Dismissed

Arawali Resources LLP v. State of Rajasthan

Rajasthan HC7 May 2024CW/6870/2024

Case brief

AI extract

What is this about?

The Rajasthan High Court dismissed a writ petition challenging the forfeiture of earnest money and five-year debarment. The court held that the successful bidder was deemed to have accepted all e-auction terms, failed to comply with the Rules of 2017, and had no ground to question clear conditions citing alleged ambuiguity.

What did the court decide?

Writ petitions dismissed. Bid security forfeited. Petitioner debarred from future e-auctions. Stay applications dismissed.

Arawali Resources LLP Vs State of Rajasthan — Contract and Commercial Disputes | Rajasthan HC (2024)

¶1

[2024:RJ-JD:19636]

¶2

HIGH COURT OF JUDICATURE FOR RAJASTHAN

¶3

AT JODHPUR

¶4

S.B. Civil Writ Petition No. 6884/2024

¶5

Arawali Resources LLP, through its Designated Partner Mr. Dilip Datt Sharma S/o Late Shri Vishnu Datt Sharma, aged about 54 years, having its registered Office at Flat No. A-34, Shahid Chandra Shekhar Aazad Affordable Awasiya Yojna, DCM Road, Kota, Rajasthan.

¶6

----Petitioner

¶7

Versus

¶8

State of Rajasthan, through the Secretary, Department of Mines and Geology, Government Secretariat, Jaipur.

¶9

The Director, Mines and Geology, Government of Rajasthan at Khanij Bhawan, Shastri Circle, Udaipur.

¶10

The Mining Engineer, Mines and Geology Department, Khanij Bhawan, Bhilwara (Rajasthan)

¶11

The MSTC Limited, a Government of India Enterprise and E-Auction Agency having its Regional Office at Room No. 114, 1^st Floor, BSNL Building, Lal Kothi, Behind Nagar Nigam, Jaipur-302015

¶12

----Respondents

¶13

Connected With

¶14

S.B. Civil Writ Petition No. 6866/2024

¶15

Arawali Resources LLP, through its Designated Partner Mr. Dilip Datt Sharma S/o Late Shri Vishnu Datt Sharma, Age About 54 years, having its registered Office at Flat No. A-34, Shahid Chandra Shekhar Aazad Affordable Awasiya Yojna, DCM Road, Kota, Rajasthan

¶16

----Petitioner

¶17

Versus

¶18

State of Rajasthanthrough the Secretary, Department of Mines and Geology, Government Secretariat, Jaipur.

¶19

The Director, Mines and Geology, Government of Rajasthan at Khanij Bhawan, Shastri Circle, Udaipur.

¶20

The Mining Engineer, Mines and Geology Department, Khanij Bhawan, Bhilwara (Rajasthan)

(2 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

The MSTC Limited, a Government of India Enterprise and E-Auction Agency having its Regional Office At Room No. 114, 1^st Floor, BSNL Building, Lal Kothi, Behind Nagar Nigam, Jaipur-302015

¶25

----Respondents

¶26

S.B. Civil Writ Petition No. 6870/2024

----Petitioner

Versus

State of Rajasthanthrough the Secretary, Department of Mines and Geology, Government Secretariat, Jaipur.

¶31

The Director, Mines and Geology, Government of Rajasthan at Khanij Bhawan, Shastri Circle, Udaipur.

¶32

The Mining Engineer, Mines and Geology Department, Khanij Bhawan, Bhilwara (Rajasthan)

¶33

The MSTC Limited, a Government of India Enterprise and E-Auction Agency having its Regional Office At Room No. 114, 1^st Floor, BSNL Building, Lal Kothi, Behind Nagar Nigam, Jaipur-302015

¶34

----Respondents

¶35

For Petitioner(s)	:	Mr. R.K. Agarwal, Sr. Advocate,
		assisred by Mr. Adhiraj Modi Mr. Pratap Thakur
		Mr. Abhishek Choudhary Ms. Adwaita Sharma
For Respondent(s)	:	Mr. Mahaveer Bishnoi, AAG with Mr. Gaurav Bishnoi

¶36

HON'BLE DR. JUSTICE NUPUR BHATI O R D E R

¶37

REPORTABLE

¶38

Reserved on: 03/05/2024 Pronounced on: 07/05/2024

[2024:RJ-JD:19636]

[CW-6884/2024]

(3 of 25)

Though the matter is listed in the fresh category, However on joint request of the counsel for the parties the matter is being heard today itself.

¶43

These writ petitions have been filed by the petitioner challenging the order passed by the Director, Mines and Geology, Government of Rajasthan at Khanij Bhawan, Shastri Circle, Udaipur dated 15.04.2024 (Annex.15) whereby the Earnest Money Deposit (‘EMD’) amounting to Rs. 40,00,000/- has been forfeited and the petitioner has been debarred from participating in auction proceedings for a period of 5 years. The petitioner has also sought a direction to the respondents not to finalize granting of mining lease for the Minor Mineral Bajri (River Sand) for Plot No. BJ-05 situated at Revenue Village Akola, Tehsil Sawaipur, District Bhilwara under the E-auction notice dated 06.03.2024 (Annex.2), and also not insist upon the deposition of 40% of the premium amount quoted, till clarification is not provided by the respondents as sought by the petitioner is not provided. The petitioner has also prayed that the respondents may not be allowed to conduct fresh auction for the said plot. Certain other ancillary relief(s) have also been sought by the petitioner.

