KABINI MINERALS PVT LTD Vs. STATE OF ORISSA

JUDGEMENT

(1.) Appellants call in question legality of the judgment rendered by a Division Bench of the Orissa High Court dismissing their challenge to the decision of the State of Orissa in the Department of Steel and Mines, granting lease over an area of 6.90 acres in the villages Bada Dalma and Jangia in Mayurbhanj District in favour of respondent No. 4 and consequentially rejecting appellant No.1 application dated 7th October, 2002.

(2.) Factual position in a nutshell is as follows: Appellant No.1 applied for quarry lease to the Secretary, Government of Orissa Steel and Mines Department, in Form A of the Orissa Minor Mineral Concession Rules, 1990 (in short the Rules) for decorative stone for a period of 10 years. On 25-10-2002, the Managing Director of the appellant No.1-Company entered into an agreement with one R. Narayan Swami for purchase of land measuring 1.134 acres in village Ambagan in the District of Ganjam to set up a cutting and polishing unit for decorative stones. On 26-10-2002 the Mining Officer, Baripada Circle, Baripada issued Form-B to appellant No.1 and confirmed the receipt of its quarry lease application dated 7-10-2002. On 2-12-2002 appellant No.1 placed orders with Metcons Engineering Pvt. Ltd. for supply of machineries for setting up the cutting and polishing unit for decorative stones. On 5-12-2002 respondent No. 4 applied for a quarry lease in Form-A for decorative stones for a period of 10 years over an area of 6.90 acres. On 28-1-2003 respondent No. 4 wrote a letter to the Director of Mines regarding purchase of sick unit i.e. M/s. Valley Granites (P) Ltd. from the Orissa State Financial Corporation (in short the Corporation) and requested consideration of its quarry lease application dated 5-12-2002. On 7-2-2003 appellant No.1 vide its letter of even date wrote to the Principal Secretary to the Government, Department of Steel and Mines informing him regarding the agreement to purchase land and placement of orders for machineries of proposed unit. On 4-6-2003 the State Government took a decision to grant the quarry lease in question in favour of respondent No. 4. Writ Petition No. 5994 of 2003 was filed by the appellants before the Orissa High Court questioning the decision of the Government to grant quarry lease in favour of respondent No. 4. By the impugned judgment dated 10-2-2004 the writ petition was dismissed. The High Court held that the case of respondent No. 4 was covered by Rule 6(6-a)(i) of the Rules and it had priority over the appellant No.1. Said judgment as noted above is the subject-matter of challenge in this appeal.

(3.) According to learned counsel for the appellant, the view of the High Court is clearly erroneous. Undisputedly, the appellant No.1 had filed the application for the quarry lease earlier and his case was to have precedence over that of respondent No. 4. Merely because the respondent No. 4 had purchased a sick unit which was not functional, priority under Rule 6 (6-a)(i) was not available to it. It was submitted that no reasons were indicated as to why and under what circumstances respondent No. 4 could have priority vis-a-vis appellant No.1.