*THE HON’BLE SRI JUSTICE N.V. RAMANA +Writ Petition No.26068 of 2010 % 26-11-2010 # The Nellore Zilla Praja Parishad, Rep. by its Chairman K. Govardhan Reddy … Petitioner Vs. $ The Govt. of A.P., rep. by the Principal Secretary, Industries and Commerce, Hyderabad, and others. … Respondent ! Counsel for the petitioner: Sri P. Sridhar Reddy Counsel for the Respondents: G.P. for Mines and Geology G.P. for Revenue Mr. C.V. R. Rudra Prasad < Gist: > Head Note: ? Cases referred: THE HON’BLE SRI JUSTICE N.V. RAMANA W.P. No. 26068 of 2010 O r d e r: The petitioner, namely Nellore Zilla Parishad, represented by its Chairman, has filed this writ petition questioning the orders dated 14.10.2010, issued by respondent No.1, namely the Government of Andhra Pradesh, entertaining the revision, filed by respondent No.6, and pending thereof, staying the auction of Reach No. 50, Kotitheerdham, Chejarla Mandal of SPSR Nellore District, in pursuance of the auction notification No. 864/S/10-4, dated 05.10.2010 of the Assistant Director of Mines and Geology, Nellore, as illegal and arbitrary, and consequently to set aside the same, and permit respondent Nos. 1 to 5 to proceed with the auction in terms of the auction notification dated 05.10.2010. The petitioner states that the Government of Andhra Pradesh issued G.O. Ms. No. 24, Industries and Commerce (M.1) Department, dated 12.02.2007, rationalizing the procedure for conducting sand auctions. As per Clause 12 thereof, auctions would be conducted every year, for a period of one year from 1st January to 31st December, and further as per Clause 22, the auction proceeds would be distributed amongst the Zilla Parishad/Mandal Praja Parishads/Gram Panchayats, in the ratio of 25:50:25 respectively, on quarterly basis, as envisaged in G.O. Ms. No. 225, Pasnchayat Raj and Rural Development, dated 02.08.2001. Subsequently, the Government issued Circular Memo No. 1536/R9/2008, dated 06.10.2008, changing the period of auction every year from 1st April to 31st March of succeeding year. As election code came into force, the petitioner states that auction notification, for auctioning the leasehold rights to quarry sand, could not be issued for the lease year 01.04.2009 to 31.03.2010 prior to 01.04.2009, and the auction notification was issued on 18.04.2009. In pursuance of the said auction notification, auction was conducted on 18.05.2009 in respect of the reach in question, namely Reach No. 50 in Penna River of Kotitheerdham, Chejerla Mandal, SPSR Nellore District, in which respondent No.6 was the highest bidder. Accordingly, respondent No.3, namely the Joint Collector-cum-District Level Sand Committee, issued proceedings dated 18.05.2009, confirming the auction in favour of respondent No. 6, who as per the terms and conditions of the auction notification, deposited 25% of the bid amount. While so, a writ petition in W.P. No. 10073 of 2009 was filed before this Court in public interest alleging that the reaches have been auctioned without the reaches having been identified by the River Conservator and without obtaining clearance from the Ground Water Department. A Division Bench of this Court stayed the auction proceedings. Because of the said stay orders, no further steps could be taken pursuant to the auctions conducted, including in respect of the reach in question, for which respondent No.6 is the highest bidder. The petitioner got impleaded as party-respondent in the said writ petition. Ultimately, by order dated 22.01.2010, the writ petition was disposed of by a Division Bench of this Court holding that there appears to be no illegality to grant lease in accordance with law pursuant to the auction notification dated 18.04.2009 in respect of those reaches for which clearance was issued by the Director, Ground Water Department and which clearance is available with the District Level Sand Committee, and in respect of those reaches, where no Ground Water Clearance reports are available, no grant of leases can be made, even if the bids pursuant to auction notification are processed. After disposal of the above writ petition, respondent No.5, namely the Assistant Director, Mines and Geology, issued notice dated 22.11.2009 calling upon respondent No.6 to pay the balance 75% of the amount and submit the necessary documents for execution of lease deed, but respondent No.6 did not do so. Therefore, respondent No.5, as a last chance, issued another letter dated 23.01.2010 calling upon respondent No.6, to submit the required documents for execution of lease deed and pay the balance 75% of the bid amount on or before 27.01.2010. As respondent No.6 failed pay the balance bid amount and submit necessary documents for executing the lease deed within the stipulated time, respondent No.4, namely the District Collector, Nellore, vide proceedings dated 29.01.2010, revoked the confirmation