Karnataka High Court
T R Narayanaswamy S/O T K Ramanatha Iyer vs The State Of Karnataka By Its ... on 5 November, 2012
Author: Vikramajit Sen
Bench: Chief Justice, B.V.Nagarathna
1
IN THE HIGH COURT OF KARNTAKA AT BANGALORE R
DATED THIS THE 5th DAY OF NOVEMBER 2012
PRESENT
THE HON'BLE MR.VIKRAMAJIT SEN, CHIEF JUSTICE
AND
THE HON'BLE MRS. JUSTICE B.V. NAGARATHNA
WRIT APPEAL NO.3932/2004 (GM-MMS)
BETWEEN:
T.R. Narayanaswamy,
S/o. T.K. Ramanatha Iyer,
Aged about 66 years,
No.226, C.V. Raman Avenue,
Rajmahal Vilas,
Bangalore. : Appellant
(By Shri. H. Srinivas Rao, Advocate)
AND:
1. The State of Karnataka,
By its Secretary -II,
Department of Commerce
and Industries,
M.S. Building, K.R. Circle,
Bangalore.
2. The Director,
Department of Mines and
Geology, Khanija Bhavan,
Race Course Road,
Bangalore. : Respondents
(By Shri. R.G. Kolle, Addl., Government Advocate for R-1 & 2)
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This Writ Appeal is filed under Section-4 of the Karnataka
High Court Act praying to set aside the order passed in Writ
Petition No.117/2003 dated 23rd July 2004 and to direct the
respondent No.1 to consider the Appellant's application dated
12.02.2002 for renewal, read with the direction of this Court in
W.P.No.42001/1995.
This Writ Appeal having been heard and reserved for
pronouncement of judgment, this day, the Chief Justice
pronounced the following :
JUDGMENT
Vikramajit Sen, C.J.
In this Appeal the Appellant has called in question the legal correctness of the decision dated 23.07.2004 of the learned Single Judge in Writ Petition No.117/2003. The facts germane to the controversy are not in dispute. On 15.03.1982 a Quarry Lease pertaining to Survey No.421 of Maralabbe Kuppe village of Kanakapura taluk, Bangalore Rural District, Karnataka, admeasuring 54 acres came to be granted in favour of the Petitioner/Appellant for a period of ten years. It was renewed thereafter for another tranche of ten years. Accordingly, the tenure of the lease was to terminate by efflux of time on 15.03.2002. The Appellant, as per Rule 9(2) of the Karnataka 3 Minor Mineral Concession Rules, 1994 [hereafter referred to as 'KMMCR 1994'] applied within the prescribed time, on 12.02.2002, for the renewal thereof. Rule 9 (2A) of KMMCR 1994, inserted with effect from 17.07.1997, ordains that where a renewal application has been filed within the prescribed time the lease shall be deemed to have been extended till such time as the Government passes the requisite Orders; there is no automatic renewal of the subject Lease postulated in the Rules. Eventually on 21.11.2002 the Respondents accorded a renewal of the lease, however restricting it to an extent of 10 acres only as against the erstwhile 54 acres. This decision was predicated on Rule 15 of the KMMCR 1994 on the ground that the Appellant did not possess an "100% export oriented granite cutting and polishing small scale industrial unit" as contemplated under Rule 15 of the KMMCR 1994. It was this Order which came to be impugned by way of the subject Writ Petition. The impugned Order categorically claims support for the view of another learned Judge taken in W.P. No.42001/1995 which was also filed by the petitioner herein; it was allowed on 28.08.2000, remitting the 4 matter back for reconsideration in accordance with law viz., by means of a reasoned and speaking order.
2. Principally two arguments have been raised before us. Firstly, that it is The Granite Conservation and Development Rules, 1999 ['GCDR 1999' for brevity] (a Parliamentary as also be a later enactment renders the KMMCR 1994 ineffectual). Secondly, that the factual matrix of the case in hand concerned the 'renewal' in contradistinction to the 'grant' of a quarry lease and therefore, the terms of the original lease particularly with reference to the extent of land could not have been altered by the respondents.