¶44

These writ petitions, S.B.C.W.P No. 6866/2024 and 6870/2024 along with the present writ petition are being decided by this common order, however, facts of SBCWP No.6884/2024 are illustratively taken for consideration.

¶45

Briefly stated, the facts of this case are that the respondent no. 2 issued an E-auction notice bearing No. ML Bajri II/2024/E05502 dated 06.03.2024 (Annex.2) for 14 plots for Minor Minor Bajri situated in District Bhilwara and Sirohi. The petitioner

[2024:RJ-JD:19636]

[CW-6884/2024]

(4 of 25)

participated in the E-auction for the Plot No. BJ-05 through a Bid on 23.03.2024 (Annex.3), quoting its bid at Rs. 85,99,43,240/along with submitting Rs. 40,00,000/- as earnest money and the requisite documents. Thereafter, the auction took place on 28.03.2024 and on the same day, vide a mail (Annex.4), the petitioner was declared as a successful bidder and was thereby asked to submit the relevant documents as provided under Rule 14(10) of the Rajasthan Minor Mineral Concession Rules, 2017 (‘Rules of 2017’), failing which the bid security would be forfeited and the petitioner would be debarred from participating in future e-auctions for 5 years. Furthermore, a challan dated 30.03.2024 (Annex.5) had been issued by the respondent no. 3 against the bid security/earnest money deposited by the petitioner, amounting to Rs. 40,00,000.

¶50

In response to the said intimation mail (Annex.4), petitioner submitted a letter dated 03.04.2024 (Annex.6) stating that the requisite documents have already been submitted on 23.03.2024 before the respondent No.4, Mining Department and vide the same letter, also sought clarification with respect to the terms and conditions regarding maximum sale price at pit mouth for sale of mineral Bajri.

¶51

Subsequently, the respondent no. 3, vide letter dated 04.04.2024 (Annex.7) directed the petitioner to submit requisite documents along with the first installment of 40% of the premium amount after adjusting the bid security amount of Rs. 40,00,000/-. The petitioner also furnished a letter dated 05.04.2024 (Annex.10) seeking clarifications on the contradictory and ambiguous terms and conditions of the e-auction notice dated

[2024:RJ-JD:19636]

[CW-6884/2024]

(5 of 25)

06.03.2024 and thereafter reminders letters dated 09.04.2024 (Annex.11) and 11.04.2024 (Annex.12) were also sent seeking clarification on the above-mentioned grounds, to which the respondent no. 3, vide letter dated 13.04.2024 (Annex.13) specified that no clarifications are to be given, since the e-Auction Notice itself is clear on the said grounds. In pursuance of the same, the petitioner submitted another letter dated 14.04.2024 (Annex.14), claiming the said conditions of e-Auction Notice to ambiguous and impossible.

¶56

Thereafter, the respondent no. 2, vide order dated 15.04.2024 (Annex.15), forfeited the bid security amount of Rs. 40,00,000/- and debarred the petitioner from participating in future e-auctions for 5 years, on account of the first installment of the premium amount not being deposited by the petitioner along with violation of Rule 14(10) of the Rules of 2017.

¶57

Thus, being aggrieved of the order dated 15.04.2024 (Annex.15) passed by the respondent no. 2, the petitioner has preferred this writ petition.

¶58

Learned counsel for the petitioner submitted that the date of registration of lease deed shall be determined as laid down in the conditions of the E-Auction Notice that the period of mining lease shall be five years from the date of registration of the lease and the same is ambiguous for the reason that as per Rule 16 (3) of the Rules of 2017, the mining lease shall be granted by the competent authority with a condition that lessee shall commence the mining operation after obtaining Environment Clearance (‘EC’). Learned counsel for the petitioner also submitted that though the

[2024:RJ-JD:19636]

[CW-6884/2024]

(6 of 25)

mining lease would be granted in favour of lessee, however, no mining activities can be carried out until and unless the EC can be obtained from the concerned authority. Learned counsel also submitted that it takes about one-two years in obtaining the EC and thus the said condition in the E-Auction Notice that the validity period of five years counted from the date of registration creates an ambiguity as the mining activities can be carried only after obtaining the EC. He also submitted that there can be a situation that the EC could not be granted in favour of the lessee for a period of five years and in such case, the lease period would expire without operating the mining lease and the lessee would suffer an irreparable loss. He also submitted that in the light of directions given by the Hon’ble Apex Court in the case of Deepak Kumar v. State of Maharashtra : (2012) 4 SCC 629, the lease for minor mineral shall be granted by the respondent State only once the EC has been obtained by the concerned person. He further submitted that until and unless the respondent State clarifies the commencement of the lease period of five years, the petitioner being an interested bidder could not have participated in the said auction process.

