K.P. GRANITE INDUSTRIES Vs. STATE OF ORISSA

JUDGEMENT

(1.) THIS writ petition has been filed with a prayer to quash the order/proceeding dated 22.09.2011 passed/drawn in the Department of Steel and Mines under Annexure-11 whereby the mining lease granted vide Proceeding No. 8418/SM, dated 22.8.2005 and mining lease executed on 14.02.2006 for decorative stone over an area of 6.972 hectares in village Andhrajholi of Gajapati district in favour of petitioner was cancelled on the ground that the said order is illegal, arbitrary, outcome of colourable exercise of power in violation of principles of natural justice and in contravention of Articles 14 and 19(1)(g) of the Constitution of India and contrary to the provisions of Orissa Minor Mineral Concession Rules, 2004 (for short, 'the Rules, 2004').

(2.) PETITIONERS ' case in a nutshell is that petitioner no.1-firm was mainly engaged in mining of decorative stone and related activities. Petitioner no.2 is the Managing partner of petitioner no.1-firm. On 30.4.2004, petitioner no.1-firm applied for a mining lease of decorative stone over an area of 30.865 hectares in village Andharijholi in the district of Gajapati before opposite party no.1-Commissioner-cum-Secretary, Department of Steel and Mines, Bhubaneswar under Rule 15 of the Rules, 2004. Opposite party no.2-Director of Mines, Odisha forwarded the said mining lease application of petitioner no.1-firm to the State Government on 5.7.2004 with the recommendation for grant of mining lease over an area of 26.325 hectares. On 18.10.2004, Government of Odisha-opposite party no.1 issued terms and conditions for grant of mining lease over an area of 26.325 hectares, which was accepted by the petitioner-firm on 20.10.2004. Upon acceptance of terms and conditions by the petitioner-firm, the Govt. of Orissa-opp. Party no.1 issued the order granting mining lease for decorative stone over 26.325 hectares in village Andharijholi in the District of Gajapati in favour of the petitioner-firm for a period of 10 years vide proceeding No. 11795 dated 31.12.2004. Pursuant to grant of mining lease by the State Government on 31.12.2004, opp. Party no.2 vide letter dated 19.1.2005 directed opposite party no.3 to execute the mining lease deed with petitioner-firm. Upon a joint inspection, the mining lease area was demarcated by the officials of the Mining, Revenue and Forest Department on 19.4.2005. On such inspection it was found that the granted mining lease area contains cashew trees and other unclassified and bushy growth for which recommendation was made by the inspecting team for deletion of the vegetated area and to grant mining lease over an area of 6.972 hectares out of 26.325 hectares. The joint inspection report dated 19.4.2005 was forwarded by the Director of Mines-opp. Party no.2 on 2.5.2005 to the State Government with the recommendation to consider grant of mining lease over a reduced area of 6.972 hectares. Since no action was taken by the State Government to execute the lease deed with the petitioner-firm, the latter filed writ petition bearing W.P.(c) No. 4331 of 2005 before this Court, which was disposed of on 25.4.2005 with a direction to the petitioner-firm to produce the writ petition with all annexures before opp. Party no.2- Director, Mines which shall be treated as a representation and opp. Party no.2 was directed to consider the said representation for due compliance of order dated 19.1.2005 of opp. Party no.2.

(3.) ON 30.6.2008, opp. Party no.3 issued demand notice directing the petitioner-firm to deposit Rs.1,78,494.00 towards dead rent and surface rent up to 31.12.2008. Pursuant to such demand notice on 14.8.2008, the petitioner-firm deposited Rs.79,910.00 with opp. Party no.3 towards surface rent and dead rent up to 31.12.2007 which was duly received and acknowledged by opp. Party no.3. On 12.10.2010, opp. Party no.3 issued demand order directing the petitioner-firm to deposit Rs.4,24,483.00 towards dead rent and surface rent for the period 2008-2010 and interest for the year 2007. Pursuant to such demand notice dated 31.12.2010, petitioner- firm deposited Rs.4.24,483.00 with opp. Party no.3 which was duly received and acknowledged by opp. Party no.3. On 31.12.2010, the petitioner-firm submitted a representation before the competent authority through proper channel to accord permission for opening quarrying operation and lifting of decorative stone from the leasehold area and the said representation was duly forwarded by opp. party no.2 to opp. party no.3 vide its letter dated 18.1.2011. On 31.12.2010, the petitioner­firm also requested the opp. Party no.3 to issue permit to lift the existing stock of 70.073 cubic metres of decorative stone as there was market demand. While the petitioner-firm awaiting permission for opening mining operation and lifting of the materials, all of a sudden on 29.7.2011 opp. Party no.1 issued a notice to the petitioner-firm for personal hearing as to why the lease shall not be cancelled under Rule 25(5) of the Rules, 2004. In the said notice it was stated that opp. Party no.2 vide his letter dated 3.2.2011 has submitted a proposal for cancellation of the mining lease on the ground that after execution of lease deed, petitioner-firm has kept the area idle since more than two years deviating Rule 25.(5) of the Rules, 2004. Pursuant to the aforesaid notice, on 16.8.2011, petitioner no.2 appeared before the Additional Secretary to Govt. Department of Steel and Mines for personal hearing and submitted a note stating its case. Petitioner-firm in the personal hearing also stated that it will start a decorative stone processing unit in the lease hold area within a period of one year from the date of issuing the order for reopening the quarry and submitted a letter to that effect. Opp. Party no.1 without considering the matter in its proper perspective, and without supplying the proposal of opp. Party no.2 dated 3.2.2011 to the petitioner-firm, in a most illegal, arbitrary and perfunctory manner vide order dated 22.9.2011 has held that there is violation of Rule 25(5) of the Rules, 2004 and therefore, the mining lease granted on 22.8.2005 and the lease deed executed on 13.2.2006 were cancelled. Hence, the present writ petition.