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Return ₹2.8 crore to mining firm for not honouring contract: HC to Punjab
The HC observed that having put mine to auction, the Punjab authorities could not abdicate their responsibility to provide safe passage to the firm to use the revenue rasta in question
The Punjab and Haryana high court has directed the Punjab government to return about ₹2.8 crore to a mining firm for not honouring the terms and conditions of a 2017 contract.
“The duty to maintain law and order is cast on the state and it is its responsibility to ensure that no member of the local population obstructs the passage through a revenue rasta and causes hindrance to the petitioner from using it,” the bench of Justice MS Ramachandra Rao and Justice HS Madaan said on the plea of a mining firm that could not operate due to hindrance by locals and now, the state government was not ready to return the deposited amount.
The firm, Confitech Barter Private Limited, had got the contract in 2017 for Lubangarh located in Ludhiana Machhiwara. The firm deposited two instalments as per the bid of ₹2.8 crore and ₹3.25 lakh. It could operate briefly in 2018 and later in 2019, that too due to court’s intervention. But largely, no mining work could be done due to protests from locals.
Director, mining, in an order passed in April 2021 had stated that it was the responsibility of the contractor to take care of such issues. It was also held that mining was not done as per the approved plan. Hence, the contract was cancelled and amount deposited was forfeited. Upon this, the mining firm had approached the high court, arguing that it was the duty of the respondents to provide an approach road free of any hindrance and access to the auctioned mine site, and when such hindrance cannot be prevented by the state, it cannot refuse to refund the amount paid by the firm.
The court observed that having put mine to auction, the authorities could not abdicate their responsibility to provide safe passage to the firm to use the revenue rasta in question.
“They have no moral authority to retain the amount deposited by the petitioner in the hope of successfully executing the mining contract, which continues to be hindered on account of the default of the state agencies in failing to give a free passage through the revenue rasta to the mining site,” the bench said, while quashing April 2021 order of the director, mining, Punjab and directed the authorities to refund the amount deposited by the firm after deducting the instalments payable by the petitioner for the period it could operate.
The amount is to be refunded with 6% interest per annum from the date deposited within two months.