orders, issued for right of quarrying sand in the reach in question and forfeited the 25% bid amount paid by respondent No.6 to the Government in terms of Rule 9-I(4) of the A.P. Minor Mineral Concession Rules, 1966 (hereinafter referred to as ‘the Rules’). Against the said order of respondent No.4, respondent No.6 filed revision allegedly under Rule 35 of the Rules in Form-J, before respondent No.1-Government, on 25.02.2010 accompanied with challan for Rs.1,000/- and grounds of revision, wherein he stated that within a short period of four days, he was not able to pay the balance 75% of the knocked down amount, that delay in executing the lease deeds requires condonation and that several court litigation has been raised and without getting the delay condoned from the Government, respondent No.4 forfeited 25% of the bid amount, and prayed to allow his revision and execute the lease deed duly condoning the delay in payment of 75% of the bid amount, and as no orders thereon were passed, respondent No.6 filed writ petition in W.P. No. 15949 of 2010, and this Court by order dated 07.07.2010, disposed of the writ petition directing respondent No.1 to dispose of the revision filed by respondent No.6, within a period of two months from the date of receipt of a copy of the order. While the matters stood thus, respondent No.5 issued auction notification dated 05.10.2010, calling for sealed tenders, for according sand quarrying rights in respect of two sand reaches, including the sand reach in question. At that point of time, respondent No.1, pending hearing of the revision filed by respondent No.6, granted stay of the auction of the reach in question pursuant to the auction notification dated 05.10.2010 of respondent No.5. The said order of respondent No.1 is called in question by the petitioner in this writ petition. The learned counsel for the petitioner submitted that the revision filed by respondent No.6 is not maintainable in law. According to him, respondent No.6 has filed the revision in Form J, which is a model form for filing appeal or revision in terms of Rule 35 or Rule 35-A of the Rules. Under Rule 35 of the Rules, an appeal against any order passed by the Assistant Director or Deputy Director or Joint Director, shall lie to the Director and against the order of the Director, appeal shall lie to the Government, to the aggrieved party, within a period of two months from the date of communication of the order, while under Rule 35-A of the Rules, the Government may either suo motu or at any time or on an application within 90 days call for and examine the record relating to order passed or proceeding taken by the Director or Joint Director or Deputy Director or Assistant Director, for the purpose of satisfying for themselves as to the legality or propriety or regularity of such order or proceeding, and pass such order in reference thereto as they think fit. He submitted that since the order dated 27.01.2010 is not an order passed by the Assistant Director or Deputy Director or Joint Director or Director, but an order passed by respondent No.4, under Rule 9-I(4) of the Rules, no appeal or revision would lie to the aggrieved party against such an order, and therefore, the revision filed by respondent No.6 is not maintainable. Apart from the revision filed by respondent No.6 not being maintainable, the learned counsel for the petitioner submitted that respondent No.1 committed a grave error in granting stay of the auction of the sand reach in question, proposed to be conducted pursuant to the notification dated 05.10.2010, issued by respondent No.5, and more so when there was no application filed by respondent No.6 in that regard. Hence, he submitted that the impugned order passed by respondent No.1 entertaining the revision and granting stay of the auction be set aside and the writ petition be allowed. In spite of granting time, respondent Nos. 1 to 6 did not file counters. However, the learned Government Pleader for Mines and Geology appearing on behalf of respondent Nos. 1 to 5 and the learned counsel for respondent No.6 made submissions. They submitted that under Rule 9-H(1) of the Rules, the District Collector, is the confirming authority, and since the confirmation order and revocation order are passed by respondent No.4, namely the District Collector, appeal/revision against such order would lie under Rule 9- H(7) of the Rules, and therefore, the revision filed by respondent No.6 against the order passed by respondent No.4, revoking the confirmation order is maintainable, and no exception can be taken to the action of respondent No.1 in entertaining the revision filled by respondent No.6 against the order of respondent No.4. They further submitted that since while the revision filed by respondent No.6 against the order of respondent No.4 revoking the confirmation was pending