Judicature For Rajasthan Bench High Court · 2026

Judgment

1. State Of Rajasthan, Through Director Cum Special Secretary, Environment And Climate Change Department, Jaipur.

2. State Of Rajasthan, Through Principal Secretary To Government Of Rajasthan, Department Of Mines And Geology, Udaipur, Rajasthan.

3. Director, Department Of Mines And Geology, Udaipur, Rajasthan.

4. Mines And Petroleum (Gr-Ii) Department, Government Of Rajasthan, Through Joint Secretary To The Government Of Rajasthan, Jaipur.

5. M/s Commercial Engineers, Singhana Road, Narnaul, Haryana, Through Its Partner. ----Respondents For Petitioner(s) : Mr. R.N. Mathur, Senior Advocate assisted by Mr. Tarun Gupta, Mr. Abhishek Mewara & Mr. Rajat Sharma For Respondent(s) : Mr. Kamlakar Sharma, Senior Advocate assisted by Mr. David Mehla Mr. Vigyan Shah, AAG assisted by Mr. Yash Joshi, Mr. Priyam Aggarwal & Mr. Pulkit Bhardwaj Mr. Vinayam Saran 2 HON'BLE THE ACTING CHIEF JUSTICE MR. SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE BALJINDER SINGH SANDHU Judgment Date of conclusion of arguments: 11 th November 2025 Date on which judgment was reserved: 11 th November 2025 Whether the full judgment or only the operative part is pronounced: Full Judgment Date of pronouncement: 08 th January 2026 REPORTABLE Per: Baljinder Singh Sandhu, J

1. The present writ petition has been preferred by the petitioner company challenging the e-auction dated 20.03.2025 conducted by the department of Mines and Geology, Government of Rajasthan pursuant to e-auction notice dated 01.03.2025 of mines located at plot No.4/2023, plot No.6/2023 and plot No.8/2023 situated at Alwar Rajasthan.

2. The petitioner has also laid challenge to the amendment in Rule 18 of the Rajasthan Minor Mineral Concession Rules, 2017 (hereinafter referred to as ‘MMCR-2017’) by which the second proviso has been added below sub Rule 2 providing bid security to be twenty five percent of the offered price if the offered bid is more than Rs. 30 Crore. This amendment has been brought into effect by way of amendment in MMCR amendment rules 2025 on 03.01.2025. Facts of the Case:

3. The relevant facts ,in brief, are that the State Government issued and e-auction Advertisement on 01.03.2025 putting up 67 blocks of minerals for auction throughout the State of Rajasthan, and the blocks in question were shown at serial number 49, 50 and 51 being plots No.4/2023, plot No.6/2023 and plot No.8/2023 respectively at 3 Alwar of Masonry Stone, and were to be auctioned for a period of Fifty Years.The Advertisement provided for the terms and conditions in relation to the auction of the mineral blocks. The relevant portion of the Advertisement is reproduced herein-under:- सर्व(cid:3)साधारण को सूचनार्थ(cid:3) प्रकाशि(cid:16)त शिकया जाता है शिक राजस्थान अप्रधान खशिनज रिरयायत शिनयम , 2017 के अध्याय - के अन्तर्ग(cid:3)त अप्रधान खशिनजों के - शिनम्नांशिकत प्लॉट ई नीलामी (e-auction) . के माध्यम से आंर्वशिटत शिकये जाने है शिजसके शिलए इच्युक बोलीदाता आर्वेदन (cid:16)ुल्क र्व शिबड की प्रशितभूशित राशि(cid:16) - जमा कर ई - नीलामी में भार्ग ले सकता है। ई नीलामी में भार्ग लेने र्वाले - बोलीदाताओं को प्रत्येक प्लॉट हेतु नॉन रिरफण्डेबल आर्वेदन (cid:16)ुल्क रुपया 10,000/- तर्था शिबड प्रशितभूशित राशि(cid:16) ( नीचे अंशिकत ताशिलका के कॉलम 9 के अनुसार ) - शिनधा(cid:3)रिरत शितशिर्थ तक ई नीलामी की सेर्वा प्रदाता कम्पनी मेसस(cid:3) एम . एस . टी . सी . शिल . को जमा कराना आर्वश्यक होर्गा। आर्वंशिटत शिकये जाने र्वाले खनन प‌ट्टों ( प्लॉट ) का शिर्वर्वरण एर्वं बोली की शिनधा(cid:3)रिरत शितशिर्थयां र्व समय शिनम्नानुसार है :- jktLFkku ljdkj funs'kky; [kku ,oa Hkw foKku foHkkx] jktLFkku] mn;iqj Øekad% funs@v-[k-v- uhykeh@uhykeh¼ML 04½@2025@bZ&10412 bZ&uhykeh foKfIr loZlk/kkj.k dks lwpukFkZ izdkf'kr fd;k tkrk gS fd jktLFkku vizk/kku [kfut fj;k;r fu;e] 2017 ds v/;k;&III ds varxZr vizk/kku [kfutksa ds fuEukafdr IykWV bZ&uhykeh ¼e-auction½ ds ek/;e ls vkoafVr fd;s tkus gSa] ftlds fy, bPNqd cksyhnkrk vkosnu 'kqYd o fcM dh izfrHkwfr jkf'k tek dj bZ&uhykeh esa Hkkx ys ldrk gSA bZ&uhykeh esa Hkkx ysus okys cksyhnkrkvksa dks izR;sd IykWV gsrq ukWu&fjQ.Mscy vkosnu 'kqYd #i;ks 10]000@& rFkk fcM izfrHkwfr jkf'k ¼uhps vafdr rkfydk ds dkWye 9 ds vuqlkj½ fu/kkZfjr frfFk rd bZ&uhykeh dh lsok iznkrk dEiuh esllZ ,e-,l-Vh-lh- fy- dks tek djkuk vko';d gksxkA vkoafVr fd;s tkus okys [kuu iV~Vksa ¼IykWV½ dk fooj.k ,oa cksyh dh fu/kkZfjr frfFk;ka o le; fuEukuqlkj gS & Ø- la- 1 49 dk;kZy; dk uke ftlesa [kku ftlesa [kuu IykWV fLFkr gS ,oa IykWV Øekad [kuu iV~Vk ¼IykWV½ dk fooj.k Hkwfe jktLo IykWV {ks=Qy [kfut dk uke fcM izfrHkwfr jkf'k ¼#i;ksa esa½ vkjf{kr jkf'k ¼#i;ksa esa½ cksyh yxkus gsrq vkosnu 'kqYd o fcM izfrHkwfr jkf'k tek djkus dh vafre frfFk vkWuykbZu cksyh dh fnukad vkWuykbZu cksyh dk le;

,usD'kpj Øekad tgk¡ IykWV dk foLr`r fooj.k vafdr gS] foKfIr ds lkFk layXu gS rFkk fo'ks"k fooj.k 2 3 4 5 6 7 8 9 10 11 12 13 14 [kfu vfHk;ark] IykWV Øekad% 4@2023 xSj eqefdu igkM+ igkMok l gjlkSyh [kSjFky& frtkjk 2-7773 eslsujh LVksu 2500000 555600 19-03-2025 20-03-2025 12-00 ih-,e- ls 02-00 ih-,e- ,usD'kpj&49 50 [kfu xSj igkMok gjlkSyh [kSjFky& 3-7167 eslsujh 2500000 743400 19-03-2025 20-03-2025 12-30 ,usD'kpj&50 4 eqefdu igkM+ l frtkjk LVksu igkMok l [kSjFky& frtkjk eslsujh LVksu gjlkSyh 3-9603 2500000 792200 19-03-2025 20-03-2025 xSj eqefdu igkM+ ih-,e- ls 02-30 ih-,e- 01-00 ih-,e- ls 03-00 ih-,e- ,usD'kpj&51 51 vfHk;ark] IykWV Øekad% 6@2023 [kfu vfHk;ark] IykWV Øekad% 8@2023 ¼v½ egÙoiw.kZ fcanq%& 1- Ø-la- 1 ls 22 o 25 ls 67 ij of.kZr [kuu iV~Vksa dh vof/k lafonk iaft;u fnukad ls 50 o"kZ ds fy;s gksxhA 2- Ø-la- 23 o 24 ij of.kZr ,e&lS.M ijfeV dh vof/k 10 o"kZ ds fy;s gksxhA 3- XXXX 4- XXXX 5- XXXX 6- XXXX 7- XXXX 8- XXXX 9- bZ&uhykeh esa izLrqr cksyh jkf'k 30 djksM+ ls vf/kd gksus ij fcM izfrHkwfr jkf'k izLrqr cksyh jkf'k dh 25 izfr'ku tek djokuh gksxhA ¼l½ bZ&uhykeh dh çfØ;k 1- XXXX 2- XXXX 3- XXXX 4- XXXX 5- XXXX 7- cksyhnkrk viuh cksyh uhykeh iw.kZ gksus ls iwoZ fdruh Hkh ckj c<+k ldrk gSA uhykeh lekfIr ds fu/kkZfjr le; ls vkB feuV ds vUnj ;fn dksbZ cksyh izkIr gksrh gS rks cksyh dk le;] cksyh izLrqr djus ds le; ls vkB feuV Lor% gh c<+ tkosxkA ;g izfØ;k rc rd tkjh jgsxh tc rd vafre vkB feuV esa dksbZ cksyh izkIr ugha gksrh gSA cksyh 5000 #i;s ds xq.kkad (Multiple) esa c<+kbZ tk ldsxhA 8- mPpre cksyhnkrk dk p;u dEI;wVj flLVe }kjk Lor% fd;k tkosxkA ftldh lwpuk lsok iznkrk }kjk tfj;s bZ&esy mPpre cksyhnkrk dks Hksth tkosxhA

4. From the advertisement, it is clear that the same has been conducted under the MMCR-2017 for the plots in question, the reserve price has been mentioned. The bid security amount is mentioned as Rs. 25 Lakh. The last date of submission of the application fees and the amount of bid security has been mentioned as 19.03.2025 and the online e-auction date has been mentioned as 20.03.2025, meaning thereby that anyone who wants to participate in the auction has to deposit the application fees and the bid security by 19.03.2025. In the conditions, it is also provided that if the bid is beyond Rs. 30 Crore then the bid security of twenty five percent of the offered bid 5 has to be deposited. The petitioner as well as respondent No.5 participated in the e-auction bidding process. After several rounds of bidding all the three blocks were released in favour of respondent No.5, M/s Commercial Engineers, who had submitted the highest bid of Rs.29,99,95,600/- for plot No. 4/2023, Rs. 29,99,98,400/- for plot No.6/2023 and Rs.29,99,97,200/- for plot No. 8/2023 respectively.

