Punjab-Haryana High Court
Manoj Kumar vs State Of Haryana And Another on 23 January, 2013
Author: Rajive Bhalla
Bench: Rajive Bhalla, Rekha Mittal
Civil Writ Petition No. 18509 of 2012 1
IN THE HIGH COURT OF PUNJAB AND HARYANA, CHANDIGARH
Civil Writ Petition No.18509 of 2012
Date of Decision: 23.1.2013
Manoj Kumar ..Petitioner
Versus
State of Haryana and another ..Respondents
CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA
HON'BLE MRS. JUSTICE REKHA MITTAL
Present: Mr. Babbar Bhan, Advocate, for the petitioner.
Mr. H.S.Hooda, Advocate General, Haryana
with Mr. D.Khanna, Additional Advocate General,
Haryana, for the respondents.
RAJIVE BHALLA, J.
The petitioner prays for issuance of a writ, order or direction quashing the invitation of proposals for pre-qualification of mining agencies issued by the State of Haryana and for a direction to the respondents, to conduct an unrestricted open auction, of minor minerals, in the State of Haryana.
Counsel for the petitioner submits that the petitioner is a small entrepreneur, engaged in the business of mining of minor minerals. The State Government has, under the garb of scientific and systematic mining adopted a pre-qualifying procedure by inviting proposals for auction of minor minerals, thereby excluding small entrepreneurs, like the petitioner, from participating in the open auction. The terms and conditions, laid down in the invitation of Civil Writ Petition No. 18509 of 2012 2 proposals, are so designed as to be tailor made to suit certain big companies and corporate houses. The pre-qualification procedure/criteria is violative of Article 14 of the Constitution of India (hereinafter referred to as "the Constitution") and the right of the petitioner to carry on his occupation, trade or business, as protected by Article 19(1)(g) of the Constitution. The parameters of technical valuation, set out are arbitrary, irrelevant and have no nexus with the object sought to be achieved, namely, an attempt to professionalise the mining sector and to eliminate fly by night operators. The parameters would, instead, prohibit genuine entrepreneurs and small contractors, like, the petitioner, involved in this business of mining, for the last many years from carrying on their business. It is further submitted that the limited bidding process would, in essence, create a cartel of large corporates, thereby rendering the process of bidding illusory.
The main thrust, of the petitioner's arguments, however, is directed against the conditions and the scoring methodology, set out in the notification, as it is argued that the conditions and scoring methodology do not disclose a rational criteria. The condition requiring employment of mining engineers, mining foremen, mining mates-cum-blasters and the qualifications prescribed etc. are not necessary, as mining of minor minerals does not require technical and qualified staff, with scientific skills. The mining, in the State of Haryana, involves breaking of large rocks into small stones which are, thereafter, crushed into small pieces, or mere excavation of sand and stone from and around river beds. The allocation of a total 15 Civil Writ Petition No. 18509 of 2012 3 marks for employing mining/geological/experts is uncalled for, particularly in Dadri Sub Division, as mining is on a very small scale and employment of 05 mining engineers, 03 geologist, 08 second class managers and 09 blasters, is not economically viable. The requirements would place a financial burden on the mining agency even before allotment of the actual lease.
Counsel for the petitioner further contends that the question of employing such a large number of professionals, would only arise after allotment of the lease. The condition of ownership of machinery and equipment, is not necessary and marks allotted for machinery and equipment, are unjust and arbitrary. The heavy machinery, referred to in the relevant criteria, requires the prior permission for use by the DGMS Ghaziabad and is, therefore, beyond the jurisdiction of the State of Haryana. The mining business depends upon demand and supply and an agency may hire /lease such machinery. The condition that the machinery must be owned by the applicant, in essence, reveals an intent to confer benefits upon big companies/corporate houses by placing them on a panel, thereby ruling out competition. The condition, with respect to 3-5 years' experience in mining, is irrational as mining has been banned in the State of Haryana since 2010, thereby depriving local business-men of their right to compete in the auction. It is further submitted that the provision with respect to annual turnover, for the last 03 years, is unreasonable as it does not have any nexus with the object sought to be achieved, i.e., scientific mining. The other conditions relating to turnover, profit and loss and net worth of the bidding agency are Civil Writ Petition No. 18509 of 2012 4 similarly arbitrary. The other conditions, relating to R&R initiative and environment compliance, are matters to be considered, after allotment of the lease and cannot form part of a pre qualification criteria. The other items, pertaining to social responsibility and successful completion of the mining project, are similarly illegal and arbitrary. It is prayed that as a pre qualifying procedure is unknown to law and is violative of Articles 14 and 19(1)(g) of the Constitution of India, clauses 8.4 and 8.6 of the circular/instructions may be set aside, as illegal and arbitrary.