¶63

Learned counsel for the petitioner also submitted that in the E-Auction Notice as per conditions laid down, the maximum sale price of mineral Bajri is fixed by the respondent State, which shall not be more that five times of the royalty and the said sale price shall be inclusive of all the taxes, royalty, District Mineral Foundation Trust (DMFT–10% of royalty), Rajasthan State Mineral Exploration Trust (RSMET-2% of royalty), Excavation expenses, labour and loading etc. He submitted that in the said condition, it

[2024:RJ-JD:19636]

[CW-6884/2024]

(7 of 25)

is mentioned that the maximum sale price shall be applicable on the sale of Bajri at mouth pit of the river, which makes the petitioner assume that Bajri is to be sold at mouth pit on the maximum sale price fixed by the respondents. He also submitted that the said condition as laid down in the E-Auction Notice is supported by the provision of Rule 13 (6) of the Rules of 2017, which lays down that in the case of mineral Bajri, the State Government may specify the maximum sale price at pit mouth of the lease and the successful bidder shall deliver or sale Bajri on such specified price.

¶68

Learned counsel for the petitioner further submitted that as per Condition No.n (2) of the E-Auction Notice, the lease holder has to identify and install two stockyards within two KM radius of river where Bajri has to be stored and sold out through weighing on weigh-bridge. He further submitted that as per condition No. n (20) laid down in the E-Auction Notice, the lease-holder is bound to comply with the said conditions, wherein it has been laid down the lease-holder shall have to comply with paragraph 11 (III) of the report submitted by Central Empower Committee (CEC) dated 23.12.2020 and the Guidelines of 2016 and 2020 issued by MoEFCC, which specifically restricts the lease-holder from sale of Bajri from pit mouth. He thus submitted that on the one hand the Bidder is not permitted to sell Bajri from the pit mouth and on the other hand, the maximum sale price of Bajri is applicable on the sale of Bajri at pit mouth. Thus, the respondents have created an ambiguity, inasmuch as when the Bidder cannot sell the Bajri from the pit mouth of the river, the maximum sale price for Bajri cannot be specified by the State Government from the pit mouth of the

[2024:RJ-JD:19636]

[CW-6884/2024]

(8 of 25)

river. Learned counsel for the petitioner also submitted that the petitioner has submitted before the respondents various letters and e-mails seeking clarification on the contradictory and ambiguous terms and conditions, however, the respondents chose to sit tight over the matter, whereas, they were under obligation to respond to the ambiguity and contradictory situations created by them. Learned counsel for the petitioner also drew the attention of the Court towards the reply filed by the respondent State and submitted that the respondents did not respond to letter submitted by the petitioner, however, in the reply they have taken a stand that the mining lease will be granted only after obtaining the EC and the mining lease holder will get complete five years’ working in the area put for e-auction. He thus submitted that on account of the fact that the respondents did not clear the ambiguous conditions in the E-Auction Notice, the petitioner did not fulfill the requisites as laid down in the communications dated 23.03.2024 (Annex.3) and 04.04.2024 (Annex.7), issued by the respondents.

¶73

Learned counsel for the petitioner submitted that in the light of Section 29 of the Contract Act, the agreements meaning of which is not certain or capable of being made certain, are void and thus in the present case, once the condition in the E-Auction Notice are having ambiguity and contradictions to each other, then in such circumstances, the E-Auction Notice itself deserves to be quashed and set aside as the agreement if any entered would itself be void and the respondents are required to issue E-Auction Notice afresh with clear and unambiguous conditions. Learned counsel for the petitioner also submitted that as per Section 93 of

[2024:RJ-JD:19636]

[CW-6884/2024]

(9 of 25)

the Indian Evidence Act, when the language used in a document is on its face ambiguous or defective, then in such case, the evidence may not be given of facts which would show its meaning or supply its defect; and in the present case the language used in the E-Auction Notice is ambiguous and defective, and therefore, the E-Auction Notice is required to be quashed and set aside.

¶78

Learned senior counsel for the petitioner submitted that the order dated 15.04.2024 (Annex.15) suffers from gross violation of the principles of natural justice since the respondents have passed the said order without giving the petitioner an opportunity of being heard. He submitted that on numerous ocasssions, the petitioner had sent letters seeking clarification regarding the terms and conditions of the e-Auction Notice, however there has been no response from the respondents and thus, the order has been passed without paying heed to any of the representations made by the petitioner. Learned senior counsel for the petitioner also submitted that the action of respondents, debarring the petitioner is an abuse of power, in the absence of show cause notice being served by them and thus, is in violation of the principles of natural justice. He placed reliance upon the judgment passed by Hon’ble Apex Court in the case of Gorkha Security Services vs. Government of NCT of Delhi [ (2014) 9 SCC 105 ]. The relevant para reads as under:

¶79

It is a common case of the parties that the blacklisting has to be preceded by a show cause notice. Law in this regard is firmly grounded and does not even demand much amplification. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. With blacklisting many civil and/or evil consequences follow. It is described as "civil death" of a person who is foisted with the

(10 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in Government Tenders which means precluding him from the award of Government contracts. Way back in the year 1975, this Court in the case of Erusian Equipment and Chemicals Ltd. v. State of West Bengal and Anr. (1975) 1 SCC 70, highlighted the necessity of giving an opportunity to such a person by serving a show cause notice thereby giving him opportuE-Auction Noticey to meet the allegations which were in the mind of the authority contemplating blacklisting of such a person.”