3. The relevant Rules of the KMMCR 1994 are reproduced for facility of reference:
"9. Application for grant or renewal of a quarrying lease -
xxxx
9(2) - An application for renewal of a
quarrying lease to quarry specified minor
mineral belonging to the State Government which has not been notified under Rule 8-B shall be in FORM-R and shall be made to the 5 Director at least twelve months before the expiry of the lease. The application shall be accompanied by a fee of rupees two thousand in the form of a treasury challan under the specified Head of account together with the difference of amount of security deposit, if any, to be paid by the lessee at the prevailing rates in the form of treasury challan and a certificate issued by the Competent Authority for having cleared the arrears, if any, in respect of any lease held by him as on the date of making application for renewal..
(2A) If an application for renewal of a quarrying lease made within the time referred to in sub-rule (2) is not disposed of by the State Government before the date of expiry of the lease, the period of that lease shall be deemed to have been extended by a further period till the State Government passes orders thereon.
xxxx
11. Grant or renewal of quarrying lease:-
(1) There shall be a Committee to make recommendations for grant or renewal of a quarrying lease under this rule. ......
xxx 6 (3) On receipt of applications from the Director, the committee shall having regard to the priorities under rule 12, and the guidelines issued by the State Government, if any, consider such applications and make recommendations to the Government.
Provided that the Committee shall not consider such applications in respect of any area, which is notified under rule 8B after the receipt of the application on or before the date of consideration and all such application shall be liable to be return to the applicants and security deposit and fee paid, if any, may be refunded.
xxx
12. Priorities:- (1) Selection from amongst the applicants for grant of quarrying lease under this chapter shall normally be made in the following order of preference, namely:-
(i) a Corporation or undertaking owned or controlled by the State or Central Government and Joint Sector projects with such Government Corporations or Undertakings;7
(ii) persons who have already established hundred per cent export oriented units for cutting and polishing of granites in the State;
(iii) Persons who have already established a small scale Industrial unit for cutting and polishing of granites in the State;
(iv) Persons who hold a valid licence for establishment of a granite cutting and polishing unit within the State for the purpose of hundred per cent export and persons who hold a permanent Registration Certificate for establishment of a Small Scale Industrial Unit in the State;
(v) a society registered under the Karnataka Co-operative Societies Act,1959, and the members of which belong to the Scheduled Castes & Scheduled Tribes;
(vi) a Society registered under the Karnataka Co-operative Societies Act,1959, and the members of which belong to economically weaker sections of the Society and who are also stone quarry workers by tradition;
(vii) all others:8
(2) In case of applicants falling under clause
(iv) of this rule 12 who require specified minor mineral for their proposed industry they shall set up industry in accordance with their industrial program within a period of twenty four months from the date of execution of lease deed and shall keep the Director informed of the progress made every six months from the date of execution of lease deed. On setting up of industry the lessees shall inform the fact in writing to the Director failing which the lease shall be deemed to have been terminated on the expiry of the said period of twenty four months.
Where the lessees are unable to set up industry within the said period for reasons beyond their control they may submit before the expiry of the said period an application to the Director explaining the reasons for the same together with affidavits. The Director shall forward such applications to the State Government and it may on being satisfied that such failure in setting up the industry was due to reasons beyond the control of the lessee, extend the period of such lease by one more year either prospectively or retrospectively.
x x x 9
14. Disposal of application for grant or renewal of lease:-
(1) Application for grant or renewal of lease shall be disposed-
(i) in the case of an existing industry within a period of One hundred and eighty days from the date of receipt of application failing which the applicants shall be informed of the reasons for delay within fifteen days after the expiry of the disposal period.
(ii) in all other cases within a period of four months from the date of receipt of applications failing which the applicants shall be informed of the delay within fifteen days after the expiry of the disposal period.
15. Maximum area of Quarrying lease to be granted:-
(1) Total area of one or more quarry leases to quarry specified minor minerals shall not exceed;
(i) fifty acres in case of an existing hundred percent export oriented granite cutting and 10 polishing unit in the State, falling under clause (ii) of sub-rule (1) of rule of 12;
(ii) forty acres in case of other granite cutting and polishing units in the State, falling under clause (iii) (iv) and (v) of Sub-rule (1) of rule 12;
(iii) ten acres in all other cases, falling under clause (iv),(v),(vi) and (vii) of sub-rule (1) of rule 12.
xxx xxx x x x
57. Application of these rules for renewal:-
Where a quarrying lease or any other right for quarrying a minor mineral has been granted before the commencement of these rules is renewed after such commencement, these rules shall apply in relation to such renewal of a quarrying lease or licence granted after such commencement".
