Praying for an appropriate writ directing the first Appellant to proceed with the second round of auction as per Sub-Rules (10) to (12) of Rule 9 of the Mineral (Auction) Rules (Para 2)
The Division Bench held that the decision-making process of the Appellants to annul tender no. MSTC/RNC/DEPARTMENT OF MINES AND GEOLOGY/42/RANCHI/19-20/35661, and the auction notice dated 28.01.2020, is vitiated. Hence, the Civil Appeal at the instance of the State and the Director of Mines and Geology. (Para 2)
The last date for submission of the technical bid and IPO was 16.12.2019. The NIT dated 25.10.2019 specifically invited the expression of interest through the digital platform on the MSTC website and submission of a physical copy of the uploaded bid documents at the office of the second Appellant. It is admitted by the parties that in response to tender notice 25.10.2019, the Respondent has not uploaded the technical bid and IPO through the digital platform of MSTC. The Respondent, however, submitted the bid letter dated 13.12.2019, which was acknowledged by the MSTC by e-mail dated 16.12.2019. (Para 4)
The minutes of the even date also mention the consequences of not communicating the expression of interest in the way the tender document specified, meaning that if the mode and the manner of the communication of the expression of interest are not followed, the technical bid will be deemed not received. The TEC in the meeting of the even date recommended annulment of the auction initiated through auction notice dated 25.10.2019. (Para 5)
The present schedule of tender is that the last date of submission of the technical bid and IPO on the MSTC website was 13.03.2020. The date of opening the tender was 16.03.2020. The original tender evaluation schedule, which was affected by the COVID-19 pandemic, was changed through a letter dated 08.06.2020. The schedule for technical evaluation was changed. It was noted by the TEC in the meeting held on 11.06.2020, that in response to the NIT dated 28.01.2020, only one expression of interest was received, i.e., from the Respondent herein and further resolved as follows (Para 5.1)
The Appellants, by letter dated 27.12.2021, advised MSTC to upload the decision of the State Government to annul the auction initiated through tender dated 25.10.2019 and 28.01.2020. In other words, the Appellants have decided to annul the auction without processing further as desired by the TEC in the meeting dated 11.06.2020. (Para 6)
The Respondent filed Writ Petition No. 5152/2021 canvassing two grievances, namely, the inaction of the Appellants in finalising the tender in terms of the recommendation of the TEC dated 11.06.2020, and for consideration of the Respondent’s bid in terms of the second proviso to Sub-Rule (12) of Rule 9 of M(A) Rules. (Para 7)
We notice that only one response to the NIT dated 28.01.2020 was received, and the decision of the TEC to take the auction process to the next stage. Therefore, the TEC recommended for further consideration of the case of the Respondent as may be decided by the Appellants. Hence, the Respondent prayed for the prayers referred to in para no. 2 hereinabove. (Para 7.1)
The Appellants opposing the Writ prayers, inter alia averred that in response to the NIT dated 25.10.2019, no expression of interest/bid was received in terms of the subject tender document dated 25.10.2019. In other words, the consideration by the TEC on 17.12.2019 is merely a perfunctory consideration, because no technical bid in terms of the tender document was received or was made available for evaluation. The steps taken from 25.10.2019 till 17.12.2019 cannot be considered as the first attempt of auction in terms of the subject Rules. (Para 7.2)
We notice that the Learned Single Judge looked at the issue in the Writ Petition from the right perspective, and the summary of analysis of the judgment of the Learned Single Judge is noted (Para 7.3)
The summary of findings recorded by the Division Bench is stated thus:
(i) That, the Appellants made their decision based on a note found in a file dated 27.12.2001, which indicated that there were less than two or three bidders. This decision is not valid because the proviso to Sub-Rule (12) of Rule 9 of the M(A) Rules specifies that a decision should be made for a second attempt at the auction process, even if there are less than two or three bidders. This means that even if there is only one bidder, according to this provision, the decision should be made for a second attempt in the auction process. Considering this legal provision, the TEC had already decided to go for the second attempt of the auction process on 11.06.2020.
(ii) That, once the TEC decided to have a second attempt at the auction process, the State Government cannot use the excuse of resorting to a completely new tender process. Not following the TEC’s findings, even when they are provided for in a statutory provision, is unreasonable and arbitrary.
(iii) That, the Single Judge dismissed the Writ Petition, stating that allowing a single bidder in the auction process would go against public policy. This conclusion is incorrect because the Single Judge failed to recognize that allowing the tender process to proceed with a single bidder does not necessarily contradict public policy. What would be against public policy is if the TEC is required to take action under the statutory provisions and fails to do so. In this case, the TEC’s decision should not be considered contrary to public policy, because it was made in accordance with the statutory provisions. The Division Bench allowed the L.P.A. No. 165/2022.
The Division Bench erred in not appreciating the structured and compartmentalised consideration of the bidding process under Rule 9, Sub-Rules (6), (11) and (12) of the M(A) Rules in conducting auctions of minerals. (Para 10)
According to the Learned Counsel for the Appellants, the Division Bench ignored all crucial circumstances including the inconsistency or impracticability in examining the lone response of the Respondent herein and going forward with a lone price bid. In the absence of communication of the technical bid in terms of Clause 13.1.2 of the tender document, there is no bid present for evaluation before the TEC in the meeting dated 11.06.2020. (Para 10)
The Appellants, through the subject NITs, have set in motion the process of granting lease by auctioning the subject bauxite mines. Natural resources, including mines, minerals, etc., are considered national wealth for the common good and benefit of society through a systematic, scientific and legal exploitation of the natural resources. Grant of mining leases/permits for exploitation of natural resources is one of the sources of revenue for the State Government. It has been consistently held by this Court that the exploitation of natural resources must be in accordance with the law, including environmental and local laws. (Para 12)
The sole limitation should the State wish to proceed with a second auction attempt is that the terms and conditions of the first attempt of auction are maintained or continued. The limitation operating from the first proviso to Sub-Rule (12) of Rule 9, is the highest initial bid offered by technically qualified bidders, if any, in the first cancelled attempt, shall serve as the minimum reserve price for the first round of the second attempt, is complied with for second attempt of auction. (Para 13.10)
In the case in hand, the first attempt of the auction was similar to being void, not for want of requisite number of technically qualified bidders, but for want of a valid bidder and any financial bid. (Para 15.2)
SUPREME COURT OF INDIA
2023 STPL(Web) 434 SC
[2023 INSC 1010]
State Of Jharkhand, Through Its Secretary, (Mines & Geology) And Another Vs. Sociedade De Fomento Industrial Pvt. Ltd. And Others
Civil appeal no. 7495 of 2023 (Arising out of S.L.P. (Civil) No. 21467 of 2022)-Decided on 20-11-2023
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