¶84

Learned senior counsel for the petitioner further submitted that due to the above-mentioned violations, the action of the respondents lack transparency and clarity and thus in the absence of the same, the petitioner sought clarifications which were also not resorted by the respondents and they have proceeded to forfeit the bid security and debar the petitioner. He also submitted that the said action of the respondents is not in exercise of power for public good and is instead being an abuse of power and is against the interest of public at large.

¶85

Learned Counsel for the Petitioner placed reliance on the judgments passed by Hon’ble Apex court in the case of Dutta Associates (P) Ltd. v. Indo Merchantiles (P) Ltd. , (1997) 1 SCC 53; Tata Cellular v. Union of India, (1994) 6 SCC 651; Meerut Development Authority v. Assn. of Management Studies, (2009) 6 SCC 171; and the judgment passed by the Hon’ble Himachal Pradesh in the case of Rashmi Metaliks Limited vs State Of Himachal Pradesh (2022) 0 Supreme(HP) 419.

¶86

Per contra, learned AAG submitted that the petitioner has deposited non-refundable application fees of Rs.10,000/- and Bid

(11 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

security amount as well and therefore, the petitioner once has participated in the E-Auction Notice cannot challenge the conditions at a belated stage. He also submitted that as per Condition No. l (2) of the E-Auction Notice, it is clear that after depositing application fees and Bid security, the Bidder becomes a participant of e-auction proceedings and in such case, the petitioner is bound by the conditions that have been laid down in the E-Auction Notice. He also submitted that in the light of the fact that the petitioner has duly participated in the-auction proceedings with open eyes and after going through the conditions laid down in the E-Auction Notice, cannot invoke jurisdiction of this Court under Article 226 of the Constitution of India and thus the present writ petition is not maintainable and deserves to be dismissed. Learned AAG also submitted that as per Rule 15 (9) of the Rules of 2017, it shall be deemed that by submitting a Bid, the Bidder has accepted the risk of inadequacy, error of mistake in the information provided by or on behalf of Government relating to any matters related to e-auction process and thus the petitioner cannot raise any objection by way of filing the present writ petition challenging the conditions of the E-Auction Notice. Rule 15 (9) of the Rules of 2017 reads as under:

¶91

“ 15. Guidelines for submitting any bid on e- auction platform. -

¶92

xxx

¶93

(9) It shall be deemed that by submitting a bid, the bidder has,-

¶94

(i) made a complete and careful examination of rules or guidelines for e-auction and unconditionally and irrevocably accepted the terms thereof;

¶95

(ii) reviewed all relevant information provided by the Government, as may be relevant to the bid;

(12 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

(iii) accepted the risk of inadequacy, error or mistake in the information provided by or on behalf of the Government relating to any of the matters related to the e- auction process;

¶100

(iv) satisfied itself about all matters regarding the e- auction process for submitting an informed bid, in accordance with the rules; and

¶101

(v) acknowledged and agreed that inadequacy, lack of completeness or incorrectness of information or ignorance of any of the matters related to the e-auction process hereinabove shall not be a basis for any claim for compensation, damages, extension of time for performance of its obligations, loss of profits etc. from the Government.”

¶102

Learned AAG also submitted that the conditions as laid down

¶103

in the E-Auction Notice that the duration of the mining lease shall be for a period of five years commencing from the date of registration of the mining lease, is strictly as per the provisions of Rule 9 (1) and 21 (6) of the Rules of 2017. Learned AAG further submitted that the apprehension expressed by the petitioner that in case the EC is obtained at a belated stage i.e. much after registration of the mining lease the petitioner would not get complete five years period for mining activity, is wholly misconceived as in the light of proviso of Rule 21 (4) of the Rules, the petitioner or the lease-holder can submit application seeking extension of time for bonafide delay when the grantee fails to complete the formalities. He submitted that in the eventuality if the EC is obtained by the petitioner at belated stage, then he can always seek extension of time in the light of proviso to Rule 21 (4) of the Rules of 2017. Learned AAG submitted that there is no contradictions or ambiguity in Condition No. n (5) vis-a-vis Condition No. n (2) of the E-Auction Notice, which mentions about the sale price of Bajri at stockyard situation within a distance of 2 KM from the river site where Bajri has to be stored. He submitted

[2024:RJ-JD:19636]

[CW-6884/2024]

