Supreme Court Safeguards Procedural Integrity: Annuls Erroneous Judgment, Upholds State’s Discretion in Mining Lease Auction
TITLE: STATE OF JHARKHAND V. SOCIEDADE DE FOMENTO INDUSTRIAL PVT. LTD. AND OTHERS
CITATION: CIVIL APPEAL NO. 7495 OF 2023 (ARISING OUT OF S.L.P. (CIVIL) NO. 21467 OF 2022)
DECIDED ON: 20 NOVEMBER 2023
CORAM: JUSTICE SANJIV KHANNA AND JUSTICE S.V.N. BHATT
Justice Sanjiv Khanna and Justice S.V.N. Bhatt observe that “the effect of allowing the Writ Petition is that the directions of Writ Court compel the Government to open the price bid and evaluate the feasibility of awarding the subject Mining Lease to the Respondent. Once the NIT dated 27.10.2019 is held as a non-responsive tender, then the Sub-Rule (12) of Rule 9 of the M(A) Rules is not attracted, and the Appellants are not compelled to evaluate the sole price bid of the Respondent in terms thereof. g. In our considered view, the Impugned Judgment did not appreciate the want of a bidder in the first round of auction in the first attempt but examined the decision-making process of the Appellants in annulling the tender process and had set aside the well-considered judgment of the Learned Single Judge; which according to us, for the above discussion, is erroneous and unsustainable”.
Brief Facts:
The case, Civil Appeal No. 7495 of 2023, involved a dispute between the State of Jharkhand and Sociedade De Fomento Industrial Pvt. Ltd. The disagreement centered around the auction process for granting mining leases of bauxite mineral blocks. The State had annulled the first auction attempt due to insufficient bids, prompting the Respondent to file a Writ Petition seeking directions for the State to proceed with the second round of auction as per the Mineral (Auction) Rules.
Court’s Observation and Analysis:
Supreme Court of India, in Civil Appeal No. 7495 of 2023, conducted a thorough analysis of the intricacies surrounding the dispute between the State of Jharkhand and Sociedade De Fomento Industrial Pvt. Ltd. The core of the matter lay in the annulment of the first auction attempt for granting mining leases of bauxite mineral blocks due to insufficient bids. The Court, in its scrutiny, meticulously interpreted Rule 9 of the Mineral (Auction) Rules, which governs the bidding process, and delved into procedural aspects such as bid submission, evaluation criteria, and consequences of insufficient bids.
Emphasizing the paramount importance of public interest and adherence to statutory rules in the grant of mining leases, the judgment articulated the limited scope of judicial review in contractual matters. It underscored the significance of decisions being bona fide and in the public interest, reflecting a cautious approach by the judiciary in interfering with administrative and contractual decisions.
The Court’s analysis further addressed the validity of the annulment of the first auction attempt, ultimately concluding that it was valid due to the lack of responsive bids. Additionally, the judgment affirmed the State’s discretion in not evaluating the sole bid in the second attempt, reinforcing the importance of procedural regularity and statutory compliance in the auction process for granting mining leases. In essence, the decision provided a comprehensive examination of the legal and procedural complexities involved, ensuring a balanced and well-reasoned resolution to the dispute. The judgment under appeal is unsustainable and is set aside. 19. Civil Appeal is allowed. No order as to costs.
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Written by- Komal Goswami