Counsel for the State of Haryana, submits that in view of the statutory powers conferred by Section 15(1) and Section 23 C of the Mines and Mineral (Development and Regulation) Act, 1957 (hereinafter referred to as the "1957 Act"), the State of Haryana, has, vide notification dated 20.6.2012, notified the Haryana Minor Minerals Concession, Stocking, Transportation of Minerals, and Prevention of Illegal Mining Rules, 2012 (hereinafter referred to as the "2012 Rules") to ensure scientific and systematic mining. The prevailing mining practices have devastated the environment, particularly in the Aravalli ranges of Faridabad and Gurgaon and, therefore, due care is being taken to accord priority to scientific and systematic mining with particular reference to environmental concerns. The mining operations have been divided into two categories, namely, (i) extraction of minor minerals and (ii) mining operations, where explosives are to be used. The old system of mining has been discarded and in its place, a system, that would entail significant investment by deployment of requisite equipment, Civil Writ Petition No. 18509 of 2012 5 machinery, qualified manpower, previous experience, expertise and resources, as a basic requirement for undertaking mining operations has been put in place a pre-requisite. The pre-qualification procedure is an attempt to, bring transparency to the much maligned process of bidding and limit the bidding amongst pre-qualified bidders. Rule 9 of the 2012 Rules provides for a competitive bidding process and also provides that, whenever the State deems it necessary, it may pre-qualify bidders, who would then participate in an open auction. The petitioner's submission that the pre-qualification procedure is tailored to suit large corporations and to exclude small entrepreneurs, is incorrect. The attempt is to put into place a transparent procedure and to ensure scientific and systematic mining by persons, who are qualified, possess requisite manpower, machines and resources to exploit minor and minerals in a scientific and systematic manner. The entire procedure is fair and cannot be said to be arbitrary or to exclude any person, much less, the petitioner. The petitioner would be well within his right to employ qualified personnel, set up a professional company and participate in the pre-qualification process. It is further submitted that as various queries were raised regarding these rules, in a conference held on 29.8.2012, written submissions made by a group, including the petitioner, raising an apprehension regarding non-availability of raw-material for the stone crushing industry on the premise that pre-qualified agencies would be large companies/corporate houses who may set up their own processing units/crushers, thereby adversely impacting the existing stone crushing industries, were duly considered and requisite Civil Writ Petition No. 18509 of 2012 6 clarifications, Annexures R-3 and R-4 have been issued to allay these fears. It has been decided, in principal, to stipulate a condition that mining agencies shall reserve and offer, a certain percentage, of their production of raw-material to local stone crushing units. An enabling provision has already been made in the rules in this behalf. It is further submitted that the assessment criteria and the scoring methodology cannot be said to be arbitrary, illegal, discriminatory or violative of Articles 14 and 19(1)(g) of the Constitution of India. The procedure is an attempt to ensure transparency and an endeavour to ensure scientific mining. The parameters prescribed by Section 11(3)(a) of the 1957 Act that, while deciding applications for mineral concessions, special knowledge, experience in prospecting operations or mining operations, financial resources, the nature and quality of the technical staff, the investment, which the applicant proposes to make in the mines and such other matter, as may be prescribed, have been taken into consideration while framing these rules. The marks assigned for various qualifications disclose an objective criteria intended to remove any arbitrary selection and to ensure that the best possible persons participate in the auction. It is prayed that as the impugned rules are not illegal or violative of Articles 14 and 19(1)(g) of the Constitution, the writ petition may be dismissed.
We have heard counsel for the parties, perused the pleadings, the 2012 Rules and the impugned notification inviting proposals for pre-qualification of mining agencies.
