Jammu & Kashmir High Court - Srinagar Bench
M/S Baba Chemicals vs State Of J&K; And Others on 14 December, 2018
Author: Sanjeev Kumar
Bench: Sanjeev Kumar
HIGH COURT OF JAMMU AND KASHMIR
AT SRINAGAR
...
OWP no.1878/2018 IA no.01/2018 Date of order: 14.12.2018 M/s Baba Chemicals v.
State of J&K and others Coram:
Hon'ble Mr Justice Sanjeev Kumar, Judge Appearing Counsel:
For Petitioner(s): Mr Ateeb Kanth, Advocate For Respondent(s): Mr Saad Ganai, GA Mr A. H. Naik, Senior Advocate with Mr Zia, Advocate Mr U. K. Jalali, Senior Advocate with Mr Hashim Hussain, Adv.
Whether approved for reporting? Yes
1. Petitioner is sole proprietor of a micro, small and medium enterprise (MSME), registered, as such, with District Industries Centre, Baramulla, in the name of M/s Baba Chemicals. Unit of petitioner is located at Salamabad, Dachna, Boniyar, Uri.
Petitioner's unit has been registered for exploration of minerals, viz. mining of gypsum, vide Certificate of Permanent Registration bearing no.DIC-B/1799 dated 27th September 2013.
2. Respondent no.2 (J&K Minerals Limited, Srinagar) vide its NIT no.BC:27(3)/2018-101-10 dated 3rd July 2018, invited bids for extraction/exploration of gypsum in Subblocks (B) & (C) at Parlanka Sector of Ramban, with targeted production/ sale of 1.0 million tonnes per annum. Apparently, petitioner was not qualified as per terms and conditions of NIT and therefore, could not participate in bidding process as is claimed by OWP no.1878/2018 Page 1 of 21 IA no.01/2018 petitioner. After tender of respondent no.3 was accepted and it was allotted the work, petitioner approached respondents with his grievance. It was only when respondents 1&2 failed to redress his grievance that he was left with no option but to approach this Court by way of instant petition.
3. Petitioner has called in question both tender document (Annexure C with writ petition) and Government Order no.111-IND of 2016 dated 20th May 2016 (Annexure B with petition), whereby lease was granted by respondent no.1 in favour of respondent no.2. Apart from challenging aforesaid government order and tender document, petitioner also seeks a direction to grant fresh mining lease by strictly complying with provisions of Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as "Act of 1957") and Rules framed thereunder. He is also seeking a direction to respondents to issue fresh NIT for extraction/purchase of gypsum at Parlanka, Ramban, so that he too participates in the same. This, in nutshell, is the relief claimed by petitioner in this petition.
4. Reply has been filed by respondents strenuously resisting writ petition.
5. I have heard learned counsel for parties and considered the matter.
6. Before proceeding further and appreciating rival contentions of parties, it would be necessary to take note of few admitted facts. The mineral 'gypsum' is one of the important industrial minerals used as raw-material in cement, plaster of paris, fertilizer and wall board and panels. The requirement of this OWP no.1878/2018 Page 2 of 21 IA no.01/2018 mineral in various industries within and outside the State is substantial. The State of Jammu and Kashmir is endowed with rich reserves of gypsum. Large quantity of gypsum is available in District of Ramban. An area of 246 hectares in Parlanka of District Ramban, where there is abundance of gypsum reserves, has been demarcated. The Government through its Public Sector Undertaking, namely, J&K Power Development Corporation (for short "JKPDC") is in the process of constructing Sawalakote Hydro Electric Dam Project and for that purpose, JKPDC approached the Department of Geology and Mining for their No Objection. While processing No Objection Certificate, demanded by JKPDC, it was noted by Department of Geology and Mining that there are huge gypsum reserves, coming under submergence zone, which are required to be exploited/extracted before commissioning Hydro Electric Project. It has been brought to the notice of this Court that with a view to extracting maximum possible gypsum reserves, the Government decided to grant lease of about 246 hectares area in the Parlanka Sector at Ramban to respondent no.2, so that gypsum reserves are explored before mining area containing gypsum reserves comes under submergence of Dam Project. It is in this background that respondent no.1 vide Government Order no.III-IND of 2016 dated 20th May 2016 accorded renewal of mining lease for gypsum occurring on an area of 246 hectares at village Sumerbogh, Hodog, Parlanka, District Ramban, falling under different Khasra numbers, excluding the area falling in demarcated Forest. Lease has been granted for a OWP no.1878/2018 Page 3 of 21 IA no.01/2018 period of ten years, retrospectively from 9th February 2010 and is subject to terms and conditions as laid down in aforesaid