5. It will also be relevant to state that the bid condition also provided that the bidder can submit a bid as many times as it wishes until the same is completed. The time provided for each bid was eight minutes and the bid could be increased in the multiples of Rs. 5000/-. Arguments of the Petitioner:

6. The petitioner's company submits that although it had duly complied with all requirements of registration, fee payment and furnishing of bid security of Rs. 25 Lakh as mandated under the e-auction notice, when it attempted to place bids exceeding Rs. 30 Crore during the live auction, the auction portal refused to accept the entry. On seeking clarification from the authorities the petitioner was informed that the portal was configured to block the submission of bids beyond Rs.30 Crore unless twenty five percent of the offered bid was already pre-deposited in the bidder’s wallet. The petitioner asserts that such refusal was not attributable to any default or lack of readiness on its part but solely because no window or mechanism existed through which the required twenty five percent amount could be deposited at the relevant stage. The petitioner maintains that it was willing and financially capable of making the deposit, yet the absence of an operational facility to do so, rendered bidding beyond Rs.30 Crore impossible, thereby preventing the petitioner from placing further 6 bids.

7. It is urged that this impediment was neither disclosed nor explained in the auction advertisement. The petitioner contends that the e- auction notice unequivocally informed bidders that submission of Rs.25 Lakh as bid security entitled them to participate in the auction without limitation. Having deposited this security, the petitioner legitimately believed that it would be entitled to bid to any extent permitted under competitive bidding. The petitioner submits that imposing an undisclosed condition mid-auction, without providing any mechanism to fulfil it amounts to arbitrariness, denial of fair opportunity and breach of legitimate expectation. It is further submitted that the petitioner expressly conveyed its willingness to deposit the requisite twenty five percent security, but was disabled because the portal did not provide for such transaction. Consequently, it is alleged that the amendment inserted on 03.01.2025 became a tool to curtail participation rather than a bona fide regulatory measure.

8. Expanding upon this grievance, the petitioner submits that neither the amendment nor the auction notice prescribed a manner or procedure for deposit of the twenty five percent security. The notice merely stated that if the bid crosses Rs.30 Crore, twenty five percent of the offered bid must be deposited. It is contended that this ambiguity led bidders to reasonably assume that once the offer crossed Rs.30 Crore, the system would prompt or enable them to make the enhanced deposit. However, the complete absence of an operational 7 mechanism meant that although rules required compliance, no means to comply existed. As such, the petitioners argue that the impugned provision imposed an impossible condition, making the rule facially absurd and unworkable. The petitioners has contended that not allowing them to submit the bid beyond Rs.30 Crore on the ground of non-deposition of 25% of the said amount in advance is ex facie perverse, irrational, absurd and preposterous. It is submitted that once the bid security of rupees twenty Lakh was deposited, they had right to participate in the bid and such a right could not have been arbitrarily curtailed by this new ambiguous condition. In fact the bidding came at a halt at the amount which was below thirty Crore and the maximum price of the mineral plot could not be achieved.

9. It is further submitted that the proviso is a clear embargo on the right of a qualified bidder to enhance his bid beyond thirty Crore, and the same is in fact contrary to Rules 15 and 16 of the MMCR, 2017. Allegations have also been levelled that, in fact, the auction process has been mischievously manipulated so that the respondent No. 5 is successful in the auction, and the same is evident from the fact that his last bid for all the three plots was just placed less than rupees five thousand below thirty Crore, which leaves no margin for the next bidder to offer his bid.

10. The petitioner further points out that this confusion was not peculiar to it alone. It submits that even the successful bidder, respondent No. 5, had not deposited the twenty five percent amount and had only deposited Rs.25 Lakh like all other bidders. But, respondent No. 5 pleads up to Rs.29.99 Crore and ultimately succeed, whereas the 8 petitioner was barred from placing bids above Rs.30 Crore. This, according to the petitioner, demonstrates clear discrimination and vitiates the fairness and transparency of the auction. The petitioner submits that the bidding pattern, with bids reaching just short of Rs.30 Crore across all three blocks, itself shows that the auction had been artificially capped due to the flawed rule, thereby suppressing the natural course of competitive bidding.

11. It is then argued that because the petitioner was ready to offer bids above Rs.30 Crore, the auction system ought to have facilitated bidding beyond that level. Instead, the portal barred him from participating, thereby defeating the object of competitive auction. The petitioner asserts that the State, being trustee of natural resources, is under constitutional obligation to ensure maximisation of revenue through fair participation. By preventing bidders from competing beyond a limit, the State caused loss to the public exchequer. Thus, the petitioner submits that it is not merely a private grievance but a matter of public interest, since the flawed rule restrained higher offers which would have substantially enhanced State revenue.

12. As a result, the petitioner has challenged the second proviso inserted under Rule 18(2) by notification dated 03.01.2025. The petitioner submits that the requirement of depositing twenty five percent of the offered bid amount once the bid exceeds Rs.30 Crore is unclear, unreasonable and unconstitutional, and therefore violates Articles 14 and 19(1)(g) of the Constitution. It is contended that the arbitrariness lies both in the condition itself and in the way it operates. The proviso makes compliance dependent on a future and uncertain bid amount, 9 without explaining how, when or in what manner the required deposit is to be made. According to the petitioner, such uncertainty leaves bidders without clear guidance and is contrary to the rule of law. It is further argued that a condition linked to an undefined future amount, which cannot be calculated before placing a bid, despite best due diligence creates an obligation that is impossible to meet. The petitioner submits that this requirement restricts participation in auctions, disturbs fair competition and, instead of protecting the auction process, suppresses competition and results in undervaluation of public resources.

13. The petitioner therefore contends that the amendment runs counter to the purpose of the Mines and Minerals (Development and Regulation) Act, 1957,(hereinafter referred to as MMDR-1957) which mandates open competition and maximisation of public revenue through transparent auction. The petitioner submits that the amendment is manifestly arbitrary, unconstitutional, incapable of compliance and violative of the doctrine of public trust doctrine, as it deprives the State and its citizens of legitimate auction value. Accordingly, the petitioner seeks striking down of the proviso and annulment of the auction held under its oppressive influence. Arguments of the Respondent State and Respondent No.5

14. The respondent State as well as respondent no.5- M/s Commercial Engineers, have preferred reply to the writ petition supporting the e- auction held on 20.03.2025. The respondents have stated that the e- auction was conducted in an absolutely fair and transparent manner and strictly in accordance with the provisions of the MMCR-2017. It is 10 submitted that Rule 18, as amended on 03.01.2025, clearly stipulates that the bid security is to be twenty five percent of the offered bid price. Rule 14 specifically provides for electronic auction and bidding procedures, while Rule 15 prescribes guidelines for submitting bids on the e-auction platform. These rules, according to the respondent, require every person offering a bid to make careful examination of the governing provisions and guidelines and by participating, to be deemed to have accepted their terms.

15. It is further submitted that the advertisement dated 01.03.2025 is absolutely clear and the requirement of twenty five percent bid security for offers of Rs. 30 Crore and above is stipulated at serial No.9. The State asserts that bidders were free to deposit any amount into their auction wallet at their discretion and such deposits would be utilised when bids were placed, with no restriction on the amount that could be pre-funded. The e-advertisement also explicitly prescribed

19.03.2025 as the last date for submission of the bid security and only those bidders who deposited the requisite security were eligible to participate in the auction held on 20.03.2025.

16. According to the respondent, the entire bidding process was conducted through the online portal without human intervention and therefore, if the petitioner failed to deposit twenty five percent of the offered bid, no fault can be attributed to the authorities. It is argued that had the petitioner been genuinely desirous of bidding beyond Rs.30 Crore, would have deposited the requisite twenty five percent amount in advance, as per the schedule and conditions prescribed in the e-auction. It is emphasised that it was for the petitioner to assess 11 the value of the mineral block and its own financial capacity before bidding. The respondent reiterates that the auction was conducted in strict conformity with the MMCR-2017 Rules as well as the terms stipulated in the e-auction notice dated 01.03.2025, through the MSTC portal. The allegation that the portal barred the petitioner from bidding above Rs. 30 Crore is stated to be misconceived and factually incorrect rather, the petitioner was unable to place such a bid due to absence of the twenty five percent security deposit in its auction account.

17. In defending the validity of the amendment to Rule 18, whereby the proviso was inserted, the respondents contend that the amendment was introduced to safeguard the auction process by ensuring that only serious and financially sound bidders participate, to prevent bid- rigging and to maintain the sanctity of public auctions. The revised bid security condition, according to the State, deters misuse of the auction platform and ensures that successful bidders are financially capable and less likely to default, thereby protecting valuable public resources. It is further submitted that the requirement also prevents speculative, frivolous or disruptive bids which may burden the State exchequer, delay allotment, deter genuine investors and compromise the integrity and transparency of the auction system.

