KEONJHAR INDUSTRIAL FEDERATION Vs. STATE OF ORISSA

JUDGEMENT

(1.) The petitioner is a registered Association consisting of 247 members, who own and established Crusher Units in the Barbil, Keonjhar, Koida and Mayurbhanj region. Each one of them is aggrieved by the implementation of 5th proviso of Rule 3 of the Orissa Minerals (Prevention of Theft, Smuggling and Illegal Mining and Regulation of Possession, Storage, Trading and Transportation) Rules, 2007 (in short "the 2007 Rules"). Instead of approaching this Court individually thereby multiplying the number of writ petitions the members have decided and authorized the Association to file the writ petition challenging the vires of the 5th proviso of Rule 3 of the 2007 Rules.

(2.) The brief facts giving rise to this writ petition are as follows : The petitioner-Keonjhar Industrial Federation is a registered body hearing Registration No. KJR-4963-47-2008-2009 and has two other affiliated Associations under the name and style of Iron Ore Crusher Owners Association, Barbil and District Small Scale Industries Association, Keonjhar representea through its President/Secretary consists of the members who have owned and established Crusher Units in the Barbil, Keonjhar, Koida and Mayurbhanj region. About 60% of the units have been established prior to 2007 and the rest have been established after 2007. The petitioner-Association has 247 members in the aforesaid four regions. They all have been granted new/renewed licenses under the 2007 Rules. After the Rules of 2007 came into force in the year 2007, the licenses of most of the Crusher Units have been renewed. All units have been set up keeping in mind the availability of minerals with huge capital expenditures by borrowing money from Banks/financial institutions/private sources and the average investment of each one of the units would be Rs. 1.5 crores to Rs. 2.5 crores. Due to increase in demand for steel in the National as well as International markets and the consequential enhanced requirement of steel production, the importance of iron ore, which is the basic raw material for manufacturing steel, has gone up manifold in the recent years. The need for maximizing the production and minimizing the cost was also felt across the globe in the steel industry. The latest technology of Crushing Machines has been geared towards minimizing the cost while maximing the production. The concept of maximizing the production at the reduced cost has given rise to the iron ore crushing projects. The reduce the cost and increase the profitability, the Steel Mills have started consuming sponge iron in place of iron ore lumps. For production of sponge iron, iron ore in the size of +5 mm -18 mm is preferred. By these foreign materials existing in the lump ore gets separated to maintain the foreign exchange content at 65% and this iron ore is preferred by sponge iron plants.

(3.) In recent past, the need of +5 mm - 18 mm crushed size of iron ore has gone high giving large scope for crusher plants. Previously crushing activities were confined to steel mills where huge investment was required. But the concept of small investment in crusher plant has given viability to this type of crushing plants where they pay off period of investment is maximum 2 years. The future is expected to be minimum 10 years to come. In view of the increased demand of calibrated iron ore in Orissa and neighbouring States and the richness of iron ore and minerals in this area, has triggered the establishment of Crusher Units. Besides the availability of raw materials, Crusher Units have been set up with a distinct locational advantage such as availability of adequate and with favourable soil characteristics, proximity to mines being source of raw materials, availability of infrastructure facility like water, power, transportation and man power and proximity of consumers for selling finished products, i.e., sponge iron plants located nearby and around the iron ore mines. All the crusher units have been set up on self acquired lands and have complied with all the requisites statutory premissions from the authorities.