government order. Amongst other terms and conditions, one of the conditions embodied in lease is that lessee would extract gypsum to be used for captive purpose and sell the same within the State. This condition has been incorporated apparently to avoid mandate of granting mining leases, invariably, by way of auction. As is apparent from bare reading of Government Order no.111-IND of 2016 (supra), renewal of lease of respondent no.2 was granted as far back as on 20th May 2016. Respondent no.2 is not a private individual but a Public Sector Undertaking of the Government of Jammu and Kashmir. Nobody, including petitioner herein, ever raised any objection with regard to renewal of mining of lease of gypsum granted by respondent no.1 in favour of respondent no.2. It is only when respondent no.2, with a view to outsource exploration of gypsum and its simultaneous sale, invited NIT on 3rd July 2018 and after evaluating bids received, issued Letter of Intent in favour of respondent no.3 on 28th July 2018, which was followed by a proper lease deed between respondents 2 and 3, that on 21st August 2018, petitioner appears to have woken from slumber. He did not immediately approach the Court, but waited till 3 rd October 2018 and by that time respondent no.3 had mobilised his men and machinery and had even started exploration work allotted to him. A careful perusal of contents of writ petition filed by petitioner would indicate that he is primarily aggrieved of eligibility criteria laid down in NIT, as the same had OWP no.1878/2018 Page 4 of 21 IA no.01/2018 prevented him from staking his bid for exploration work in question. Appreciating correctly that he may not succeed in getting qualifying criteria laid down in NIT declared bad, the petitioner has decided to assail validity of lease granted by respondent no.1 to respondent no.2 on various grounds. This was an act of sheer ingenuity on part of petitioner. I am saying so, for the reason that had petitioner been aggrieved of grant of lease by respondent no.1 in favour of respondent no.2, he would not have waited till 3rd October 2018, when pursuant to lease renewed in favour of respondent no.2, respondent no.2 by way of public tender, had already allotted the work to respondent no.3. Petitioner for reasons, which are not explained anywhere in the petition, waited till exploration work started at the site and respondent no.3 had sufficiently mobilised men, machinery and resources to meet all the targets of exploration as set out in NIT. This the respondent no.3 has done only pursuant to the allotment and consequential lease deed executed between him and respondent no.2. This Court is aware that in the instant case seemingly there may not be inordinate delay in approaching the court, but given the nature of contract, i.e. exploration of minerals, that too to be undertaken in a time bound manner to save the gypsum reserves from coming under submergence of Dam, timing of petitioner for approaching this Court cannot be lightly ignored. In this regard it would be appropriate to recollect what was stated by the Apex Court in Noble Resources Limited v. State of Orissa (2006) 10 SCC 236, while considering the question: whether governmental contracts are OWP no.1878/2018 Page 5 of 21 IA no.01/2018 within the realm of judicial review and if yes to what extent? It was held that it is trite if an action on the part of State is violative the equality clause contained in Article 14 of Constitution of India, a writ petition would be maintainable even in contractual field. A distinction indubitably must be made between a matter at the threshold of a contract and a breach of contract. While in former the court's scrutiny is more intrusive, in the latter the court may not generally exercise its discretionary jurisdiction of judicial review. Relevant excerpt of Noble Resources Limited (supra) is profitable to be reproduced infra:
"It is trite that if an action on the part of the State is violative the equality clause contained in Article 14 of the Constitution of India, a writ petition would be maintainable even in the contractual field. A distinction indisputably must be made between a matter which is at the threshold of a contract and a breach of contract; whereas in the former the court's scrutiny would be more intrusive, in the latter the court may not ordinarily exercise its discretionary jurisdiction of judicial review, unless it is found to be violative of Article 14 of the Constitution. While exercising contractual powers also, the government bodies may be subjected to judicial review in order to prevent arbitrariness or favouritism on its part. Indisputably, inherent limitations exist, but it would not be correct to opine that under no circumstances a writ will lie only because it involves a contractual matter."