4. The GCDR 1999 has been formulated by the Central Government in exercise of the powers conferred by Section 18 of the MMDR Act 1957. In the event of any irreconcilable differences between the two pandects of Rules, the Central Rules which are also later in time would prevail. There can be no cavil however that subsequent legislation or formulations of Rules and 11 Regulations will not automatically repeal or annul all that is then in existence. It is for the Courts to peruse the two pandects in an endeavor to give effect to both in so far as that may be possible. This position stands clarified, although arguably it need not have been so done, by Rule 52 of GCDR 1999. Under these circumstances, we need not discuss in detail the exposition of the law enunciated by the Constitution Bench titled Ishwari Khetan Sugar Mills Vs. State of Uttar Pradesh, AIR 1980 SC 1955 : (1980) 4 SCC 136 as well as the series of other pronouncements to the same effect. The relevant Rules of the GCDR 1999 are also reproduced for facility of reference.
"6. Period for which leases may be granted or renewed -
(1) The maximum period for which a lease
may be granted shall not exceed thirty
years:
Provided that the minimum period
for which any such lease may be granted
shall not be less than twenty years.
(2) A lease may be renewed for a period not
exceeding twenty years.
(3) Notwithstanding anything contained in
sub-rule (2), if the State Government is of 12 the opinion that in the interest of development of granite it is necessary to do so, it may, for reasons to be recorded, authorize the renewal of a lease for a further period or periods not exceeding twenty years in each case.
7. Minimum and maximum area for grant of a mining lease:-
(1) The minimum area that may be granted or renewed under a lease for ensuring mining activities to optimum depth shall not be less than one hectare.
(2) The maximum area that may be granted under a mining lease shall not exceed fifty hectares:
Provided that the State Government, if it is satisfied on the basis of proposed production level, geological or topographical conditions, may for the reasons to be recorded in writing, grant or renew a lease over an area more than the maximum area or less than the minimum area specified under this rule.
52. Applicability of the provisions of Minor Miner Concession Rules framed by the State Government.13
The provisions of the Minor Mineral Concession Rules or any other rules framed by the State Government under Section 15 of the Act shall be applicable to granite quarry leases to the extent they are not repugnant to or inconsistent with these rules".
5. Rule 15 of the KMMCR 1994 (supra) stipulates that the maximum area that can be granted for a quarry lease cannot exceed 50 acres in case of an existing hundred percent export oriented granite cutting and polishing unit; and 40 acres in case of other granite cutting and polishing units (see supra). Since the petitioner does not fall in either, it is entitled only to ten acres. On the other hand, Rule 7 of the GCDR 1999 ordains that the minimum area shall not be less than one hectare and the maximum area shall not exceed 50 hectares; the proviso thereto, however, should not be overlooked as it vests informed discretion on the State Government to breach both the maximum and minimum areas. We must immediately note that in the case in hand, this discretion has obviously not been even exercised since the impugned Order dated 21.11.2002 does not even attempt to articulate any reason for the Respondent-State 14 Government to have transgressed the aforementioned parameters. As is known, an acre of land is equal to 4840 square yards (4047 square meters) whereas one hectare is equivalent to 100 ares or 10000 square meters or 2.471 acres.
Even though the renewal of the Appellant's quarry lease has been confined only to ten acres by the respondent, it is nonetheless more than one hectare which is the minimum area prescribed by the Rule 7(1) of the GCDR 1999. Even without taking recourse to the discretion of the State Government preserved by the proviso, the reduction of area does not infringe or violate either the GCDR 1999 or the KMMCR 1994. Therefore, the challenge to the area/extent of the land as contained in the renewed lease does not have any substance as it is well within the postulation/parameter of both the enactments mentioned above. The decision of the Constitution Bench of the Apex Court is rendered in respect of the facts of that case. There is no repugnancy in the two pandects. Arguably, it would have arisen had the area covered by the renewed lease fallen short of one hectare i.e., less than 2.47 acres. Even in such a situation, had valid and articulated reasons been disclosed by the State 15 Government justifying going below one hectare, advantage of the proviso to Rule 7 of the GCDR 1999 could have been availed.
6. It seems to us that both the State and the Central Rules can coexist and in fact tend to prescribe similar principles and endeavour to achieve common objectives. The preamble of GCDR 1999 clarifies that its intendment is "for conservation and systematic development and scientific mining to conserve the granite resources and to prescribe a uniform framework with regard to systematic and scientific exploitation of granite throughout the country. . .". Therefore, both GCDR 1999 as well as KMMC 1994 can coexist since their provisions are not repugnant or incompatible to each other. So far as the present factual matrix is concerned, the problem would have become acutely manifest had the grant or renewal pertained to an area which was less than 2.4 acres. It should be kept in perspective that since granite is a minor mineral, by virtue of Section 14 of the MMDR Act 1957 the postulations contained in Sections 5 to 13 thereof would not be applicable.