The petitioner's ire is, primarily, directed against the Civil Writ Petition No. 18509 of 2012 7 invitation of proposals for pre-qualification of mining agencies, and the corrigendums issued by the State of Haryana, are appended with the writ petition, as Annexures P-1 and P1/1, respectively. The petitioner contends that the pre-qualification criteria/procedure, set out in Annexure P-1, is illegal, arbitrary and violative of Articles 14 and 19(1)(g) of the Constitution as it has been designed to exclude small operators and to suit big corporates. The procedure and the criteria do not advance or meet the object sought to be achieved. The criteria and marks to be awarded are arbitrary as these conditions are to be considered, after the auction. The petitioner invokes the right to equal treatment amongst equals and his right to carry on business, as protected by Article 19(1)(g) of the Constitution.
The first question that requires consideration is, whether the State is empowered to prescribe a pre-qualification procedure and the source of its power to prescribe such a procedure?
The State of Haryana has, in the exercise of power under Section 15 of the 1957 Act, notified the Haryana Minor Minerals Concession, Stocking, Transportation of Minerals, and Prevention of Illegal Mining Rules, 2012. The proviso to Rule 9, of 2012 Rules, empowers the State to adopt a pre-qualification procedure by inviting a response from companies/individuals so as to pre qualify them for participating in the final auction. Rule 9(1) of the 2012 Rules, with its proviso, reads as follows:
" 9. Grant of Mining Lease through competitive bidding. (1) any minor mineral deposits, where the government decides such areas to be operated under a lease, may be Civil Writ Petition No. 18509 of 2012 8 granted on mining lease for a period not less than 10 years but not exceeding 20 years following a competitive bid process as provided under Chapter 7 of these rules:
Provided that the Government may, wherever it deems necessary, pre qualify the bidders, with the pre- qualification criteria determined upfront, by inviting expressions of interest through a public notice, and limit the bidding process among such pre-qualified bidders. (2) In case the Government accept the bid, the payment of earnest money, initial bid security, security and advance instalment shall be made in accordance with the provisions contained in Chapter 7 of these rules. (3) The highest bid received shall become the `annual dead rent' amount payable by the lessee. The rate of annual dead rent initially determined on the basis of competitive bids/auctions shall be increased @ 25% on completion of each block of three years.
Explanation: If the initially determined amount of annual dead rent is Rs.100/-, it shall be increased to Rs.125/- with the commencement of the fourth year and to Rs.156.25 with the commencement of the 7th year and so on and so forth for the next each block of three years. (4) A lease deed shall be executed by the successful bidder with the Director or an officer authorized in this behalf in the prescribed form ML-1, appended hereto, within the period as prescribed under rule 21 of these Civil Writ Petition No. 18509 of 2012 9 rules.
(5) The lessee shall pay royalty in respect of each of the minor minerals extracted or removed or consumed by him or by his agent, manager, employee etc. The royalty shall be payable at the rates prescribed in the First Schedule appended to these rules."
The proviso to sub rule (i) of Rule 9, of the 2012 Rules, empowers the government to pre-qualify bidders "wherever it deems necessary" by inviting expressions of interest through a public notice, on the basis of a pre-qualification criteria amongst such pre- qualified bidders. The power to invite, pre-qualification bids is, therefore, derived from the proviso to sub-rule (i) of Rule 9 of the 2012 Rules.
The second question is, whether pre-qualification criteria is repugnant to the concept of equality so as to be illegal and arbitrary and whether it impinges upon the right of the petitioner to carry on his business, as protected by Article 19(1)(g) of the Constitution?
An exercise of administrative powers setting out a classification, when tested on the touchstone of the principles of equality would require that the classification, so made, is free from the vice of an arbitrary or irrational classification and discloses an intelligible differentia between people sought to be treated differently. The exclusion of a particular class or category of persons does not, by itself, attract the charge of inequality as inherent in any classification or, let us say, a pre-qualification procedure, is a degree Civil Writ Petition No. 18509 of 2012 10 of exclusion. The charge of an unequal treatment of equals would succeed if the classification or the exclusion, so prescribed, is arbitrary, irrational or discloses a differentia between people or a class of people that has no nexus with the object sought to be achieved. The State may, in the exercise of its legislative power, frame rules to set out a classification that tends to secure acceptable standards of efficiency and commercial practice by providing for inclusion and exclusion of certain categories of persons. The classification so prescribed may not be scientifically perfect or logically complete but if it discloses an intelligible differentia between classes and categories, such a classification would be normally upheld.