7. In the aforesaid backdrop, the challenge of petitioner to renewal of lease, granted by respondent no.1 in favour of respondent no.2, is concerned, the same must fail for the following reasons:
(i) It is not the case of petitioner that he was ever interested to have the lease of this huge reserve of gypsum situated at Ramban from the Government.
(ii) That the lease was renewed by Government in favour of respondent no.2 on 20th May 2016. The expression "renewal of lease" with effect from 9th February 2010, OWP no.1878/2018 Page 6 of 21 IA no.01/2018 presupposes that respondent no.2 was holding lease of aforesaid mining area till 9th February 2010. Admittedly petitioner was not in existence prior to 27th September 2013 and therefore could not have been aggrieved of original lease granted in favour of respondent no.2. So far renewal of lease is concerned, the same happened on 20th May 2016, petitioner never objected to it nor even represented before any authority in this regard.
(iii) Pursuant to renewal of lease granted by respondent no.1 in favour of respondent no.2, NIT was floated for outsourcing exploration and purchase on 3rd July 2018, still the petitioner did not resent. Bids were followed by allotment in favour of respondent no.3 on 28th July 2018, even then the petitioner did not resent and raise any objection. He was quiet even when the formal lease between respondents 2&3 was executed on 21st August 2018. There is nothing on record to show that petitioner even represented at the relevant point of time.
(iv) It appears that petitioner reacted by way of filing of this petition for the first time when respondent no.3 mobilised his men, machinery and resources for exploration in terms of allotment made in his favour.
(v) All these circumstances, taken cumulatively, would indicate that petitioner has though laid challenge to lease granted by respondent no.1 in favour of respondent no.2, but he is actually opposed to grant of contract of exploration of gypsum in favour of respondent no.3. Even OWP no.1878/2018 Page 7 of 21 IA no.01/2018 the decision to challenge allotment in favour of respondent no.3 is afterthought. This is so, because when this writ petition was filed, petitioner had only arrayed respondents 1&2 as party respondents, though he was aware, as is indicated by him in paragraph 2(f) of writ petition, that tender had been allotted to contractor. Later on, may be, after going through response filed by respondent no.2, petitioner decided to array respondent no.3 and many other SSI units of the State as party respondents but without appropriately amending the writ petition and without throwing specific challenge to allotment made in favour of respondent no.3, and lease deed executed between respondents 2 and 3. The sequence of events narrated above clearly indicate lack of bona fides of petitioner to file instant writ petition.
8. Learned counsel appearing for petitioner raised few important points with regard to mode and manner, in which renewal of lease was granted by respondent no.1 in favour of respondent no.2 and took this Court through various provisions of Act of 1957 and Rules framed thereunder, to demonstrate that renewal of lease, granted by respondent no.1 in favour of respondent no.2, was in complete derogation thereof. This Court would have examined all these issues, raised by learned counsel for petitioner, some of which were of considerable substance, had the petitioner approached this Court in the year 2016 itself, i.e. immediately after renewal of lease was sanctioned by respondent no.1 in favour of respondent no.2 on 20th May 2016.
OWP no.1878/2018 Page 8 of 21 IA no.01/2018Much water has flown thereafter downstream and it would not be in public interest to reverse the clock, for doing so would be detrimental to public interest and huge loss to public exchequer. It is because of being persuaded by aforesaid considerations also this Court has not found it prudent to go into legality or otherwise of lease granted by respondent no.1 in favour of respondent no.2.
9. The issue of environmental impact of exploration of lease, raised at any stage, is such which cannot be lightly ignored. However, reading of order of renewal of lease, i.e. Government Order no.111-IND of 2016, would indicate that lessee - respondent no.2, has been enjoined to take all necessary steps as may be required to safeguard environment while extracting mineral at the site. To ensure that there is no damage to environment and ecological balance in the area, this Court also deems it proper to direct J&K Pollution Control Board (for brevity "JKPCB") and Environment Impact Committee, if any, in position in terms of Act of 1957 and Rules framed thereunder, to visit the site and evaluate impact of exploration of mineral on environment and issue necessary instructions to safeguard the same.
