High court raps Haryana for refusing mining contract to highest bidder

DADAM MINES Setting aside the government order to cancel petitioner’s bid, HC says govt has to act fairly and it should not treat public contracts as ‘largesse to be distributed at its whims and fancies’

ONCE THE BID WAS ACCEPTED THERE WAS NO JUSTIFICATION FOR GOVT TO SIT OVER IT FOR 7 MONTHS AND THEN LET HSIIDC IN THROUGH BACK DOOR, SAYS COURT

The BJP government in Haryana has come under fire for refusing to grant lease for extracting minor minerals from Dadam mines in Bhiwani to the highest bidder.

Setting aside the government’s order to cancel the bid of the petitioner (the highest bidder), a division bench of the Punjab and Haryana high court on August 14 ordered that the mining lease to the highest bidder be awarded.

The HC bench of justices Mahesh Grover and Mahabir Singh Sindhu in its order said that once the petitioner’s bid was accepted there was no justification for the government to sit over the matter for as long as seven months and then clandestinely let Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) in through the back door without even intimating the petitioner.

Holding the actions of the state government highly arbitrary, the HC said: “In matters of public contract, the government has to act fairly and not treat the subject matter of the contract as a largesse to be distributed at its own whims and fancies, which again is impermissible as there has to be a supporting coherent policy even if discretion of the government has to be exercised.” The successful bidder M/s Goverdhan Mines and Minerals had petitioned the court, praying that the July 25 order of the Haryana government whereby the bid offered by them for mining was cancelled and permission refused arbitrarily, be quashed.

The state government had issued an e-auction notice inviting bids for extraction of minor minerals from the mines of Mahendergarh, Bhiwani and Dadri districts.

For the Dadam mines in Bhiwani, the reserved price was Rs.115 crore. The auction fell through as no one responded.

Another e-auction notice was put up on August 29, 2017 with the reserve price of Rs 115 crore. Once again the auction fell through with no prospective bidder coming forward.

Subsequently, the process of e-auction was again started with a reduced reserve price of Rs.92 crore. The petitioner, Goverdhan Mines and Minerals, made a bid of Rs.92.12 crore and deposited the 10% of the bid amount, Rs 9.20 crore with the state government.

However, the government did not issue a letter of intent to the petitioner for seven months even as the petitioner kept sending representations and legal notices.

On July 26, the state government issued an order stating that though the bid of Rs92.12 crore was offered by the petitioner, the permission to operate is being refused as the government has decided to operate the mines through the public sector undertaking in public interest. It was also ordered that the initial amount deposited by the bidder be refunded.