The Punjab and Haryana High Court has given seven days’ time to the contractors of 67 mines in Punjab to decide their future course of action on the notices issued to them by the government last year asking them to either change the bidding mode from reverse bidding to progressive bidding or surrender their contracts.
The High Court, in its judgment released Monday, has held that the state was entitled to change the terms of an existing contract and observed that the Punjab government’s decision to opt for progressive bidding has been taken in public interest to rationalise the sale of minor minerals. The bench, in the judgment pronounced Friday, had dismissed 83 pleas against the government decision pending since May last year.
The progressive e-bidding system means contracts are given to the highest bidder as against the reverse bidding process where contracts were given to the lowest bidder. The Congress government had said the progressive bidding will end the cartelisation of sand and other mines in the state.
“The state of Punjab has taken a conscious policy decision to change the mode of auction. This is a decision taken by the Cabinet, which is the highest policy-making body of the state,” the division bench of Justices Surya Kant and Sudhir Mittal said in the 55-page judgment.
The division bench observed that although the pit head sale price would increase to a great extent but the same will not result in increase of retail price because “there is likely to be optimisation of production and reduction in illegal mining because a contractor would protect its territory from outsiders in his own interest.”
“Moreover, the cartelisation would be reduced if not completely eradicated, because a contractor has to pay 25 per cent of the annual contract amount as security deposit plus the contract money for first quarter of the ensuing year in advance. It would, therefore, be difficult for one person to obtain contracts in respect of large number of mines because of the cost factor involved, whereas in the ‘reverse bidding method’ cartelization was highly probable due to low cost of auction,” the bench said in the judgment.
Punjab in the case was represented by Additional Advocate General Rameeza Hakeem while as the contractors were represented by at least 13 advocates including four Senior Advocates.
Stating that the freedom of the state to exercise its executive powers cannot be restricted in any manner by any contract, the division bench said the contractors cannot claim the right of hearing as no premature termination of the contracts is involved in the case.