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Judgment
These two writ petitions can be conveniently disposed of by a common judgment as the facts arc identical and the question for determination is also the same in both the matters. For the purpose of this judgment, it is sufficient if the facts in WP No.11299of 1997aresetout.
On 10-10-1997 the State Government issued a notification notifying the areas in the State for the purpose of undertaking prospecting and mining operations for semi-precious stones. The Government also appointed the Andhra Pradesh Mineral Development Corporation (''APMDC'' for short) as an agent to call for offers for mining franchise through sealed tender-cum-public auction. Pursuant to the said orders of the Government, the APMDC issued an advertisement on 23-10-1996 inviting offers for mining franchised through scaled tender-cum-public auction from the interested parties. In response to the advertisement, the petitioner submitted its offer and participated in the auction held on 6-11-1996 and became the highest bidder for the franchise of prospecting and mining semi-precious stones in Peddamadina revenue village, Visakhapatnam district. The petitioners'' bid of Rs.27,77,899/ - was accepted and APDMC executed an agreement dated 26-11-1996 in favour of the petitioner. As per the terms and conditions of the said agreement, the franchise was for a period of six months only from 1-12-1996 to 31-5-1997 which may be extended for equal period subject to the terms and conditions mutually agreed provided the petitioner applies within 30 days before the expiry of the contract. Pursuant to the said agreement, the petitioner carried on the prospecting/mining operations. On 21-5-1997 the APDMC addressed a letter to the petitioner requesting the petitioner to inform the firm offer towards payment of franchise amount for consideration of extension of contract for a further period of six months on the same terms and conditions before 24-5-1997 for taking further action in the matter. The petitioner sent a reply to the said letter on 24-5-1997 informing that their offer is the same as the offer made under the earlier contract. The petitioner also made a further request to extend the contract period for three months on the pica that it could not derive the full benefit of the contract on account of the restrictions placed by the APDMC in limiting the working hours from 6.00 a.m. to 6.00 p.m. While the matter was still under consideration, the petitioner filed the present writ petition on 26-5-1997 seeking a declaration that the contract dated 26-11-1996 enures for a period of twenty years by virtue of the provisions of the Mines and Minerals (Regulation and Development) Act, 1957 and the Minor Mineral Concession Rules, I960 and a consequential direction to the respondents to extend the lease granted under the agreement dated 26-11-1996 for a period of twenty years and for such oilier order or orders as are deemed fit and proper. The writ petition initially came up for admission on 27-5-1997 during summer vacation. But it was adjourned to 9-6-1997 taking the view that there was no urgency in the matter as it was represented by the learned Standing Counsel for A.P.D.M.C. that it would take considerable amount of time for notifying fresh tenders and finalising them even if there is such a proposal. Meanwhile on 29-5-1997, the Corporation addressed a letter to the petitioner extending the contract for an equal period of six months on the same terms and conditions subject to certain modifications and called upon the petitioner to execute the contract before 7-6-1997. On 31-5-1997, the petitioner sent a reply to the Corporation accepting the offer subject to the result of the writ petition which was already filed. On 7-6-1997 the petitioner sent a cheque for Rs.27,77,899/- towards the franchise amount for the extended period. The Corporation, however, sent a reply on 9-6-1997 informing the petitioner that since the petitioner has not complied with the terms and conditions contained in the letter dated 29-5-1997 request for extension of contract stands rejected and the cheque was also returned.
Sri S. Venkat Reddy, the learned senior Counsel appearing for the petitioners, referring to the various provisions of the Mines and Minerals (Regulation and Development) Act, 1957 and the Minor Mineral Concession Rules, 1960, has vehemently contended that the Act and the Rules envisage the grant of a mining lease for 20 years or a prospecting licence for three years as the case may be and there cannot be a mining lease or prospecting licence for six months. He further contended that when the law requires a thing to be done in a particular manner, it can be done in that manner only and not in any other manner. By force of the statute, the lease/franchise granted to the petitioner under the contract dated 26-11-1996 enures for a period of 20 years and that the respondents have no right to curtail the same to six months only. In any case, if the respondents want to introduce any other terms and conditions in the contract, they can do so only with the prior permission of the Central Government Finally, the learned senior Counsel submitted that the action of the Corporation in cancelling the offer made by it for extension of the contract after the same was accepted by the petitioner on the ground that the acceptance of the offer by the petitioner was not unconditional but subject to the result of the writ petition, is highly arbitrary, illegal, whimsical and perverse.
On the other hand, the learned Advocate General, appearing for the respondents, contended that the writ petition is wholly misconceived and is not maintainable. He further contended that the petitioner, having willingly and voluntarily entered into the contract and having derived benefit of the contract for its full term, cannot now turn round and question its validity. The petitioner cannot blow hot and cold.
The learned Counsel for the petitioners sought to repel the arguments of the learned Advocate General by contending that there can be no estoppel against statute and that even in contractual matters, the Court can interfere when the State or its instrumentalities act in an arbitrary or whimsical manner.
In support of their rival submissions, the learned Counsel for both parties have cited a number of decisions.