(13 of 25)

that Condition n (5) of the E-Auction Notice is strictly in accordance with the recommendations of the CEC as approved by the Hon’ble Apex Court vide order dated 11.11.2021 and thus the contention of the petitioner that the condition is in contravention of the recommendations of CEC is without any force. He also submitted that as per Condition No. n (5), the mining lease holder is required to dispatch the mineral Bajri from the stockyard weighing through E-Transit Pass, which is generated through online mode and the maximum sale price of Bajri at stockyard shall be a multiplication of quantity and royalty of Bajri as per 2^nd Schedule of the Rules of 2017 and as amended from time to time. He thus submitted that petitioner itself is creating confusion, whereas the conditions in the E-Auction Notice are selfexplanatory as Condition No. n (2) very specifically lays down that the lease-holder shall select two stock sites within 2 KM of river where the account holder will establish a register incoming outgoing register. He further submitted that there is no such condition which permits the lease-holder to excavate the mineral Bajri from pit mouth of river as the same is in contravention of the Report submitted by CEC and duly approved by the Hon’ble Apex Court. He further submitted that as far as Condition No.n (5) is concerned, the pit mouth of river is taken into consideration only for the purpose of determining the maximum price of mineral Bajri as the said condition also specifically restrains the lease holder from selling Bajri at a higher sale price than the more rate prescribed and such condition is only to the extent of putting restraint from selling the Bajri at a higher sale price thanthe price

(14 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

prescribed at pit mouth. He thus submitted that as the conditions laid down in the E-Auction Notice were and are absolutely in accordance with order dated 11.11.2021 passed by the Hon’ble Apex Court, and are self-explanatory, there was no requirement for the respondents to respond to the letters submitted by the petitioner. Learned AAG submitted that as many as about 132 Bidders have participated in the E-Auction Notice without raising any objection, which again fortifies the fact that there is no ambiguity or contradiction in the conditions laid down in the E- Auction Notice.

¶112

Learned AAG further submitted that the argument of the petitioner that the e-Auction Notice lacks clarity is not justified since not only the e-Auction Notice but also the Rules of 2017 are clear on the said position that the petitioner was required to submit the documents as mentioned in Rule 14(10) of Rules of 2017. It is also submitted that it was only after the petitioner is declared as a successful bidder the requisites of the e-Auction Notice as well as the provisions of Rules of 2017 come into play and that, after being declared as the highest bidder, the petitioner cannot be given the benefit of his own wrong since it had complete knowledge of the conditions of e-Auction Notice and provisions of Rules of 2017 and thus the petitioner had deposited bid security amount and participated in the e-Auction. He also submitted that once the petitioner consciously agreed to the terms and conditions, it is estopped from raising doubts with regards to the said conditions of the e-Auction Notice after submitting its bids and being declared as the highest bidder.

[2024:RJ-JD:19636]

[CW-6884/2024]

(15 of 25)

Learned AAG further submitted that the e-Auction proceedings have been conducted as per the directions issued by the Hon’ble Apex Court vide order dated 11.11.2021 in the case of Bajri Lease LOI Holders Welfare Society

¶117

[ MANU/SC/1048/2021 ] and the same is pending before the Hon’ble Supreme Court, with the next date of hearing being 16.07.2024, thus in the present case, it cannot be said that the respondents acted in violation of the directions given by the Hon’ble Apex Court in the case of Bajri Lease LOI Holders Welfare Society ( supra ).

¶118

Learned AAG submitted that principles of natural justice have not been violated while issuing the office order dated 15.04.2024 (Annex.15), as the same has been issued while invoking Rule 14 (11) of the Rules of 2017, as the petitioner who was declared successful Bidder under Rule 14 (10) of the Rules of 2017 was required to submit certain documents alongwith first installment being 40% of the offered premium amount to the respondents within fifteen days of completion e-auction. He further argued that the petitioner failed to comply with the conditions and thus bid security amount has rightly been forfeited and the petitioner has been debarred for five years in participating in further e-auction. 21. Learned AAG further relied upon the judgment passed by the Hon’ble Apex Court in the case of N.G. Projects Ltd. v. Vinod Kumar Jain and Ors. [ (2002) 6 SCC 127 ], wherein it has been observed that whether a bidder has satisfied a tender condition or not, can be determined primarily by the authority inviting bids and that the writ courts should be reluctant in interfering with

(16 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

contracts involving technical questions and at the same time, refrain itself from imposing its decision over the employer as to whether to accept the bid of the tenderer or not. The relevant paras of the judgment reads as under:

¶123

“22. The satisfaction whether a bidder satisfies the tender condition is primarily upon the authority inviting the bids. Such authority is aware of expectations from the tenderers while evaluating the consequences of non-performance. In the tender in question, there were 15 bidders. Bids of 13 tenderers were found to be unresponsive i.e., not satisfying the tender conditions. The writ Petitioner was one of them. It is not the case of the writ Petitioner that action of the Technical Evaluation Committee was actuated by extraneous considerations or was malafide. Therefore, on the same set of facts, different conclusions can be arrived at in a bona-fide manner by the Technical Evaluation Committee. Since the view of the Technical Evaluation Committee was not to the liking of the writ Petitioner, such decision does not warrant for interference in a grant of contract to a successful bidder.

¶124

In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present-day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the presentday Governments are expected to work.”

(17 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

Heard learned counsel for the parties, perused material available on record and judgments cited at the Bar.