18. It is asserted that the amendment applies uniformly to all bidders placing bids above Rs. 30 Crore and constitutes reasonable classification founded on the financial magnitude of the bid, which forms an intelligible differentia having rational nexus with the objective of ensuring fiscal discipline and safeguarding the auction 12 process. The State submits that the amendment does not prohibit any entity from participating in the auction. Any eligible person may bid to the fullest of its capacity, subject only to the requirement of proportionate financial commitment applicable to high value bids. The State therefore maintains that the proviso added to Rule 18 is neither discriminatory nor arbitrary and does not violate Article 14 or Article 19(1)(g) of the Constitution.

19. The State has alleged that the auction advertisement explicitly set out that the bid security was to be deposited by 19.03.2025 i.e. a day prior to the auction. The petitioner failed to the deposit the 25% of the bid security by the said cut off date, due to which he was not allowed to increase the bid beyond Rs. 30 Crore, and as such the contention that the he was not allowed to increase the bid is wholly false. It is alleged, that the petitioner having voluntarily participated in the e-auction and having failed to emerge successful, has now sought to challenge the auction conditions as well as the amendment, which is impermissible. The challenge, according to the respondent, is an afterthought, motivated solely by the petitioner’s failure to comply with bid terms and inability to secure allotment.

20. It is emphasised that in matters arising out of contractual and auction processes, the scope of writ jurisdiction is limited. Reliance is placed on the principle that Courts do not ordinarily interfere with the policy decisions of the State or with tender/auction conditions unless the action complained of is shown to be malafide, arbitrary, discriminatory or in violation of statutory provisions. The petitioner has not demonstrated any legal infirmity warranting interference by this 13 Hon'ble Court. Accordingly, it is prayed that the writ petition be dismissed as devoid of merit.

21. It is relevant to note here that this Court while hearing the petition on stay application had passed a detailed order on 15.05.2025 and the State Government was asked to file additional affidavit placing on record the information as to the bidders who may have deposited 25% of Rs.30 crores in anticipation of the bids during the auction proceedings. The Court was also pleased to stay the execution of the lease deed in the matter. In pursuance of the same, an additional affidavit was filed by the State Government on 23.05.2025 informing that in no case 25% of the bid exceeding 30 crores has been deposited. Heard learned Senior counsels for the petitioner as well as for respondent no.5; Learned AAG for the state of Rajasthan and perused the material available on record. Analysis:-

22. Before adverting to the rival contentions on the validity of the impugned proviso and the legality of the auction conducted pursuant thereto, it is necessary to notice the relevant statutory provisions governing the e-auction of mineral concessions. The MMCR-2017, prescribe a comprehensive framework for registration of bidders, conduct of electronic auctions, submission of bids and deposit of bid security. The relevant portion of Rule 14, 15, 16 and 18, which regulate the manner of auction and the conditions of participation, is reproduced herein-above for proper appreciation of the controversy. 14 “14. Electronic auction and bidding process of mineral concession.- (5) Intending bidders shall get registered with the agency appointed for auction as prospective bidder for participating in e-auction. The registration shall always open for all prospective bidders to get registered with the e-auction service provider and shall be one time. After registration, prospective bidder shall be eligible for participating in E- auction conducted by the department for grant of mineral concession and contracts. (6) Bidders shall carefully read guidelines mentioned in rule 15 before submitting bids. (7) The Government, its employees and advisers make no representation or warranty and shall have no liability to any person, including any bidder under any law, statute, rules or regulations or tort, principles of restitution or unjust enrichment or otherwise for any loss, damages, cost or expenses which may arise from or be incurred or suffered on account of any information or data or arising in any way from participation in the auction process. (8) The ascending forward online electronic auction shall be held in the following manner, namely: (i) The prospective bidders shall deposit bid security as per rule 18 and a refundable application fee of (rupees ten thousand) as per time and date mentioned in notice inviting hid to the agency authorized for conducting e- auction through RIGS NEFT/NET-BANKING: Provided that the prospective bidder may deposit a lump-sum amount in advance and from such amount, application fee and bid security of the plot for which he intends to bid, shall be deducted. The bidder may participate in as many auctions as pet deposited amount; (ii) The prospective bidders shall submit their price offer on the electronic platform exclusive of all taxes and duties, which shall not be less than the reserve price. The bidder will have the sole responsibility to make payment of all the applicable taxes and duties to the authorities concerned directly and produce the proof of the same the department. Provided that the price offer may be revised till the conclusion of the e-auction as per notice inviting bid; (iii) The date, time and period of e-auction shall be as per the schedule mentioned in notice inviting bid. However the closing time of e-auction shall be automatically extended in the event a bid is received during the last eight minutes before the scheduled closing time of electronic auction. The closing time of electronic auction will be automatically extended by eight minutes from the last received bid time to give equal opportunity to all other qualified bidders. This process of auto extension will continue till the last highest bid remains unimproved for a period of eight minutes. (iv) The successful bidder shall be decided by the system solely on the basis of highest bid submitted by the bidders. No negotiation shall be conducted with any bidder; 15 (v) On close of e-auction, the highest bidder shall be declared as successful bidder and thereafter bid sheet indicating the name of the successful bidder and bid price etc. shall be made available by the agency through e-mail within twenty four hours. The bid sheet may be downloaded through Management Information System (MIS) reports. [Provided that where total number of bidders is less than two, the bidder shall not be declared as successful bidder and auction process shall be annulled. Provided further that if in the second attempt of auction, total number of bidders continues to be less than two, [then the such single Bidder] shall be declared as successful bidder.;] .......………………..." "15. Guidelines for submitting any bid on e-auction platform.- (7) During e-auction process, the qualified bidder will be able to submit its [Price Offer] as many times as it wishes against the same mining lease, quarry license, royalty collection contract, or excess royalty collection contract. The qualified bidder shall remain anonymous to other qualified bidders participating in the electronic auction process as well as to e-auction service provider or Government. The qualified bidder will be able to see the prevailing highest [Price Offer] against the mining lease, quarry license, royalty collection contract or excess royalty collection contract, but the name of the highest qualified bidder at any point of time shall not be displayed. The qualified bidder shall have to put its [Price Offer] over and above the displayed highest bid by a minimum increment as mentioned in notice inviting bid (NIB) to become the highest qualified bidder. The electronic auction process will have a scheduled start and close time which will be displayed on screen. The qualified bidder shall be able to put its [Price Offer] after the start of bid time and till the close time of electronic auction. The current server time (IST) will also be displayed on the screen. In the event a [Price Offer] is received during the last eight minutes before the scheduled close time of electronic auction, the close time of electronic auction will be automatically extended by eight minutes from the last received bid time to give equal opportunity to all other qualified bidders. This process of auto extension will continue till no [Price Offer] is received during a period of eight minutes. (9) It shall be deemed that by submitting a bid, the bidder has,- (i) made a complete and careful examination of rules or guidelines for e-auction and unconditionally and irrevocably accepted the terms thereof; (ii) reviewed all relevant information provided by the Government, as may be relevant to the bid; (iii) accepted the risk of inadequacy, error or mistake in the information provided by or on behalf of the Government relating to any of the matters related to the e-auction process; (iv) satisfied itself about all matters regarding the e-auction process for submitting an informed bid, in accordance with the rules; and (v) acknowledged and agreed that inadequacy, lack of completeness or incorrectness of information or ignorance of 16 any of the matters related to the e-auction process herein- above shall not be a basis for any claim for compensation, damages, extension of time for performance of its obligations, loss of profits etc. from the Government.........." "16. Grant of mining lease.- (1) Mining lease shall be granted to a person who offers highest premium amount through e-auction subject to provisions of [clause (vi) of sub-rule (5) of Rule 9 or clause (viii) of ] sub-rule (8) of rule 14;] [Provided that the gap area and strip of land shall be granted as per the provisions of sub-rule (3) and (3A) of rule 7] ……………............" "18. Bid security of e-auction for mineral concession:- (1) Bid security shall be in form of electronic fund transfer (RTGS/NEFT, etc.). (2) [The amount of bid security shall be specified in table given below:- S.No. Area of plot put under e- auction Amount of bid security 1 1A 2 3 4 5 Less than 1 hectare 1 hectare More than 1 hectare and upto 2 hectare 2 Lacs 10 lacs 15 Lacs More than 2 hectare and upto 2 hectare 25 Lacs More than 5 hectare and upto 10 hectare 35 Lacs More than 10 hectare 40 Lacs Provided that in notified scheduled area, plots having one hectare area, the amount of bid security shall be 5 Lakh. Provided further that where offered bid price is more than thirty Crore, the bid security shall be twenty five percent of offered bid price. (3) The bid security of successful bidder shall be adjusted first installment to be deposited as per sub-rule (10) of rule 14, if not forfeited under these rules. ……………..........."

23. The matter requires examination in the context of the statutory scheme and the constitutional principles governing allocation of natural resources. It is well settled that mineral resources constitute public property and vest in the State, in trust, for the benefit of the people. Consequently, any process adopted by the State for their allocation, particularly for commercial exploitation, must conform not 17 only to the statutory scheme, but also to the constitutional mandates of fairness, equality, transparency and public interest. These principles form the foundational touchstone against which the validity of auction conditions, delegated legislation and the conduct of the auction process itself must be assessed.