10. Next comes the challenge to NIT floated by respondent no.2 on 3rd July 2018 for outsourcing exploration work of mineral and its simultaneous purchase, which, as early noted, had already culminated into allotment and execution of lease deed between respondents 2 and 3, much before filing of writ petition. Here also, petitioner has not acted promptly and had allowed things OWP no.1878/2018 Page 9 of 21 IA no.01/2018 to drift. Reversal whereof cannot be without detriment to larger public interest and public exchequer. At this stage let us recount the six cardinal principles laid down by the Supreme Court in paragraph 94 in Tata Cellular v. Union of India (1994) 6 SCC 651, while explaining the permissible extent of judicial review in contractual matters:
(1) The modern trend points to judicial restraint in administrative actions.
(2) The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract.
Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. (Underlined by me)
11. In the light of above legal position, let us examine the grievance of petitioner. Impugned NIT has been assailed by petitioner primarily on the following grounds:
OWP no.1878/2018 Page 10 of 21 IA no.01/2018(i) That qualifying criteria/conditions of eligibility prescribed in NIT with regard to financial capacity is illegal, arbitrary and has no nexus with the object sought to be achieved. It is submitted that Condition no.5 (B) of NIT, dealing with financial criteria of bidders is violative of Article 14 and 19 of the Constitution of India and, therefore, cannot sustain.
(ii) That Condition no.5 (A) (3) of NIT, which provides for preference to be given to the bidder, who is permanent resident of Jammu & Kashmir as defined in Section 6 of the Constitution of J&K, has been violated as the allottee (respondent no.3), who is a consortium of four firms: two from Jammu and Kashmir and two from Punjab, does not meet aforesaid criteria.
(iii) That lease granted by respondent no.1 in favour of respondent no.2, is specifically for extraction of gypsum only for captive purposes and sale in the State of Jammu and Kashmir and, therefore, respondent no.2 could not have allotted contract to respondent no.3 for exploration, purchase, and its sale outside the State of Jammu and Kashmir.
(iv) That the work in question has been allotted in favour of respondent no.3 without resorting to process of E-tender as is mandated under Act of 1957 and Rules framed thereunder.
12. Respondent no.2 has filed detailed objections and has explained as to how tendering process was undertaken by it. Respondents OWP no.1878/2018 Page 11 of 21 IA no.01/2018 have also justified financial criteria provided in NIT, by submitting that huge quantity of gypsum is to be extracted and sold and, thus, financial capacity of bidder/contractor was of paramount importance. Such a huge work, worth crores of rupees, could not have been granted to a person, who was bereft of financial resources to execute the same. Upon consideration of the matter, I am in agreement with learned counsel for respondent no.2. NIT was given a wide publicity, besides putting it on official website, it was also published in National Dailies, like Hindustan Times and Economic Times. It was also published in State level dailies, like, Daily Aftab, Daily Greater Kashmir, Daily Excelsior, Daily Amar Ujala. In response, respondent no.2 received bids from as many as four bidders:
(i) Luthra Sales Corporation, Haryana.
(ii) Shankar Printing Mills, Amritsar.
(iii) Ores & Minerals Impex (a consortium of four firms two from J&K and two from Punjab) - Respondent no.3
(iv) A. G. Agencies, Haryana.
13. It is upon evaluation of financial and technical bids that respondent no.3 was found to be the highest eligible bidder and, accordingly, Letter of Intent was issued in his favour. It was later on followed by execution of formal lease agreement on 21st August 2018. So far as the plea of petitioner that permanent resident of the State was entitled to preferential treatment for allotment of work, is concerned, it may be noted that nobody from the State other than aforesaid four tenderers/bidders, responded to NIT and therefore, there was no question of according any preferential treatment as envisaged in NIT. Only OWP no.1878/2018 Page 12 of 21 IA no.01/2018 four bidders qualified and accordingly their bids were evaluated both on technical and financial parameters. The contract was bagged by respondent no.3, who was found to be the highest eligible bidder. That being so, no fault can be found with allotment of work in question in favour of respondent no.3.