¶129

This Court finds that the objection of the petitioner that the condition in the E-Auction Notice is having ambiguity, as on the one hand it has been said that duration of mining lease shall be for a period of five years from the date of registration and on the other hand, as per the provision of Rule 16 (3) of the Rules of 2017, the mining lease shall be granted by the competent authority on condition that the lessee shall commence the mining operation after obtaining the EC and thus the petitioner does not have clarity that what would be the actual date of commencement of the mining lease, is not sustainable for the reason that Rule 16 (3) of the Rules of 2017 specifically lays down that the mining lease shall be granted by the competent authority with the condition that the lessee shall commence the mining operation after obtaining EC and thus there is no iota of doubt that the mining operations can be commenced only after grant of EC. As per Rule 16 (3) of the Rules of 2017, the lessee shall have to commence mining operation after obtaining EC, and there was no requirement for the respondents to clarify the date of commencement of the mining lease to the petitioners. Rule 16 (3) of the Rules of 2017 reads as under:

¶130

“ 16. Grant of mining lease .-

¶131

xxx

¶132

(3) The area shall be granted by the competent authority, if the applicant or successful bidder, as the case may be, complies with the conditions within the stipulated or extended period of time and applicant or successful bidder, as the case may be, shall be intimated by registered post and e-mail.”

(18 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

The relevant Condition v (1) of the E-Auction Notice reads as under:

¶137

“[kfut ctjh ds [kuu iV~Vs dh vof/k lafonk iath;u dh fnukad ls 5 o”kZ ds fy;s gksxhA”

¶138

Further, submission of the petitioner that the conditions viz. n (2) and (5) as laid down in the E-Auction Notice, are ambiguous and contradictory in nature, as on the one hand the respondents have said that the maximum sale price of mineral Bajri would be fixed by the respondents, which shall be applicable on the sale of Bajri at pit mouth, which shows that Bajri is to be sold at pit mouth on the maximum sale price fixed by the respondents; and on the other hand, the Condition No. n (2) mandates the leaseholder to select two stock sites within 2 KM radius of river, on which it will stock gravel as per Rules, which shows that the sale of Bajri is to be done at the pit mouth of the river, is not sustainable for the reason that said Condition n (2) in the E- Auction Notice has been mentioned in the light of proviso (6) of Rule 13 of the Rules of 2017, which empowers the State Government to specify the maximum sale price at pit mouth of the lease and the same is reproduced herein below:

¶139

“ 13. Bidding parameters for e-auction :

¶140

(6) In case of mineral bajri, the State Government may specify the maximum sale price at pit mouth of the lease and the successful bidder shall deliver or sale the Bajri on such specified price.”

¶141

Condition n (2) of the E-Auction Notice reads as under:

¶142

“yht /kkjd unh ds 2 fdyksehVj ifjf/k esa nks LVkWd LFky dk p;u djsxk ftl ij [kkrsnkj ls iathd`r lgefr izkIr dj fu;ekuqlkj ctjh LVkWd djsxkA LVkWd LFky ij lhlhVhoh dSejk]

(19 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

[kfut dk vkod&tkod jftLVj o os&fczt LFkkfir djsxkA LVkWd LFky ij ,UVªh o ,fDtV ikWbZUV vyx&vyx gksaxsA ”

¶147

Condition n (5) of the E-Auction Notice reads as under:

¶148

“5 ली�जधा�रक खनि�ज बजर� क� पि�ट मा�उथ �र ब�चा�� क� अनिधाकतमा क�मात र�ज्य सरक�र द्वा�र� क्त्तू�ली क� ज�� वा�ली� र!यल्ट� क� 4 गु$�� हो&गु�, जिजसमा� र!यल्ट�, डी�.एमा.एफ.ट�. ब�र एसएमाईट� सजि,मानिलीत हो&गु� ज& त्तूमाय-त्तूमाय �र र!यल्ट� क� दर. मा/ �रिरवात1� हो&�� र समा��$��नितक रू� स� �रिरवात1�शी�ली रहो�गु� एवा4 तद्‌ �$स�र पि�ट मा�उथ �र ब�चा�� क� अनिधाकतमा क�मात क� �$�6 नि�धा�1रण किकय� ज� सक�गु� नि�धा�1रिरत अनिधाकतमा दर स� अनिधाक दर �र खनि�ज बजर� क� पिवाक्रय पि�ट मा�उथ �र �हो�4 किकय� ज� सक�गु�।"

¶149

Therefore, in view of above the petitioner’s apprehension based on Condition n (5) of the E-Auction Notice that the lessee can excavate the mineral Bajri from the pit mouth is not acceptable, as the condition does not project that the lease-holder has been permitted to excavate the mineral Bajri from the pit mouth, rather the State Government has been empowered under Rule 13 (6) of the Rules of 2017 to determine the sale price at the pit mouth of the river, rather the lessee is restricted to sell the mineral Bajri at the pit mouth at a higher rate than the prescribed maximum rate. As the State Government is empowered to specify the maximum sale price at pit mouth of the lease and the successful Bidder is required to sell the Bajri at such specified price, the later condition in E-Auction Notice i.e. n (5) only refrains the lessee to sell the Bajri at a higher rate than specified by the Government. It is important to note that the maximum sale price of mineral Bajri is specified at the pit mouth of the lease in the light of Rule 16 (3) of the Rules, and therefore, in the later

(20 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

condition of E-Auction Notice i.e. n (5) it refrains the lessee to sell the mineral Bajri at a higher rate than the maximum sale price at pit mouth specified by the State Government. Thus, it cannot be said that the Condition n (2) and (5) are ambiguous and contradictory to each other. It is also important to note that as per the submission of the learned AAG, as many as 132 Bidders have participated in the E-Auction Notice in question without raising any objection and the successful Bidder/s have also been declared by the respondents, which also reflects that there is no ambiguity/contradiction in the conditions laid down by the respondents in the E-Auction Notice and are self-explanatory.

