THE HON'BLE SRI JUSTICE P.S. NARAYANA W.P.No.15540 of 2006 Date : 14-9-2009 Between : Paladugu Rajendra .. Petitioner And The District Level Committee for Sand Auctions, Krishna District At Machilipatnam and others .. Respondents THE HON'BLE SRI JUSTICE P.S. NARAYANA W.P.No.15540 of 2006 ORDER: 1. W.V.M.P.No.1774/2006 is filed by respondents 5 and 6 to vacate the interim order dated 28-7-2006 made in W.P.M.P.No.19365/2006. 2. Heard the Counsel. At the request of the Counsel, the Writ Petition itself is being disposed of finally though the same is coming under the caption “Interlocutory”. 3. Sri T.Srikanth Reddy, the learned Counsel representing the petitioner had taken this Court through the contents of the affidavit filed in support of the Writ Petition and also pointed out to the orders of the 4th respondent extending the lease in favour of respondents 5 and 6 dated 18-7-2006 and also pointed out to the representation made dated 11-7- 2006 and would maintain that in the facts and circumstances and also in public interest the Writ Petition to be allowed. The learned Counsel also placed strongrlc on Rule 9(l) of A.P. Minor Mineral Concession Rules and would maintain that in the light of the same, the relief prayed for in the Writ Petition to be granted. 4. The learned Assistant Government Pleader for Panchayat Raj representing the respondents 1, 2, 3, and 4 would maintain that the writ petitioner at present may not have any locus standi to challenge the said action and even otherwise in the facts and circumstances, the writ petitioner is not entitled to any of the reliefs. 5. Sri V.V.Prabhakar Rao, the learned Counsel representing respondents 5 and 6 had taken this Court through the contents of the counter affidavit and would maintain that the writ petitioner has no subsisting interest and has no locus standi at all to challenge the action. Further the learned Counsel also placed strong reliance on the order made by this Court in W.P.No.12788/2006 and also the order made by the Division Bench in W.A.No.415/2006 dated 21-4-2006 and would maintain that in the light of the same, the Writ Petition to be dismissed. 6. Heard the Counsel. 7. The Writ Petition is filed for a writ of mandamus declaring the inaction of the respondents in not conducting sealed tender-cum-public auction for grant of leasehold rights to quarry sand in respect of Chagantipadu and Devqarapalli Sand Reaches of Krishna District and granting extension of lease in favour of respondents 5 and 6 vide orders of the 4th respondent dated 18-7-2006 made in Rc.Nos.198/2005-P.7 and 197/2005- P.7 respectively as arbitrary, illegal, without jurisdiction, non- application of mind, violative of lease agreements executed in Form G1 under Rule 9-H of the A.P. Minor Mineral Concession Rules, 1966, the fundamental rights guaranteed under Articles 14 and 19 of the Constitution of India and consequently direct the 1st respondent to forthwith hold sealed tender-cum-public auction for grant of leasehold rights to quarry sand in respect of Chagantipadu and Devarapalli Sand Reaches of Krishna District and to pass such other suitable orders. 8. It is stated in the affidavit filed in support of the Writ Petition that the 2nd respondent issued notification dated 19-4- 2006 seeking to hold public auction by way of sealed tenders on 5-5-2006 in respect of Thotlavalluru Sand Reach. The upset price for the said Reach was fixed at Rs.50 lakhs for a period of one year. It is further stated that the petitioner participated in the said auction and became the highest bidder at Rs.1,04,45,999/- and became the leaseholder of the said Reach. It is further stated that the leasehold rights in respect of Chagantipadu Sand Reach were granted in favour of 5th respondent for a period of one year from 20-3-2005 to 19-3- 2006. Similarly, the leasehold rights of Devarapalli Sand Reach were given in favour of 6th respondent for a period of one year from 20-3-2005 to 19-3-2006. The lease amount in respect of the said two reaches for a period of one year was Rs.22,55,000/- and Rs.24,44,445/- respectively. The said lease agreements are statutory in nature as the same were entered into in terms of Rule 9H of the Rules and the said Reaches are abutting Thotavalluru Sand Reach. 