HON'BLE SRI JUSTICE R. SUBHASH REDDY WRIT PETITION No.5536 of 2010 Date : 08.02.2011 Between : K. Purnachandra Rao. …..Petitioner And The Government of Andhra Pradesh, rep. by its Secretary, Industries and Commerce (M-I) Department & others. …..Respondents HON'BLE SRI JUSTICE R. SUBHASH REDDY WRIT PETITION No.5536 of 2010 ORDER : On a mention being made for withdrawal of writ petition, this writ petition is posted for orders, but when such withdrawal is opposed by the learned counsel appearing for the 6th respondent, the matter was heard and is being disposed of by this order. This writ petition is filed, seeking directions by way of Mandamus, declaring the action of respondents in proposing to confirm the auction for grant of leasehold rights in respect of sand in Nimmagadda sand reach in Puratigadda village of Challapally Mandal in Krishna District in favour of the 6th respondent, pursuant to letter No.1020/Q/2007, dated 10th February 2010, as illegal and arbitrary and also contrary to the orders issued by the Government in G.O.Ms.No.24, dated 12.02.2007 and A.P.Minor Mineral Concession Rules, 1966 framed under the Mines and Minerals (Development and Regulation) Act, 1957. Necessary facts in brief, are as under: The 3rd respondent has issued auction notice No.2743 of 2005-P-7, dated 14.11.2006, inviting sealed tenders to conduct open auction for grant of leasehold rights in respect of sand quarries mentioned therein, which include the quarry situated at Nimmagadda sand reach of Puratigadda village. The lease was notified for a period of one year. When the lease was notified, a writ petition was filed in W.P.No.24937 of 2006, challenging the notification on the ground that necessary clearance was not obtained from the ground water department and the river conservator, which is a pre-requisite for conducting the auction. This Court has granted interim orders in the said writ petition on 01.12.2006, directing the respondents therein not to grant lease for quarrying of sand pursuant to the auction held on that day, in respect of the notified reaches. In the auction held pursuant to the auction notice, dated 14.11.2006, the 6th respondent herein was the highest bidder, who has offered the bid amount of Rs.30,00,500/-, but further proceedings to confirm the lease, were not taken up in view of the interim orders passed by this Court. The interim order passed in the said writ petition continued during the pendency of the writ petition, but when the writ petition came up for hearing before a learned Single Judge of this Court, it was dismissed, by recording a finding that the cause in the writ petition, in a way, has become infructuous as much as the ground water survey was conducted during the pendency of the writ petition. In view of dismissal of the writ petition, the 6th respondent has made a representation to the 3rd respondent, who is the Chairman of the District Level Committee, to allow him to execute the lease, pursuant to the auction held on 01.12.2006. Basing on the said representation, and on the ground that the 6th respondent has agreed to enhance the bid amount by 20% on the previous knocked down bid amount of Rs.30,00,500/- pursuant to the auction held on 01.12.2006, the Assistant Director of Mines and Geology has issued letter, dated 10.02.2010, in letter No.1020/Q/2007, directing the 6th respondent to pay the balance amount, so as to take further steps in the matter of allowing him to execute the lease. At that point of time, this writ petition is filed by the petitioner. It is the case of the petitioner that in the auction notice No.2743 of 2005-P-7, dated 14.11.2006, auction was notified only for a period of one year and in that view of the matter, after this length of time, it is not open to the respondents to consider the representation made by the 6th respondent to award lease in his favour, by increasing 20% on the bid amount of Rs.30,00,500/-. Reliance is also placed on the orders of the Government, issued in G.O.Ms.No.24, dated 12.02.2007, by which, the Government has shifted the subject of auction of sand from the Panchayatraj and Rural Development Department to the Industries and Commerce Department. It is the further case of the petitioner that if the open auction notice is issued now, it will fetch more than one Crore of rupees, as such, it is not open for the respondents to accept the bid of the 6th respondent at Rs.53,57,664/-. In the affidavit filed in support of the writ petition, it is stated that the ground water clearance is a pre-requisite before issuing auction notice and the survey conducted during the pendency of the earlier writ petition cannot be the basis for accepting the offer of the 6th respondent to execute the quarry lease now, pursuant to the auction conducted on 01.12.2006. The Assistant Director of Mines and Geology has filed counter affidavit. In the counter affidavit, while denying the various allegations made by the petitioner, it is stated that in view of the interim orders passed by this Court, the lease was not confirmed in favour of the 6th respondent, but as much as there is no order of cancellation of the auction notification, considering the representation made by the 6th respondent, respondents have taken a decision to allow the 6th respondent to execute the lease, subject to increase of 20% on the bid amount, which was offered in the auction held on 01.12.2006. While referring to the representation made by the 6th respondent, it is stated that as the 6th respondent has agreed to enhance the bid amount by 20% before the District Level Committee on 21.01.2010, the impugned letter, dated 10.02.2010, is issued, directing him to pay the balance amount. A further counter affidavit is filed by the Joint Director of Mines and Geology, who is presently holding the additional charge of the post of the 2nd respondent- Director of Mines and Geology. In this detailed counter affidavit, while referring to the facts in detail and the orders passed