B L WADEHRA Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner, an Advocate, has filed this petition in public interest questioning the transfer of mining lease of Deposit No. 11-B, Iron-Ore Mine by the National Mineral Development Corporation (for short 'NMDC') in favour of private sector. The NMDC - a wholly owned Government of India undertaking has agreed to transfer lease of mine in question to a joint sector company, namely, Bail Adila Mineral Development Company Ltd. (Respondent No.7). An Industrial House by the name of 'Mittals' has 89% shareholding in the said joint venture company ('JVC' for short). Brief Facts:

(2.) The lease of 1809 hectares of land in Baledilla Reserve Forest Area, Bastar District, Madhya Pradesh, was granted in favour of NMDC for a period of 30 years with effect from 12th June, 1967 by the State of Madhya Pradesh. Deposit 11 -B, is part of this land and lies in the middle of the area leased out to NMDC. It has world's best quality iron-ore with ferrous content of above 65% which is particularly suited for gas based sponge iron plants. A Japanese delegation visited this iron-ore deposit in May 1991 and because of its superior quality ore showed interest in taking over this Deposit only and not iron-ore in other Deposits. They were, however, not willing to pay remunerative price. Considering the non-availability of budgetary support from Government and lack of its internal resources the NMDC in August/September 1991 submitted a proposal to the government for setting up of a JVC to develop this particular deposit. The NMDC Board in its meeting held on 15th November 1991 in terms of Item No.274/2 decided that the project be opened up as a joint venture with not more than two private promoters apart from NMDC. The said two promoters were M/s.Essar Gujarat Ltd. and M/s. Nippon Denro Ispat Ltd. who were to use the ore for their plants and not sell it. The Board also decided that the equity participation shall be static throughout the life of JVC. A sub committee of the Board of NMDC held discussions with these two companies and also with M/s.Mukand Ltd whose name was suggested by the Government. These companies did not agree to the arrangement proposed by NMDC because each company wanted to be the sole promoter with NMDC and wanted the management control to rest with it. These conditions were not acceptable to NMDC. In this view, the NMDC in terms of its letter dated 20th April 1992, decided/recommended as follows:

(3.) The Ministry of Steel in terms of its letter dated 25th May 1992 conveyed to NMDC 'in principle' approval of the above recommendations and sought a detailed proposal for development of this deposit in the manner proposed by the subcommittee. Further, the Ministry of Steel in terms of its letter dated 22nd September,1992 sent to NMDC, conveyed the approval of the Government for incurring expenditure of Rs. 2.00 crores for the preparation of detailed Project Report and to undertake the preliminary and enabling works of development of this particular deposit. Thus, the Government also granted stage one clearance. A detailed project report was prepared by NMDC. The Board of NMDC on 27th March, 1993 approved DPR and investment of Rs. 515.00 crores. The development of the project was to take approximately 4 years for commissioning after all the clearances had been obtained from the Government. The NMDC requested the Government for providing special fast track clearances.