14. It is true that one of the terms and conditions of lease granted by respondent no.1 in favour of respondent no.2, is that extracted gypsum will only be used for captive purpose and sale in Jammu and Kashmir, whereas no such condition is embodied by respondent no.2 in NIT and letter of allotment issued in favour of respondent no.3. Respondents have tried to explain aforesaid position by stating that gypsum reserves to be explored in the leased mining area, are so huge that it would create imbalance between 'demand' and 'supply' in the State. It is submitted that consumption of gypsum in the State is far less than quantity that would be extracted and therefore the excess quantity cannot be allowed to go waste as that would be detrimental to public interest and public exchequer. It is also stated that with a view to facilitate export of gypsum outside the State of Jammu and Kashmir, on the request of respondent no.2, the State has issued Notification/SRO 66 dated 5 th February 2018, whereby Section 5 of Levy of Toll Act, Samvat 1995 (Act no.VIII of 1995) has been amended to provide that export of fresh fruit and gypsum produced within the State of Jammu and Kashmir, shall be exempted from payment of toll leviable under the said Act. Relying upon the provisions of aforesaid SRO, it is submitted on behalf of respondent no.2 that Government has OWP no.1878/2018 Page 13 of 21 IA no.01/2018 impliedly accepted the plea of respondent no.2 that gypsum was required to be exported out of the State and, therefore, exempted the same from the payment of toll. The plea put forth by respondents is too specious to be accepted. The amendment of Section 5 of Levy of Toll Act vide SRO 66, has nothing to do with lease granted by respondent no.1 in favour of respondent no.2 and does not in any manner amount to modifying terms and conditions thereof. It is understandable that stipulation in the lease restricting the sale of extracted gypsum for captive purposes in the State of Jammu and Kashmir, was made with the purpose. This was probably done to avoid rigors of provisions of Act of 1957 and Rules framed thereunder and law enunciated by the Supreme Court. Ordinarily, grant of lease and renewal thereof could have been done by respondent no.1 by way of auction and deviation therefrom was permissible only under certain circumstances. Respondent no.1 was well aware that renewal of lease in favour of respondent no.2, otherwise than by way of auction may not be sustainable in law, therefore, put up a rider that lessee shall extract gypsum to be used for captive purposes and shall sell the same within the State only, to justify deviation. I would have accepted the argument of learned counsel for petitioner that lessee, i.e. respondent no.2, could not have granted in favour of respondent no.3, what was not vested in it by virtue of lease deed, executed by it in favour of respondent no.3. However, for reasons explained above and later developments, which have rendered the position fiat accompli, I am not inclined. In any case, the lease has been OWP no.1878/2018 Page 14 of 21 IA no.01/2018 granted by the State in favour of its PSU, incorporated for mineral development and allied mining operations.
15. It is next contended by the learned counsel for petitioner that financial criteria provided in Clause/Condition no.5(B) of NIT is ultra vires the Constitution. Before dealing with aforesaid submission, it may be pertinent to reproduce Clause (B) of Condition no.5 of NIT hereunder:
"B) Financial Capacity.
The applicant (or lead Member in case of a consortium) has to satisfy following financial criteria of turnover net worth in order to be considered for the financial proposal evaluation: -
i) Net worth required in Indian rupees at least 10 crores as on 31st March, 2018 (to be supported by a certificate issued by reputed firm of practicing Chartered Accountant).
ii) Annual turnover in India rupee of at least 30 crores for the last 3 (three) financial year(s) (to be supported by documentary proof (Audited Balance sheet & Profit & Loss Account with Audit Report certified by reputed firm of Chartered Accountant) (in case of company by Auditors of the Company).
iii) The bidder or lead member of the consortium shall be a profit-
making company consistently for at least 3 years."