9. Further it is stated that the respondents 1 and 2 are expected to conduct auctions in respect of the Reaches that are vacant and augment revenue to the State Exchequer resulting in contribution of the same to the local bodies of their respective shares. In fact, elaborate procedure is contemplated under A.P. Minor Mineral Concession Rules 1996 for grant of leasehold rights of the sand available in Reaches by way of public auction-cum-sealed tender process. However, in the present case, though the lease period in respect of Chagantipadu and Devarapalli Sand Reaches expired as far back as in March 2006, the respondents are not holding auctions. Meanwhile, taking advantage of the prevailing circumstances, third parties in active connivance with the unofficial respondents are illegally extracting the sand from the neighbouring Reaches and selling the same at a lesser price resulting in huge financial loss to the petitioner. When the petitioner made enquiries with the official respondents regarding holding of auctions in respect of the aforesaid Reaches, they informed the petitioner that due to the Zilla and Mandal Parishad Elections, they could not hold auctions and as soon as the said elections are over, the Raches will be put to public auction. 10. It is also further stated that the taking advantage of the situation, the respondents 5 and 6 who are no longer legally entitled to hold leasehold rights beyond March 2006, influenced the authorities to see that the said Reaches are not put to auction and the lease is extended in their favour on one pretext or the other so that they will be in a position to earn more money without paying a single pie to the State. In the said process, they approached the 1st respondent requesting extension of the lease period on the ground that the Mandal Revenue Officer directed them to stop quarrying due to floods in Krishna river. However, the Committee rejected their claim for extension of lease as it is contrary to the Rules. It is further stated that once the lease expires and after lapse of four months, the official respondents cannot benefit the respondents 5 and 6 under the guise of extension of lease without holding public auction in terms of the Rules depriving the right of the businessmen like the petitioner to hold the leasehold rights on payment of crores of rupees. 11. It is also further stated that if Chagantipadu and Devarapalli Sand Reaches which are situated very near to the Thotlavalluru Sand Reach are put to auction, they are likely to fetch few crores to the State Government. If the lease is extended contrary to the Rules and agreements without conducting public auction resulting in discrimination among equals and the same is violative of Article 14 of the Constitution of India and hence the petitioner is constrained to submit a detailed representation dated 11-7-2006 to the respondents 1 to 3 requesting them to hold auctions in terms of Rules to prevent financial loss to the State exchequer and not to illegally extend the lease in favour of third parties. It is further stated that once the lease period expires the Rules do not contemplate extension of the same on any ground nor compensation is provided to the lessee. There is a specific clause in the lease agreement that the Conservator has right to stop quarrying of sand without issuing any notice and during floods from the river conservancy point of view and the bidder is not eligible for any compensation and thus initially the 1st respondent being the competent authority under the Rules rightly rejected the case of the respondents 5 and 6 for extension of the lease. 12. It is also further stated that the impugned orders show that the respondents 5 and 6 approached the 3rd respondent by way of request for extension of lease suppressing the rejection order passed by the 1st respondent, the competent authority under the Rules, and in turn the 3rd respondent issued Memo dated 20-5-2006 seeking to compensate for the period during which the lessees were asked to stop quarrying by the M.R.O. due to floods subject to satisfaction of the 2nd respondent that no quarrying operations were conducted during the said period. There is no element of compensation once the lease agreement was entered and as such the 3rd respondent ought not to have issued such a Memo. Further it is stated that the order of the 3rd respondent is dated 20-5-2006 and the representation of the petitioner is dated 11-7-2006. Immediately on receipt of the representation of the petitioner by the respondents 1 to 3, the respondents 5 and 6 seem to have influenced the 4th respondent to pass the impugned order. In fact, the 4th respondent has no jurisdiction