24. The Hon’ble Supreme Court has repeatedly emphasised these principles while examining the allocation of natural resources by the State. In Centre for Public Interest Litigation v. Union of India, reported in (2012) 3 SCC 1 (the 2G Spectrum Case), Further the Apex Court held that natural resources are vested in the State as a trustee of the people and that their distribution must be guided by the doctrine of equality and public trust. The Court underscored that any method adopted for alienation of natural resources must be fair, transparent, non-discriminatory and conducive to protection of public interest, observing as under :- “75. … while distributing natural resources the State is bound to act in consonance with the principles of equality and public trust and ensure that no action is taken which may be detrimental to public interest. Like any other State action, constitutionalism must be reflected at every stage of the distribution of natural resources. In Article 39(b) of the Constitution it has been provided that the ownership and control of the material resources of the community should be so distributed so as to best subserve the common good, but no comprehensive legislation has been enacted to generally define natural resources and a framework for their protection. 85. As natural resources are public goods, the doctrine of equality, which emerges from the concepts of justice and fairness, must guide the State in determining the actual mechanism for distribution of natural resources. In this regard, the doctrine of equality has two aspects: first, it regulates the rights and obligations of the State vis-à-vis its people and demands that the people be granted equitable access to natural resources and/or its products and that they are adequately compensated for the transfer of the resource to the private domain; and second, it regulates the rights and obligations of the State vis-à-vis private parties seeking to acquire/use the resource and demands that the procedure adopted for distribution is just, non-arbitrary and transparent and that it does not discriminate between similarly placed private parties. 18

89.In conclusion, we hold that the State is the legal owner of the natural resources as a trustee of the people and although it is empowered to distribute the same, the process of distribution must be guided by the constitutional principles including the doctrine of equality and larger public good. 95.This Court has repeatedly held that wherever a contract is to be awarded or a licence is to be given, the public authority must adopt a transparent and fair method for making selections so that all eligible persons get a fair opportunity of competition. To put it differently, the State and its agencies/instrumentalities must always adopt a rational method for disposal of public property and no attempt should be made to scuttle the claim of worthy applicants. When it comes to alienation of scarce natural resources like spectrum, etc. it is the burden of the State to ensure that a non- discriminatory method is adopted for distribution and alienation, which would necessarily result in protection of national/public interest. 96.In our view, a duly publicised auction conducted fairly and impartially is perhaps the best method for discharging this burden and the methods like first-come-first-served when used for alienation of natural resources/public property are likely to be misused by unscrupulous people who are only interested in garnering maximum financial benefit and have no respect for the constitutional ethos and values. In other words, while transferring or alienating the natural resources, the State is duty-bound to adopt the method of auction by giving wide publicity so that all eligible persons can participate in the process.”

25. In Reliance Natural Resources reported in (2010) 7 SCC 1, the Apex Court observed that the constitutional mandate is that the natural resources belong to the people of the country, and the doctrine of public trust has broader application. Referring to M.C. Mehta (1997) reported in 1 SCC 388, the Court held that :- “114. It must be noted that the constitutional mandate is that the natural resources belong to the people of this country. The nature of the word "vest" must be seen in the context of the Public Trust Doctrine (PTD). Even though this doctrine has been applied in cases dealing with environmental jurisprudence, it has its broader application. 116. … It is thus the duty of the Government to provide complete protection to the natural resources as a trustee of the people at large.”

26. The Apex Court in Natural Resources Allocation’s case (2012) 10 SCC 1 held that although auction is not elevated to the status of a constitutional mandate for allocation of natural resources, the method adopted by the State is subject to judicial scrutiny on the touchstone of Article 14. The Court emphasized that the State, as 19 trustee of natural resources, must adopt a process that is fair, transparent, non-arbitrary and conducive to genuine competition, so as to secure the best possible return for the public. It was observed as under:- “146.........The Court cannot mandate one method to be followed in all facts and circumstances. Therefore, auction, an economic choice of disposal of natural resources, is not a constitutional mandate. We may, however, hasten to add that the Court can test the legality and constitutionality of these methods. When questioned, the courts are entitled to analyse the legal validity of different means of distribution and give a constitutional answer as to which methods are ultra vires and intra vires the provisions of the Constitution. Nevertheless, it cannot and will not compare which policy is fairer than the other, but, if a policy or law is patently unfair to the extent that it falls foul of the fairness requirement of Article 14 of the Constitution, the Court would not hesitate in striking it down.

149. Regard being had to the aforesaid precepts, we have opined that auction as a mode cannot be conferred the status of a constitutional principle. Alienation of natural resources is a policy decision, and the means adopted for the same are thus, executive prerogatives. However, when such a policy decision is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated for commercial pursuits of profit maximising private entrepreneurs, adoption of means other than those that are competitive and maximise revenue may be arbitrary and face the wrath of Article 14 of the Constitution. Hence, rather than prescribing or proscribing a method, we believe, a judicial scrutiny of methods of disposal of natural resources should depend on the facts and circumstances of each case, in consonance with the principles which we have culled out above. Failing which, the Court, in exercise of power of judicial review, shall term the executive action as arbitrary, unfair, unreasonable and capricious due to its antimony with Article 14 of the Constitution.”

27. Recently, in M/s Shanti Construction Pvt. Ltd. v. State of Odisha reported in (2025 INSC 1295), the Hon’ble Supreme Court reiterated that a public tender or auction is not a private commercial transaction but an instrument of governance through which the State discharges its constitutional obligation as trustee of public resources. The Court held that the ‘heart beat of fair play’ in tender matters is non-arbitrariness and fairness in State action and where tender 20 conditions, or their interpretation, narrow competition or exclude higher bids without legal justification, judicial intervention is not merely permissible but constitutionally mandated, particularly where such interpretation results in loss of public revenue and defeats the object of competitive allocation of natural resources. It was observed as under :- “9. The ‘heart beat of fair play’ in tender matters is non- arbitrariness and fairness in State action. The court’s interference is limited to cases where the decision making process is shown to be arbitrary, irrational, mala fide or contrary to public interest. (See : Michigan Rubber (India) Ltd. v. State of Karnataka & Others11). The same principle resonates in Banshidhar Construction Pvt. Ltd. v. Bharat Coking Coal Ltd. & Others12 wherein this Court reiterated that decisions of the Government must be free from arbitrariness and guided by the constitutional mandate contained in Article 14 of the Constitution of India. The principle of restraint enunciated in TATA Cellular v. Union of India that Courts do not interfere in contractual matters of the State, is accompanied by an equally strong duty to intervene in decision making process if the same is irrational, perverse or against public interest. 10. A public tender is not a private bargain. It is instrument of governance, a mechanism through which the State discharges its solemn duty as trustee of public wealth. Its purpose is not merely procedural compliance, but maximisation of public value through a process i.e. fair, transparent and competitive. The obligation of the Tendering Authority is therefore twofold, namely, to interpret its own terms with consistency and to ensure that such interpretation advances, not defeats, the object of tender. The court must intervene in a case of demonstrable misconstruction of a tender condition or irrationality which affects the public interest. When an interpretation of a tender condition narrows competition and excludes the highest bidder on a ground unsupported by law, the decision making process is vitiated. The interpretation of the terms of tender must, therefore, serve the object and purpose of the tender mainly to maximise the revenue to the State, when it deals with a natural resource.15.......The Tender Committee, however, proceeded on a narrow and erroneous understanding of the expression of the term ‘previous Financial Year’ and erroneously concluded that since the unsuccessful bidder had not filed the Income Tax Return for Financial Year 2021-2022, therefore it had not complied with the mandate contained in Rule 27(4)(iv) of the Rules. The Tender Committee has erroneously interpreted the tender condition which excludes the highest bidder and defeats the purpose of the tender. Such an interpretation by the Tender Committee undermines the principle that State must act to enhance and not diminish, the public exchequer in case it is dealing with natural resources. When an authority acting under a tender misinterprets the tender condition that diminishes competition and deprives the State of its legitimate revenue, the constitutional duty of the court to interfere is beyond question. The High Court while deciding the writ petition has failed to advert itself to the aforesaid aspect of the matter. The impugned judgment passed by the High Court, therefore, 21 cannot be sustained. In view of our aforesaid conclusion, it is not necessary for us to advert to various other contentions urged by the parties.16.It is well settled that tenders and public auctions, specially for natural resources, are not mere commercial transactions, but an exercise in public trust. The State as custodian of natural wealth is obligated to secure the best value for public resources consistent with the principles of fairness and transparency."

28. It is significant to note that the mineral concessions in the present case have been granted for a period of Fifty Years. Once such rights are allotted, they generally remain in place for a long time and are not easily revisited. Any illegality, arbitrariness or procedural error at the stage of auction or allotment therefore has lasting consequences. Given the long tenure of such grants, the Court’s duty to closely scrutinise the process becomes more heightened, as an unlawful or unfair allotment would otherwise continue to affect public interest for several decades.

29. Considering the Statutory scheme we see that the MMDR Act 1957 was enacted for development and regulation of mines and minerals under the control of the union. The earlier legal framework of MMDR Act, 1957, did not permit the auctioning of mineral concessions. The MMDR (Amendment) Act, 2015 was brought into force with the object and reason to introduce a transparent, fair and non-discretionary regime for allocation of mineral resources by mandating auction as the primary mode of grant. The amendment sought to promote competitive bidding, eliminate arbitrariness, and ensure maximisation of value of mineral resources of the country. In furtherance of this legislative mandate, the MMCR Rules, 2017 have also adopted auction as the mode of grant so as to ensure fair, transparent, and 22 competitive process for allocation of mineral concessions and also to maximise revenue for the State.

30. Under the MMCR Rules the process of e-auction is given under Rule 14, and sub rule 8 provides the manner of auction to be followed in the ascending order. The first condition it provides for is the deposition of bid security as per Rule 18 by the date and time specified in notice inviting bid, and the proviso provides for a wallet where the lump-sum amount can be deposited in advance to be adjusted in fees and bid security, nevertheless the same has to be deposited as per the date and time provided for bid security. Sub Rule 8 (iii) provides that the date, time and period of e-auction shall be as per the schedule mentioned in the notice inviting bids and the timing of the bid shall only close once the bidding is over giving a fair opportunity to all the bidders to participate. But the same does not provide for any window to deposit security bid during the process of auction.