¶154

This Court, upon the perusal of the e-Auction Notice dated 06.03.2024 (Annex.2) along with Rule 15(9) of Rules of 2017, finds that, it is clearly prescribed that once the petitioner has submitted its bid, it shall be deemed that it had carefully read and understood all the terms and conditions of the said e-Auction Notice and thus, cannot be given the benefit of questioning the same e-Auction Notice on account of being vague and ambiguous, after consciously and willfully depositing the bid security of Rs. 40,00,000/-. The relevant condition in the e-Auction Notice reads as under:

¶155

“स ई-��ली�मा�क�प्रकिकय�

¶156

xxxx

¶157

2. ब&ली�द�त�द्वा�र�आवा�द�शी$ल्कएवा4 पिबडीनिसक्य$रिरट�जमा�कर��रयहोमा�� ज�वा�गु�किकब&ली�द�त�द्वा�र�ई-��ली�मा�क�शीत= एवा4 आर.एमा.एमा.स�.आर. 2017 क� प्र�वाधा��. क�ध्य��गुय�हो?।ब&ली�प्रस्त$तकर��मा/ किकस�भी� अस�वाधा��, गुलीत�अथवा�कमा�हो�त$ ब&ली�द�त�स्वा4यजिज,मा�द�रहो&गु�।"

¶158

The relevant rule reads as under:

¶159

“ 15. Guidelines for submitting any bid on e-auction platform .-

(21 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

(9) It shall be deemed that by submitting a bid, the bidder has,-

¶164

(i) made a complete and careful examination of rules or guidelines for e-auction and unconditionally and irrevocably accepted the terms thereof;

¶165

(ii) reviewed all relevant information provided by the Government, as may be relevant to the bid;

¶166

(iii) accepted the risk of inadequacy, error or mistake in the information provided by or on behalf of the Government relating to any of the matters related to the e-auction process;

¶167

(iv) satisfied itself about all matters regarding the e-auction process for submitting an informed bid, in accordance with the rules; and

¶168

¶169

This Court also observes that Rule 14(10) of Rules of 2017 is crystal clear and leave no iota of doubt with respect to the obligations cast upon the bidder after being declared as successful in the e-Auction, which also includes submission of all the requisite documents mentioned therein along with 40% of the offered premium amount to the Mining Engineer or Assistant Mining Engineer concerned within 15 days of the completion of e-Auction and thus, the petitioner cannot be given benefit of its own misinterpretation in the light of clear provisions and conditions mentioned in Rules of 2017 and the e-Auction Notice dated 06.03.2024(Annex.2) respectively. Rule 14(10) of the Rules of 2017 reads as under:

¶170

“(10) After declaration of successful bidder, the successful bidder shall submit the following documents along with first installment being forty percent of offered premium amount to the Mining Engineer or Assistant Mining Engineer concerned within fifteen days of completion of e-auction:(i)Affidavit regarding no-dues of the department;

(22 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

(ii)A no-dues certificate from the Mining Engineer or Assistant Mining Engineer concerned where the bidder holds or had held mineral concession or royalty collection contract or excess royalty collection contract:

¶175

Provided that affidavit and no-dues certificate in case of firm, company or association of persons have to be submitted by all the partners, directors or persons, as the case may be.

¶176

(iii) Memorandum of Association and Articles of Association, certificate of incorporation in case bidder is a company or partnership deed and firm registration certificate in case bidder is a firm, as the case may be;

¶177

(iv) Power of attorney in format as specified in Form 4 or resolution of board of directors in favour of person submitting bid in case of a firm or company, as the case may be;

¶178

(v) A copy of PAN card or 2[GSTIN];

¶179

(vi)A copy of address proof; and

¶180

(vii) E-mail address and mobile number.”

¶181

This Court further observes that in case when a successful bidder defaults in fulfilling its obligations under Rule 14(10) of the

¶182

Rules of 2017, Rule 14(11) of the Rules of 2017 can be invoked to forfeit the bid security submitted by the bidder and to debar it from participating in future e-auction for five years and thus, when Rule 14(11) of the Rules of 2017 clearly provides for the course of action in case of non-compliance of Rule 14(10) of the Rules of 2017, Rule 14(14) of the Rules of 2017 cannot be applied which provides for a fifteen days’ notice to be sent to the bidder after blacklisting it for participating in further auctions for a period of five years. Upon perusal of both the provisions, it is evident that Rule 14(11) of the Rules of 2017 is invoked incase of noncompliance of Rule 14(10) of the Rules of 2017, to ‘debar ’ the bidder from participating in ‘further E-Auction ’ for five years, and on the other hand, the language of Rule 14(14) of the Rules of 2017 clearly specifies the requirement of a fifteen days’ notice in case, after debarring, the bidder has been ‘blacklisted ’ for

