IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY THIRD DAY OF JUNE TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MS JUSTICE G.ROHINI WRIT PETITION NO.9778 OF 2006 AND WRIT PETITION NO.8940 OF 2008 IN WRIT PETITION NO.9778 OF 2006 Between: The Damuluru Boatsmen and Sand Loading Unloading Labour Contract Co-operative Society Ltd., No.G.3111, Damuluru Rep. by its President Mr. Chinta Veeranjaneyulu S/o.Sivashankar Rao, Coolie, R/o.D.No.11-125, Ibrahimpatnam(Ferry), Krishna District - 521456. ..... PETITIONER AND 1 The District Level Committee for Sand Auctions, Krishna District, Zilla Parishad Compound, Machilipatnam, Rep. by its Member Convenor - Cum - District Panchayat Officer. 2 The Joint Collector, Krishna District at Machilipatnam. 3 The District Collector, Krishna District at Machilipatnam. 4 The Narsapuram Sand Quarry Boatsmen, Fishermen Cooperative Society, Rep. by its President Mr.Premmadi Narasimha Rao S/o.Venkataswamy, R/o.Narsapuram, West Godavari District. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue an appropriate writ, order or direction, more particularly one in the nature of writ of mandamus, declaring action of respondents in not confirming the auction in favour of the petitioner for grant of leasehold rights to quarry sand in respect of Ibrahimpatnam Reach on Krishna River Left Bank, pursuant to the auction held on 5/5/2006 by the 2nd respondent and further action in seeking to grant the said leasehold rights in favour of the 4th respondent as arbitrary, illegal, colourable exercise of power, contrary to Rule 9-B3 to G.O.Ms.No.1., Industries and Commerce (M-1) Department, dt.1/1/2001, amendment to the A.P. Minor Mineral Concession Rules, 1966, which was issued in exercise of the powers conferred by section 15(1) of the Mines and Minerals (Development and Regulation) Act, 1957 and violative of the Fundamental Right guaranteed under Article 19(1)(g) of the Constitution of India and consequently direct the 1st and 3rd respondents to grant aforesaid leasehold right in favour of the petitioner and pass such other order or orders as are deemed fit and proper in the circumstances of the case. Counsel for the Petitioner : MR. C.V.R.RUDRA PRASAD Counsel for the Respondents : GP FOR PANCHAYAT RAJ & RURAL DEV. IN WRIT PETITION NO : 8940 of 2008 Between: The Damuluru Boatsmen and Sand Loading Unloading labour Contract Co-Operative Society Ltd No.G-3111 Damuluru Ibrahimpatnam(M) Krishna Dist rep,by its Secretary Mr.S.K.Nannebude S/o.S.K.Sileman R/o.Damuluru(V) Ibrahimpatnam(M) Krishna Dist. ..... PETITIONER AND 1 The Dist Collector Krishna Dist Machilipatnam 2 The Dist Level Committee for Sand Auctions Krishna Dist Rep.by its Chairman-Cum Joint Collector Krishna. 3 The Assistant Director of Mines & Geology Vijayawada cum Member Convenor Dist Level Committee for Sand Auctions Krishna Dist 4 M/s. The Krishna Murthy Country canal Boat Workers Labour Contractors Coooperative Society Ibrahimpatnam (V) &(M) Krishna Dist Rep.by its President Mr.K.Nageswara Rao .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue an appropriate writ, order or direction more particularly one in the nature of writ of Mandamus declaring order of the 1st respondent confirming the auction in favour of the 4th respondent and order of the 3rd respondent dt.04-04-2008 in proceedings No.1622/Sand/2008 permitting the 4th respondent to conduct sand quarry operations from Ibrahimpatnam Sand Reach Ibrahimpatnam (M) Krishna Dist as arbitrary, illegal courable exercise of power contrary to the order of this Hon'ble court dt.24-03-2008 made in WP No.6103 of 2008 violative of the A.P Minor Mineral Concession Rules 1966 apart from being violative of the Fundamental Rights Guaranteed under Articles 14 and 19(I)(g) of the constitution of India and consequently direct the respondents 1to 3 to drop all further proceedings pursuant to the auction held on 27-03-2008 in respect of Ibrahimpatnam Sand Reach,Ibrahimpatnam(M) Krishna Dist. Counsel for the Petitioner : MR.C.V.R.RUDRA PRASAD Counsel for the Respondents : GP FOR MINES AND GEOLOGY The Court made the following common order : THE HON’BLE Ms. JUSTICE G. ROHINI WRIT PETITION NO.9778 OF 2006 AND WRIT PETITION NO.8940 OF 2008 COMMON ORDER : The petitioner in both these writ petitions is a society registered under the A.P. Co-operative Societies Act, 1964, having its area of operation in Ibrahimpatnam Mandal. The main object of the society is to extract sand through boats owned and possessed by its members to eke out their livelihood by way of loading and unloading sand. Since both the writ petitions arose out of a dispute with regard to grant of leasehold rights for sand quarrying in Ibrahimpatnam sand reach, Krishna District, under the provisions of the A.P. Minor Mineral Concession Rules, 1966 (for short, ‘the Rules, 1966), these two writ petitions are heard together and decided by this common order. It is to be noted that in exercise of powers conferred under sub- section (1) of Section 15 of the Mines & Minerals (Regulation & Development) Act, 1957 (67 of 1957) (for short, ‘MMDR Act’), the State Government made A.P. Minor Mineral Concession Rules, 1966 (for short, ‘the Rules). So far as quarry lease for sand is concerned, Rule 9- B to Rule 9-X as substituted under G.O.Ms.No.1, Industries & Commerce (M1) Department, dated 