SERAJUDDIN AND CO Vs. UNION OF INDIA

JUDGEMENT

(1.) This writ petition is directed against refusal by the Government of India to accord approval for the renewal of a Mining Lease of the petitioner Company by the Government of Orissa under the provisions of Mines and Minerals (Regulation and Development) Act, 1957 read with the Mineral Concession Rules, 1960. It appears that sometime in the year 1944, the petitioner applied to the then Raja of Keonjhar Estate for grant of a Mining Lease in respect of Manganese Ore over an area of about 3329.40 acres in several mouzas in Champua Sub-Division of the said Estate. On 29th Dec, 1947, the Raja of Keonjhar granted a Mining Lease for the Manganese Ore to the petitioner for a period of to years commencing from 1st Nov. 1946 with an option of renewal for a further term of 15 years. On 8th June, 1949, the Government of Orissa annulled the said Mining Lease. On 14th July, 1949, the Government, however, allowed the petitioner to continue mining operations in the said area on payment of rates and royalties in accordance with the terms and conditions of the said Mining Lease and promised to grant a new Lease to the petitioner in accordance with the policy to be laid down by the Government of India for leasing out Mines. It, however, appears that subsequently by an order dt. 3rd July, 1951, the State Government of Orissa withdrew and cancelled the said order. The petitioner company however submitted to the State Government of Orissa its terms and conditions of compromise and to settle the dispute mutually. On 12th June, 1952, the State Government of Orissa intimated its acceptance of the said terms and conditions of the Mining Lease and the said terms and conditions were also reduced and embodied into a written agreement known as Subsidiary Agreement. In Dec. 22, 1952, the said Subsidiary Agreement was executed and registered at Keonjhar and under the terms of the said Agreement, the petitioner company surrendered about 830 acres out of the demised area of 3329.40 acres and the petitioner company became lessee for the balanced area viz. 2499.40 acres for a term of 20 years with effect from November 1, 1946 with a stipulation that the State Government would grant and the petitioner company would take a renewed lease for a further period of 20 years. As the period of lease was not consistent with the existing law the Controller of Mining Lease for India directed that the petitioner's Mining Lease should be for a period of 20 years from 1st Nov. 1946 and the renewal oi the said lease could be regulated according to the law and rule in force at tht time of such renewal. On 28th Oct. 1965, the petitioner company made an application for first renewal for 20 years from 1st Nov. 1966 under the provisions of Rule 22 (2) of the Mineral Concession Rules, 1960. As within the stipulated period such application of the petitioner company, was not considered by the State Government, it was deemed under the provisions of the said Mineral Concession Rules that the said application of the petitioner had been rejected by the State Government of Orissa. The petitioner company thereafter made an application for revision before the Central Government under the said Mineral Concession Rules, 1960 against the deemed rejection of the application of the petitioner for renewal of the said lease by the Government of Orissa. It appears that the said revision application was allowed by the Central Government and by an order dated 26th June, 1968, the Central Government passed an order remanding the petitioner company's application for renewal to the State Government of Orissa directing the State Government to consider the petitioner company's application for renewal on merits and to pass suitable orders thereon at an early date. It appears that after consideration of the case of the petitioner company on merits for renewal of the said lease, the Government of Orissa by its Memo dated 1st October, 1969 informed the Central Government that the State Government of Orissa had decided to grant renewal of the said Mining Lease for Manganese Ores to the petitioner company and the State Government sought for approval for such renewal of the Mining Lease by the Central Government. It also appears that on 27th March, 1973 the petitioner company submitted a petition to the Central Government through the State Government under Rule 63 of the Mineral Concession Rules, 1960 requesting the Central Government to consider the merits of the petitioner company's case for grant of renewal of the said Mining Lease and to accord necessary approval and/or sanction for the same. On 26th Oct. 1973 the State Government passed an order rejecting the application of the petitioner company for renewal of the Said lease on the ground that the Central Government had advised the State Government to reject the said application for renewal as the area in question was required for public sector exploitation. The petitioner company thereafter challenged the said order of rejection of the petitioner's application for renewal of lease under Article 226 of the Constitution in this Court and a Rule being Civil Rule No. 3608 (W) of 1973 was issued by this Court on the said application under Article 226. It appears that the said Rule was made absolute by this Court and the impugned order dated 26th Oct. 1973 passed hy the State Government of Orissa and also the order passed by the Central Government refusing to grant approval were quashed by this Court. It was directed by this Court in the said order that the Central Government should hear the petitioner within two months from the date of the order after giving notice Of hearing to the petitioner and in the mean time, parties would maintain status quo. It appears that on 10th Sept. 1977 the petitioner company made a representation to the Central Government inter alia explaining the background of the application of renewal of the said Mining Lease and the petitioner company also requested that pursuant to the order passed by this Court a suitable date might be fixed for giving the petitioner a personal hearing. But the petitioner contends that the Central Government, however, failed to comply with the direction of this Court and did not give the petitioner any hearing within the specified date. It also appears that in the representation, the petitioner company also pointed out that when the State Government of Orissa, on consideration of the merits of the application, intended to grant the first renewal of lease for 20 years it was not open to the Central Government to deny any approval which it had granted by necessary implications at an early stage. In Nov. 1977, the petitioner company was given a hearing before the Joint Secretary, Department of Mines, Central Government and by a communication dated 26th March, 1979 the Central Government regretted its inability to accord approval for the renewal of the said lease as the area was required for development in the public sector. The petitioner company thereafter again moved this Court under Article 226 of the Constitution of India against the said decision of the Central Government refusing to grant approval to the renewal of the said Mining Lease as desired by the Orissa Government and the instant Rule has been issued by this Court.

