Bihar mining tenders must include block-wise coordinates in survey reports; state may owe damages for failing to provide required documents, Patna High Court rules.

The State auctioned Stone Block No. 27 in 2017, and issued a letter of intent (LOI) to Balaji Enterprises on 21 September 2017.

The petitioner deposited an initial bid amount of ₹2.90 crore, but the lease was not executed because environmental clearance had not been obtained; the petitioner claimed that the District Survey Report (DSR) lacked the block’s geo-coordinates.

The petitioner first sought assistance from the Mining Authority in August 2018, while the State later failed to provide the required information, including the geo-coordinates.

In January 2023, the District Magistrate cancelled the LOI and forfeited the deposit; the Commissioner of Mines dismissed the petitioner’s appeal.

The Single Judge allowed the writ petition and directed the authorities to finalize the DSR, extend the lease period, and complete the lease settlement.

The State appealed.

1. Whether the State’s action in cancelling the LOI and forfeiting the deposit was subject to judicial review in the circumstances of the case

2. Whether the delay in executing the lease was attributable to the petitioner, the State, or both, and what relief followed from that allocation of responsibility

3. Whether the Single Judge’s directions to finalize the DSR and complete the lease settlement should stand

Rule 28 of the Bihar Minerals (Concession, Prevention of Illegal Mining, Transportation & Storage) Rules, 2019 requires execution of the formal lease within 180 days and ordinarily provides for deemed revocation and forfeiture if required documents are not submitted in time; its second proviso permits execution after that period where the Collector is satisfied that the grantee was not responsible for the delay.

The Court also referred to Rule 25(1) of the Bihar Minor Mineral Concession Rules, 1972, concerning execution within 120 days and deemed revocation.

Under State of Bihar v. Pawan Kumar, Civil Appeal Nos. 3661–3662 of 2020, decided 10 November 2021, the 2020 Guidelines require a DSR to be prepared before auction or grant of the LOI.

On judicial review, Subodh Kumar Singh Rathore v. Chief Executive Officer, (2024) 15 SCC 461, together with Mahabir Auto Stores and A.B.L. International, supports review of State contractual action to guard against arbitrariness, while leaving consensual contract terms generally to ordinary private-law remedies.

The Court also invoked the restitution principle that a party should not retain an advantage obtained through litigation or delay.

The Court found that the petitioner did not begin seeking the information needed for environmental clearance until about 11 months after the LOI, while the State also failed to provide necessary documents, including the DSR’s geo-coordinates.

It therefore treated the delay as attributable to both parties, rather than solely to the petitioner, and held that the Single Judge had failed to account for the parties’ contributory negligence and the State’s resulting loss.

Although the statutory framework governed execution and revocation of the lease, the State’s own failure to perform its part justified setting aside forfeiture of the deposit.

The Court consequently declined to preserve the direction compelling completion of the existing lease and instead ordered repayment with interest, alongside procedural directions for future mining tenders.

The Court set aside forfeiture of the petitioner’s ₹2.90 crore deposit and directed payment with interest at 12% per annum from the date of deposit until payment, before initiation of a new tender for Block No. 27.

The petitioner was to be permitted to participate in the new tender, and its past conduct could not be used to reject its bid.

The Court also issued guidelines requiring, among other things, that the DSR and block-specific geo-coordinates accompany the tender notice, and prescribing timelines for the LOI, mining plan, approvals, and environmental-clearance process.