by this Court in the earlier writ petition, it is categorically averred that the decision of the 4th respondent in accepting the offer of the 6th respondent for an amount of Rs.53,57,664/-, by enhancing 20% per annum on the bid amount of Rs.30,00,500/-, is not in conformity with the existing A.P. Minor Mineral Concession Rules, 1966, which were amended by G.O.Ms.No.84, dated 10.04.2007. It is stated that the period notified in the auction notice itself is for one year from the date of auction and thus the period has expired long prior to the date of impugned letter and also in view of the new set of Rules framed while transferring the subject of sand auctions from Panchayat Raj Department to the Industries and Commerce Department, the 6th respondent could not have been allowed to execute the lease. Counter further states that all notifications already issued, where auctions have not been confirmed, stood cancelled in view of the orders of the Government in G.O.Ms.No.24, Industries and Commerce (M-I) Department, dated 12.02.2007. It is also averred that there is no provision in the Rules for considering the successful bidder at this point of time, for execution of the lease pertaining to the year 2006, by confirming the same after a lapse of three years. It is stated that a fresh auction ought to have been conducted after receipt of the report of the ground water department on 29.02.2008, in terms of Rule 9(B) of the A.P.Minor Mineral Concession Rules, 1966. A separate counter affidavit is filed by the 6th respondent. In the counter affidavit, while denying the various allegations made by the petitioner, it is stated that though he was the highest bidder in the auction held on 01.12.2006, the auction was not confirmed in his favour and lease deed was not executed. It is stated that after dismissal of the earlier writ petition in W.P.No.24937 of 2006, he represented to the respondents to allow him to execute the lease, as much as there was no fault on his part. It is stated that the 3rd respondent, considering his request, has agreed to execute the lease in his favour, accepting 20% over and above the bid amount of Rs.30,00,500/- and he was asked to pay the balance 1/4th bid amount, namely, Rs.4,47,460/-, taking into consideration the amount of Rs.9,46,000/-, which he has already deposited on 01.12.2006. It is alleged that the petitioner in the earlier writ petition in W.P.No.4742 of 2010 has demanded a sum of Rs.40,000/- from him, and when he refused to pay the same, the said writ petition was filed and it was withdrawn subsequently. It is further averred that even W.P.No. 24937 of 2006 was filed by the persons who were politically opposed to him, with a view to cause loss to him. It is alleged that the present writ petitioner is set up by one Mr.D.Gopala Krishnaiah, who was the petitioner in W.P.No.4742 of 2010. With reference to the orders issued by the Government in G.O.Ms.No.24, dated 22.02.2007, it is stated that as much as the lease in his favour was not confirmed in view of the interim orders passed by this Court, the said G.O. is not applicable to him. With the aforesaid averments, he prayed for dismissal of the writ petition. Heard Sri A. Sanjeev Kumar, learned counsel appearing for petitioner, learned Government Pleader for Mines and Geology, appearing for respondents 1 to 3 and 5, learned Government Pleader for Revenue, appearing for respondent No.4, Sri C.V.Mohan Reddy, learned Counsel appearing for the 6th respondent and Sri K.L.N.Swamy, learned counsel appearing for the impleaded respondents. Having heard the learned counsel for the parties, the only question, which requires consideration is, whether the 6th respondent is entitled for award of lease in Nimmagaddaa sand reach of Puratigadda village for a period of one year in terms of the letter, dated 10.02.2010, issued by the Assistant Director of Mines and Geology. In this case, it is to be noted that the auction notice was issued as early as on 14.11.2006 vide auction Notice No.2743 of 2005-P-7, inviting sealed tenders for grant of leasehold rights for a period of one year only. At that point of time, a writ petition was filed in W.P.No.24937 of 2006. While it is true that the 6th respondent was the highest bidder in the said auction conducted on 01.12.2006, who has offered an amount of Rs.30,00,500/-, but the fact remains that the auction was not confirmed in his favour in view of the interim orders of this Court in the aforesaid writ petition. Primarily, in the writ petition in W.P.No.24937 of 2006, it was the case of the petitioner therein that there was no clearance from the ground water department and the river conservator. In that view of the matter, an interim order was passed in the said writ petition and it continued all along during the pendency of the writ petition. The said writ petition was dismissed, by recording a finding that in a way, the writ petition has become infructuous, as the ground water survey was conducted and feasibility report was given subsequently. But, it is to be noticed that the said ground water report is the report prepared during the pendency of the writ petition and subsequent to the auction conducted on 01.12.2006. When the lease period itself is over, and in view of the long lapse of time, the only option left to the respondents is to notify the auction afresh. When the auction was notified specifically for a period of one year, in the absence of any provision in the A.P.Minor Mineral Concession Rules, 1966, it is not open for the respondents to consider the representation filed by the 6th respondent and allow him to execute the lease for a period of one year, on the ground that he has agreed to enhance the amount by 20% per annum on the bid amount, which he had offered in 2006. It is not known, how the respondents have considered the request of the 6th respondent to permit him to execute the lease at this point of time, in the absence of any such provision in the Rules governing the