31. Rule 15 provides for guidelines for submitting the bid and sub-rule provides that the qualified bidder will be able to submit the bid as many times as it wishes against the same mining lease. Sub rule (9) specifically provides that before submitting the bid, the bidder shall be deemed to have made complete and careful examination of the rules or guidelines for e-auctions and to have unconditionally and irrevocably accepted the terms thereof and reviewed all relevant information. Rule 16 deals with grant of mining lease and provides that the same shall be grated to a person who offers highest premium amount through e- auction.

32. Rule 18 deals with bid security and lays down the financial conditions 23 for participation in the e-auction. While the main part of Rule 18 prescribes a fixed and clearly identifiable bid security linked to the area of the mineral plot, the second proviso inserted by amendment dated 03.01.2025 introduces an additional requirement. Under this proviso, where the offered bid price exceeds Rs.30 Crore, the bid security is required to be deposited is twenty-five percent of the offered bid price.

33. The newly inserted proviso thus departs from the earlier framework by linking the amount of bid security to the 'offered bid price', a figure that comes into existence only during the course of live competitive bidding. This gives rise to concerns regarding the timing, manner and practical feasibility of complying with the enhanced security requirement, particularly since no mechanism is prescribed for depositing such security during the auction process itself.

34. The controversy before the court is not limited to a personal grievance arising out of the auction process, rather it raises a substantial issue relating to the constitutional validity and practical working of the second proviso to Rule 18(2) of the MMCR Rules, 2017 and its effect on the fairness, competitiveness and revenue- maximising purpose of public auctions of natural resources. The Court is therefore required to examine not only the legality of the proviso itself, but also the impact of its application on the e-auction conducted on 20.03.2025. 24

35. In view of the factual background, statutory framework and rival submissions of the parties, the following issues arise for consideration before this Court: (1) Whether the second proviso to Rule 18(2) of the MMCR Rules, 2017, inserted by amendment dated 03.01.2025, is constitutionally valid. (2) Whether the second proviso to Rule 18(2) undermines fair and competitive bidding and thereby defeats the statutory auction scheme under the MMDR Act and the MMCR Rules. (3) Whether the e-auction conducted pursuant to the impugned proviso is vitiated in law and liable to be set aside.

1. Whether the second proviso to Rule 18(2) of the MMCR Rules, 2017 is constitutionally valid.

36. In order to examine constitutional validity of the proviso, first of all it becomes necessary to advert to the settled principles laid down by the Apex Court governing the validity of subordinate legislation under Articles 14 and 19 of the Constitution of India. The law with regard to the challenge of the plenary or subordinate legislation and the scope of judicial review to strike down such legislation, has been well settled by the Hon’ble Supreme Court in a catena of judgments. The authoritative principles for challenging subordinate legislation were clearly laid down by the Apex Court in State of Tamil Nadu v. P. Krishnamurthy (2006) 4 SCC 517 in para nos. 15 and 16 :- “15. There is a presumption in favour of constitutionality or validity of a subordinate legislation and the burden is upon him who attacks it to show that it is invalid. It is also well recognised that a subordinate legislation can be challenged under any of the following grounds: 25 (a) Lack of legislative competence to make the subordinate legislation. (b) Violation of fundamental rights guaranteed under the Constitution of India. (c) Violation of any provision of the Constitution of India. (d) Failure to conform to the statute under which it is made or exceeding the limits of authority conferred by the enabling Act. (e) Repugnancy to the laws of the land, that is, any enactment (f) Manifest arbitrariness/unreasonableness (to an extent where the court might well say that the legislature never intended to give authority to make such rules).

16. The court considering the validity of a subordinate legislation, will have to consider the nature, object and scheme of the enabling Act, and also the area over which power has been delegated under the Act and then decide whether the subordinate legislation conforms to the parent statute. Where a rule is directly inconsistent with a mandatory provision of the statute, then, of course, the task of the court is simple and easy. But where the contention is that the inconsistency or non-conformity of the rule is not with reference to any specific provision of the enabling Act, but with the object and scheme of the parent Act, the court should proceed with caution before declaring invalidity.”

37. The tests for challenging the constitutionality of the subordinate legislation was considered by the Honble Supreme court in Cellular Operators Association of India v. TRAI, (2016) 7 SCC 703, and relying on Indian Express Newspaper (Bombay) P. Ltd. v. Union of India (1985) 1 SCC 641, it was observed: " Violation of fundamental rights

42.We have already seen that one of the tests for challenging the constitutionality of subordinate legislation is that subordinate legislation should not be manifestly arbitrary. Also, it is settled law that subordinate legislation can be challenged on any of the grounds available for challenge against plenary 26 legislation. [See Indian Express Newspapers (Bombay) (P) Ltd. v. Union of India. SCC at p. 689, para 75.]

43.The test of “manifest arbitrariness” is well explained in two judgments of this Court. In Khoday Distilleries Ltd. v. State of Karnataka [Khoday Distilleries Ltd. v. State of Karnataka, (1996) 10 SCC 304] , this Court held: (SCC p. 314, para 13). “13. It is next submitted before us that the amended Rules are arbitrary, unreasonable and cause undue hardship and, therefore, violate Article 14 of the Constitution. Although the protection of Article 19(1)(g) may not be available to the appellants, the Rules must, undoubtedly, satisfy the test of Article 14, which is a guarantee against arbitrary action. However, one must bear in mind that what is being challenged here under Article 14 is not executive action but delegated legislation. The tests of arbitrary action which apply to executive actions do not necessarily apply to delegated legislation. In order that delegated legislation can be struck down, such legislation must be manifestly arbitrary; a law which could not be reasonably expected to emanate from an authority delegated with the law-making power. In Indian Express Newspapers (Bombay) (P) Ltd. v. Union of India, this Court said that a piece of subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a competent legislature. A subordinate legislation may be questioned under Article 14 on the ground that it is unreasonable; “unreasonable not in the sense of not being reasonable, but in the sense that it is manifestly arbitrary”. Drawing a comparison between the law in England and in India, the Court further observed that in England the Judges would say, “Parliament never intended the authority to make such rules; they are unreasonable and ultra vires”. 27 In India, arbitrariness is not a separate ground since it will come within the embargo of Article 14 of the Constitution. But subordinate legislation must be so arbitrary that it could not be said to be in conformity with the statute or that it offends Article 14 of the Constitution.”

44.Also, in Sharma Transport v. State of A.P., this Court held: (SCC pp. 203-04, para 25) "25. … The tests of arbitrary action applicable to executive action do not necessarily apply to delegated legislation. In order to strike down a delegated legislation as arbitrary it has to be established that there is manifest arbitrariness. In order to be described as arbitrary, it must be shown that it was not reasonable and manifestly arbitrary. The expression “arbitrarily” means: in an unreasonable manner, as fixed or done capriciously or at pleasure, without adequate determining principle, not founded in the nature of things, non-rational, not done or acting according to reason or judgment, depending on the will alone.”

38. Considering the challenge to the plenary legislation under article 19(1)(g), the Hon'ble Apex court observed: “46. Under Article 19(6)of the Constitution, the State has to conform to two separate and independent tests if it is to pass constitutional muster – the restriction on the appellants’ fundamental right must first be a reasonable restriction, and secondly, it should also be in the interest of the general public. Perhaps the best exposition of what the expression “reasonable restriction” connotes was laid down in Chintaman Rao v. State of Madhya Pradesh, SCR 763 AIR 119 para 7as follows:-

7.“The phrase "reasonable restriction" connotes that the limitation imposed on a 28 person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public. The word "reasonable" implies intelligent care and deliberation, that is, the choice of a course which reason dictates. Legislation which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in article 19(1)(g) and the social control permitted by clause (6) of article 19, it must be held to be wanting in that quality.”

39. The principle was finally crystallised in Shayara Bano v. Union of India reported in (2017) 9 SCC 1, and followed in Navtej singh Johar V. Union of India reported in (2018) 10 SCC 1, wherein the Supreme Court held that Article 14 strikes at manifest arbitrariness in legislation itself. The Court clarified that a law, plenary or subordinate, which is capricious, irrational, disproportionate, or lacking any adequate determining principle is liable to be struck down as violative of Article 14. The law as explained by the Supreme court permits judicial review of legislation not merely on the touchstone of impermissible classification, but equally on the broader ground that the law, by its very nature or operation, is inherently arbitrary. Consequently, subordinate legislation which is vague, indeterminate, unworkable or incapable of rational application cannot be sustained in constitutional law. The Hon'ble Apex court observed as under :- “100. To complete the picture, it is important to note that subordinate legislation can be struck down on the ground that it is arbitrary and, therefore, violative of Article 14 of the Constitution. In Cellular Operators Assn. Of India v. TRAI [Cellular Operators Assn. of India v. TRAI, (2016) 7 SCC 29 703], this Court referred to earlier precedents, and held: (SCC pp. 736-37, paras 42-44)..............”

101. It will be noticed that a Constitution Bench of this Court in Indian Express Newspapers (Bombay) (P) Ltd.v. Union of India stated that it was settled law that subordinate legislation can be challenged on any of the grounds available for challenge against plenary legislation. This being the case, there is no rational distinction between the two types of legislation when it comes to this ground of challenge under Article 14. The test of manifest arbitrariness, therefore, as laid down in the aforesaid judgments would apply to invalidate legislation as well as subordinate legislation under Article 14. Manifest arbitrariness, therefore, must be something done by the legislature capriciously, irrationally and/or without adequate determining principle. Also, when something is done which is excessive and disproportionate, such legislation would be manifestly arbitrary. We are, therefore, of the view that arbitrariness in the sense of manifest arbitrariness as pointed out by us above would apply to negate legislation as well under Article 14.”

