IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.306 of 2009 Bishwajeet Singh son of Sri. Tapeshwar Singh, resident of village-Barun, P.O. & P.S. Barun, District-Aurangabad(Bihar). …….Petitioner Versus 1. The State Of Bihar 2. The Khanan Commissioner, Government of Bihar, Patna. 3. District Magistrate-cum-Collector, Aurangabad. 4. The Assistant District Khanan Officer, Aurangabad(Bihar). 5. The Khanan Development Officer, Aurangabad(Bihar) 6. Md. Nakib Ahmad son of Md. Shafi Ahmad, resident of village- Nasriganj, P.O. & P.S. Nasriganj, District-Rohtas(Sasaram). …….Respondents ----------- For the petitioner : Mr. Y.V.Giri, Sr. Adv. : Mr. Ashok Kumar Singh, Adv. : Mr. Anil Kumar Singh, Adv. For the Respondent No. 6 : Mr. V. Kanth, Sr. Adv. For the State : Mr. V.M.K. Sinha, S.P.P. ----------- 04. 16.03.2009 The petitioner was a settlee for excavating sand of Unit No. II in the District of Aurangabad for the calendar year 2007-2009. This settlement has come to be cancelled by the Collector, Aurangabad which order was affirmed in revision by the Mines Commissioner, Government of Bihar. It is these two orders that are firstly challenged. Then consequent to the cancellation of settlement in favour of the petitioner, the Balu Ghats were put up for auction and they have now been settled with respondent No. 6 which is the second challenge by - 2 - the petitioner. Respondent No. 6 has since appeared and notwithstanding settlement in his favour, by interim order dated 23.01.2009 this Court stayed the settlement. Parties have appeared. The writ application has been heard at length for disposal at this stage itself. As noticed above, there are two issues involved in the present writ application. One is with regard to petitioner’s settlement being prematurely cancelled by the Collector and the cancellation affirmed by the Mines Commissioner. The second is with regard to resettlement of the same with respondent No. 6 and its validity. With regard to the first issue, the facts are as follows. Petitioner had got the settlement for the calendar years 2007-2009 in respect of which an amount of Rs. 1, 17, 59,086/- is payable for the calendar year 2007 with 10% enhancement for the calendar year 2008 and a further 10% enhancement for the calendar year 2009 was fixed. The year’s royalty had to be deposited in three installments. First installment was of 50% and second and third installments being payable on 15th March and 25th September were of 25% each. So far as Sales Tax is concerned, it was provided that. Sales Tax as Value Added Tax would be payable on twice the settlement amount at the rate of 4%. Thus seen the financial liability of the petitioner to the State was accordingly - 3 - fixed. The said liability did not vary as per removal of sand. While everything was going on normal for the year 2007, in 2008 an F.I.R. was lodged by the Inspector of Mines on or about 22.02.2008 inter alia alleging that on a surprise inspection some of the trucks carrying sand from the petitioner’s mining areas were found to be using forged Challan. This was immediately after petitioner had deposited 50% of the royalty as per settlement for the year 2008. Pursuant to the F.I.R. a P.S. Case was instituted and immediately the Collector, Aurangabad by his order dated 11.03.2008 cancelled the settlement of petitioner on ground of F.I.R. being lodged. This was immediately challenged by the petitioner before this Court on the ground of violation of natural justice and this Court vide order dated 24.04.2008 passed in C.W.J.C. No. 4893 of 2008 has set aside the order and remanded the matter to the Collector to act in accordance with law. Pursuant to the orders of this Court as aforesaid, on 05.05.2008, a show cause notice was issued to the petitioner (Annexure-8) to which petitioner replied. Petitioner’s defence was that using forged Challan was not causing any loss to the State in any manner as petitioner was to discharge a fixed liability. Petitioner’s further defence was that the mining area is - 4 - dominated by Naxalite and one of his employees was working in collusion with those persons to divert sand to other areas. Petitioner on coming to know had even dismissed those employees. The violation if any was technical and to trivial to warrant such a drastic action. Notwithstanding the aforesaid by order dated 11.09.2008 as contained in Annexure-10, the Collector cancelled the settlement for alleged violation of the terms and conditions of settlement on the ground that the F.I.R. had been lodged for using forged Challan. The settlement was cancelled and as noted above it was in relation to Unit II in the District of Aurangabad. There appears to be another Unit with regard to Unit I that was also unsettled. Collector Aurangabad then sought permission of the State Government vide his letter