(2.) It appears that during the pendency of the Rule, the Manganese Ore (India) Limited, a public sector undertaking, made an application for addition of party and by an order dated 22nd Aug. 1979, the said Manganese Ore (India) Limited (hereinafter referred to as MOIL) was added as a party respondent to the Rule.

(3.) Mr. Deb being ably assisted by Mr. Balai Chandra Roy appearing for the petitioner company contends that against the deemed refusal by the Government of Orissa to consider the application of the petitioner company for renewal ol the said Lease in accordance with the provisions of the Act and the Mineral Concession Rules, 1960, the petitioner company made an application for revision before the Central Government and the Central Government allowed the said application for revision and directed the State Government of Orissa to consider the application for renewal made by the petitioner company on merits. Mr. Deb submits that it is, therefore, quite evident that the Central Government had no objection of its own against the grant of renewal of the said lease in favour of the petitioner company and it only gave a green signal to the Stale Government of Orissa to consider the case of the petitioner company on merits and to take a decision as to whether or not the State Government of Orissa was inclined to grant the renewal of the lease as prayed for. Mr. Deb submits that the State Government of Orissa thereafter considered the case of the petitioner company on merits and decided to grant renewal of the said lease subject to accord of formal approval by the Central Government in accordance with the provisions of Mines and Minerals (Regulation and Development) Act, 1957 read with Mineral Concession Rules, 1960. Mr. Deb submits that In the facts of this case, the accord of approval by the Central Government was only a formality under the said Act and the Rules and in the backdrop of events there was no scope for the Central Government to refuse approval when the State Government had agreed to grant the renewal. Mr. Deb contends that in the facts of the case it must be held that by directing the Government of Orissa to consider the case of the petitioner on merits against an earlier order of deemed rejection by the State Government, the Central Government, by necessary implication, made it quite clear that subject to the willingness of the State Government to grant renewal, the Central Government had the required approval for the renewal of the said Mining Lease. Mr. Deb submits that in the circumstances, the Central Government was not entitled to hold back its approval on any ground whatsoever at 3 later stage. Mr. Deb also submits that under Rule 58 of the Mineral Concession Rules, a reservation for public sector undertaking or for Government Company can be made after giving notification in the official gazette for the said purpose, Such power is also circumscribed by Rule 49 of the Mineral Concession Rules, 1960. This Rule 58 of the Mineral Concession Rules has, however, come by amendment and at the relevant time when the Central Government refused to accord approval on the ground of reservation of the area for public sector exploitation the said Rule 58 was not in force. Mr. Deb also contends that under Section 17 of the Mines and Minerals (Regulation and Development) Act, the Central Government after consultation with the State Government may undertake prospecting or mining operation in any area not already held under any lease or prospecting licence, and if the Central Government proposes to do such prospective and mining operation it shall, by notification in the official gazette, specify the boundaries and/or areas of operation. In the instant case, no such notification has been made and as such there cannot be any reservation for any public sector exploitation. Mr. Deb also submits that the petitioner company has been carrying out mining operations for a pretty long time and there has not been any complaint whatsoever against the petitioner company for such mining operations and the Government of Orissa has also expressed its satisfaction for the manner in which the petitioner company has been working out the mining operations. The petitioner company has also paid rates and royalties to the State Government regularly and the Orissa Government has also expressed its willingness to grant renewal of Mining Lease in favour of the petitioner company. Mr. Deb has also pointed out that previously other areas were made available to MOIL for exploitation of the Manganese Ores but MOIL failed to utilise such offer and the Orissa Government is not, therefore, interested in getting the area in question exploited by MOIL. It is also contended by the learned counsel for the petitioner company that the Manganese Ores are principally consumed by the public sector undertakings including the Steel Authority of India and the export of Manganese Ores are also controlled by the Central Government in various ways. It is also contended by the learned counsel for the petitioner that there is no allegation against the petitioner company that the petitioner company is not carrying out the Mining operations scientifically or effectively thereby causing losses of the material resources of the country. In the circumstances, the refusal by the Central Government is absolutely arbitrary and without any valid reason and for extraneous reasons not authorised under the Act and the Rules. Mr. Deb has also submitted that this Court in exercise of powers in the writ jurisdiction can direct the Central Government to grant approval of lease and it is no longer necessary to direct the Central Government to consider afresh the petitioner's application for renewal. In support of the contention that in appropriate case this court can straightway direct the Central Govt. to accord approval for renewal of Mining Lease, Mr. Deb has referred to the decisions of the Supreme Court made in the case of P. Bhooma Reddy v. State of Mysore and Union of India v. Anglo Afghan Agencies reported in AIR 1968 SC 718.