1.1.2001 provide for the procedure in detail. Rule 9-B(1) provides that all the sand bearing areas in the State shall be leased out by sealed tender-cum-public auction, reach or village wise wherever applicable by Mandal Revenue Officer, or Revenue Divisional Officer or Joint Collector for a specified period in any case not more than two years with an yearly enhancement of 10% of the knocked down amount and subject to the conditions prescribed in the notice of sealed tender-cum-public auction as specified in Rule 9-C. As per Rule 9-B (3) preference shall be given to the Boatsmen Co-operative Societies so far as the reaches identified in major rivers where the sand is lifted and carried by means of boats. In terms of the above Rules, the Joint Collector, Krishna District issued public auction notice dated 19.4.2006 proposing to conduct auction on 5.5.2006 for grant of leasehold rights in respect of sand reaches mentioned therein for a period of one year. Ibrahimpatnam sand reach was also included in the said auction notice and the same was identified for preference to the Boatsmen Societies. The 4th respondent in W.P.No.9778 of 2006 was declared as the successful bidder for Ibrahimpatnam sand reach. Aggrieved by the same, W.P.No.9778 of 2006 has been filed contending inter alia that since the petitioner society is a local society and entitled for preferential rights and it is also ready and willing to pay the amount offered by the 4th respondent in the sealed tender, the respondents 2 and 3 ought to have granted the leasehold rights in favour of the petitioner. It is alleged that since the petitioner society is a registered local Boatsmen Co-operative society, it is entitled for preference where more than one Boatsmen Co- operative Societies participated in the auction for the same reach. This Court while directing rule nisi, by order, dated 4.12.2006 in W.P.M.P.No.12391 of 2006 directed that any further steps taken pursuant to the auction held on 5.5.2006 shall be subject to further orders. Since the period of said lease expired, the Assistant Director of Mines & Geology issued a fresh auction notice dated 7.3.2008 proposing to conduct public auction in respect of several sand reaches including Ibrahimpatnam sand reach on 27.3.2008. Admittedly, the petitioner society did not participate in the auction, but made a representation dated 10.3.2008 before the State Government claiming preferential right for grant of lease on the ground that it is a local society. Since their request was not considered, the petitioner society filed W.P.No.6103 of 2008 challenging the inaction on the part of the Government. The said writ petition was disposed of by this Court by order dated 24.3.2008 holding that the petitioner was entitled for preferential rights and directing the respondents to consider the representation of the petitioner dated 10.3.2008 on or before 27.3.2008 i.e., the date of auction. However, the respondents did not consider the representation of the petitioner society, but on the other hand proceeded with the auction on 27.3.2008. In the circumstances, contending that the action of the respondents was arbitrary and illegal and violative of the order of this Court, the petitioner filed W.P.No.7256 of 2008. However, the said writ petition was dismissed by order dated 3.4.2008 as premature since no leasehold rights were granted in favour of any third party by that time. While so, on 4.4.2008 the Assistant Director of Mines & Geology, Vijayawada, passed an order according sanction to the 4th respondent society herein for sand quarrying in Ibrahimpatnam sand reach for a period of one year. The said order shows that in the auction held on 27.3.2008, one M/s. Gollapudi All Castes Sand Boat Workers and LCC Society was found to be the highest bidder. However, the 4th respondent in W.P.No.8940 of 2008 made a representation to the District Collector, Krishna stating that being a local Boatsmen Co- operative society it was entitled for preference and also expressed its willingness to pay the bid amount offered by the successful bidder. Since admittedly the successful bidder was a non-local society, the request of the 4th respondent society for grant of lease was considered favourably and the lease in its favour was confirmed vide proceedings of the District Collector, Krishna, dated 1.4.2008, followed by the work order issued by the Assistant Director of Mines & Geology, dated 4.4.2008. The said action of the respondents 1 to 3 in granting the lease in favour of the 4th respondent society is under challenge in W.P.No.8940 of 2008. I have heard the learned counsel for both the parties and perused the material on record. The learned counsel for the petitioner vehemently contended that the action of the 1st respondent – District Collector, Krishna in confirming the auction in favour of the 4th respondent pursuant to the auction held on 27.3.2008 is arbitrary and illegal apart from being in violation of the directions of this Court in W.P.No.6103 of 2008. It is also contended that the 1st respondent has no authority or jurisdiction to confirm the auction in favour of the 4th respondent and that as per the Rules the Joint Collector alone is the competent authority. It is further contended that the lease in favour of the 4th respondent society under the impugned proceedings