to pass such orders that too based on the Memo issued by the 3rd respondent and as such the same is without jurisdiction, contrary to the Rules apart from the conditions of the agreements and on that ground alone the impugned orders are liable to be set-aside. The respondents 1 to 4 failed to see that the respondents 5 and 6 will enjoy the right to quarry sand for a period of more than three months without paying a single pie resulting in financial loss to the State exchequer. If the said Reaches are leased out by way of public auction several persons like the petitioner are ready and willing to participate and pay huge amounts. In fact when the authorities granted extension of lease in favour of a third party beyond the lease period that was mentioned in the lease deed under the guise of renewal on payment of the amount, this Court was pleased to hold that the such an extension/renewal is impermissible and contrary to the A.P. Minor Mineral Concession Rules 1966. Further, this Court was pleased to set-aside such extension in W.A.No.2156/2005 by order dated 20-2-2006 and directed the authorities to hold fresh auctions in terms of Rule 9-B(1) r/w. Rules 9-C to 0-Hence of the Rules. The said decision was challenged by the affected party before the Apex Court and the same was confirmed. Hence viewed from any angle the respondents 1 to 4 are duty bound to follow the Rules and hold public auctions or else it amounts to violation of the fundamental right guaranteed under Article 19 of the Constitution of India. In spite of receipt of the representation submitted by the petitioner, the respondents 1 to 3, for the reasons best known to them, made the 4th respondent to pass the impugned orders solely with a view to personally benefit the respondents 5 and 6. Unless this Court is pleased to suspend the impugned orders and direct the respondents to hold public auctions in terms of the Rules in respect of Chagantipadu and Devarapalli Reaches, not only the interested persons like the petitioner but also the State exchequer will suffer grave and irreparable loss. 13. In the counter affidavit filed by the respondents 5 and 6 it is stated that the 5th respondent entered into a lease agreement with District Panchayat Officer, Krishna, Machilipatnam i.e., the 2nd respondent for quarrying sand situated at Chagantipadu Sand Reach and the 6th respondent had entered into a lease agreement with the District Panchayat Officer, Krishna, Machilipatnam for quarrying sand situated at Devaraplli Sand Reach in the Sub-Division of Krishna District for a period of one year from 20-3-2005 to 19-3-2006 for an amount of Rs.22,55,000/- and Rs.24,44,445/- respectively. Pursuant to the said lease agreement the respondents 5 and 6 conducted quarrying operations of the sand as per the lease agreement. During the lease period in respect of Chagantipadu Sand Reach and Devarapalli Sand Reach, Thotlavalluru Mandal, Krishna District as per the orders of the Mandal Revenue Officer, the respondents 5 and 6 stopped quarrying sand from 6-8-2005 to 14-11-2005. The reason for stopping quarrying sand operations is due to floods to Krishna District and in the interest of public and to avoid loss of life of general public. 14. It is further stated that while the matters stood thus, the respondents 5 and 6 made a representation to the District Collector (Panchayat Raj Wing), Krishna District, Machilipatnam stating the aforesaid facts. The District Collector, Krishna, Machilipatnam by proceedings in Rc.No.198/2005-P.7 dated 18-7-2006 extended the lease for a period of 98 days from 19- 7-2006 to 24-10-2006 and 99 days from 19-7-2006 to 25-10- 2006 in respect of Chagantipadu Sand Reach and Devarapalli Sand Reach respectively as per the conditions stipulated in Rc.No.198/2005-P.7 dated 11-4-2005. It is further stated that by no fault of the respondents 5 and 6, they could not quarry the sand earmarked to them for a period of 98 days and 101 days pursuant to the orders of the Mandal Revenue Officer, Thotlavalluru Mandal, Krishna District. As aforesaid the respondents 5 and 6 made representations to the District Collector to consider the facts and circumstances for not conducting the quarrying operations and further requested him to compensate the lease period in their favour. The District Collector, after considering all the aspects, passed orders dated 18-7-2006 extending the lease for a period of 98 days from 19- 7-2006 to 24-10-2006 and 99 days from 19-7-2006 to 25-10- 2006 in respect of Chagantipadu Sand Reach and Devarapalli Sand Reach respectively. 