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7. We shall now consider the second argument placed by the learned counsel for the appellant. As has already been narrated above, the first renewal was granted on 10.10.1994 with effect from 15.03.1992 for a period of ten years. The second renewal was applied for by the appellant on 12.02.2002, by which time the KMMCR 1994 had come into operation having been published in the Karnataka Gazette Extraordinary, dated 28.05.1994. It must immediately be observed that to accord a renewed term, the KMMCR 1994 also governed the first renewal since the decision was taken five months later, but since this question has not been argued by either side, we shall not dwell on it any further. Indubitably, by virtue of Rule 57 of KMMCR 1994, the respondents were obliged to apply them atleast when the second renewal had been asked for. Furthermore, after 08.07.1999, Rule 16 contains an embargo against granting a quarry lease for a period in excess of twenty years, which period has been crossed on 15.03.2002 so far as the present case is concerned, if the KMMCR 1994 are adverted to. However, unlike the case of the extent of land which can be granted for a quarry lease, there is variance between the State and Central Rules so 17 far as the tenure thereof is concerned, as the GCDR 1999 prescribes a maximum of thirty years and a minimum of twenty years tenure for a lease. In addition, a renewal is postulated for a period not exceeding twenty years, and the third sub-rule enables further renewals if so justified in writing by the State Government, in the event it is of the persuasion that the opinion that these renewals would be in the interest of the development of the granite industry. With regard to the tenure of a granite quarry lease the KMMCR 1994 must give way to the GCDR 1999. It was this dialectic which prevailed on us to hold so, in W.P.Nos.16107-108/2012 disposed of on 17.09.2012.
8. Another significant difference between KMMCR 1994 and the GCDR 1999 concerns the initial grant of a quarry lease. Rule 12 of the KMMCR 1994 contains an enumeration of priorities which would prevail on the State to grant a quarry lease to an applicant. The learned Single Judge in the impugned Order has held that "the petitioner's application for renewal of lease requires to be considered on the basis of the priorities in Rule 12. If that be so, the application of Rule 15 fixing the ceiling on the area of quarrying lease cannot be restricted to 18 applications for grant of quarrying lease, but, is applicable also to applications for renewal." Contrary to the submissions made by the learned counsel for the Appellant/Petitioner there is little in substance or no difference between the 'grant' and 'renewal' of the lease. The argument of learned counsel for the appellant before us appears to be somewhat different. It is contended that the renewal cannot bring into existence fresh or altered covenants except those pertaining to the tenure or periodicity of the lease. We are not persuaded by this argument. In Delhi Development Authority Vs. Durga Chand Kaushish (1973) 2 SCC 825 their Lordships have clarified that -
"a renewal of lease is really grant of a fresh lease. It is called a 'renewal' simply because it postulates the existence of a prior lease which generally provides for renewal as of right. In all other respects, it is really a fresh lease." In that case a lease was admittedly for a period of 90 years, and an increase/enhancement of rent prior to the expiry of its tenure or during its tenure was held to be impermissible since no covenant in the lease envisaged such an action. Even though the factual matrix of the two cases are different, the foregoing enunciation of 19 the law by the Apex Court is relevant and must be applied. In the present case, we shall abjure from pronouncement as to whether the priorities contained in Rule 12 of the KMMCR 1994 would once again have to be kept in perspective even at the time of its renewal, as this aspect does not arise for our determination.
However, it appears to us that on the coming into effect of the GCDR 1999, Rule 12 of the KMMCR 1994 has been rendered otiose. If Rule 12 is not applicable to 'grant of leases' then it could be argued that having regard to 1999 Rules, Rule 15 is also not applicable to grant of lease as the extent is dependent on nature of unit specified in Rule 12. It could further be argued that if Rule 12 is not applicable to "renewal of leases" then automatically Rule 15 also would not apply with regard to renewal of leases. Therefore, the argument could be that if Rule 12 is not applicable for grant or renewal of leases, then Rule 15 also would not be applicable. In other words Rules 12 and 15 would not be applicable for renewal of a lease but we do not say anything regarding their applicability for grant of a lease. They also do not refer to "renewal of a lease" but only "grant of a lease"20
unlike other provisions such as Rules 8, 9, 11, 14, 16, 18 which refer to both expressions.