dated 26.09.2008 to make advertisement for resettlement of both the units together. It may be noticed that the two units are segregated only because of the length involved otherwise they are contiguous units. Petitioner filed revision application before the Commissioner, Mines against the cancellation order which was registered as Revision case No. 44 of 2008. The Commissioner also holding the petitioner responsible for the act of his servant of being in possession of forged Challan for which F.I.R. was lodged upheld the cancellation by his order dated - 5 - 30.12.2008(Anexure-13). On the first issue, it is these orders at Annexure-10 and Annexure-13 i.e. under challenge. In my view, the petitioner prima-facie is correct when he submits that the action of cancellation is not justifiable as petitioner has caused no harm to the State. Mr. Giri, learned senior counsel for the petitioner submits that both the royalties and the V.A.T. were fixed liabilities which petitioner was duly discharging. There was no further financial liability and as such using forged Challan was really of no consequence. I am afraid, I can not accept it finally. The terms of settlement itself provides that the petitioner must comply with the statutory rules and regulations. If Challan were found to be forged and Challan were statutory requirement then surely petitioner was in violation of the rules and being in violation of rules he was in violation of terms of settlement. Whether pecuniary loss was caused or not is not the question but the question remains what has now to be done after the F.I.R. is lodged. First Information Report is merely a report of crime. It is not a finding of guilt. The matter is yet to be investigated, the trial is still to be started but canceling his settlement and holding him guilty before the investigation has concluded appears to be inappropriate. However as the petitioner has not - 6 - disputed in the show cause that Challan was not in fact forged, the issue has to be decided as against the petitioner. Thus found the order of cancellation and its being upheld in revision can not be interfered with. Now coming to the second issue. This relates to the so called resettlement. As seen above, petitioner’s settlement was for the Calendar year 2007, 2008 and 2009. It was cancelled and then a public advertisement was issued for resettlement for the balance period on 22.11.2008. Re-tender notice as contained in Annexure- 12 is in respect of both the units which were earlier settled separately and was for a minimum amount of Rs. 3,81,54,050/-. In the said notice itself it was stated that the auction would take place on the 10th of December, 2008 and if for any reason it could not be so held then on 12th of December, 2008 failing which lastly on 15th of December, 2008. Thus three days in alternative were fixed. It is not in dispute that on neither of the three days any one turned up to take the settlement. Petitioner submits that he did not participate as that would have prejudiced is pending revision application against the cancellation of this settlement. It is a matter of record that thereafter the Collector, Aurangabad informed the State that probably because of the high reserve jama fixed no one is turning up and as such requested - 7 - permission to re-advertise with a lower reserve jama. This has been responded to by the State Government by their letter dated 23rd of December, 2008 directing the Collector to re-advertise the same immediately. Now things suddenly changed. No readvertisement was issued. On the 30th of December, 2008 the Commissioner, Mines, Government of Bihar at Patna dismisses petitioner’s revision application against the cancellation of his settlement as done by the Collector. On 30th of December, 2008 itself respondent No. 6 makes an application to the Collector, Aurangabad expressing his willingness to take settlement for Rs. 3,43,00,000/- for the calendar year 2009 in respect of both the units. On the next day i.e. on 31.12.2008 he makes another application to the Collector, Aurangabad pointing out that as the reserve Jama for the settlement was Rs. 3,81,54050/-, he was ready to pay the said amount and take the entire settlement. It appears from the counter affidavit that on the same day, the District Mining Officer sends memo No. 886 dated 31.12.2008 to the State Government at Patna seeking their approval for the settlement in question with Respondent No. 6. What is most curious is on the same day i.e. on 31.12.2008, the State Government in the Department of Mines and Geology at Patna by memo No. 71 dated 31.12.2008 - 8 - accords the approval and directs the settlement in favour of respondent No. 6. This is extra-ordinary. To this Court, all this appears not to be bona- fide. Collector was under the orders to re-tender. Those orders