before respondent No.1-Government, respondent No.5, issued auction notification dated 05.10.2010, respondent No.6 filed another application seeking stay of the auction of the reach in question proposed to be conducted pursuant to the auction notification, and respondent No.1 considering the same, has stayed the auction of the reach in question, while entertaining the revision filed by respondent No.6, and no exception can be taken thereto. Hence, they contended that no interference is warranted with the impugned order passed by respondent No.1 and prayed that the writ petition be dismissed. The learned counsel for respondent No.6 submitted that respondent No.6 is the highest bidder in the auction, but due to litigation before this Court, and grant of stay orders passed by this Court, staying the proceedings consequential to the auction, the official respondents did not proceed with the consequential proceedings like collecting the balance auction amount and getting the necessary documents executed from respondent No. 6. Immediately, after this Court vacated the stay orders, respondent Nos. 5 and 4 though granted time to respondent No.6 to pay the balance auction amount and execute the necessary documents, but respondent No.6 could not pay the balance auction amount because the time granted was short. Therefore, respondent No.6 requested them to grant some more time, but respondent No.4 instead of granting time, revoked the confirmation order and forfeited the amount paid by respondent No.6. He submitted that since respondent No.4 is the confirmation authority under Rule 9- H(1) of the Rules, an appeal/revision in Form-J under Rules 35 and 35-A of the Rules, would lie before the Government, against an order of revocation of confirmation passed by him. Therefore, no fault can be found with the action of respondent No.1 in entertaining the appeal/revision filed by respondent No.6 against the order passed by respondent No.4 revoking the confirmation order and forfeiting the amount. He further submitted that since during the pendency of the appeal/revision filed by him, rspondent No.5, issued auction notification, respondent No.1, was justified in staying the auction also. He thus contended that the writ petition be dismissed. Heard the learned counsel for the petitioner, the learned Government Pleader for Mines and Geology for respondent Nos. 1 to 5 and the learned counsel for respondent No. 6. In the light of the arguments advanced, the only question that arises for consideration is whether respondent No.1, namely the State Government, has the power to entertain an appeal/revision filed under Rules 35 and 35-A of the Rules and in Form-J, against an order passed by respondent No.4, namely the District Collector, under Rule 9-I(4) of the Rules, revoking the confirmation order and forfeiting the deposit made by respondent No.6 and pass an order staying the auction notification in spite of no application being filed in that regard? To consider this question, a reference be made to the A.P. Minor Mineral Concession Rules, 1966, framed to regulate the grant of mining leases in respect of minor minerals. Rule 9 of the Rules deals with grant of quarry lease or permit. Rule 9-D thereof prescribes issuance of notice of sealed tender-cum- auction, while Rule 9-E deals with submission of sealed tender and accepting the bid. Rule 9-H(1) of the Rules, prescribes the auctioning, confirming and appellate authority, and the same is as follows: Sl. No. Minimum Bid Amount in Rupees Auctioning Authority Confirming Authority Appellate Authority 1. Upto 5.00 lakhs Deputy Director of Mines and Geology Zonal Joint Director of Mines and Geology Director of Mines and Geology 2. Above 5.00 lakhs Joint Collector District Collector Government Rule 9-H(2) of the Rules states that the Auctioning authority shall have discretion to fix the minimum and maximum amounts of hike by the bidders in the Auction hall for each Reach. While sub-rule (3) of Rule 9-H of the Rules, deals with selection of 1st, 2nd and 3rd highest bidders by way of draw of lots for Reach/Mandal. Rule 9-H(7) of The Rules, enables filing of appeal or revision against an order passed under sub-rule (1) of Rule 9-H of the Rules, which shall be in Form J-1. The said sub-rule (7) of Rule 9-H reads as follows: Any appeal or revision as the case may be against the order passed under sub-rule (1) of Rule 9-H can file such appeal or revision application before the concerned in Form J-1 and the fee for such appeal or revision shall be made as per Rule 35-B of APMMC Rules, 1966 within 15 days from the date of receipt of the order. The appellate/revision authority can condone the period of delay on valid grounds. From the above it is clear, that under Rule 9-H(1) of the Rules, in respect of minimum bid amount of up to Rs.5.00 lakhs, the Zonal Joint Director of Mines