40. One of the well-recognised facets of manifest arbitrariness is the vagueness or absence of clear and intelligible standards governing the operation of a provision. Where a statutory or delegated provision fails to indicate with reasonable certainty its meaning, scope or the manner of compliance, it becomes susceptible to arbitrary application and enforcement. Such indeterminacy has consistently been held to offend Article 14 of the Constitution. This principle was applied by the Supreme Court in Harakchand Ratanchand Banthia & Ors. v. Union of India & Ors., (1969) 2 SCC 166, where a provision found to be uncertain, vague and unintelligible was held to be void for vagueness and was struck down as unconstitutional. The court while striking down section 27(2)(d) of the Gold (Control) Act,1968 held as under :- 30 “21. We now come to Section 27 of the Act which relates to licensing of dealers. It was stated on behalf of the petitioners that the conditions imposed by sub-section (6) of Section 27 for the grant or renewal of licences are uncertain, vague and unintelligible and consequently wide and unfettered power was conferred upon the statutory authorities in the matter of grant or renewal of licence. In our opinion this contention is well founded and must be accepted as correct. Section 27(6)(a) states that in the matter of issue or renewal of licences the Administrator shall have regard to “the number of dealers existing in the region in which the applicant intends to carry on business as a dealer”. But the word “region” is nowhere defined in the Act. Similarly Section 27(6)(b) requires the Administrator to have regard to “the anticipated demand, as estimated by him, for ornaments in that region.” The expression “anticipated demand” is a vague expression which is not capable of objective assessment and is bound to lead to a great deal of uncertainty. Similarly the expression “suitability of the applicant” in Section 27(6)(e) and “public interest” in Section 27(6)(g) do not provide any objective standard or norm or guidance. For these reasons it must be held that clauses (a),(d),(e) and (g) of Section 27(6) impose unreasonable restrictions on the fundamental right of the petitioner to carry on business and are constitutionally invalid. It was also contended that there was no reason why the conditions for renewal of licence should be as rigorous as the conditions for initial grant of licence. The requirement of strict conditions for the renewal of licence renders the entire future of the business of the dealer uncertain and subjects it to the caprice and arbitrary will of the administrative authorities. There is justification for this argument and the requirement of Section 26 of the Act imposing the same conditions for the renewal of the licence as for the initial grant appears to be unreasonable. In our opinion clauses (a), (b), (e) and (g) are inextricably bound up with the other clauses of Section 27(6) and form part of a single scheme. The result is that clauses (a), (b), (c), (e) and (g) are not severable and the entire Section 27(6) of the Act must be held invalid. Section 27(2)(d) of the Act states that a valid licence issued by the Administrator “may contain such conditions, limitations and restrictions as the Administrator may think fit to impose and different conditions, limitations and restrictions may be imposed for different classes of dealers”. On the face of it, this sub-section confers such wide and vague power upon the Administrator that it is difficult to limit 31 its scope. In our opinion Section 27(2)(d) of the Act must be struck down as an unreasonable restriction on the fundamental right of the petitioners to carry on business. It appears, however, to us that if Section 27(2)(d) and Section 27(6) of the Act are invalid the licensing scheme contemplated by the rest of Section 27 of the Act cannot be worked in practice. It is, therefore, necessary for Parliament to enact fresh legislation imposing appropriate conditions and restrictions for the grant and renewal of licences to dealers. In the alternative the Central Government may make appropriate rules for the same purpose in exercise of its rule-making power under Section 114 of the Act.”

41. In Global Energy Ltd. v. CERC reported in (2009) 15 SCC 570, the apex court in clear terms observed that the statute cannot be vague and uncertain. The court held as under :- “26. A legislative policy providing for qualification or disqualification of a person for obtaining a trading licence should not be vague or uncertain. Parameters must be laid down therefore for determining the financial integrity, reputation, character, efficiency and honesty of the applicant. An explanation appended to Clause (f) of Regulation 6A points out various aspects that may be considered while determining the said criteria, reputation, etc. have not been defined. How and in what manner the said criteria are required to be ascertained have not been laid down, the criteria are subjective ones.

27. A disqualifying statute, in our opinion, must be definite and not uncertain; it should not be ambiguous or vague. Requisite guidelines in respect thereof should be laid down under the statute itself. It is well settled that essential legislative function cannot be delegated.....”

42. The Supreme Court in Shreya Singhal v. Union of India reported in (2015) 5 SCC 1, while relying on earlier precedents, reaffirmed the principle that vagueness leads to arbitrary enforcement and is violative of Article 14, and struck down Section 66A for impermissible vagueness. The Court observed as under:- 32 “67. In A.K. Roy & Ors. v. Union of India & Ors., [1982] 2 S.C.R. 272, a part of Section 3 of the National Security Ordinance was read down on the ground that “acting in any manner prejudicial to the maintenance of supplies and services essential to the community” is an expression so vague that it is capable of wanton abuse. The Court held:- “...............We find it quite difficult to understand as to which are the remaining commodities outside the scope of the Act of 1980, in respect of which it can be said that the maintenance of their supplies is essential to the community. The particular clause in sub-section (2) of Section 3 of the National Security Act is, therefore, capable of wanton abuse in that, the detaining authority can place under detention any person for possession of any commodity on the basis that the authority is of the opinion that the maintenance of supply of that commodity is essential to the community. We consider the particular clause not only vague and uncertain but, in the context of the Explanation, capable of being extended cavalierly to supplies, the maintenance of which is not essential to the community. To allow the personal liberty of the people to be taken away by the application of that clause would be a flagrant violation of the fairness and justness of procedure which is implicit in the provisions of Article 21.” (at page 325-326) “68. Similarly, in Kartar Singh v. State of Punjab, (1994) 3 SCC 569 at para 130-131, it was held :- “130. It is the basic principle of legal jurisprudence that an enactment is void for vagueness if its prohibitions are not clearly defined. Vague laws offend several important values. It is insisted or emphasized that laws should give the person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly. Vague laws may trap the innocent by not providing fair warning. Such a law impermissible delegates basic policy matters to policemen and also judges for resolution on an ad hoc and subjective basis, with the attendant dangers of arbitrary and discriminatory application. More so uncertain and undefined words deployed inevitably lead citizens to “steer far wider of the unlawful zone … than if the boundaries of the forbidden areas were clearly marked." 33 “82. ......... Quite obviously, a prospective offender of Section 66A and the authorities who are to enforce Section 66A have absolutely no manageable standard by which to book a person for an offence under Section 66A. This being the case, having regard also to the two English precedents cited by the learned Additional Solicitor General, it is clear that Section 66A is unconstitutionally vague. Ultimately, applying the tests referred to in Chintaman Rao and V.G. Row's case, referred to earlier in the judgment, it is clear that Section 66A arbitrarily, excessively and disproportionately invades the right of free speech and upsets the balance between such right and the reasonable restrictions that may be imposed on such right.”

43. The legal position that emerges from the aforesaid decisions is clear that the subordinate legislation must conform to the constitutional requirements of reasonableness, non-arbitrariness, clarity and workability. The Supreme Court has explained that a delegated provision is manifestly arbitrary when it operates in an unreasonable or capricious manner, or without any adequate determining principle, and is of a nature that could not reasonably be expected to emanate from an authority vested with delegated lawmaking power. A provision that is irrational in design, vague in content, disproportionate in effect or incapable of compliance, attracts the vice of manifest arbitrariness under Article 14, and where such a provision additionally imposes an unreasonable or impracticable burden on participation in trade or commerce, it also falls foul of Article 19(1)(g) of the Constitution.

44. Applying the aforesaid principles, we proceed to examine the validity of the provision under challenge.

45. Prior to the amendment of Rule 18, the proviso did not exist. Vide Amendment Act 2025, the two new provisos have been inserted 34 below sub-rule 2 of Rule 18, and the earlier rule has been kept intact. The earlier bid security was based on size of the plots and now in addition to the same, for bids above thirty Crore the condition has been inserted that the bid security shall be 25% of the offered bid price, hence, the bidder has to deposit 25% of the bid he is going to offer.

46. The State has contented that the reasons for bringing the present amendment is to deter the non serious bidders who disturb the auction process and to prevent bid rigging. It is to ensure that only genuine and financially strong bidders participate in the high value auctions, as non serious bidders default in complying with the conditions of the bid, which disturbs the auction process and causes financial loss thereby causing delay in the auction process.

47. Although the State is well within its rights to safeguard its interests and protect the auction process from speculation or delay, but any condition imposed for curbing the so called non-serious bidders must nevertheless withstand the scrutiny of Articles 14 and 19 of the Constitution of India.

48. The scheme of the Rules of 2017 provides for auction of mineral concessions by way of e-auction and every intended bidder has to get himself registered with the agency appointed for auction to participate in the auction, and thereafter has to comply with the conditions of the e-auction notice. Rule-14 provides for the e-auction of the mineral concessions and Sub Rule-8 specifically provides for the manner in ascending order in which the auction is to be held. The 35 same starts with the deposition of the bid security, which is the first step in participation of the e-auction and the same has to be done in accordance with Rule-18.

49. The date and time for depositing bid security is prescribed in the e- auction notice, which in the present case is 19.03.2025, and the prescribed bid security for all three plots is Rs. 25 Lakh. The reserve prices for the three mines were Rs. 5,55,600/-, Rs. 7,43,400/- and Rs. 7,92,200/- respectively. A bidder who deposits the bid security mentioned in column No. 9 and satisfies all other conditions becomes eligible to participate. Further, under Rule-15(7), there is no ceiling on the number of bids an eligible bidder may submit. As per Rule 16 mining lease is grated to the person who offers higher bid, which necessarily presupposes a process of free and effective competitive bidding to arrive at the highest realisable price in the auction.

