Chiplun Sand Mining & Trading Corporation v. The State of Maharashtra

1. Rule. Rule made returnable forthwith. By consent of the parties, the petition is heard finally.

2. This Writ Petition under Article 226 of the Constitution of India is filed by five Petitioners who were successful bidders of the tender floated by the Respondent-State for excavation of sand from the river/creek beds and to transport the extracted sand to the depot created for storage of the said sand and for management of the said depot. Although, various prayers have been sought in the petition, the effective prayer pressed for our consideration is writ of mandamus directing Respondents not to make Government Resolution dated 16th February 2024 applicable to the contracts executed between the Petitioners and the Respondent-State pursuant to tender dated 24th May

2023. Brief facts are as under:-

3. On 19th April 2023, the Respondent-State issued a Government Resolution detailing comprehensive policy regarding extraction, storage and sale of sand through online process. The objective of the said policy 2 of 11 was not to extract the sand commercially but to make it available for development work and also to avoid flood like situation which may arise due to accumulation of sand in river bed. Therefore, the Government on experimental basis, issued the said policy, for a period of one year with an objective to make the sand available to the citizens in the State at a cheaper rate and to curb unauthorised extraction. The said policy also provided for the terms and conditions regarding depot construction and management. The rate for sale of sand as per the said policy was determined at Rs.600/- per brass for one year for the entire State on experimental basis and the amount of royalty would be waived. The expenses of sand transportation will have to be borne by the citizens. The said policy also had a mechanism for redressal of grievances in sand extraction by a Committee at district level.

4. Pursuant to the above policy, on 24th May 2023, Respondent- State published the tender inviting the contractors to bid for sand extraction. The Petitioners along with other bidders applied for the said tender and ultimately the Petitioners were allotted the tender for five different sites. The successful bidders were issued a LOI and, thereafter, the Respondent-State and the Petitioners executed an agreement on 29th August 2023. In the present petition, one such agreement is enclosed between the Respondent-State and Petitioner No.1. 3 of 11

5. On 16th February 2024, Respondent-State issued another Government Resolution dated 16th February 2024 for extraction of the sand. The said Government Resolution dated 16th February 2024 modified and superseded earlier Government Resolution dated 19th April 2023 and a revised sand policy came to be issued by the said February 2024. Chapter 10 of the said Government Resolution provides that the sand depots which are operative as per the provisions of earlier Government Resolution dated 19th April 2023 will continue to operate in the same manner. However, the terms and conditions for the said sand depot will be applicable as per this revised sand policy. Further the sale cost of sand/gravel mentioned in Chapter No.6 (III) in the revised policy, will be applicable from the date of the new Government Resolution dated 16th

2024. It is on this backdrop that the Petitioners are before us. Submissions of the Petitioners:-

6. The primary contention of the Petitioners is that Respondent- State cannot unilaterally change the terms and conditions of the agreement dated 29th August 2023, which was executed pursuant to the tender floated on 24th May 2023. The Petitioners submit that this would be contrary to the principle of promissory estoppel and also contrary to the contract executed between the Petitioners and the Respondent-State. 4 of 11 The Petitioners submitted that they have arranged their business affairs on the basis of the agreement executed on 29th August 2023 and now the Respondent-State cannot unilaterally make Government Resolution dated 16th February 2024 applicable to such contract. The action of the Respondent-State, therefore, is unfair and contrary to the decision of the Coordinate Bench of this Court in the case of Musale Constructions, Builders and Contractors, Nagpur Vs. Vidarbha Irrigation Development Corporation, Nagpur & Anr.1. The Petitioners further submitted that on account of onset of the monsoon season, the sand extracted and lying on the beds will be washed away and huge loss would be incurred. The Petitioners in its rejoinder have enclosed month-wise daily lifting chart for the period December 2023 to April 2024 and submitted that post introduction of the impugned Government Resolution, the daily lifting has reduced substantially. The Petitioners have, therefore, prayed for a declaration that Respondent-State cannot unilaterally make the February 2024 applicable to the contract executed under the earlier Government Resolution dated 19th April 2023. Submission of Respondent-State:-