[2024:RJ-JD:19636]

[CW-6884/2024]

(23 of 25)

participating in ‘ future auctions ’ for a period of five years. Therefore, both the provisions stem from different cause of actions and in the present case, as seen from the impugned order dated 15.04.2024 (Annex.15), the bid security of Rs. 40,00,000/submitted by the petitioner has been forfeited and the petitioner has been debarred from participating in further ‘e-Auction ’ for five years under Rule 14(11) of the Rules of 2017. It is also important to note that while issuing the office order dated 15.04.2024 (Annex.15) the respondents while invoking Rule 14 (11) of the Rules of 2017 have forfeited the security amount to the tune of Rs.40 lacs and have further barred the petitioner from participating in Bid for five years and in case the respondents want to black list the petitioner from participating in future auction for a period of five years while invoking Rule 14 (14) of the Rules of 2017, then in such case, the respondents would be under obligation to give petitioner a prior fifteen days’ notice and such exercise can be undertaken after the Bidder is barred while invoking Rule 14 (11) of the Rules of 2017. In the instant case, the petitioner has not been black listed vide the office order dated 15.04.2024 (Annex.15) and the petitioner has only been debarred and the security deposit has been forfeited. Thus, the petitioner’s contention that a prior fifteen days’ notice was required to be issued before passing the order impugned dated 15.04.2024 (Annex.15) is having no force. Rule 14(11) of the Rules of 2017 reads as under:

¶187

“ 14. Electronic auction and bidding process of mineral concession. -

(24 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

(11) If successful bidder fails to comply the provisions of sub-rule (10), bid security deposited shall be forfeited and shall be de-barred for five years in participating in further 4[e-auction]. In such a case, fresh e-auction shall be conducted.

¶192

xxxx

¶193

(14) The Director after debarring the bidder may blacklist the bidder for participating in future auctions for a period of five years after giving him a fifteen day’s notice.”

¶194

The relevant part of the impugned order dated 15.04.2024

¶195

(Annex.15) reads as under:

¶196

“ अत6 र�जस्थ��अप्रधा��खनि�जरिरय�यतनि�यमा, 2017 क�नि�यमा 14 (10) क��ली��हो�4 किकय�ज��क�फलीस्वारू�नि�यमा 14 (11) क�प्र�वाधा��. अ�$स�र क�य�1लीयखनि�अनिभीयन्त�, भी�लीवा�डी�क�उक्तप्ली!टस4ख्य�ब�ज�-05 हो�त$ उच्चातमा ब&ली�द�त�मा?सस1 Arawali Resources LLP/497151 द्वा�र�जमा�कर�ईगुई पिबडीप्रनितभी�नितर�निशीरू�य�-40,00,000/- (अक्षर�रू�य�चा�ली�सली�खमा�त्र) जब्तक�ज�करउन्हो�आगु�मा��Jचावार्षोंL कनिलीय�ई-��ली�मा�स�किडीब�रकिकय�ज�त� हो?।"

¶197

Furthermore, this Court observes that the petitioner, after being declared as the successful bidder, was duly informed by the respondent no. 4 vide the intimation mail dated 28.03.2024 (Annex.4) that the petitioner is required to submit documents mentioned in the Rule 14(10) of the Rules of 2017 along with the first installment, i.e. 40% of the offered premium amount to the Mining Engineer/Assistant Mining Engineer within 15 days from the closing date of the e-Auction, failing which the petitioner would be debarred for 5 years from participating in future e- auctions. Moreover, an email was also sent by the respondent no. 3 dated 13.04.2024 (Annex.13) stating that the terms of the NIB, i.e., the e-Auction are in itself sufficient and clear and thus, do not require any clarification, therefore, the petitioner ought to have fulfilled the requisites within a period of fifteen days from the date of e-auction. Thus, in the opinion of this Court, the petitioner had knowledge of the fact that the respondents would be free to forfeit

(25 of 25)

[2024:RJ-JD:19636]

[CW-6884/2024]

the bid security and debar the petitioner in case the requirements of Rule 14(10) of the Rules of 2017 are not fulfilled and despite knowing this, the petitioner kept on seeking clarification through numerous letters and did not deposit 40% of the premium offered premium amount to Mining Engineer or Assistant Mining Engineer within 15 days of the completion of e-Auction.

¶202

Thus, in the considered opinion of this Court, no interference is called for in the order dated 15.04.2024 (Annex.15) passed by the Director, Mines and Geology, Government of Rajasthan. The writ petitions lack merits and, therefore, the same are hereby dismissed. Stay applications as well as all other pending applications, if any, also stand dismissed.

¶203

(DR. NUPUR BHATI),J

¶204

46-Devesh-DJ/-

Arawali Resources LLP v. State of Rajasthan

Case brief

What is this about?

What did the court decide?

Arawali Resources LLP v. State of Rajasthan

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Danmal Banthiya Vs the Commissioner

Kaniya Devi Vs the State of Rajasthan

Udailal Vs State of Rajasthan

Shanti Lal Lodha Vs Rampal Sen

Ecosafe Infraprojects LLP Vs State of Rajasthan

Arawali Resources LLP Vs State of Rajasthan