‘Third party interest cannot be created out of own free will’
Mohinder Verma
JAMMU, Dec 21: The High Court of Jammu & Kashmir and Ladakh has held that Letter of Intent is only a formality of initiation of process and right to claim grant of lease and execution of formal lease deed would accrue to the concerned person only if the requisite formalities as envisaged under the Mining Rules are completed. Moreover, the recipient of Letter of Intent cannot create prospective/ futuristic right out of his own free will with regard to mining lease.
Justice Wasim Sadiq Nargal held this while dismissing a writ petition filed by one Kanwarjit Singh against the UT of J&K and Others. The petitioner approached the High Court on the basis of an agreement which was alleged to have been executed between Respondent No.3 and the petitioner on 29th November, 2019, in which the respondent No. 3 under misconception of law transferred the leasehold rights in favour of the petitioner on the strength of a Letter of Intent dated 3rd September, 2019 out of his free will and consent.
Senior Advocate Sunil Sethi and Advocate Ravi Abrol appearing for the petitioner submitted that futuristic/ prospective rights have been created by the respondent No. 3 in favour of petitioner by virtue of the deed of agreement as a result of which lease hold rights have been transferred to him.
“Furthermore, it is only the petitioner with whom the department can enter into the lease deed and respondent No.3 has no right whatsoever to continue on the strength of the lease deed already executed in his favour by virtue of an order dated 17th July 2021”, the counsel for the petitioner further submitted.
Senior Advocate R S Thakur appearing for respondent No. 3 submitted that the agreement is a fraud and has already been called in question before the Court of Additional District Judge, Kathua while as Additional Advocate General Ravinder Gupta submitted that agreement on which the reliance has been placed by the petitioner is at a stage when there was only Letter of Intent, which is only a formality of initiation of process which ultimately culminates into the execution of lease deed and the right is created in the person only in the eventuality if the lease deed is executed.
After hearing the counsels for the appearing parties, Justice Wasim Sadiq Nargal observed, “the petitioner is seeking a writ in the nature of Mandamus commanding respondent No. 2 to transfer the mining lease executed with the respondent No. 3 on 30.07.2021, in favour of the petitioner with respect to Mineral Block with the description at Taraf Tajwal Tehsil of district Kathua over an area of 9.98 hectares keeping in view the execution of Deed of Agreement and supplementary partnership deed between the parties”.
“It is settled proposition of law that the Letter of Intent is just an indication to the person to whom it is issued that if he completes all the necessary formalities and obtains No Objection Certificates from all the concerned quarters, he might be considered for grant of mining license”, Justice Nargal said, adding “merely by reason of such Letter of Intent, a person does not acquire a right to the mining license, and such license can be refused by the respondents in case if the conditions are not fulfilled pursuant to the issuance of the Letter of Intent”.
High Court further said, “it is admitted case of the parties that respondent No. 3 has submitted an application for license, completed all the formalities, obtained NOCs from all the quarters, and finally pursued the matter with the respondents No. 1 & 2 which ultimately culminated into the grant of license”, adding “the respondent No. 3 by no stretch of imagination can create futuristic/prospective rights in favour of the petitioner on the basis of the Letter of Intent. After the issuance of the license and grant of lease, the Letter of Intent and everything else that may have happened in the meantime is wiped out of utility and significance”.
Justice Nargal further said, “the case of the petitioner for transfer of lease on the basis of the agreement and supplementary partnership deed is utterly misconceived. The same tantamount to seeking enforcement of his right on the basis of void documents which have no legal sanctity as respondent No. 3 has no authority whatsoever to transfer the lease deed on the basis of a Letter of Intent”.
“Admittedly, the license and lease deed were issued in favour of respondent No. 3 on 30.07.2021. On the basis of the lease deed, respondent No. 3 continued to run his mining business without any grouse/demur from the petitioner, in the period ranging from the date of execution of the lease in favour of respondent No. 3, till the filing of the present writ petition on 24.11.2022. Therefore, it appears that the present writ petition is a matter of after-thought and is loathed with mala fide considerations as the petitioner is aiming to enforce non-existent rights and obligations under the garb of documents executed between other private parties, which again is subject matter of Civil Court”, High Court said.
Pointing towards Rules 37 and 51, Justice Nargal said, “the lessee cannot assign, sublet, mortgage or in any other manner transfer the mining lease or any right, title or interest therein”, adding “it is the admitted case of the parties that the agreement and the supplementary partnership deed have been entered prior to the grant of lease on the basis of Letter of Intent. Respondent No. 3 has no authority, whatsoever, under law to transfer the lease by creating futuristic/prospective rights in favour of the petitioner, that too without the consent of the department”.
Stating that petitioner does not have any right under law to run the affairs of the mining business in absence of any lease deed in his favour, Justice Nargal said, “the relief sought by petitioner for transfer of lease in his favour, in the absence of any legally enforceable right, is devoid of any merit, because, neither the petitioner falls under the category mentioned in Rule 27, nor there is any violation of Rule 37 of the Jammu & Kashmir Minor Mineral Concession Storage, Transportation of Minerals and Prevention of Illegal Mining Rules”.
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