15. It is also further stated that while the matters stood thus the petitioner is having leasehold rights in respect of Thotlavalluru Sand Reach, Thotlavalluru Mandal, Krishna District for a period of one year. The area earmarked for quarrying sand by him and the respondents 5 and 6 is totally different. The petitioner may be the highest bidder in respect of Thotlavalluru Sand Reach and he has no locus standi to question the extension of lease of the respondents 5 and 6 for a period of 98 days and 99 days respectively. The petitioner, only with an intention to quarry sand in other quarries also filed the petition and stopped the quarrying operations by the respondents 5 and 6. It is further stated that the respondents learnt and believe the same to be true that recently the petitioner is quarrying sand with proclainers in other Sand Reaches which is contrary to the terms and conditions of the lease agreement and the authorities concerned seized the proclainers and are taking appropriate action against the petitioner for quarrying sand contrary to the lease agreement. It is also further stated that the petitioner has no grievance if the lease period of the respondents 5 and 6 is extended by 98 days and 99 days respectively. It is due to the orders of the Mandal Revenue Officer and in the interest of general public the respondents 5 and 6 could not quarry the sand during the lease period for 98 days and 101 days respectively and the same period was thought fit to be considered as compensation by the District Collector and permitted us to quarry the lease from 19-7- 2006 to 24-10-2006. The petitioner obtained ex parte interim order against the respondents 5 and 6 on 28-7-2006 and pursuant to the above interim orders the respondents 5 and 6 stopped quarrying sand from 1-8-2006. 16. It is also further stated that the petitioner relied on a Division Bench Judgement and the same is not applicable to the respondents 5 and 6. The point that came up for consideration before the Division Bench was after the expiry of the lease period, authorities concerned without calling for fresh tenders extended the lease period by way of private negotiations in favour of the third parties. In such circumstances the Division Bench was pleased to set-aside the orders of the respondents therein and directed to hold fresh auctions. In the instant case, the respondents 5 and 6 did not ask for extension of lease period after expiry of the lease but requested the authorities to compensate the lease period due to the orders of the Mandal Revenue Officer. In other words, it is stated, the respondents 5 and 6, could not quarry sand which are due to quarry during the lease period for 98 days and 101 days and in view of the loss caused to them, they requested the authorities to extend the lease for the same period. The authorities after considering the same passed the orders dated 18-7-2006. The other contentions raised in the Writ Petition by the writ petitioner are totally devoid of any merits and those decisions of the Division Bench are not applicable to respondents 5 and 6. 17. It is also further stated that by extending the lease period to the respondents 5 and 6 the petitioner is in no way affected and the petitioner has no locus standi. No doubt Rule 9-L of the Rules dealing with Penalty clause had been heavily relied upon. 18. The views expressed by this Court in W.P.No.12788/2006 and by the Division Bench in W.A.No.415/2006 had been placed before this Court. No doubt certain submissions had been made that though at present the writ petitioner may not be having any subsisting interest whatsoever or locus standi as such, in the light of the averments made in the affidavit filed in support of the Writ Petition in public interest the Writ Petition may have to be decided on merits. It is needless to say that the Writ Petition aimed at safeguarding or ventilating the grievance of public by way of Public Interest Litigation would stand on a different footing. It is needless to say that it is a case of a rival business man or a rival trader simpliciter. Even otherwise, in the light of the grounds raised, liberty is given to raise these grounds by way of a Public Interest Litigation if the parties are so advised. 19. Subject to the above observation, the Writ Petition is dismissed. No costs. _________________ Justice P.S. Narayana Date : 14-9-2009 AM