Summary
A bidder for a sand quarry lease in Cuttack district submitted a solvency certificate issued in his own name although the Sub-Collector had directed that it be issued to the charitable trust that owned the property; he obtained the lease, the Collector cancelled it on a rival bidder's representation, and the Orissa High Court restored it, treating the certificate as a bona fide error later cured and holding that only the Tehsildar could cancel under Rule 51(7) of the Orissa Minor Minerals Concession Rules, 2016. The Supreme Court allowed the rival's appeal: Rule 51(7) applies to breach of lease conditions, not an invalid certificate at the bid stage; the Collector acted on the High Court's own direction; the certificate was obtained deliberately in defiance of the Sub-Collector's order; and a later substituted certificate is irrelevant, so the bid was void ab initio.
Issues
- Whether a lease obtained on a bid supported by a solvency certificate issued to the bidder individually, contrary to the Sub-Collector's direction that it be issued to the trust owning the property, is void ab initio, and whether the Collector could cancel it notwithstanding Rule 51(7) of the Orissa Minor Minerals Concession Rules, 2016.
Provisions considered
- Rule 51(7), Orissa Minor Minerals Concession Rules, 2016The Rule empowers the Tehsildar to cancel a lease for breach of its conditions; it has no application where the defect is production of an invalid solvency certificate at the time of bidding, and the Collector's order was in any case passed on the High Court's direction to decide the rival bidder's representation. (¶¶ 7, 7.1, 7.2)
Held
- Despite the Sub-Collector's specific direction of 06.12.2017 to issue the certificate in the name of the trust, the Tehsildar issued it the next day in the bidder's individual name; that cannot be a mistake, and the bidder deliberately obtained and misused it for his own benefit to secure the lease. His 2021 request to substitute the certificate was not premised on any mistake but on a possible claim by another partner, he had used the same certificate in another tender and been disqualified, and the certificate was later cancelled by an order that attained finality. What matters is the certificate produced with the bid, not a subsequent one. (¶¶ 8, 8.1, 8.2, 8.3, 8.4)
- The High Court committed a very serious error in setting aside the Collector's order; the fresh lease executed pursuant to the High Court's judgment was expressly made subject to the outcome of the appeal and falls with it. (¶¶ 9, 10)
Result
Appeal allowed without costs; Orissa High Court judgment dated 28.10.2021 in W.P.(C) No. 16437 of 2021 quashed and set aside; order of the Collector, Cuttack dated 24.03.2021 cancelling the lease restored; fresh lease deed executed in favour of the first respondent pursuant to the High Court judgment set aside.