A pre qualification process, necessarily requires the exclusion of persons, who do not fulfil the prescribed criteria and, therefore, cannot be said to be hit by vice of inequality merely because a class of persons does not fulfil the pre qualification criteria. The distinction between two apparently equal individuals must be real and substantive and must bear a just and reasonable relation to the object sought to be achieved. The classification, if fair, just and incorporated in rules and regulations, to reflect the rapid changes in business practices and an attempt to enforce transparency, fairness and a professional regime would, in our considered opinion, not invite judicial scrutiny or be held to suffer from the vice of inequality or be hit by Article 19(1)(g) of the Constitution of India.
A pre qualification procedure is necessarily intended to Civil Writ Petition No. 18509 of 2012 11 include and exclude a certain category of persons, but this alone does not render a pre qualification process illegal, arbitrary and violative of Articles 14 or 19(1)(g) of the Constitution of India.
A pre-qualification condition, though in the context of a contract, came up for consideration before the Hon'ble Supreme Court in Association of Registration Plates versus Union of India (2005) 1 SCC 679. After setting out the nature of Articles 14 and 19 (1)(g) of the Constitution of India, the Hon'ble Supreme Court held that pre conditions or qualifications have to be laid down in tenders so as to ensure the capacity and resources to successfully execute work. Article 14 of the Constitution of India only prohibits the Government from arbitrarily choosing a contractor at its will and pleasure as the government is required to act reasonably, fairly and in public interest. A person cannot claim a fundamental right to carry on business with the government as his right is to claim a right to compete and a right to fair treatment without discrimination. A relevant extract from the judgment reads as follows:
" 43. Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work. Article 14 of the Constitution prohibits the government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding contract. At the same time, no person can claim a fundamental right to carry on business with the Government. All that he can claim is that in Civil Writ Petition No. 18509 of 2012 12 competing for the contract, he should not be unfairly treated and discriminated, to the detriment of public interest. Undisputedly, the legal position which has been firmly established from various decisions of this Court, cited at the Bar is that government contracts are highly valuable assets and the court should be prepared to enforce standards of fairness on the government in its dealings with tenderers and contractors.
44. The grievance that the terms of notice inviting tenders in the present case virtually create a monopoly in favour of parties having foreign collaborations, is without substance. Selection of a competent contractor for assigning job of supply of a sophisticated article through an open-tender procedure, is not an act of creating monopoly, as is sought to be suggested on behalf of the petitioners. What has been argued is that the terms of the notices inviting tenders deliberately exclude domestic manufacturers and new entrepreneurs in the field. In the absence of any indication from the record that the terms and conditions were tailor-made to promote parties with foreign collaborations and to exclude indigenous manufacturers, judicial interference is uncalled for."
In Michigan Rubber (India) Ltd. Versus State of Karnataka and others, (2012) 8 Supreme Court Cases 216, the Hon'ble Supreme Court laid down the following principles considering a large number of precedents:-
Civil Writ Petition No. 18509 of 2012 13
(a) The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness it would be legitimate to take into consideration the national priorities;
(b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in this process except for striking own such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited;
(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and Civil Writ Petition No. 18509 of 2012 14
(e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government." (emphasis provided by us).
A careful consideration of principles of law set out in the aforementioned judgments, leave no ambiguity that the State is well within its power to prescribe a pre-qualification procedure/criteria and cannot be subjected to judicial review merely because a certain class of individuals are excluded. The power of judicial review may only be exercised, if the exclusion so prescribed, is arbitrary, irrational, is not founded on an intelligible differentia and has no nexus with the object sought to be achieved, is not free from an arbitrary exercise of administrative power, is afflicted by bias and actuated by mala fides.
