In a ruling having far reaching ramifications, the Punjab and Haryana high court has rejected the argument of mining lease holders from Haryana that period of mining contract should commence after obtaining the environment clearance. The HC has asked them to pay the balance lease amount with interest as per the lease agreements between them and the state government.
The HC ruling will not only restore mining operations in Haryana, thus impacting the availability and pricing of construction material, it will also facilitate government in garnering Rs 800 crore revenue from mining operations. Auction of mining sites were conducted in 2014 whereby 42 leases for extracting minor mineral (sand and stone) were granted. Only 25 mining agreements survived as several lease agreements were quashed by the high court and some withdrew on their own. This led to shortage of construction material and a sharp increase in their prices. About 15 lease holders have received environmental clearance so far. Though the HC put a stay on payment by lease holders till December 7 to enable them to challenge its order, the Haryana government on Friday filed a caveat in the Supreme Court.
Mining lease holders had petitioned the HC, seeking quashing of a clause in the letter of intent (LoI) of January 2014 stipulating the period of contract shall commence from the date of grant of environmental clearance or on expiry of 12 months from the date of LoI, whichever is earlier. They contended that mining operations can commence only upon their obtaining environmental clearance.
HC rejects contentions
Acting chief justice SJ Vazifda rand justice TS Dhindsa, in their October 19 order, rejected the contentions of the petitioners. “To allow this petition would be a travesty of justice, unfair not only to state government but to all other bidders and to potential bidders,” the HC said.
The high court said the petitioners entered into agreements fully aware and conscious of the clause. “They have not rescinded and do not intend rescinding the contract. They have derived and continue to derive benefit under the contract. They however want clause 3(i) of LoI to be amended. This is entirely impermissible. The clause is neither arbitrary nor unreasonable nor unfair,” it said.
‘Petitioners entered into contract with open eyes’
While the petitioners said the LoI stipulation that period of contract shall commence from the date of the grant of environmental clearance or on expiry of 12 months from the date of LoI’s ‘whichever is earlier’ is unreasonable and unfair, the HC said the submission was not well founded.
“The petitioners were not unaware of the terms. They were not taken by surprise. They participated in the bidding process. They never raised an objection. They entered into contract with open eyes. They accepted the benefit of the contract,” the HC said.
Bids according to timeframe
The court said that lease holders would have made an assessment of the period likely to be taken in obtaining the environmental clearance. It is elementary that any bidder would structure the financial bid after assessing the time likely to be taken in obtaining the environmental clearance.