and Geology, is the confirming authority and against his order, appeal can be filed before the Director of Mines and Geology; and in respect of minimum bid amount of Rs.5.00 lakhs and above, the District Collector is the confirming authority and against his order, appeal can be filed before the Government. Any appeal or revision, as the case may be, against order passed by the Zonal Joint Director of Mines and Geology or the District Collector, under Rule 9- H(7), has to be filed in Form J-1 and the fee for such appeal or revision shall be paid as per Rule 35-B of the Rules, within 15 days from the date of receipt of the order, and the appellate/revision authority is empowered to condone the period of delay on valid grounds. Thus it is clear that an appeal can be filed before the Government in Form-J in terms of Rule 9-H(7) of the Rules, only if it is an order passed by the confirming authority under Rule 9-H(1) of the Rules and not any other rule. Undisputedly, in the case on hand, respondent No.6 was the highest bidder in respect of the Reach in question. Due to litigation and grant of stay by this Court, no further steps could be taken pursuant to respondent No.6 being declared as highest bidder. After conclusion of the litigation, respondent No.5, namely the Assistant Director of Mines and Geology, vide letter dated 22.11.2009, called upon respondent No. 6 to pay the balance 75% knocked down amount and to submit the other required documents for execution of the lease deed. However, it appears respondent No.6 did not pay the balance 75% of the knocked down amount nor submitted the required documents for execution of the lease deed. Therefore, as a last chance, respondent No.5, namely the Assistant Director of Mines and Geology, vide letter dated 23.01.2010, called upon respondent No.6 to pay the balance 75% of the bid amount and submit the relevant documents for execution of the lease deed on or before 27.01.2010, but respondent No.6 did not pay the balance 75% of the bid amount and submit the required documents for execution of the lease deed. Therefore, respondent No.4, namely the District Collector, in exercise of the power conferred on him under Rule 9-I(4) of the Rules, passed orders dated 29.01.2010, revoking the confirmation order and forfeiting the deposit amount paid by respondent No.6, to the Government. It is the contention of the learned Government Pleader for Mines and Geology, that since the order dated 29.01.2010, passed by respondent No.4, apart from forfeiting the amount in terms of Rule 9-I(4) of the Rules also revokes the confirmation order, it should also be treated as an order under Rule 9-H(1) of the Rules, thereby enabling respondent No.1 to entertain appeal/revision under Rule 9-H(7) of the Rules. This contention cannot be accepted because a reading of the order dated 29.01.2010, passed by respondent No.4, which revokes the confirmation order and forfeits the amount paid to the Government, would make it clear that it is not an order passed under Rule 9-H(1), but is an order passed under Rule 9- I(4) of the Rules. Even though there is no independent or specific provision in the Rules, which provides for passing an order revoking the confirmation order, but Rule 9-I(4) of the Rules, contains a default clause, which provides as to what should happen if the highest bidder fails to pay the 25% knocked down amount within two working days or the remaining knocked down amount within the specified time as mentioned in the confirmation order. Rule 9-I of the Rules, was substituted, vide G.O. Ms. No. 84, Industries and Commerce (VI), dated 10.04.2007. The original Rule 9-I, provided that the competent authority shall maintain a register duly mentioning all the particulars of all the participants who possess hall tickets and have submitted sealed tenders and the person whose tender or bid is knocked down shall sign and mention his name in block letters duly affixing his thumb impression in the register. However, the newly substituted Rule 9-I of the Rules, contains five sub-rules. Sub-rule (4) of Rule 9-I of the Rules reads as follows: If the successful tenderer or bidder fails to pay either 25% of the knocked down amount within two working days or the remaining knocked down amount within the specified time as mentioned in the confirmation order, the amount so far paid by the successful tenderer/bidder shall be forfeited to the Government by the confirmation authority. On a true and fair construction of sub-rule (4) of Rule 9-I of the Rules, it is clear that there is a statutory injunction that on the default of the successful tenderer/bidder failing to pay the amounts as stipulated within the specified time mentioned in the confirmation order, the amounts thus far paid by the tender/bidder shall be forfeited to the Government by the Competent Authority. The provision