7. Per contra, the learned counsel for Respondent-State submitted that the petition is misconceived. The Respondent-State brought to our 1 2021 (1) Mah.L.J. 355 5 of 11 notice the reply filed by the State, wherein it is stated that the Petitioners would receive the same amount as they were receiving under the old policy. The Respondent-State also justified the issuance of the impugned Government Resolution dated 16th February 2024, which was issued on the basis of no profit no loss policy and the Respondent-State further submitted that sale of sand is not included in the tender and, therefore, the Petitioners have nothing to do with the sale of sand. The Respondent-State has also filed a chart giving comparative table of the policy dated 19th April 2023 and revised policy dated 16th

2024. The Respondent-State, therefore, prayed for dismissal of the present petition.

8. We have heard the learned Senior Counsel for the Petitioners and the learned counsel for Respondent-State and with their assistance have perused the documents, reply and rejoinder filed in the present proceedings which were brought to our notice. Analysis and Conclusion:-

9. There is no dispute that the agreement executed by the Petitioners and Respondent-State on 29th August 2023 was for a maximum duration of one year or until the sand reserved of the said sand gat is exhausted. Clause 2 of the said agreement further provides that the period of authorisation shall expire on 9th June 2024 and from 6 of 11 10th June to 30th September on account of monsoon, sand mining cannot be done during the said period. There is no clause in the agreement which empowers the Respondent-State to change the terms and conditions unilaterally. It is also a settled position in law that contract executed between two parties cannot be changed or modified unless both the parties to the contract agrees to the said changes or modification. In the absence of any clause in the agreement dated 29th August 2023, the Respondent-State cannot alter or modify the said agreement unilaterally.

10. Clause (4) of Chapter 10 of the Government Resolution dated 16th February 2024 provides that the sand depots which are operative as per the provisions of Government Resolution dated 19th April 2023 will continue to operate in the same manner. However, in the same clause it is also provided that the terms and conditions for such sand depots would be as per the revised sand policy of 16th February 2024. The said clause further provides that the sale and cost of sand/gravel mentioned in Chapter No.6 in the revised policy of 16th February 2024 will be applicable from the date of Government Resolution dated 16th

2024. In our view, the said clause is self contradictory. On the one hand the Government Resolution of 16th February 2024 provides that the sand depots operating as per earlier Government Resolution of 19th 2023 would continue to operate in the same manner, but later on states that the terms and conditions of the revised sand policy as per February 2024 would be applicable to such sand depots. This would also amount to modifying the agreement dated 29th August 2023 executed between the Petitioners and Respondent-State. We have already opined that agreement dated 29th August 2023 cannot be modified unilaterally. There is no approval by the Petitioners to the applicability of the terms and conditions of the revised sand policy to the agreement dated 29th August 2023. Hence clause (4) of Chapter 10 of Government Resolution dated 16th 2024 to the extent it makes the terms and conditions of the said Government Resolution applicable to the agreement dated 29th August 2023 cannot be applied to the Petitioners.

11. The Respondents in their reply have also admitted that the Petitioners would receive the same amount as they were receiving under the old policy of 19th April 2023 pursuant to which the agreement of 29th August 2023 was executed. If that be so, then we fail to understand as to why in the Government Resolution dated 16th February 2024 the terms and conditions of the revised sand policy is made applicable to the existing sand depots. In our view, the contracts awarded to the Petitioners pursuant to Government Resolution of 19th April 2023 would 8 of 11 govern the agreement executed on 29th August 2023. The Government Resolution dated 16th February 2024 would be applicable only to the tenders to be issued thereafter and not to the Petitioners contracts which were executed by the Petitioners and the Respondent-State prior to the Government Resolution of 16th February 2024 coming into force.