the 6th respondent failed to submit the local certificate at the time of submitting application, the bid was knocked down in favour of the petitioner society. It appears that 6th respondent approached this Court confirming the auction and granting lease hold rights to quarry sand from Reach No.7 on Akhanda Godavari, Vasista Godavari. He did not receive any notice in the writ petition during its pendency, but however the writ petition was disposed of by an order dated 29.8.2007 directing the District Level Committee and the Chairman District Level Committee to consider the representation of the 6th respondent society dated 19.7.2007 and pass appropriate order in accordance with law after giving opportunity to the petitioner to raise objections if any. Accordingly, a notice was given to the petitioner and the petitioner submitted detailed objections to the respondents. It is also stated that the society passed a resolution dated 09.7.2007 resolving to participate in the public auction of Reach Nos.6, 7 and 8 i.e., Vadapalli, Aurangabad and Kovvur and basing on such resolution tenders were submitted for such Reaches. Apart from that the Vadapally Reach is 2.50 KM to 4.57 KM, the Aurangabad Reach is 4.75 KM to 7.30 KM, as such the same is adjacent for the benefit of the members of the society, the members passed a resolution authorizing the president to participate in the auction. Further it is stated that petitioner society paid an amount of Rs.4,38,000/- on 16.7.2007 along with the application and also paid an amount of Rs.53,500/- after completion of auction, apart from paying income tax amount of Rs.11,345/- on 20.7.2007. The petitioner also submitted necessary documents i.e., certificate of audit of the petitioner society, resolution of the society, certificate of genuineness issued by the Divisional Cooperative Officer, whereas, 6th respondent having failed to submit the local certificate, disentitled to claim the benefit under 9(C) as he failed to fulfil the conditions contemplated under Rule 9 (C) of the Rules. The language under Rule 9(C) of the Rules as amended under G.O.Ms.No.84, dated 10.4.2007 is mandatory to submit local certificate to claim benefit under such Rule. The impugned proceedings issued by second respondent are contrary to the Rules. The second respondent having found that the 6th respondent did not produce the local certificate as contemplated under Rule 9 (C) and produced only on 06.9.2007 under reference 6 of the impugned proceedings, committed grave error in according permission in favour of 6th respondent to quarry the sand. The work permits were not issued so far in favour of the 6th respondent. If such work permits are issued, the interest of the petitioner society would be adversely affected. In such circumstances, the writ petitioner approached this Court praying for appropriate reliefs. 11. In the counter-affidavit filed by respondents 1 to 5 it is averred that both the societies i.e., Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society and the Sand Workers Labour Contract Cooperative Society and Vadapalli Boatsmen Cooperative Society had not submitted certificates obtained from the Divisional Cooperative Officer concerned to the effect that it was a local society to a particular Reach which was to be submitted at the time of filing their applications as required under Rule 9(C)(1) of the Rules. It is also stated that 6th respondent Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society had submitted a copy of order in W.P.No.15564/2007, dated 29.8.2007 passed by this Court along with certificate of the Deputy Registrar of Cooperative Societies of Kovvuru. As per the report of Deputy Registrar of Cooperative Societies of Kovvuru, the society was conducting its activity, Head Quarter at Aurangabad village and the working conditions of the society was satisfactory. Further as per bye- laws submitted by the 6th respondent society, the area of operation shall be confined to Aurangabad and Srinivasapuram, hamlet of Kovvuru Nagar Panchayat and the same was taken into consideration as per the order of this Court in W.P.No.15564 of 2007, dated 29.8.2007. Further it is stated that the auction was conducted on 19.7.2007 for 6 Reaches in AGRB and VRB, West Godavari District. The auction proceedings commenced for Reach No.7 i.e., Aurangabad at 12.30 p.m. with minimum bid amount of Rs.17,54,000/-. In the open auction the first hike amount was Rs.17,75,000/- offered by the bidder N. Hanumaiah and increased to Rs.18,25,000/-. Finally M/s Vadapalli Boatsmen Cooperative Society offered Rs.18,50,000/- in open auction. After completion of bidding on public auction, 4th respondent i.e., Chairman, Auction Authority, District Level Committee for sand auctions had opened the sealed tenders before the participants and observers. The first highest tender quoted for Rs.20,07,999/- by the petitioner’s society M/s Vadapalli Boatsmen Cooperative Society and 2nd highest tender for Rs.17,55,555/- quoted by N. Hanumaiah, the third tender quoted for Rs.17,55,000/- by the 6th respondent Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society. After announcing the sealed tender, 6th respondent M/s Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society had claimed that they were local society and also offered the same amount of the highest tendered amount of Rs.20,07,999/- and requested the Auctioning Authority to declare them as successful bidder for Reach No.7 as local society of that particular Reach No.7 of Aurangabad. The Auctioning Authority announced M/s Vadapalli Boatsmen Cooperative Society as successful bidder for Reach No.7 according to Rule 9(C) of the Rules. It is also stated that this Court in W.P.No.15564 of 2007 dated 29.8.2007 had directed the respondents 2 and 3 to consider the representation of the petitioner’s society dated 19.7.2007 and pass appropriate orders in accordance with law after giving an opportunity to the petitioner’s society. Accordingly the 3rd respondent vide Lr.No.2873/Q/2007, dated 26.9.2007 requested the petitioner’s society to submit local certificate obtained from the Deputy Registrar of Cooperative Societies, Kovvuru, required under Rule 9(C)(1) of the Rules within 5 days from the date of receipt of the letter as per the directions of this court for taking further necessary action in the matter. As per bye-laws of the petitioner’s society the area of operation shall be confined to Vadapalli village. Hence, the question of claiming as local society for Aurangabad (Reach No.7) by the petitioner’s society does not arise. Further it is stated that after completion of auction, the petitioner society had paid the balance amount of Rs.45,53,500/- along with prevailing charges i.e., income tax of Rs.11,345/- and also submitted registration certificate, bye-laws and audit copy of the society. As per by-laws of the petitioner’s society, the area of operation is confined to Vadapalli village only. Hence, there was no deviation of Rules in issuing of confirmation in favour of 6th respondent society i.e., M/s Sri Venkateswara Boatsmen and Sand Workers L.C.C. Society which was a local society. Further it is stated that this Court by order dated 29.8.2007 directed the respondents 2 and 3 to consider the representation of 6th respondent and pass appropriate orders after giving an opportunity to the petitioner’s society. Accordingly, the 3rd respondent vide Lr.No.2873/Q/2007, dated 26.9.2007 requested the petitioner’s society to submit local certificate obtained from Deputy Registrar of Cooperative Societies of Kovvuru to consider their request under Rule 9(C) of the Rules within five days from the date of receipt of the letter as per the directions of this Court and for taking further necessary action in the matter. The petitioner’s