The State of Haryana has issued an invitation for proposals for pre-qualification of mining agencies Annexure P-1 in the exercise of powers under the proviso to Rule 9 of the 2012 Rules. The compelling reasons, that led the State of Haryana to adopt a pre-qualification procedure, are set out in detail in Annexure P-1 and read as follows:-
" Mining in Haryana the Strategy and priorities:
The importance being accorded to the mining sector in the national context, and the location of Haryana being in close proximity to the national capital, it calls for adoption of long term strategies for this sector in the state. Civil Writ Petition No. 18509 of 2012 15 The time for taking such long term measures is the most appropriate now as the minimum number of third party rights exist as on date. The state is in a position not only to address all the related concerns at this stage but also become a trend-setter in adopting scientific mining practices. Keeping the above in view, the State has already decided its priorities, in order of importance, for adopting as a long terms approach, qua the mining sector as under:
(i) Ensure that mining is carried out in a scientific and systematic manner, addressing the principles of sustainable development, inter-generational equities and environmental concerns;
(ii) Ensure that the construction material is available for infrastructure related development works at economic rates;
(iii) Serve as source of revenue for the State; and
(iv) provide gainful employment generation through development of the associated down-stream industry, i.e., stone-crushers, screening plants, sand-washeries, transport services etc. etc. Paragraph 5(iii) of the Annexure P-1 would also require reproduce and read as follows:-
"5. Proposed Approach:
(i) XX XX XX
(ii) XX XX XX
Civil Writ Petition No. 18509 of 2012 16
(iii) While the State Government has further decided
to straightway auction the mining blocks where mining operations do not involve use of explosives (except in case of Slate stone) without going through the process of pre-qualification of mining agencies. Auction notices have already been issued for auctions of such areas. On the other hand, it has been decided to pre-qualify the mining agencies for mining operations involving use of explosives, drilling and blasting, including the slate stone mines."
A perusal of the above extracts reveals that the pre-qualification process is confined to mining operations involving use of explosives, drilling and blasting, including slate stone mines. The rules clarify that it does not apply to all types of mining.
A reproduction of sub paras (iv) and (v) of paragraph 5 of the Annexure P-1, would also be appropriate and read as follows:-
"(i) XX XX XX
(ii) XX XX XX
(iii) XX XX XX
(v) Since carrying out mining in a scientific &
systematic manner is at the core of the whole issue, it has been considered important to pre-qualify the agencies with established credentials that are competent to undertake mining in the intended manner. The pre-qualification of agencies would be done in a Civil Writ Petition No. 18509 of 2012 17 transparent manner, in accordance with a pre-
determined criteria, after inviting Technical Proposals from interested national/international agencies. The proposed method would ensure that technically competent operating agencies with established credentials in scientific mining and experience/track record in observance of environmental safeguards and in undertaking rehabilitation measures are short-listed to participate in the auction/bid process;
(v) Each of the mining sites would, thereafter, be put to auction/competitive bids, limited to the pre-qualified agencies, and the highest bidder would be considered for grant of the lease concessions. The state government reserves the right to open these areas to unrestricted open auctions in case the response to this Eol is not found to be sufficient."
The parameters for technical evaluation for the purpose of pre-qualification are set out in paragraph 7 of the Annexures P-1, and read as follows:
Sr.No. Parameter Factors to be considered Man-power on full- . Number of Experts in the field of time/regular Mining;
employment/on the . Number of Experts in the field of
rolls of the Company Geology;
. Number of experts for use of
1 explosive [as per Mines Act, 1952];
Civil Writ Petition No. 18509 of 2012 18
Sr.No. Parameter Factors to be considered
Machinery & Details along with make and year
equipment: of purchase/model of the;
. Owned by the .Excavators/excavator cum
Company; loaders;
.Taken on long lease . drilling m/c-Jack hammer and by the Company wagon drill machines;
. Air compressors;
. Dumpers;
. Electronic Weigh bridges;
2 . any other equipment 3 Experience in Mining . Type of Mining Major or Minor minerals;
. No. of years [mineral wise] . Scale of operations/production;
. Status of requisite environmental Clearances including licences for storage/use of explosives;
. Use of ICT in management of operations;
Turnover . Turnover for last three years
4
Profit/loss . Profit loss statement for three
years corresponding to the Turn
over period, duly certified by the
5 C.A.
Financial Resources . The availability of Financial
and Net worth of the Resources and the net-worth of Company the Company for raising funds for the mining;
6Experience in R&R . Details/particulars of the mines Initiatives and Rehabilitated in past with specific Environmental reference to last 10 years;
7compliances . Details of the sites rehabilitated; Corporate Social . Company's initiatives Responsibility implemented in fulfillment of initiatives Corporate Social Responsibility 8 objectives in the areas operated;
Civil Writ Petition No. 18509 of 2012 19 Sr.No. Parameter Factors to be considered Mining projects . With a minimum area of 20 successfully hectares and the number of completed Projects executed;
9Defaults, if any . Details of the fines/punitive action/premature termination of lease/contracts, blacklisting by any agencies [information of each of 9 the partners/directors be furnished] Assessment of . To be based on evaluation of Presentations presentations made by the Agency before the Committee constituted for the purpose. The presentations shall largely cover the approach to scientific mining, site management practices, safety measures and other related practices as adopted in the other projects operated by 10 the agency.