16. On bare look on financial criteria provided in NIT, it cannot be said to be illegal or arbitrary in any manner and even if it is accepted that better criteria could have been laid down by respondent no.2, still it would not be within the domain of this Court to sit in appeal and interfere with the same in exercise of extra ordinary writ jurisdiction. The scope of judicial review of government contracts is fairly well explained by the Supreme Court in umpteen judgements. To quote the few, the Hon'ble Supreme court in the case of Air India Limited v. Cochin International Limited (2000) 2 SCC 617, clearly held that award of contract, whether it is by a private party or by a public body or the State is essentially a commercial transaction. In OWP no.1878/2018 Page 15 of 21 IA no.01/2018 arriving at a commercial decision, the considerations, which are paramount, are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and it is not open to judicial scrutiny. In another case of Monarch Infrastructure Pvt. Ltd v. Commissioner, Ulhasnagar Municipal Corporation and ors, AIR 2000 SC 2272, it was held by the Supreme Court that the terms and conditions in the tender notice are prescribed by the Government bearing in mind the nature of contract and in such matters the authority calling the tender is the best judge to prescribe terms and conditions of tender. It is not for the Courts to say whether the conditions prescribed in the tender under consideration were better than one in earlier invitation. The Supreme Court was confronted with identical situation as in Directorate of Education and others v. Educomp Datamatics Ltd (2004) 4 SCC 19. The Supreme Court after taking note of several earlier decisions including Tata Cellular (supra) in paragraph 13, held thus:
"Directorate of Education, Government of NCT of Delhi had invited open tender with prescribed eligibility criteria in general terms and conditions under tender document for leasing of supply, installation and commissioning of computer systems, peripherals and provision of computer education services in various government/ government aided senior secondary, secondary and middle schools under the Directorate of Education, Delhi. In the year 2002-2003, 748 schools were to be covered. Since the expenditure involved per annum was to the tune of Rs. 100 crores the competent authority took a decision after consulting the technical advisory committee for finalisation of the terms and conditions of the tender documents providing therein that tenders be invited from firms having a turnover of more than Rs.20 crores over the last three years. The hardware cost itself was to be Rs.40-45 crores. The government introduced the criteria of turnover of Rs.20 crores to enable the companies OWP no.1878/2018 Page 16 of 21 IA no.01/2018 with real competence having financial stability and capacity to participate in the tender particularly in view of the past experience. We do not agree with the view taken by the High Court that the term providing a turnover of at least Rs. 20 crores did not have a nexus with either the increase in the number of schools or the quality of education to be provided. Because of the increase in the number of schools the hardware cost itself went upto Rs. 40-50 crores. The total cost of the project was more than 100 crores. A company having a turnover of Rs.2 crores may not have the financial viability to implement such a project. As a matter of policy government took a conscious decision to deal with one firm having financial capacity to take up such a big project instead of dealing with multiple small companies which is a relevant consideration while awarding such a big project. Moreover, it was for the authority to set the terms of the tender. The courts would not interfere with the terms of the tender notice unless it was shown to be either arbitrary or discriminatory or actuated by malice. While exercising the power of judicial review of the terms of the tender notice the court cannot say that the terms of the earlier tender notice would serve the purpose sought to be achieved better than the terms of tender notice under consideration and order change in them, unless it is of the opinion that the terms were either arbitrary or discriminatory or actuated by malice. The provision of the terms inviting tenders from firms having a turnover of more than Rs.20 crores has not been shown to be either arbitrary or discriminatory or actuated by malice." (underlined by me)
17. Viewed thus in the light of aforesaid settled position, it cannot be said that eligibility prescribed in NIT with respect to financial capacity of bidder is either arbitrary or discriminatory or actuated by malice.
18. Before concluding, it must be observed that learned counsel for petitioner raised many issues governing the grant of mining leases by the State and some of them were not only attractive on the face of it but were having substance as well. This Court would have ventured to examine all those issues, had the matter been brought before this Court in public interest. Conceding to the arguments of learned counsel for petitioner, particularly in OWP no.1878/2018 Page 17 of 21 IA no.01/2018 the context in which these have been raised, would be legitimising the conduct of petitioner, who, in view of discussion made above, has approbated and reprobated. It is trite that a party cannot be permitted to "blow hot and cold" in the same breath. He cannot be permitted to "fast and loose" or "approbate and reprobate". This rule is applied to ensure equity and is inherent in rule of estoppel. By this law a person may be precluded by way of his actions or conduct or silence when it is his duty to speak, from asserting a right which he would have otherwise had. This principle has been aptly discussed by the Supreme Court in Rajasthan State Industrial Development and Investment Corporation v. Diamond and Gem Development Corporation Ltd, (2013) 5 SCC 470, at paragraphs 9&10, which reads as under:
"I. Approbate and Reprobate
9. A party cannot be permitted to "blow hot-blow cold", "fast and loose" or "approbate and reprobate". Where one knowingly accepts the benefits of a contract, or conveyance, or of an order, he is estopped from denying the validity of, or the binding effect of such contract, or conveyance, or order upon himself. This rule is applied to ensure equity, however, it must not be applied in such a manner, so as to violate the principles of, what is right and, of good conscience. (Vide: Nagubai Ammal & ors v. B.Shama Rao & ors, AIR 1956 SC 593; CIT Madras v. Mr P.Firm Maur, AIR 1965 SC 1216; Ramesh Chandra Sankla etc. v. Vikram Cement etc., AIR 2009 SC 713; Pradeep Oil Corporation v. Municipal Corporation of Delhi & anr, AIR 2011 SC 1869; Cavery Coffee Traders, Mangalore v. Hornor Resources (International) Company Limited (2011) 10 SCC 420; and V. Chandrasekaran and anr v. The Administrative Officer & ors, JT 2012 (9) SC 260)
10. Thus, it is evident that the doctrine of election is based on the rule of estoppel - the principle that one cannot approbate and reprobate is inherent in it. The doctrine of estoppel by election is one among the species of estoppels in pais (or OWP no.1878/2018 Page 18 of 21 IA no.01/2018 equitable estoppel), which is a rule of equity. By this law, a person may be precluded, by way of his actions, or conduct, or silence when it is his duty to speak, from asserting a right which he would have otherwise had." (underlined by me)
19. Reference to another judgement of the Supreme Court in Shyam Teli v. Union of India, (2010) 10 SCC 165, is equally advantageous. Paragraph 14 thereof is pertinent to be reproduced hereunder:
"14. View taken in the above decision has been reiterated by this Court in City Montessori School v. State of Uttar Pradesh and Ors. (2009) 14 SCC 253. To the same effect is the decision of this Court in New Bihar Biri Leaves Co. v. State of Bihar 1981 (1) SCC 537 where this Court said :
"It is a fundamental principle of general application that if a person of his own accord, accepts a contract on certain terms and works out the contract, he cannot be allowed to adhere to and abide by some of the terms of the contract which proved advantageous to him and repudiate the other terms of the same contract which might be 18 disadvantageous to him. The maxim is qui approbat non reprobat (one who approbates cannot reprobate). This principle, though originally borrowed from Scots Law, is now firmly embodied in English Common Law. According to it, a party to an instrument or transaction cannot take advantage of one part of a document or transaction and reject the rest. That is to say, no party can accept and reject the same instrument or transaction (Per Scrutton, L.J., Verschures Creameries Ltd. v. Hull & Netherlands Steamship Co.)."
20. This bring me to the last contention of learned counsel for petitioner that the contract has been awarded to respondent no.3 for a period of five years whereas the lease, which has been renewed in favour of respondent no.2 would subsist only up to 2020. This the respondent no.2 could not have done in anticipation of further extension of lease, for the renewal of lease under the provisions of Act of 1957 and the Rules framed thereunder is not automatic or as a matter of right. The respondents have tried to explain this aspect by submitting that OWP no.1878/2018 Page 19 of 21 IA no.01/2018 the contract for five years, has been granted to respondent no.3 in anticipation of lease by the Government. It is urged that even if lease in favour of respondent no.2, is not extended, the grievance in this regard could only be raised by respondent no.3 and petitioner has no locus in this regard. It is submitted that, in any case, respondent no.3 has no impediment in exploring the lease till the year 2020 and possibly with the men and machinery at his disposal, he may able to extract the whole of the allotted minerals within aforesaid period. I am in agreement with the stand of respondents that the petitioner lacks the locus.
21. For all these reasons explained above, I do not find any merit in this petition and the same is, accordingly, dismissed.
22. Dismissal of this writ petition, however, shall not absolve J&K State Pollution Control Board of its responsibility to ensure that the process of exploration of gypsum pursuant to NIT in question by respondent no.2, does not impact the environment of the area or disturbs ecological balance. This duty cast upon JKPCB, is in addition to and independent of provisions of Act of 1957 and Rules framed thereunder. It is expected that JKPCB would perform its statutory duty and would constitute a team of its experts to visit the site of exploration and assess the impact on environment of such exploration and issue requisite orders and instructions to the concerned to ensure that ecological balance of the area is not disturbed and the people of area are not exposed to any environment hassle. It may also be made clear that dismissal of this petition, which has been ordered in OWP no.1878/2018 Page 20 of 21 IA no.01/2018 peculiar facts and circumstances as explained above, shall not be taken by respondents as approval of their action taken under special circumstances and they shall remain careful in future and ensure that while granting/renewing mining lease, all parameters as provided under the Act of 1957 and Rules framed thereunder and directives issued by the Supreme Court from time to time are strictly adhered to.
23. Copy of this order shall be served upon J&K State Pollution Control Board for compliance.
(Sanjeev Kumar) Judge Srinagar 14.12.2018 Ajaz Ahmad, PS OWP no.1878/2018 Page 21 of 21 IA no.01/2018