CHOMAL EXPORTS PVT. LTD Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) A challenge in this writ petition has been laid to the processes of the State Government under Section 11(5) of the Mines and Minerals (Development and Regulations) Act, 1957 (hereinafter to be referred in short the 'Act of 1957') for grant of a mining lease to a subsequent applicant in preference over a prior applicant. For that purpose the minutes of meeting dated 20th July, 2011 drawn by a Sub-Committee constituted by the State Empowered Committee referable to Rajasthan Enterprises Single Window Enabling and Clearance Act, 2011 (the 'Act of 2011' for brevity), the recommendations of the Principal Secretary (Industries) made on 21st November, 2011 and the communication dated 1st May, 2012 by the Deputy Director (Mines), Government of Rajasthan to the Director (Mines and Geology) have been impugned. Under the aforesaid decisions referred to above, the respondent no. 7 M/s. Super Smelters Ltd. have been found entitled to preferential allotment of iron ore mines in Tehsil Hindaun, District Karauli subject to approval by the Central Government in view of the fact that they had a better case for grant of a lease for mineral iron ore in Tehsil Hindaun District Karauli in view of their approval for setting up a 1.1 MPTA integrated steel plant at cost of Rs.3240 crores providing employment to approximately 1200 people. FACTS OF THE CASE:

(2.) THE case of the petitioner company is that it filed four applications nos. ML No. 8/2010 to ML No.12/2010 for grant of mining lease for mineral iron ore in different areas of the village Karwari and Karsauli of Tehsil Hindaun, District Karauli. Following the aforesaid applications, certain documents were required from the petitioner company by the Mining Engineer, Karauli on 4th March, 2010. On or about 20th March, 2010, the petitioner company is stated to have submitted the desired documents. On 6th January, 2011, Mining Engineer, Karauli again required the petitioner company to submit certain other documents which are stated to have been submitted on 23rd February, 2011 in respect of ML applications no. 8/2010 and 10/2010. Further under letter dated 6th April, 2011, the requisite documents in relation to ML No. 9/2010 and 11/2010 are stated to have submitted. It has been stated by the petitioner company that as there were about 95 different applications for different mineral concessions for mineral iron ore with the State Government, including that for mining leases and prospecting licenses, the State Government instructed the Director (Mines and Geology) (hereinafter 'the Director') to determine priorities amongst the multiple applicants with reference to Section 11(5) of the Act of 1957. Whereupon, the Director issued a notice dated 8th April, 2011 to all 95 applicants, each seeking different mineral concession/s for the mineral iron ore in the areas of village Karsauli and Karwari, Tehsil Hindaun District Karauli. A further notice was issued by the Director on 25th April, 2011 requiring each of the parties notified and seeking mineral iron ore concession/s to appear before him on 10th May, 2011. It is submitted that following the notice dated 8th April, 2010 aforesaid, the petitioner company submitted requisite information under their letter dated 26th April, 2011, wherein the petitioner company stated that it was a part of the diversified Monnet Group of Companies. The petitioner company appears to have proceeded to submit not requisite information pertaining to itself as the applicant in issue, but information relating to the experience in mining and details of financial resources and experience of one M/s. Monnet Ispat and Energy Ltd., stating that Monnet proposed a 1.5 MTPA integrated steel plant with a Rs.8000 crores investment and potential employment (both direct and indirect) to about 6000 people. It is stated that on 27th April, 2011, the petitioner company under the letter head of M/s. Monnet Ispat and Energy Ltd. again submitted Monet's formal proposal for establishment a 1.5 MTPA integrated steel plant on investments to be made and benefits detailed earlier. A copy of Monnet's letter dated 27-4-2011 detailing the proposal was forwarded to Commissioner of Bureau of Investment Promotion (Commissioner, BIP) as also the Principal Secretary (Industries) (PSI).

(3.) LEARNED Senior Counsel Mr. Kamlakar Sharma appearing for the petitioner company states that the proposed recommendations for the approval of the grant of preference to the respondent no.7 M/s. Super Smelters Ltd. under Section 11(5) of the Act of 1957 are wholly arbitrary, vitiated by non-application of mind and ultra vires to the Act of 1957 as also Mineral Concession Rules, 1960 (for short the 'Rules of 1960'). It has been submitted that the recommendations of the Additional Director, Mines and Geology sent under his note dated 12th May, 2011 qua the petitioner company have been completely overlooked and Monnet Ispat's proposal for setting up an integrated steel plant with a much higher investment and employment generation potential blacked out. It has been submitted that the proposal of the petitioner company for Monnet Ispat's setting up an integrated steel plant of the capacity of 1.5 MPTA via Monnet Ispat and Energy Ltd. with an investment of 8,000 crores and employment (direct and indirect) to 6000 workers was far superior to that of the respondent no.7 M/s. Super Smelters Ltd. proposing to set up merely a 1.1 MPTA with an investment of 3240 crores and employment to a mere 1200 people. It has been submitted that the petitioner company is a group company of M/s. Monnet Ispat and Energy Ltd, the later company having acquired 51% of the petitioner company 's share holding on 31st December, 2010. The case set up is that at the time when proceedings for determination of preference under Section 11(5) of the Act of 1957 were taken, effective 15th March, 2011, the petitioner company being a subsidiary company of Monnet Ispat and Energy Ltd. ought to have been considered not on its own individual technical, financial strength and experience but with reference to the technical strength, financial resources and the experience of its holding company Monnet Ispat and Energy Ltd. It has also been stated that in any event, the respondent no.7 M/s. Super Smelters Ltd. having applied in the first instance only for a prospecting license on 3rd September, 2010 as against the petitioner company 's prior applications for a mining lease on 3rd March, 2010, the respondent no.7 M/s. Super Smelters Ltd. could not have been considered at all for grant of a mining lease even with reference to Section 11 (5) of the Act of 1957. It is submitted that Section 11(5) of the Act of 1957 allows for determination of preference to applicants in the same category of mining concession and that an applicant for a prospecting license could not have been evaluated or preferred juxtaposed to a prior applicant for a mining lease -notwithstanding that following an earlier consideration on its application for prospecting license, it was chosen to be preferred for allotment of a mineral lease and thereafter prompted to file an application also for grant of mining lease for mineral iron ore a couple of days prior to the considerations by the Cabinet on March, 2012. It has also been submitted that in any event of the matter, determination of preference under Section 11(5) of the Act of 1957 had to be strictly in consonance with the procedure prescribed therefore under the Act of 1957 as also the mineral Concession Rules of 1960 and in no other manner. It is submitted that thus the consideration of the case of the respondent no.7 M/s. Super Smelters Ltd. with reference to the Ordinance of 2010 -later replaced by the Rajasthan Enterprises Single Window Enabling and Clearance Act, 2011 (Act of 2011) was wholly impermissible and the recommendations for grant of preference to respondent no.7 M/s. Super Smelters Ltd. under Section 11(5) of the Act of 1957 with reference to the Act of 2011 could not be sustained as they were ultra vires the Act of 1957 and contrary to the enunciation of law by the Hon'ble Supreme Court in the case of Sandur Maganese and Iron Ores Ltd. Vs. State of Karnataka [(2010) 13 SCC 1].