50. The newly inserted second proviso to Rule-18 requires the bidder to deposit twenty five percent of the offered bid price before participating in the auction. The ‘offered bid price’, however, comes into existence only during the course of competitive bidding i.e. after the auction commences. The proviso, therefore, operates on a hypothetical or presumed bid that may be made by a participant during the course of bidding. This circular requirement, where a bidder cannot submit a bid without first depositing 25% of that very bid, and cannot ascertain the deposit amount without bidding, rests on an undefined and indeterminate variable, rendering the quantum of bid security incapable of ascertainment. As held by the Hon’ble Supreme court, laws must lay down clear and ascertainable standard 36 so that the person governed by them are not left in the state of uncertainty and the provision that is vague or uncertain is constitutionally impermissible. The proviso here suffers from same infirmity. By requiring bidder to compute and deposit an amount based on a bid that has not yet been made, the proviso introduces uncertainty at the very foundation of the auction process. The obligation become incapable of clear understanding, ascertainment and application rendering the proviso vague and constitutionally impermissible.

51. The state has taken shelter of proviso to Rule 14(8)(i) of the MMCR Rules, 2017 which enables a bidder to make a lump-sum deposit in a digital wallet, from which the application fee and bid security are deducted, to contend that the bidder has a fair opportunity to deposit the bid security before the auction. However a close scrutiny reveals that the Rule requires the bidder to predetermine a hypothetical bid value and to make an advance deposit commensurate with such assumed figure, and such deposit, is required to be made prior to the notified cut off date, which is 19.03.2025 in the present case. In a competitive bidding environment where bids have no upper limit and may escalate without ceiling, such anticipatory deposit becomes illusory. The amount varies with each incremental bid and cannot be predicted or approximated in advance. In fact requiring a pre-bid deposit of an amount that is unknown and indeterminable at the time of deposit, renders the proviso internally inconsistent with Rule 14(8)-(i). The proviso offers no intelligible criteria to govern its application and to enable meaningful compliance and leaves bidders 37 without clear guidance as to their obligations. Such uncertainty permits arbitrary application and unequal treatment. The absence of intelligible standards renders the provision vague, unworkable and manifestly arbitrary, thereby offending Article 14 of the Constitution.

52. Rule 14(8)(i), which permits advance deposit through a wallet, closes the window for such deposits at the notified cut off date, which precedes the auction event where bid escalation occurs. Hence, the wallet system does not cure this defect, as it does not permit replenishment after the cut off date to meet increased bid security requirements. The proviso imposes a variable obligation without prescribing any procedural mechanism for compliance even during live bidding. In absence of any mechanism, the proviso operates to curb participation at a critical stage of the bidding process. Neither Rule 14 nor Rule 18 or its proviso, prescribes any procedure for real time top-ups or adjustments to meet the additional requirement. The conjoint operation of Rules 14 and 18, results in a requirement that permits no mode of compliance during live bidding and renders the second proviso unworkable. It is well settled that delegated legislation must provide a workable mechanism for compliance, and where such mechanism is absent, the provision becomes unconstitutional and cannot be sustained.

53. The ambiguity created by the impugned proviso became clear during the conduct of the auction. In the present auction, the bidding in all three plots came to a halt at bids offered by respondent No.5, which were Rs.29,99,95,600/- for Plot No.4/23, Rs.29,99,98,400/- for Plot No.6/23 and Rs.29,99,97,200/- for Plot No.8/23. All three bids 38 stopped marginally below the permissible increment threshold of Rs.5,000/-, thereby effectively locking the bidding process at that level and resulting in respondent No.5 being declared successful.

54. The affidavit filed by the State confirms that in no case twenty five percent of the bid exceeding 30 crore has been deposited. As none of the bidders had deposited any amount beyond the initial bid security of Rs.25 Lakh stipulated in the auction notice, the bidding was curtailed at an artificial threshold created by the operation of the proviso itself. Consequently, beyond the bids offered by respondent No.5, there was no further competitive bidding, and the auction effectively came to a halt. The whole concept of achieving the maximum price for the minerals through competitive bidding was defeated, and the respondent No.5 was declared successful without there being a fair and open competitive bidding beyond Rs.29.99 Crore. The auction did not conclude due to exhaustion of competition, but from the absence of any workable mechanism to comply with the enhanced security requirement. This disrupted the auction process contemplated under Rules 14, 15 and 16, suppressed competition, and prevented genuine price discovery. An auction conducted under such conditions can neither be regarded as fair, transparent or competitive, nor can it be said to have maximised public revenue. The proviso is therefore self-defeating in its operation and legally unsustainable.

55. The State has sought to justify the impugned proviso on the ground that it is intended to safeguard the auction process by ensuring participation only by serious and financially sound bidders. While this 39 object may be legitimate in principle, the condition imposed does not bear a rational connection with the stated purpose. As demonstrated above, bidder seriousness cannot be equated with the ability to pre- deposit a large and indeterminate amount dependent upon the uncertain course of live bidding. By converting bid security from a fixed and predictable requirement into a variable and uncertain obligation, the proviso introduces unstability into the auction process. A bidder who is fully eligible at the commencement of the auction may become ineligible mid-way solely due to the manner in which the condition operates. Such uncertainty and shifting eligibility undermine equality and fairness in a competitive auction. As held by the Supreme Court in Cellular Operators Association of India v. TRAI (supra), in para 56, that even if the objective of a regulation is legitimate, that by itself does not make it it immune from Article 14 and the twin tests of Article 19(6). The Authority framing the Regulation must ensure that its means are as pure as its ends – only then will regulations made by it pass constitutional muster. Applying this settled principle, the impugned proviso operates in an arbitrary and irrational manner, lacks a rational nexus with its stated objective, and therefore fails to satisfy the requirements of Article 14 of the Constitution.

56. Viewed from the prospective of Article 19(1)(g) of the Constitution, participation in a public auction for grant of mineral concessions constitutes a recognised mode of carrying on trade and business. Any condition that prevents or restricts an eligible bidder from participating in such an auction therefore amounts to a restriction on 40 this freedom guaranteed under Article 19(1)(g). The impugned proviso, by making continued participation in the auction dependent on the deposit of twenty-five percent of the 'offered bid price' clearly operates as a restriction on this freedom, as it directly affects a bidder’s ability to continue bidding once the price crosses a particular level.

57. Although the State is entitled to regulate auction processes in the interest of the general public, such regulation must satisfy the requirement of reasonableness under Article 19(6). The condition imposed by the impugned proviso does not meet this standard. It requires bidders to comply with a substantial financial obligation linked to a bid amount that is uncertain and dependent entirely on the course of live bidding.The amount to be deposited is neither fixed nor predictable in advance. As a result, the proviso does not merely regulate the participation but operated to exclude otherwise eligible bidders during the auction by imposing an obligation that is impracticable of compliance. A condition that is vague and unworkable necessarily becomes unreasonable under Article 19,when it restricts participation in trade by imposing obligations that cannot be practically complied with. Such a condition fails to strike fair balance between the freedom guaranteed under Article 19(1)(g) and the regulatory power of the State under Article 19(6). The proviso therefore cannot be sustained as a reasonable restriction in the interest of the general public and constitutes an unconstitutional restraint on the freedom to carry on trade and business.

58. In view of the foregoing discussion, and applying the principles laid 41 down by the Hon’ble Supreme Court, this Court holds that the impugned proviso, being vague and unworkable, is manifestly arbitrary and violative of Article 14 of the Constitution. The proviso also violates Article 19(1)(g) of the Constitution, as it imposes an unreasonable and disproportionate restriction on the right to carry on trade and business. For the reasons recorded above, we hold the impugned proviso to be unconstitutional; being violative of Article 14 and 19(1)(g) of the Constitution of India, and liable to be struck down. 2 – Whether the second proviso to Rule 18 undermines fair and competitive bidding and thereby defeats the statutory auction scheme under the MMDR Act and the MMCR Rules.

59. The issue under this question has to be examined by reading together the statutory scheme of auction under the MMDR Act, 1957 and the MMCR Rules, 2017, and the constitutional requirement of fairness in public auctions. These two are not independent concepts. Rather, the method of auction prescribed by the statute is itself intended to give effect to the constitutional principles of fairness, transparency, equality and maximisation of public revenue.

60. As held while deciding Issue No. 1, the impugned proviso creates uncertainty, makes compliance impossible during live bidding, and suppresses competition. On the basis of these findings, the Court now considers whether the proviso is consistent with the auction 42 framework under the MMDR Act, 1957 and the MMCR Rules, 2017, or whether it defeats their operation.

61. As noticed herein-above, the MMDR (Amendment) Act, 2015 was introduced with the primary object of ensuring fair and transparent distribution of mineral resources, mandating allocation through auction by a method of competitive bidding, and to ensure the best realisable value for such resources. Section 10-B was inserted which provides for grant of mining lease through auction by a method of competitive bidding. Although the Section 14 states that the provision of sections 5 to 13 shall not apply to the grant of minor mineral concessions, it nevertheless reflects the underlying principle governing the allocation of mineral resources. The MMCR Rules, 2017 were subsequently framed, which mandate a fair, transparent, and competitive e-auction mechanism for the grant of mineral concessions. Therefore, the distribution of mineral resources through competitive bidding lies at the heart of the statutory scheme.

62. Rule 14, 15 and 16 of the MMCR Rules together lay down the auction scheme. They contemplate continuous bidding without arbitrary restriction, and provide for grant of the mining lease to the highest bidder. This framework is intended to ensure fair price discovery through open competition.

63. As we have already held in Issue No. 1, the proviso is self-defeating as it disrupts the auction process specially contemplated under Rules 14, 15(7) and 16(1), suppresses competitive bidding, and prevents genuine price discovery. An auction conducted under such conditions 43 cannot be regarded as fair, transparent or competitive, nor can it be said to have maximised public revenue. Therefore, we find the second proviso to Rule 18(2) to be inconsistent with the statutory scheme of auction.