The method of evaluation and the scoring methodology is set out in paragraphs 8.4 and 8.6 of the Annexure P-1, and reads as follows:-
"8.4 Method of Evaluation "(1) The Technical Proposals shall be examined and evaluated by a Committee of Officers and experts constituted by the Government for the purpose;
(ii) The evaluation process shall be completed on the scores awarded based on the written submissions and, thereafter, through technical presentations before the Committee constituted for the purpose. The combined score shall form the basis for pre-qualification;
(iii) The applicant scoring a minimum of 60% technical score shall be considered as pre-qualified." Civil Writ Petition No. 18509 of 2012 20
"8.6 Scoring methodology Sr. No. Criteria Marks Mining Staff on the regular rolls of the 15 (max) agency:
(i)Number of Mining/Geological/experts/Professionals- one mark each for mining engineer having First Class Mines, Manager Certificate with minimum experience of 10 years (maximum 5 marks).
(ii) One mark each for qualified Geologist with minimum qualification of M.Sc.
(Geology) and having minimum
experience of 10 years. (Maximum 3
marks).
(iii) One marks each for two second class
mines manager certificate holders with
minimum experience of 10 years
(maximum 4 marks).
(iv) One mark each for three blasters
1 (maximum 3 marks)**
Machinery and Equipment: 5 (max)
one mark each for a set of One excavator,
three dumpers and one wagon Drill
machine
2
Experience in Mining (Major Minerals) 10 (max)
(i) More than 20 years 10
(ii) More than 10 but up to 20 years 06
(iii) More than 5 but up to 10 years 04
02
3 (iv) up to 5 years
Average Annual Turn-over computed for 10 (max.) the last three contiguous operational years (i) Rs.10 cr. to 50 cr. 2 (ii) Rs.51 to Rs.100 crores 5
(iii) 100 crore to Rs.150 crore 7.5 4 (iv) More than Rs.150 crore 10 Civil Writ Petition No. 18509 of 2012 21 Sr. No. Criteria Marks Average profit ore loss after payment of 10 (max.) taxes (for the corresponding period of turn over) 5
a) Less than 10% of the turn over 7.5 b) 10% to 15% of the turnover 10
c) More than 15% of the turnover loss -5
a) Less than 10% -7.5 b 10% to 15% of the turn over -10 5 c) More than 15% of the turnover Net-worth of the bidding Company/Agency 10 (Max.) as on 31st March 2012:
(i) Rs. 5 Cr. to 25 cr. 2.5
(ii) Rs.25 to Rs.50 crores 5.0
(iii) Rs.50 crore to Rs.75 crore 7.5
6 (iv) More than Rs.75 crore 10
Restoration and Rehabilitation works 10 max.
(5 marks each for one project/site
7 Restored and Rehabilitated)
CSR initiatives implemented by the 5(max.) Company and the amount invested year-
8 on-year basis.
Number of mining projects with minimum 10 (max.) area of 20 hectare successfully completed:
10
(i) More than 4 projects 7.5 (ii) 3 to 4 projects 5
9 (iii) Upto two projects Any black-listing/pre-mature termination (-) 5 10 for default on the part of the Company Assessment by the Committee based on Technical Presentation of the proposal covering (i) Adoption of scientific and systematic mining, safety parameters, site management practices in mining operations (demonstrated in two projects in operation or those operated in the past), and (ii) overall general mining approach 11 presented 15 Qualifying Score: 60/100 A relevant extract of paras (i) and (iv) of another paragraph also numbered as 8.6 reads as follows:
Civil Writ Petition No. 18509 of 2012 22
"8.6 Other conditions:
(i) The government reserves the right to reject an application at any stage without going into the merits of the case and without any financial liability, in case the agencies are found to be indulging in:
(a) canvassing/lobbying for their pre-qualification;
(b) the applications are found to be conditional;
(c) the technical proposal is found to be containing any wrong/misleading information or concealment of any material facts or any misrepresentation which may lead to its pre-qualification.
(ii) XX XX XX
(iii) XX XX XX
(iv) XX XX XX
(iv) The government may at any stage consider
pre-qualifying other candidates after following the due procedure before undertaking the bid process of any area and in such case the participation of bidders may not be confined to the candidates pre-qualified in response to this invitation."
