ROY AND COMPANY Vs. STATE OF ORISSA

JUDGEMENT

(1.) THE petitioner is a company registered under the Companies Act, 1956 and is engaged in the business of purchase of manganese ore from O.P. No.5 - M/s. Bhanja Minerals Pvt. Ltd., which has been granted two Mining Leases under the Mines and Minerals (Regulation and Development) Act, 1957 (MMRD Act, in short) for iron and manganese ore in village Inganijharan and iron ore in village Deojhar, both in the district of Keonjhar, and is engaged in the business of mining of iron and manganese ore. The petitioner -company through its Partner -Biplab Roy has filed this writ petition questioning the legality and validity of the Notification dated 15.1.2004 issued by the Government of Orissa in the Department of Steel and Mines, vide Annexure -2, declaring the Policy Decisions on grant of mining lease and transfer of land for commercial projects in Scheduled Areas, 2003, more particularly Clause 8 (e) thereof and praying for issuance of a writ of certiorari quashing the said Notification in Annexure -2 and declaring the same as illegal and unconstitutional and further declaring that the petitioner is not legally obliged to pay such contribution at the rate of 5% of the net annual profit so also at the flat rates as mentioned in paragraph No.4 -U of the writ petition. Under Clause 8 (e) of the notification it is decided that 5% of the net annual profit accrued to the project should be spent for the development of health, education, communication, irrigation and agriculture of the said scheduled area within a radius of 50 Kms. and the amount should be spent through Societies/Trusts constituted at the District/Divisional level besides by respective Collectors/R.D.Cs. The aforesaid Policy Decision of the State Govt. was taken in order to protect the interest of the tribal land losers and to give effect to the judgment of the apex Court rendered in Civil Appeal Nos.4601 -2002 of 1996, in Samatha v. State of Andhra Pradesh and others, on 11.7.1997, reported in AIR 1997 SC 3297.

(2.) ACCORDING to the petitioner, O.P. No.5 -Bhanja Minerals by communication dated 10.7.2005, vide Annexure -3, informed the petitioner -company that the rates agreed upon are liable for upward revision in view of the fact that the State Govt. has levied an extra cost of 5% as Periphery Development Fund on the annual net profit and accordingly added 5% to the rates agreed upon with the petitioner -company. It has been further averred that in terms of the notification in Annexure -2 a meeting was convened by the R.D.C. (N.D.) at the Collectorate on 12.3.2005 in which it was informed that a Periphery Development Society has been formed under the chairmanship of the Collector, Keonjhar, in accordance with the decision taken in the notification in Annexure -2 for supervising and monitoring the Periphery Development. In the said meeting several decisions were taken. The minutes of the aforesaid meeting of the Periphery Development Committee is annexed as Annexure -4. Under agenda No.4 of the said meeting the ways and means for computation and collection of periphery development from the mining industries was decided and under agenda No.1, i.e., Review of implementation of previous decisions, it has been indicated that a sum of Rs.14,37,40,000.00 has been collected upto that date, Rs.4,37,377.00 as interest and Rs.3,35,000.00 as sale of tender papers, thereby totalling to Rs.14,44,91,377.00. Thereafter O.P. No.4 -the Member Convenor -cum -Deputy Director, Mines, Joda, Periphery Development Committee, by letter dated 9.5.2005 indicating the rates of different types of product per tonne raised a demand against Bhanja Minerals, which is the principal of the petitioner -company, for an amount of Rs,33,25,580/ -, vide Annexure -5, and requested to deposit the demanded amount in shape of D.D. in favour of the Periphery Development Society, Keonjhar, by 30.6.2005. The relevant part of said letter in Annexure -5 is extracted hereunder :

(3.) LEARNED counsel for the petitioner submitted that the basis of the judgment in Samatha's case was the absolute prohibition for transfer of lands in Scheduled Areas as per Section 3 of Andhra Pradesh Scheduled Areas Land Transfer Regulations, 1959, as amended by Regulation 2 of 1970, and also the amendment of Section 11(5) of the MMRD Act by the Govt. of Andhra Pradesh. These two amendments when read together envisaged a total prohibition of transfer of Govt. lands in Scheduled Areas to any non -tribal. The aforesaid local amendments imposed a total embargo on transfer of Govt. land in favour of non -tribals. 'State' has also been included in the definition of 'Person' so as to make even transfer of lands by the State to be illegal, null and void and contrary to the local legislation. Therefore, all the leases in Andhra Pradesh were declared null and void. But, according to the petitioner, the relevant piece of legislation in Orissa is the Orissa Scheduled Areas (Transfer of Immovable properties by the Scheduled Tribes) Regulation, 1956 which the State Govt. in its notification also admits comprehensive enough to deal with the lot of the tribal population. The relevant section of the Orissa Act dealing with the transfer of immovable properties is Section 3 which itself does not contain any absolute bar for transfer of immovable properties by the Govt. Hence the sanctity of mining leases granted in the State of Orissa cannot be challenged by an interpretation of Section 3 of the Orissa Regulations and the State of Orissa has also not taken such a stand. Therefore, the Samatha case does not have any application in the State of Orissa. It was further submitted that the ratio of Samatha case was later on clarified in BALCO Employees' Union of India v. Union of India and others JT 2001 (10) SC 466 : 2001(8) Supreme Court 660, which limited the scope and applicability of Samatha only to the facts of that case and also to the State of A.P. in BALCO case, the apex Court Categorically held that the Samatha case would not have applicability to the State of M.P. since in M.P., there is no absolute prohibition like in A.P. for transfer of land by Govt. to non -tribals in Scheduled Areas. Therefore, when Samatha case does not apply, any collection of fund pressing reference on Samatha case would not have any justification. It was further stated that the stand taken by the State that the collection is voluntary is not true because the Units were being constantly pressurised to make such payments and in this regard attention of the Court was drawn to the minutes of the special meeting held on 18.4.2005 for periphery development under the Chairmanship of the R.D.C. (ND), vide Annexure -7, wherein it was decided, inter alia, that since the contributions are being made against the business already carried out during 2004 -05, the DDM, Joda will make mines -wise and industry -wise calculation based on the dispatch figures and capacity and the entire contribution has to be deposited in one go or in 2 -3 instalments by 30.6.2005 and any deviation in this regard will not be tolerated. The petitioner, therefore, submitted that the aforesaid would go to show that the collection is not voluntary and there is element of coercion and the purported levy takes on the character of a tax, i.e., enforced by way of notification, amounts specified at particular rates, etc. and hence is against the mandate of Article 265 of the Constitution of India and the aforesaid collection has no legal sanction, inasmuch as there is no legislation on the subject.