leases. It is the specific case of the petitioner that the sand reach in question will fetch not less than a Crore of rupees if it is auctioned now. To test the bonafides of the petitioner, this Court granted conditional interim orders on 10.02.2010, subject to deposit of one Crore of rupees by the petitioner and it is stated that pursuant to the orders of this Court, the petitioner has deposited the said amount. In that view of the matter, it cannot be said that only at the instance of the petitioner in the earlier writ petition, this writ petition is filed. It is the case of the petitioner that he is also engaged in the business of sand, and previously, he obtained leases of other reaches being successful bidder in the said auctions. Even from the counter affidavit filed by the Director of Mines and Geology, it is categorically pleaded that there is no such power or authority to the respondents to entertain the application of the 6th respondent and allow him now to execute the lease for a period of one year by increasing the bid amount by 20% per annum, pursuant to the auction held on 01.12.2006. It is also to be noticed that the Government has issued orders in G.O.Ms.No.24, dated 12.02.2007, transferring the subject matter of auctioning of sand reaches from the Panchayatraj and Rural Development Department to the Industries and Commerce Department. The constitution of the earlier District Level Committees also differs from that of the Committees constituted in G.O.Ms.No.24, dated 12.02.2007. In clause 24 of the aforesaid G.O., it is clearly stated that all notifications already issued, where auctions have not been confirmed, shall automatically stand cancelled. In that view of the matter, and as much as it is not in dispute that the auction held on 01.12.2006 is not confirmed in favour of the 6th respondent, the notification itself stands cancelled in view of the aforesaid orders of the Government, and it is not open for the respondents to allow the 6th respondent to execute the lease now. In any event, it is also to be noticed that as per the Rules, which are presently in force, the ground water clearance is a pre-requisite before auction notice is issued. The survey conducted and the feasibility report given by the ground water department during the pendency of the earlier writ petition, can be the basis for issuing the fresh notice to auction the sand reach in question, but the same could not have been the basis for allowing the 6th respondent by issuing the impugned letter, dated 10.02.2010. In any event, it is to be noticed that when it is the specific case of the petitioner that if the auction is notified now, it will fetch not less than one Crore of rupees, there is no reason for the respondents to allow the 6th respondent to negotiate for increase of price on the bid amount of 2006, so as to allow him to execute the lease. It is also not permissible to negotiate with the 6th respondent alone, at this point of time, without notifying the same, inviting fresh bids. Had the fresh bids were invited, the situation altogether would have been different. In that view of the matter, in the absence of any provision in Minor Mineral Concession Rules, 1966, for negotiating with the 6th respondent, and further, in view of the orders issued by the Government in G.O.Ms.No.24, dated 12.02.2007, which cancels the earlier notifications where auctions were not confirmed, there is no reason or justification for issuing the impugned proceedings in favour of the 6th respondent. Although it is submitted by Sri C.V.Mohan Reddy, learned Counsel appearing for 6th respondent, that the present writ petition is engineered by the petitioner in the earlier writ petition, but in view of deposit of one Crore of rupees pursuant to the interim orders of this Court, this Court is of the view that the petitioner has bonafidely approached this Court and filed this writ petition, as otherwise, there would have been huge loss of exchequer to the State, if the 6th respondent is permitted to proceed with the sand quarry pursuant to the proceedings issued by the respondents on the negotiated price by increasing 20% on the bid amount offered in 2006. For such fixation of increase of 20%, there is no basis or rationale and such an action on the part of respondents is illegal and arbitrary. The learned Counsel Sri C.V.Mohan Reddy has placed reliance on a judgment of Hon’ble Supreme Court in the case of South Eastern Coalfields Ltd. Vs. State of M.P.[1], in support of his argument that the 6th respondent is entitled to be placed in the same position, which he would have been, had the Court not intervened by way of interim order, but this Court is of the view that the Rules framed under the A.P.Minor Mineral Concession Rules, 1966 do not permit to accept the negotiated bid offered by the 6th respondent, and further, the notification itself stands cancelled in view of the orders issued by the Government in G.O.Ms.No.24, dated 12.02.2007. Therefore, the aforesaid judgment would not render any assistance in support of his argument. Further, in view of the stand taken by the Director of Mines and Geology in the counter affidavit, it is not permissible to allow the 6th respondent to execute the lease by increasing 20% over the bid amount of 2006, as per the present Rules in force. For the aforesaid reasons, this writ petition is liable to be allowed and it is accordingly allowed as prayed for. It is also made clear that the petitioner is entitled for refund of the amount, which he has deposited pursuant to the interim orders of this Court, dated 10.03.2010, and similarly, the 6th respondent is entitled for refund of the amounts, which he had deposited pursuant to the auction held on 01.12.2006, and further amounts, if any, deposited pursuant to the impugned letter, dated 10.02.2010, issued by the Assistant Director of Mines and Geology. No costs. ______________________ R. SUBHASH REDDY, J 8th February 2011 ajr [1] (2003)8 SCC 648