The corrigendum Annexure P-1/1 has been issued altering the allocation of marks and reads as follows:-
" The Para 8.6 of the RFQ document on the subject noted above shall be substituted as under: Civil Writ Petition No. 18509 of 2012 23
Sr.No. Criteria Allocation of
Marks
Mining Staff Mining/Geological/Experts/Professional) Max.Marks:15 on the regular rolls of the agency at the time its past operations ongoing activities:
(i) Mining engineer having First Class Mines Manager certificate with minimum experience of 10 years; 04
(ii) Qualified Geologist with minimum qualification of 03 M.Sc.(Geology) and having minimum experience of 10 years;
(iii) For Two Second Class Mines Manager certificate holders (1.5 mars each); 03
(iv) For two qualified blasters**(1.5 marks each); 03 1 (v) For a Qualified Mechanical Engineer 02 Machinery and Equipment: 5 (Max.) (i) Excavator (one mark each) 02 (ii) Dumpers (minimum 02) 01
(iii)Wagon Drill Machine (one mark for each) 02 2 Experience in Mining (Major/Minor Minerals) 10 (Max) (i) More than 20 years 10 (ii) 15 to 20 years 08 (iii) More than 10 but up to 15 years 06 (iv) More than 5 but up to 10 years 04 3 (v) More than 02 years but upto 5 years 02 Average Annual Turn-over computed for the last three 10 (max.) contiguous operational years
(i) Rs.5 cr. to Rs.10 cr. 3.0
(ii) Above Rs.10 cr. but upto Rs.25 crore 5.0
(iii) Above Rs.25 crore but upto Rs.50 crore 8.0 4 (iv) More than Rs.50 crore 10.0 Average Net Profit or loss (for the corresponding 10 (max.) period of turn over) Profit
a) Less than 5% of the turnover 5.0
b) Above 5% but upto 10% of the turnover 7.5 c) Above 10% of the turnover 10 Loss
a) Less than 5% of the turnover -5
b) More than 5% but upto 10% of the turn over -7.5
c) More than 10% of the turnover -10 5 Civil Writ Petition No. 18509 of 2012 24 Sr.No. Criteria Allocation of Marks Net-worth of the Applicant Company/Agency as on 31st 10 (max.) March 2012:
(i) Rs.5.00 cr. to 10.00 cr. 2.5
(ii) More than Rs.10.00 cr. but up to Rs.25 cr. 5.0
(iii) More than 25 cr. but up to Rs.50 cr. 7.5
6 (iv) More than Rs.50.00 cr. 10.0
Restoration and Rehabilitation works: 10 (max.)
(5 marks each for one project/site Restored and 7 Rehabilitated in any mining site operated anywhere) CSR initiatives, implemented by the Company and 5(max.) 8 the amount invested year-on-year basis Number of mining projects with minimum area of 15 10 (max) hectare successfully completed:
(i) Three projects or more 10.0
(ii) Two projects 7.5
9 (iii) One project 5.0
Any black listing/pre-mature termination for default on (-) 5 10 the part of the Company Assessment by the Committee based on Technical Presentation of the proposal covering (i) Adoption of scientific and systematic mining, safety parameters, site management practices in mining operations (demonstrated in two projects in operation or those operated in the past), and (ii) overall general mining 11 approach presented 15 Qualifying Score: 60/100 Note ** In case of pre-qualification only for Slate Stone Mining, 03 marks assigned for Blasting staff will be awarded on the basis of technique adopted in mining of slate stone for which the applicant will have to provide supporting documentation including site photographs.
A due consideration of the proviso to Rule 9 of the 2012 Rules, the reasons that compelled the State to adopt the impugned criteria, and the entire criteria indicates a bona fide attempt on the part of the State to ensure a scientific and systematic process of mining, free from fly by night operators who as acknowledged by the petitioner as well as by the State are responsible for the wanton destruction of the environment in the Civil Writ Petition No. 18509 of 2012 25 ecologically sensitive Aravalli ranges situated in the national capital region, falling in the districts of Faridabad and Gurgaon. It is a matter of common knowledge, judicially noticed and acknowledged by environmental experts and by the State of Haryana that mining carried out over the last few decades, has resulted in devastating consequences for the environment. One has to but travel a few kilometers from the national capital to realise the enormity of this damage. Vast tracts of the Aravalli ranges have been indiscriminately mined leaving behind huge craters, more reminiscent of a lunar scape, artificial lakes, dry underground water cisterns and dying water bodies, leading to a semi arid environment. The government may or may not fully acknowledge the extent of damage but this degradation is there for all to see and is the direct result of indiscriminate, unscientific mining by operators whose only motive is a rapacious exploitation of minor mineral with an absolute lack of a professional and an ethical approach. This wanton exploitation of minor minerals invited the attention of the Hon'ble Supreme Court as well as this Court and lead to an eventual clamp down on all sorts of mining except after obtaining requisite environmental clearance.