dated 1.4.2008 and 4.4.2008 which emanated from ex facie illegal action of the respondents in proceeding with the auction on 27.3.2008 ignoring the directions of this Court in W.P.No.6103 of 2008 is nonest and cannot be taken into consideration for any purpose. On the other hand, the learned Government Pleader for Mines & Geology appearing for the respondents 1 to 3 as well as the learned counsel appearing for the 4th respondent in W.P.No.8940 of 2008 contended that the lease granted in favour of the 4th respondent which is also a local registered Boatsmen Co-operative Society is in accordance with law and the claim of the petitioner who failed to participate in the auction held on 5.5.2006 or 27.3.2008 for grant of lease is untenable and on that ground alone the writ petition is liable to be dismissed in limine. The fact that the petitioner society did not participate in the auctions conducted on 5.5.2006 or 27.3.2008 is not in dispute. The petitioner also did not dispute the fact that the 4th respondent society is a local registered Co-operative Boatsmen Society. So far as the order of this Court in W.P.No.6103 of 2008 is concerned, it is true that there was a direction to consider the representation of the petitioner dated 10.3.2008 before the date of auction i.e., 27.3.2008. However, this Court did not stay the auction proposed on 27.3.2008. In the circumstances, even assuming that there was no justifiable reason for not considering the representation of the petitioner within the time granted by this Court the said fact by itself did not invalidate the auction held on 27.3.2008. For the alleged inaction on the part of the respondents 1 to 3 to consider the representation of the petitioner dated 10.3.2008 in compliance with the directions of this Court in W.P.No.6103 of 2008, the remedy of the petitioner may be elsewhere, but on that ground it is not open to the petitioner to contend that the entire auction process was vitiated, particularly in view of the fact that the petitioner failed to participate in the auction held on 27.3.2008. It is relevant to note that as per sub-rule (3) of Rule 9-B the registered Boatsmen Co-operative Society are given preference by allowing 10% concession on the highest bid/tendered amount offered in the auction hall and for payment of such amount in installments. Obviously, such preference cannot be extended to a society which did not even choose to participate in the auction. Hence, the contention of the petitioner society that the entire auction process is vitiated is untenable and cannot be accepted. Therefore, the lease granted in favour of the 4th respondent society which is also a local registered Boatsmen Co-operative Society and having participated in the auction paid the bid amount offered by the highest bidder in the auction held on 27.3.2008 cannot be held to be arbitrary or illegal on any ground whatsoever. The further contention of the learned counsel for the petitioner that the 1st respondent – District Collector has no authority to confirm the auction in favour of the 4th respondent and therefore the proceedings of the 1st respondent dated 1.4.2008 as well as the consequential proceedings of the 3rd respondent dated 4.4.2008 are without jurisdiction is also without any substance. Nothing could be placed before this Court by the learned counsel for the petitioner to substantiate his contention that the 1st respondent – District Collector is not the competent authority to confirm the auction under the Rules. For the aforesaid reasons, W.P.No.8940 of 2008 is devoid of any merit and is liable to be dismissed. Even with regard to W.P.No.9778 of 2006, it is clear from the counter-affidavit filed on behalf of the respondents 1 to 3 that though the lease was granted in favour of the 4th respondent therein vide proceedings dated 19.5.2006 and the said society was called upon to pay the remaining tender amount in 3 equal installments together with 2% security deposit and income-tax amount to the Income-tax Department and execute the agreement, the 4th respondent therein failed to comply with the same and therefore the lease deed could not be registered. Consequently the lease in favour of the 4th respondent therein was cancelled duly forfeiting the security deposit. Subsequently, fresh auction was conducted on 1.12.2006 pursuant to the resolution passed by the District Level Sand Committee dated 25.10.2006 in respect of Ibrahimpatnam sand reach in which the lease was granted in favour of the successful bidder one M/s. Gollapudi All Castes Sand Boat Workers Labour Contract Co-operative Society Limited (which got impleaded as respondent No.5) for a period of one year from 16.12.2006 to 15.12.2007. The 5th respondent in W.P.No.9778 of 2006 also filed a separate counter-affidavit stating that the lease granted in favour of 4th respondent pursuant to the auction notice dated 19.4.2006 stood terminated and thereafter it was granted lease in the auction held on 1.12.2006. In the circumstances, the cause in the Writ Petition No.9778 of 2006 challenging the lease granted in favour of the 4th respondent therein does not survive as on today. In the result, W.P.No.9778 of 2006 is dismissed as infructuous and W.P.No.8940 of 2008 is dismissed for the reasons stated supra. No costs. ______________ G. ROHINI, J. Dt. 23.06.2008 gbs