admits of no discretion to the confirming authority. As against an order passed under Rule 9-I(4) of the Rules, there is no appeal/revision provided in the Rules. In the absence of any discretion available to the confirming authority not to forfeit the amounts paid, and no appeal/revision having been provided against an order of forfeiture, either the Government or any other authority under the Rules, cannot assume on themselves the un-conferred appellate/revision power to entertain the appeal/revision and interfere with the liability of the successful tenderer/bidder of having the amounts thus fair paid, forfeited to the Government. In the case on hand, even though respondent No.6 paid the 25% of the bid amount, as noted supra, he did not pay the remaining 75% of the bid amount even though immediately upon culmination of the litigation, he was called upon by respondent No.5, to pay the remaining bid amount, vide letters dated 22.11.2009 and 23.01.2010. As respondent No.6 did not pay the balance bid amount, respondent No.4, invoked the default clause in Rule 9-I(4) of the Rules, and forfeited the amount thus far paid by him. As noted supra, since no appeal is provided under the Rules as against an order of forfeiture passed by the confirming authority under Rule 9-I(4) of the Rules, the appeal of respondent No.6 before respondent No.1, is thus, patently incompetent and the entertaining of the same, is inherently without jurisdiction and therefore, liable to be interfered with by issuance of an order in the nature of Writ of Prohibition. It is axiomatic that appellate jurisdiction under the Rules is a creation of the Rules and such jurisdiction is not available beyond the limits permitted by the Rules. When once the highest bidder, in whose favour the confirmation order is issued, fails to comply with the conditions imposed in the confirmation order, then the confirming authority has no option except to forfeit the amounts paid by the highest bidder to the Government, and when once an order forfeiting the amount paid for non-compliance of the conditions imposed in the confirmation order is passed, the resultant effect would be that there would be no confirmation order in existence, because it stands worked out the moment the amount paid by the highest bidder, for non-compliance of the conditions of confirmation order, are forfeited to the Government. Even though, sub-rule (5) of Rule 9-I of the Rules, provides that if the first bidder does not turn up for further proceedings of execution of a Reach/Mandal by paying the remaining amount, the same Reach/Mandal should be offered to second highest tenderer/bidder provided 25% of minimum bid deposited in the form of EMD is retained with the Assistant Director of Mines and Geology concerned and such tenderer/bidder is willing to pay the highest knock down amount and on his failure to the 3rd bidder, the fact remains, respondent No.4, namely the District Collector, did not offer the Reach in question to the 2nd/3rd bidders. The old Rule 9-H of the Rules, which contained four sub-rules, was substituted by new Rule 9-H vide G.O. Ms. No. 84, Industries and Commerce (VI), dated 10.04.2007, which contains seven sub-rules. The old Rule 9-H, did not provide for any appeal or revision, against an order passed by the confirming authority. However, the remedy of appeal/revision under the new Rule 9-H came to be provided in sub- rule (7). The remedy of appeal/revision provided in sub-rule (7) of Rule 9-H of the Rules, is an independent provision, provided only against the orders of the confirming authority, passed under sub-rule (1) of Rule 9-H of the Rules. Though against the orders passed under the Rules, remedy of appeal and revision is provided in Rules 35 and 35-A of the Rules, but the said remedy of appeal and revision, is not available against the order passed by the District Collector, and the same would become evident from a perusal of the said appeal and revision provisions, which read as under: Rule 35: An appeal against any order passed by the Assistant Director or Deputy Director, Joint Director under these rules shall lie to the Director within a period of two months from the date of communication of such order to the party aggrieved and an appeal against an order of the Director shall be to the Government in like manner. Rule 35-A: The Government may either suo motu at any time or on an application made within ninety days, call for and examine the record relating to any order passed or proceeding taken by the Director, Joint Director, Deputy Director or Assistant Director under these rules for the purpose of satisfying themselves as to the legality or propriety of such order or as to the regularity of such proceedings and pass such order in reference thereto as they think fit. Provided that no order adversely affecting any person shall be