Orissa High Court
M/S. Sahu Metaliks Private Limited vs State Of Odisha And Others ... Opposite ... on 1 September, 2025
Author: Murahari Sri Raman
Bench: Murahari Sri Raman
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.18891 of 2025
M/s. Sahu Metaliks Private Limited ... Petitioner
Mr. Jatindra Kumar Mohapatra, Advocate
-Versus-
State of Odisha and others ... Opposite parties
Mr. Saswat Das,
Additional Government Advocate
CORAM:
THE HON'BLE THE CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE MURAHARI SRI RAMAN
ORDER
Order No. 01.09.2025
03. 1. Pursuant to the notice inviting tender published and
advertised way back in 2018, the petitioner submitted its bid and was declared as the second highest bidder. Since the highest bidder could not meet the statutory requirement or the terms and conditions embodied in the said tender, the petitioner was intimated of the aforesaid fact and was directed to deposit the EMD amounting to Rs.33,493/- within seven days. The petitioner deposited the said amount within the time stipulated therein, but the contract was not awarded as there was some protest from the villagers. The Authorities took note of the objection of the villagers and ultimately decided to proceed with the said tender, subject to the petitioner obtaining the Environmental Clearance Certificate from the Competent Authority. The said Environmental Clearance Certificate was Page 1 of 6 granted on 19.03.2024 which was duly submitted to the Authorities for further action to be taken in this regard. The only exercise left over was to execute the agreement/lease upon fulfilling the other statutory imposition, but the petitioner received a letter dated 05.06.2025 issued by the Mining Officer, Cuttack Circle, Cuttack wherein the petitioner was directed to deposit a minimum amount of additional charge (MAC) at Rs.928/- per Cum in terms of the File No.DOMM-DMM-MISC- 0147-2024-1145, dated 21.04.2025, as a condition precedent for execution of the agreement/lease. The said letter dated 21.04.2025 is annexed to the file to be treated as Annexure-10 to the writ petition. The said letter reveals that the Deputy Director (Geology) took a decision to impose a condition of minimum amount of additional charge at Rs.928/- per Cum as a condition precedent for executing the lease deed / agreement in favour of the petitioner.
2. The petitioner vociferously contends that the Deputy Director (Geology) is not bestowed with the power to impose any minimum amount of additional charge as the process of granting the mining lease was initiated in the year 2018 and fructified into a right to have the lease deed executed after the Environmental Clearance Certificate was issued in favour of the petitioner. It is fervently contended that the Odisha Minor Mineral Concession Rules, 2016 does not empower the Deputy Director to impose any minimum amount of additional charge, more particularly when the highest bidder failed to comply the statutory as well as the contractual obligations enshrined in the tender document and Page 2 of 6 the petitioner was invited as the second highest bidder to deposit the EMD.
3. Mr. Saswat Das, learned Additional Government Advocate submits that Rule 27 of the said Rules, which is contained in Chapter-IV of the said Rules, is an exhaustive provision relating to grant of quarry lease, and therefore, the Authorities have acted strictly within the purview thereof.
4. On the conspectus of the aforesaid rival stand taken in the instant writ petition, the point hinges upon the interpretation of the several provisions contained in Rule 27 of the said Rules, in order to find out the action of the Authority in imposing the minimum amount of additional charge at such astronomical rate. For the purpose of record, the price quoted by the petitioner was below the price quoted by the highest bidder, but was invited to deposit the EMD as the highest bidder failed to deposit the same. Subsequently, the Authorities called upon the petitioner for negotiation to match the price quoted by the highest bidder, which, in fact, has been consented to by the petitioner and the amount in commensurate with the said rate had also been deposited by the petitioner. Such being the position, all the statutory impositions leviable on the rate so quoted in respect of granting the mining lease was duly complied with, but by a letter dated 21.04.2025, the minimum amount of additional charge was imposed upon the petitioner, much higher than the rate so quoted by the highest bidder.
Page 3 of 64.1. Rule 27 (9) of the said Rules postulates that in the event of default by the highest bidder, the Competent Authority shall issue the intimation in the same manner as required to be issued to the highest bidder to the second highest bidder to meet the rate quoted by the highest bidder as an additional charge and in the event the second highest bidder matches the said price so quoted by the highest bidder, the Authority shall require the security deposit to be deposited by the said second highest bidder. The said sub-rule is quoted hereunder:-
"(9) In the event of default by the selected bidder, the Competent Authority may issue intimation as specified in sub-rule(6) to the next highest bidder to meet the highest additional charge offered by highest bidder, who shall then be required to convey his acceptance and to make the security deposit calculated in the manner mentioned in sub-rule(7) within 7 days of receipt of intimation."
4.2. It is manifest from the bare reading of the said provision that it is imperative on the Competent Authority to issue an intimation in the same manner as was issued to the highest bidder to the next highest bidder to meet the highest additional charge offered by the highest bidder. In the event the next highest bidder agrees and accepts the price so quoted, there is no power conferred upon the Competent Authority to impose minimum amount of additional charges above the price quoted by the highest bidder. The second highest bidder has accepted and conveyed his consent to agree on the said price.
Page 4 of 64.3. We do not find any power conferred upon the Authority to fix any minimum amount of additional charges over and above the rate so quoted by the highest bidder as a condition precedent for execution of the mining lease agreement. The Authority cannot act beyond the provisions provided in the statutory rule nor can travel beyond the circumference thereof. The said letter dated 21.04.2025 issued by the Deputy Director (Geology) is exercising the power not conferred in the statute. Therefore, such action can be perceived as an action in excess of the power conferred by the statutory rules, as the demand letter dated 05.06.2025 is issued by the Mining Officer, the foundation whereof was laid on the said letter dated 21.04.2025 issued by the Deputy Director (Geology).
4.4. In view of the discussions made hereinabove, since we find that the said Authorities have acted beyond the purview of the statutory provision, therefore, such action is not only void but a nullity. Since the order impugned in the instant writ petition is assailed, we do not find any fetter on the part of the Court to set aside the decision or order of the Authority which laid the foundation stone for the said letter under challenge. There is no fetter on the part of the Court to exercise the power and quash the decision/action of the Authority, which is per se illegal, arbitrary, whimsical and beyond the purview of the statutory provision.
5. We, therefore, quash and set aside the letters dated 21.04.2025 and 05.06.2025. The Competent Authority is directed to proceed for execution of the mining lease agreement by following the provisions contained under the said Rules, 2016, Page 5 of 6 within three months from the date of communication of this order.
6. Accordingly, the writ petition stands disposed of.
(Harish Tandon) Chief Justice (M.S. Raman) Judge Aswini Signature Not Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-Charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 03-Sep-2025 11:05:29 Page 6 of 6