64. The Supreme Court has consistently held that the object of a public auction is to secure the highest realisable value through open and unfettered competition. In Natural Resources Allocation, In re (2012) 10 SCC 1, the Court held that the method adopted by the State must satisfy the requirements of fairness and non-arbitrariness under Article 14 and must ensure a process which maximises public revenue. In M/s Shanti Construction Pvt. Ltd. v. State of Odisha(supra), it has been again reiterated that State as custodian of natural wealth is obligated to secure the best value for public resources consistent with the principles of fairness and transparency.

65. In Rajiv Kumar Jindal & Others v. BCI Staff Colony Residential Welfare Association & Others, 2023 INSC 439, the Supreme Court reaffirmed that the purpose of a public auction is to ensure a free, fair and competitive process capable of securing the highest realisable value. It follows that any condition which restricts participation or curtails competition defeats the very purpose of public auction.

66. It is also a settled principle that delegated legislation must conform to the parent statute, further the object of the statutory scheme and not frustrate it. The Honble Apex court explained the concept of delegated legislation in Dr. Mahachnadra Prasad Singh V. 44 Chairman Bihar Legislative Council, (2004) 8 SCC 747, and observed : -

13. ........The true extent of the power governs the legal meaning of the delegated legislation. The delegate is not intended to travel wider than the object of the legislature. The delegate's function is to serve and promote that object, while at all times remaining true to it. That is the rule of primary intention. Power delegated by an enactment does not enable the authority by regulations to extend the scope or general operation of the enactment but is strictly ancillary. It will authorise the provision of subsidiary means of carrying into effect what is enacted in the statute itself and will cover what is incidental to the execution of its specific provision. But such a power will not support attempts to widen the purposes of the Act, to add new and different means of carrying them out or to depart from or vary its ends.”

67. In Cellular Operators Association of India v. TRAI (2016) 7 SCC 703, the Hon'ble Supreme court held that regulation must be consistent with both the letter of the Act and the purposes for which the Act has been enacted: “41. .........Regulation cannot be said to be inconsistent with Section 11 of the Act. However, what has also to be seen is whether the said Regulation carries out the purpose of the Act which, as has been pointed out herein-above, under the amended Preamble to the Act, is to protect the interests of service providers as well as consumers of the telecom sector so as to promote and ensure orderly growth of the telecom sector. Under Section 36, not only does the Authority have to make regulations consistent with the Act and the Rules made thereunder, but it also has to carry out the purposes of the Act, as can be discerned from the Preamble to the Act. If, far from carrying out the purposes of the Act, a regulation is made contrary to such purposes, such regulation cannot be said to be consistent with the Act, for it must be consistent with both the letter of the Act and the purposes for which the Act has been enacted. In attempting to protect the interest of the consumer of the telecom sector at the cost of the interest of a service 45 provider who complies with the leeway of an average of 2% of call drops per month given to it by another Regulation, framed under Section 11(1)(b)(v), the balance that is sought to be achieved by the Act for the orderly growth of the telecom sector has been violated. Therefore, we hold that the impugned Regulation does not carry out the purpose of the Act and must be held to be ultra vires the Act on this score.”

68. The Supreme Court in Kerala State Electricity Board v. Central Electricity Regulatory Commission (2022 INSC 1123) reaffirmed that subordinate legislations must supplement the parent Act and cannot supplant or defeat its scheme. It was further held that where delegated legislation is inconsistent with the statutory framework it renders such legislation ultra vires. It was observed as under: “80......The Court, considering the validity of a subordinate legislation, will have to consider the nature object and scheme of the enabling Act, and also the area over which power as has been delegated under the Act and then decide whether the subordinate legislation conforms to the parent statute.”

69. It is true that the Hon'ble Supreme Court in the above referred judgment cautioned that courts should be slow in invalidating subordinate legislation merely because it does not fully align with the object or scheme of the statute. However, in the present case, the impugned proviso is vague, unworkable, incapable of compliance and disrupts the statutory auction process, resulting in suppression of competition. The rule frustrates the working of the Rules itself, and therefore warrants judicial interference.

70. When tested against the above principles, the second proviso to Rule 18 is found to be inconsistent and incompatible with the auction 46 framework under the MMCR Rules. Instead of facilitating continuous and competitive bidding, it prematurely halts the auction process, prevents the grant of the mining lease to the highest bidder as contemplated under Rule 16, and fails to secure the best realisable value of public resources. Being unworkable and incapable of compliance, the proviso obstructs the statutory auction mechanism resulting in an outcome contrary to the object of fair and competitive auctioning of natural resources. The same defeats the very purpose of auction envisaged under the MMDR Act and the MMCR Rules.

71. In view of the foregoing discussion, read with the findings recorded under Issue No. 1, it is evident that the proviso fails to ensure fair and competitive bidding. It is inconsistent with the statutory scheme of auction and thereby frustrates the object and scheme of the MMDR Act, 1957, as amended in 2015, and the MMCR Rules, 2017. Therefore, the proviso is held to be ultra vires on this ground.

3. Whether the e-auction conducted pursuant to the impugned proviso is vitiated in law and liable to be set aside.

72. Since the proviso has been held to be unconstitutional and ultra virus, the e-auction conducted pursuant thereto cannot be sustained. It is a settled principle that when a statutory condition forming the very foundation of eligibility and participation is invalid, the process built upon such condition also stands vitiated. The Supreme Court in Deepak Sibal v. Punjab University, (1989) 2 SCC 145, has held that where the source of power or the governing rule is invalid, all actions taken pursuant thereto must necessarily fail.

73. The material on record clearly establishes that the defective proviso 47 had a direct and decisive impact on the conduct of the auction. As a result, the auction failed to achieve genuine price discovery. The Supreme Court has consistently held that eligibility conditions which strike at the root of participation cannot be treated as peripheral or curable defects (Monarch Infrastructure (P) Ltd. v. Commissioner, Ulhasnagar Municipal Corporation, (2000) 5 SCC 287).

74. This Court accordingly holds that the e-auction dated 20.03.2025, having been conducted pursuant to a provision that is unconstitutional and ultra vires, stands vitiated in law. Hence, the entire auction proceedings dated 20.03.2025 held in pursuance of e- auction notice dated 01.03.2025 of mines located at plot No.4/2023, plot No.6/2023 and plot No.8/2023 at serial nos.49,50 &51 respectively and all consequential actions taken thereunder are illegal and liable to be set aside.

75. The State has raised the objection regarding the limited scope of judicial interference in auction and tender matters and has placed reliance on the judgment passed in Tata Motors Limited vs The Brihan Mumbai Electric Supply & Transport Undertaking (BEST) and Others reported in (2023) 6 SCC 127 and Airports Authority of India Vs. Centre for Aviation Policy, Safety and Research (CAPSR) & Ors. reported in (2022) 7 SCC 1000. The restraint ordinarily exercised by courts applies only where the auction process is fair, competitive and conducted in accordance with a valid statutory framework. The Hon’ble Supreme Court in the judgments 48 cited by the respondents has clearly observed that it is duty of the Courts to interfere in the contractual and commercial matters when there is arbitrariness, irrationality, malafide and bias. In the present case, the auction process is founded upon an unconstitutional and unworkable proviso, resulting in suppression of competition and failure to achieve the revenue maximising object of the public auction. The proviso has been held to irrational and arbitrary. In such circumstances judicial interference is not only permissible but warranted, as the process itself stands vitiated by arbitrariness and illegality. Hence, the objection as to scope of interference therefore stands rejected.

76. Another objection raised by the respondents is that the petitioner having participated in the auction, is barred from challenging the rule on the ground of waiver or acquiescence. Rule 15 of the MMCR Rules obliges bidders to acquaint themselves with and accept the rules and conditions governing the auction. The auction notice dated

01.03.2025 required bidders to deposit only Rs.25 Lakh as bid security, with the last date for such deposit fixed as 19.03.2025. The auction notice only showed Rs. 25 Lakh to be deposited as bid security, against the column presiding. The condition reassigning bid security of Rs. 30 crore was prescribed in instruction and says that 25% of bid security will have to be deposited. Therefore, neither the auction notice, nor the portal instructions, or the rules provided any clarity as to the manner, timing, or mechanism for depositing twenty five percent of the offered bid price in the event bids exceeded Rs.30 Crore.

77. This structural defect surfaced only after the bidding reached Rs. 30 49 crore, the stage at which the bidder was rendered incapable of continuing participation, because the portal could not accept bids beyond that in absence of enhanced security, and there was no mechanism to deposit it. The doctrines of waiver and acquiescence will not apply where the condition in question is itself uncertain and incapable of compliance. A bidder cannot be said to have waived or accepted a condition that is inherently unclear, irrational or impossible to perform. In such circumstances, the plea of waiver or estoppel cannot be sustained. Final Order and Directions

78. In view of the findings recorded herein-above, we allow the present writ petition, and :- (i) Strike down the second proviso to Rule 18(2) of the MMCR Rules 2017, viz. “provided further that where offered bid price is more than thirty crore, the bid security shall be twenty five percent of offered bid price”, inserted vide amendment dated 03.01.2025, as unconstitutional and ultra vires. (ii) Consequentially, the e-auction dated 20.03.2025 conducted by the department of Mines and Geology, Government of Rajasthan pursuant to e-auction notice dated 01.03.2025 of mines located at plot No.4/2023, plot No.6/2023 and plot No.8/2023, at serial nos.49, 50 & 51 respectively, and all actions taken thereunder are also quashed and set aside. 50 (iii) Any amount deposited by the parties pursuant to the auction shall be refunded along with interest at the applicable bank rate from the date of deposit till the date of refund. (iv) The State is at liberty to conduct afresh e-auction afresh in accordance with law, after prescribing clear, workable and constitutionally compliant conditions and ensuring appropriate procedure and mechanism for their implementation. (v) There shall be no order as to costs. (vi) Pending application(s), if any, stand disposed of. (BALJINDER SINGH SANDHU), J (SANJEEV PRAKASH SHARMA), ACJ danish/46