Admittedly the petitioners in these two writ petitions have willingly and voluntarily entered into the contract for six months with eyes wide open. It is not their case that they were labouring under any mistake or acting under compulsion. They have worked the contracts and derived the benefit thereunder. I do not, therefore, think that it is open to them to turn round and contend that the contracts obtained by them enure for a period of 20 years. Though the provisions of the Mines and Minerals (Regulation and Development) Act and the Minor Mineral Concession Rules provide for the grant of a mining lease for a period of 20 years and a prospecting licence for a period of three years, there is no express prohibition either in the Act or in the Rules against the grant of a lease/licence for a lesser period.
In State of Orissa and others Vs. Narain Prasad and others, etc. etc., , it is held that a person, who enters into certain contractual obligations with his eyes wide open and works the entire contract, cannot be allowed to turn round and question the validity of those obligations or the validity of the rules which constitute the terms of the contract. The extraordinary jurisdiction of the High Court under Article 226 which is of a discretionary nature and is exercised only to advance the interests of justice cannot certainly be employed in aid of such persons. Neither justice nor equity is in their favour. In Har Shankar and Others Vs. The Dy. Excise and Taxation Commr. and Others, , it was held that the writ jurisdiction of the High Courts under Article 226 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred. In view of these authoritative pronouncements of the Apex Court, it must be held that the petitioners arc not entitled to contend that the contracts in their favour enure for a period of twenty years, The decision in Srinivas Sastry v. Appaiah 1964 (1) An.WR 37, relied on by the learned Counsel for the petitioners in this context is easily distinguishable. In that case a Division Bench of this Court, dealing with the provisions of the Andhra Tenancy Act (Act XVIII of 1956) held that having regard to the legislative policy and the scheme and intendment of the Act, the lessee is entitled to continue in possession for a period of six years as provided in the Act even though the lease granted to him by the lesser \\vas for a lesser period. The said Act contained a specific provision in Section 17 that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith in any preexisting law, custom, usage, agreement or decree or order of a Court. That was a piece of a social, welfare legislation intended to provide protection and security of tenure to the tenants of agricultural lands. The Mines and Minerals (Regulation and Development) Act, with which we are concerned, is not a welfare legislation. The subject-matter and the legislative object of the two enactments arc wholly different. I do not, therefore, think that the decision relied upon by the learned Counsel for the petitioners has any relevance or application in the present context. In this view of the matter, I do not think it necessary to refer to the various provisions of the Mines and Minerals (Regulation and Development) Act or the Rules and the other decisions cited by the learned Counsel for the petitioner. I have, therefore, no hesitation to hold that it is not open to the petitioners to contend that the contracts in their favour enure for a period of 20 years. The said contention is accordingly rejected.
The question, however, still remains whether the cancellation of the offer for extension of the contracts for a further period of six months on the same terms and conditions is valid or not.
It is true that, as a general rule, contractual obligations cannot be enforced through a writ petition under Article 226 of the Constitution. But it is the settled position that even in contractual matters, the State and its instrumentalities have to act in a fair and reasonable manner and the Court can interfere even in such matters where the State or its instrumentalities act in an arbitrary or whimsical manner. (See The Commissioner of Provident Fund and Another Vs. Dr. V.S.V. Ramesh, through General Power of Attorney holder - Dr. V.V. Subba Rao and Another, , LIC of India and Another Vs. Consumer Education and Research center and Others, . It is not in dispute that the offer made by the Corporation for extending the contracts of the petitioners for a further period of six months was accepted by the petitioners and the petitioners have also sent cheques towards the franchise amount for the extended period. The Corporation, however, rejected the same on the ground that the acceptance by the petitioners was not unconditional but it was made subject to the result of the writ petitions. It is, in my view, neither fair nor reasonable. The petitioners cannot be penalised merely because they have approached the Court or stated that they are accepting the offer without prejudice to their contentions in the writ petitions which were already filed by them. In Hindustan Sugar Mills Vs. State of Rajasthan and Others, , it was held that in a democratic society governed by the rule of law, it is the duty of the State to do what is fair and just to the citizen and the State should not seek to defeat the legitimate claim of the citizen by adopting a legalistic attitude but should do what fairness and justice demand. The learned Counsel for the petitioners has also brought to my notice that in a similar matter, a Division Bench of this Court granted an interim order in C.M.A.No.1038 of 1997 dated 9-7-1997 directing the continuance of the lease for the extended period of six months. It is also stated that in two other similar matters, the Court of the I Additional Judge, City Civil Court, Hyderabad, also passed similar orders in O.S.Nos.717 and 718 of 1997- If such a benefit was granted to similarly situated persons, there is no reason why the same should be denied to the petitioners herein.
For the foregoing reasons, the two writ petitions are disposed of with a direction to the respondents to consider the case of the petitioners for extension of the respective contracts in their favour for a further period of six months and to pass appropriate orders in that behalf in the light of this judgment within four weeks from the date of receipt of this order. Meanwhile the interim orders granted earlier in the writ petitions will continue.
There will be no order as to costs.