One Solvency Certificate for Multiple Sand Quarry Bids Is Valid, Orissa HC Rules in Sabara Sand Bed Dispute

The Orissa High Court upheld a quarry lease granted to the highest bidder, ruling that Rule 27(4)(iv) of the Odisha Minor Minerals Concession Rules, 2016 does not require separate solvency certificates when bidding for multiple sand sairats. The bench also reprimanded the Office of the Advocate General for advising authorities to stall implementation of an appellate order in the absence of any court-granted stay.

A Division Bench of the High Court of Orissa at Cuttack, comprising Chief Justice Harish Tandon and Justice Chittaranjan Dash, disposed of two connected writ petitions on 27 July 2026 arising from a contested settlement of the “Sabara Sand Bed” quarry in Bonai. The bench dismissed the challenge brought by the second-highest bidder, Nabin Kumar Mishra (W.P.(C) No.16738 of 2021), and directed immediate implementation of the Appellate Authority's order granting the quarry lease to the successful bidder, Phakir Mohan Naik (W.P.(C) No.13562 of 2025). The court interpreted Rule 27(4)(iv) of the Odisha Minor Minerals Concession Rules, 2016 and held that the provision does not mandate a separate solvency certificate for each sand sairat when only one sairat is ultimately awarded to a bidder.

The Dispute Over the Sabara Sand Bed

The Tendering Authority advertised the settlement of three sand quarries, including the Sabara Sand Bed. Phakir Mohan Naik was adjudged the highest bidder, offering higher additional charges. Form ‘F’, described in the judgment as a mandatory condition, was issued in his favour.

Nabin Kumar Mishra, the second-highest bidder, raised objections on two grounds. First, he contended that Naik had submitted a single solvency certificate while bidding for two sand sairats, and that the certificate fell short of the combined additional charges offered across both. He argued this required rejection under Rule 27(4)(iv) of the Odisha Minor Minerals Concession Rules, 2016. Second, he alleged that Naik had been lifting sand without permission from the sand sairats and that the settlement should be cancelled on that account.

The initial authority found no substance in either objection. Mishra challenged that decision before the Appellate Authority, which — after a direction from this court in an earlier round to afford Mishra a fresh hearing — again rejected both objections and directed execution of the lease deed in Naik's favour with immediate effect.

Mishra then filed W.P.(C) No.16738 of 2021 before this court challenging the Appellate Authority's order. In the meantime, Naik separately filed W.P.(C) No.13562 of 2025 seeking execution of the lease deed for the balance period and quashing of a letter dated 5 December 2022 issued by the Tahasildar, Bonai, directing stoppage of quarry operations.

The Legal Issue: What Rule 27(4)(iv) Actually Requires

Chapter IV of the Odisha Minor Minerals Concession Rules, 2016 governs the grant of quarry leases across the State. Rule 27(4) lists documents that an intending applicant must submit along with an application in Form M for a quarry lease. Clause (iv) requires:

“A solvency Certificate or Bank guarantee valid for a period of eighteen months for an amount not less than the amount of additional charge offered and the royalty payable for the minimum guaranteed quantity for one whole year.”

Mishra's counsel, Mr. Sidharth Sahu, argued that because Naik applied for two sand sairats with a single solvency certificate, the combined additional charges exceeded the certificate's value, which required the authority to reject Naik's bid outright. He pressed that Rule 27(4)(iv) was a mandatory condition and its breach was fatal.

Naik's counsel, Mr. Jaydeep Pal, countered that Rule 27(4)(iv) does not create any bar against a single solvency certificate covering bids for more than one sairat, and that the relevant question was whether the certificate met the requirement for the one sairat actually awarded to Naik — which it did.

How the Bench Reasoned

The bench began by affirming the limited scope of Article 226 review over fact-finding authorities. It stated that the High Court does not act as a court of appeal and should not re-examine facts unless the finding is perverse or contrary to settled law. Since both the original authority and the Appellate Authority had examined the record and found no merit in Mishra's objections, that finding deserved preservation.

On the solvency certificate question, however, the court engaged the text of Rule 27(4)(iv) directly. It read the language to cover the amount of additional charge “so offered” — meaning the charge referable to the quarry lease being applied for — plus the royalty for a Minimum Guaranteed Quantity for a whole year. The provision neither requires a separate certificate for each sairat bid upon, nor forbids an applicant from bidding for more than one sairat using a single certificate.

The bench drew an important distinction between the stage of making an offer and the stage of granting the lease. Sub-rule (4) governs the application stage; sub-rule (5) governs the grant of the lease. A document required at the grant stage cannot be read backwards to override conditions at an anterior stage. Since the solvency certificate for Naik plainly covered the one sand sairat awarded to him, there was no deficiency.

The court located the legislative object of the solvency certificate requirement in assessing a bidder's financial capacity to meet royalty and other charges for the sairat in question. That object was satisfied on the facts. Reading the clause to require separate certificates for each sairat bid upon would go beyond what the text demands and would not serve the identified purpose.

On the second objection — alleged illegal lifting of sand — the Appellate Authority had found no documentary evidence of seizure of vehicles or imposition of any penalty on Naik. It had observed that if illegal lifting had indeed occurred and was detected by the Tahasildar and Revenue Officers, the absence of any action taken against Naik was telling. The bench accepted that this was a pure finding of fact reached after examination of the record, and declined to disturb it.

A Pointed Observation About the Advocate General's Office

Beyond deciding the merits, the bench recorded strong observations about the conduct of the Office of the Advocate General. During the hearing, it emerged that a letter had been issued from that Office to the Competent Authority directing it to refrain from taking any further action on the Appellate Authority's order — solely because Mishra had filed a writ petition. There was no interim order or stay granted by this court in those proceedings.

The bench reiterated that mere filing of a writ petition does not automatically stay or shadow the decision of an authority. The Indian legal system, including amendments introduced on the basis of the Malimath Committee recommendations, expressly recognises that pending proceedings before a higher forum do not automatically stall proceedings below in the absence of an express court order.

The court stated that the Office of the Advocate General “should not be a mere messenger” and must give meaningful legal advice that respects the law rather than directing non-implementation of valid orders when no prohibitory order has been passed. It found that such advice had put the successful bidder's accrued rights in jeopardy and delayed justice. The bench noted that the letter predated the current regime in that Office and appreciated the Additional Government Advocate, Mr. Saswat Das, who appeared in the matter.

Directions on Compensation for Lost Quarry Period

The bench acknowledged that because of the litigation and the stalling of the lease, Naik was prevented from operating the quarry for a substantial period. Since the quarry lease is approaching expiry, the court left it open to the authority to take a conscious decision on the remaining period. If Naik is permitted to operate for less than the full tenure of the lease, he may claim compensation before the authority, and the authority shall award compensation as found just and equitable.

Outcome

W.P.(C) No.16738 of 2021, filed by Nabin Kumar Mishra, was dismissed for want of merit. W.P.(C) No.13562 of 2025, filed by Phakir Mohan Naik, was disposed of with a direction to implement the Appellate Authority's order with immediate effect and without any further delay. The bench also directed that urgent certified copies, if applied for, be issued within three days.