9. On the other hand, it could also be interpreted that Rule 15 would apply to all renewals of leases subsequent to the enforcement of the KMMCR 1994, though the initial lease was prior to 1994, even though the word "renewal" is not found in Rule 15. We say so because renewal of a lease is in substance grant of a fresh lease. But Rule 12 cannot be applied to a renewal of lease granted prior to 1994. Rule 12 cannot be applied for considering a renewal of a lease granted prior to KMMCR 1994 as the word 'renewal' would then lose its contextual meaning having regard to priorities for grant of lease stated in Rule 12. On the other hand, in respect of a lease granted after the enforcement of KMMCR 1994 both Rules 12 and 15 would apply for grant of lease. With regard to renewal of a lease, depending on the nature of the unit at the time of renewal, Rule 15 is applicable but not Rule 12. We say this because the GCDR 1999 prescribe the grant of a prospecting licence prior to the execution of a quarry lease. The comprehensive preferences put into place by Rule 12 have 21 escaped the postulation of the GCDR 1999 either in respect of grant of a prospecting licence or of a quarrying lease, and this being so it seems to us that Rule 12 prioritization would apply mutatis mutandis to the grant of prospecting licence, as that is the threshold or springboard for the grant of quarry leases or prospecting licences. As is apparent, it is an arduous task that the Court has to perform an ironing out the creases of the statute or Rules and Regulations when they appear to collide with or confront each other; the Court will always endeavour to apply the rationale of both unless it becomes impossible to do so.
10. Since the renewal tantamounts to a fresh grant, irrespective of the time of grant i.e., when with respect to a grant made prior to KMMCR Rules, the State Government is duly empowered to consider the extent of land which it finds expedient to convey to any applicant such as the Petitioner/Appellant having regard to the statutory provisions relating to renewal of a lease. Unlike in the case of the tenure of the lease, both the GCDR 1999 and KMMCR 1994 can coexist so far as the extent of land sought to be given on lease is concerned. We do not find any infraction of any law or of any Rules in the 22 decision of the State Government to reduce the area of the leased land from 54 acres to 10 acres, as contained in the impugned Order. Both the GCDR 1999 and KMMCR 1994 accord preference to parties who have already invested or are willing to invest moneys for the "Conservation and Systematic Development of the Scientific Mining to conserve, the granite resources". So far as the petitioner is concerned, it is not his case that he is entitled to 50 acres, possibly because he has not set up hundred percent export oriented granite cutting and polishing unit. It is also not his case that he is entitled to 40 acres because he has established a granite cutting and polishing unit. Therefore, in our opinion, the grant of a lease for 10 acres as against erstwhile 54 acres is totally justified and reasonable. It is ubiquitously believed in the trade or market that Indian granite is of high quality; pink granite available in Karnataka is amongst the best and therefore is must sought after. A person who is not willing to or has neglected to plough in requisite investment, in the ultimate analysis, deprives others from engaging the enterprise to the optimum; and prevents the State from generating/recoverable maximum returns. Our attention 23 has been drawn to the exposition of law in Maya Mathew Vs. State of Kerala (2010) 4 SCC 498. The GCDR 1999 partake of the nature of a special enactment when compared to KMMCR 1994 which are general inasmuch as they apply to all minor minerals. But in addition, the GCDR 1999 are also subsequent or later in time, and therefore its provisions must prevail over the earlier KMMCR 1994. Our analysis respects and implements these well entrenched principles of statutory interpretation.
11. We are now in a piquant position since the impugned order of the Government has been quashed in the impugned decision of the learned Single Judge but it is not the State of Karnataka which has come up in appeal. Therefore, in the absence of an appeal, the impugned decision would have to be reconsidered by the Government in the light of our observations made above. The prayer in the Appeal is for setting aside the finding of the learned Single Judge declaring that Rule 15 of the KMMCR 1994 has application to the 'renewal of Quarry Lease' in the Order dated 23.07.2004 which, because of our analysis, we do not find to be legally acceptable. We also do not find any error in the impugned order of the State Government in applying 24 Rule 15 of KMMCR 1994 and accordingly dismiss the Appeal, but with no order as to the costs.
Sd/-
CHIEF JUSTICE Sd/-
JUDGE Vr/Sk/-