were received by him as late as on 23rd of December, 2008 and then all of a sudden the Mines Commissioner dismisses petitioner’s revision application on 30th of December, 2008 and on the same day respondent No. 6 makes application for settlement and on the very next day, he revises his application which is then sent from Aurangabad to Patna for approval not by Collector but District Mining Officer and approval granted at Patna on the very day and communicated to the Collector Aurangabad on the same very day. It looks as if that everyone was knowing what was to happen and was waiting for it to happen all prepared. Why respondent No. 6 did not participate in the earlier notified tender is not disclosed. How all of a sudden such a huge amount of cash was collected and deposited all in one day is not known. Petitioner though has stated in his rejoinder that respondent No. 6 has sand leases in adjoining Districts of Rohtas where District Mining Officer of Aurangabad was posted in recent past. It is he who has contrived the whole game. It is not the Collector of the District who sent the - 9 - application of respondent No. 6 for approval to the State but it was the District Mining Officer who sent it to the State on his own and got the approval the same day from the State. These facts are not denied by anyone in any affidavit. Collector also accepts to act on State’s approval so received. In my view, these facts clearly establish the non bona-fide on the part of the respondents in making settlement with the respondent No. 6. Here I may also point out that in terms of rule 11 of the Bihar Minor Mineral Concessions Rule 1972 as amended , it is now statutorily provided that all Minor Mineral leases for sand has to be made only by public auction. There is neither any discretion in the government or the licensing authority in this regard. Yet definying the statutory provisions ignoring the order of State to readvertise, the application of respondent No. 6 was entertained and not only that the State Government acted in clear breach thereof in granting approval to the settlement as sought for. This Court fails to understand why because no reason much less a bona-fide reason is given for the same. There appeared to be a terrible hurry to execute particular sinister plan of action where unfortunately everyone from top to bottom got involved. In that view of the matter, I am left with no - 10 - option but to hold that the settlement as made in favour of respondent No. 6 was clearly in breach of the statutory provision and was clearly illegal and unauthorized. His application for settlement could not have been entertained at all much less proceeded with. Settlement is thus declared illegal and quashed as such. Here I again notice a curious thing that has happened. Once this Court stays the settlement in favour of respondent No. 6 by interim order in this writ as noticed above, State instead of asking its own Corporation to undertake the mining operation, it surreptitiously again made a settlement with another private person. As apparent from the petitioner’s rejoinder, what was done was the year’s settlement amount was divided by the number of days of the years and daily average calculated without regard to rainy season when sand mining operation is not possible. It is common knowledge that effectively for almost three months in a year, sand mining work is stopped. It works for about nine months a year but still in making settlement with the private individuals instead of working out average daily payment on basis of nine working months, twelve working month was done which obviously resulted in lesser revenue to the government and greater profit to the individual settlee which again - 11 - appears to be far from bona-fide. Mr. Vinod Kumar Kanth, learned senior Advocate appearing for the respondent No. 6 then prays that State must be directed to refund the money of about 1,00,00,000/- with he had deposited for taking the settlement along with interest because he is not at fault. So far as refund is concerned, respondent No. 6 is entitled to immediate refund of the amount deposited by him but so far as interest is concerned, this Court can not entertain the prayer for the simple reason that it was a calculated business risk that respondent No. 6 took in investing money in such a manner and that being so he must face the consequence himself. The prayer for refund with interest is thus rejected. Collector would be obliged to ensure the refund to the respondent No. 6 the entire money deposited by him within a period of two weeks from today. In view of the forgoing reasons, the writ petition partly succeeds. Resettlement with respondent No. 6 is quashed. State is at liberty to readvertise the settlement. The writ petition is partly allowed. Shageer (Navaniti Prasad Singh, J)