The introduction of a pre qualification procedure appears to suggest that the government has woken up to its responsibility and after taking into consideration the damage caused to the environment, notified "the 2012 Rules", in order to introduce scientific mining, and a degree of transparency in the process of bidding and awarding of leases and contracts.
The petitioner has raised a number of pleas in the writ Civil Writ Petition No. 18509 of 2012 26 petition, but has, essentially, confined his pleas, while challenging the pre-qualification criteria to a plea that marks provided for each criteria, are irrational, have no foundation in law and cannot possibly achieve the object sought to be achieved and are tailor made to suit large corporate houses.
The 1957 Act as well as the 2012 Rules require the state to exploit minor minerals by a public auction. Rule 9 of the 2012 Rules provides that minor mineral deposits shall be excavated after grant of mining leases. The proviso to Rule 9 of the 2012 Rules, empowers the government, wherever it deems necessary to pre- qualify bidders and and set out a pre-qualification criteria by inviting expressions of interest through a public notice and limit the bidding process amongst such pre-qualified bidders. The endeavour of the State, in our considered opinion, is to ensure scientific mining, by employing qualified staff, that use adequate machinery and while winning minor minerals, do not destroy the environment. The assessment of the capability and capacity of the mining entity, its financial well being and its experience, as a measure of pre- qualification, in our considered opinion, cannot be said to be illegal, arbitrary or violative of Articles 14 or 19(1)(g) of the Constitution of India. The State, in its endeavour to ensure that the best possible people/companies/corporations come forward to exploit minor minerals, has set out a criteria that meets the requirements of law as well as may address concerns of environmental degradation. The mere fact that small operators may be disqualified cannot, in our considered opinion, be said to be violative of Article 14 of the Civil Writ Petition No. 18509 of 2012 27 Constitution. The petitioner and similarly situated persons are free to employe requisite qualified staff, purchase or lease out requisite machinery and fulfil the criteria set out in the pre-qualification bid and participate in the pre-qualification process. The pre-qualification procedure cannot, in our considered opinion, be said to have been tailored to suit a particular class or category of persons as it is an attempt to ensure scientific and systematic mining of minor minerals.
The petitioner's plea that marks allotted for various pre- qualification criteria are irrational and arbitrary, has to be rejected. To a specific query, as to how this criteria of awarding marks is arbitrary, counsel for the petitioner was unable to refer to any principle of law, that would prohibit such a methodology. The process for awarding marks, is an attempt to ensure transparency and afford a level playing field for all concerned with no government officer, able to arbitrarily select a person on account of any pressure or extraneous consideration. The petitioner's argument that it is impossible for them to employ mining, geological expert, purchase or lease out machinery and equipment without being allotted a parcel of land for mining, in our considered opinion, is the very reason that compelled the State Government to prescribe this criteria. The criteria prescribed in the pre-qualification bidding, would lead to a professional exploitation of minor minerals by companies or corporations with requisite experience, manpower, and qualified personnel, who would not only be responsible for excavating minor minerals but also responsible for the restoration and rehabilitation of the mining site. The criteria prescribed is not arbitrary, is not hit by Civil Writ Petition No. 18509 of 2012 28 the vice of `inequality' or the prohibition in Article 19(1)(g) of the Constitution of India and discloses a rational classification in consonance with the object sought to be achieved, namely, a scientific and systematic exploitation of minor minerals with due consideration for the environment.
In view of what has been stated hereinabove, we find no reason to hold that pre-qualification procedure and the criteria set out therein are, in any manner, illegal and arbitrary.
The writ petition is, consequently, dismissed.
( RAJIVE BHALLA ) JUDGE ( REKHA MITTAL ) 23.1.2013 JUDGE VK