Rajasthan High Court - Jodhpur
M/S Gotan Limestone Khanij Udyog Pvt. ... vs State Of Rajasthan on 24 February, 2022
Author: Pushpendra Singh Bhati
Bench: Pushpendra Singh Bhati
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ Petition No. 12253/2019
M/s Gotan Limestone Khanij Udyog Pvt. Ltd., Having Its
Registered Office At D7, Shastri Nagar, Jodhpur Rajasthan
Through Its Power Of Attorney Holder Shri Rajesh Kedia Son Of
Shri Bajrang Lal Kedia, Age 55 Years Resident Of 53 Officers Flat,
Jublee Road, Northen Sahar, Jamshedpur Jharkhand.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Mines
Department, Government Secretariat, Jaipur.
2. Joint Secretary, Mines (Gr. 2) Department, Government
Secretariat, Jaipur.
3. Director, Department Of Mines And Geology, Rajasthan,
Udaipur.
4. Assistant Mining Engineer, Department Of Mines And
Geology, Gotan, Tehsil Merta City, District Nagaur.
----Respondents
Connected With
S.B. Civil Writ Petition No. 404/2013
J.k. Cement Ltd.
----Petitioner
Versus
State Of Raj. And Ors.
----Respondent
For Petitioner(s) : Mr. Kamlakar Sharma, Sr. Adv.
assisted by Ms. Alankrita Sharma
Mr. Anjay Kothari
Mr. Mukesh Gurjar
For Respondent(s) : Mr. Sandeep Shah, Sr.Adv. & AAG
assisted by
Ms. Akshiti Singhvi.
Mr. Ramit Mehta
Mr. Saurabh Maheshwari
Ms. Shweta Chauhan
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
Order Reserved (on application) on 17/02/2022 Pronounced (on application) on 24/02/2022 (Downloaded on 24/02/2022 at 08:49:38 PM) (2 of 13) [CW-12253/2019]
1. On 16.02.2022, the matters came up for consideration before this Court on the application under Article 226(3) of the Constitution of India preferred in the above-numbered CWP No.12253/2019 for vacation of the interim order dated 21.08.2019 passed in the said petition.
2. In continuation on 17.02.2022, the parties were heard at length and the order on the aforementioned application was reserved, with the following order being passed:
"In wake of instant surge in COVID-19 cases and spread of its highly infectious Omicron variant, abundant caution is being maintained, while hearing the matters in the Court, for the safety of all concerned.
Submission of all parties on the application under Article 226(3) of the Constitution of India are complete.
Order reserved on application under Article 226(3) of the Constitution of India.
List the matters on 24.02.2022 on the application under Order 1 Rule 10 CPC."
Thus, the present order decides only the application preferred under Article 226(3) of the Constitution of India, as aforementioned.
3. The prayer made in the application under consideration reads as follows:
"It is, therefore, respectfully prayed that this misc. application filed by the applicants/respondents under Article 226(3) of the Constitution of India for vacation of interim order dated 21.08.2019 may kindly be allowed and the interim order may kindly be vacated."(Downloaded on 24/02/2022 at 08:49:38 PM)
(3 of 13) [CW-12253/2019]
4. Brief facts of this case, as noticed by this Court, are that a mining lease bearing Mining Lease No.45/1993 was granted by the State of Rajasthan (through the Joint Secretary, Department of Mines) to M/s. Gotan Limestone Khanij Udyog Pvt. Ltd., which was a partnership Firm at the relevant time, and the said lease was renewed, as per the law. The said partnership Firm, in March 2012, was incorporated as a private limited company.
5. The order dated 25.04.2012 by which the transfer of the said mining lease in question from the partnership Firm to the petitioner-Company, was approved by the State of Rajasthan (through the Director, Mines).
6. Thereafter, in July, 2012, the 100% equity shareholding of the petitioner-Company was transferred by its promoter-Directors in favour of M/s UltraTech Cement Ltd. and the petitioner-
Company thus became a subsidiary Company of M/s Ultratech Cement Ltd.; thereby, the mining lease in question was also acquired by M/s. Ultratech Cement Ltd.
7. On 16.12.2014, the State/respondent passed an order by which the aforementioned order dated 25.04.2012, approving the transfer of the mining lease in question in favour of the petitioner- Company, was declared to be null and void.
8. The said cancellation of the mining lease was challenged by the petitioner-Company before this Hon'ble Court by filing SBCWP No.9669/2014, which was allowed by the Hon'ble Single Bench of this Court vide order dated 25.03.2015, with a direction to the State respondents to hand over back the leased area of mining. (Downloaded on 24/02/2022 at 08:49:38 PM)
(4 of 13) [CW-12253/2019] Thereafter, on an appeal (D.B. Civil Special Appeal (Writs) No. 328/2015) being preferred by the State respondents against the said order, the conclusion drawn by the Hon'ble Single Bench was affirmed by the Hon'ble Division Bench of this Court.
9. The State/respondents thereafter filed a Special Leave Petition, being SLP No. 23311/2015 before the Hon'ble Supreme Court, wherein vide order dated 20.01.2016, it was observed as follows:
36. Learned Single Judge and the Division Bench have gone by only one aspect of law, i.e. the general principle that sale of shares by itself is not sale of assets but this principle is subject to the doctrine of piercing of corporate veil wherever necessary to give effect to the policy of law. In the present case, this principle clearly applies as transfer of shares to cover up the real transaction which is sale of mining lease for consideration without the previous consent of competent authority, as statutorily required. The statutory requirement is sought to be overcome with the plea that it was a transaction merely of transfer of shareholding when on the face of it the transaction is clearly that of sale of the mining lease. In view of the above, the view taken by the High Court cannot be sustained.
37. Accordingly, this appeal is allowed and the judgment of the High Court is set aside. We, however, direct the State of Rajasthan to frame and notify its policy in the matter within one month from the receipt of a copy of this order. The State of Rajasthan may within one month thereafter pass an appropriate order in respect of the mining lease in question in the light of the policy so framed. Till such a decision is taken, status quo may be maintained.(Downloaded on 24/02/2022 at 08:49:38 PM)
(5 of 13) [CW-12253/2019] Thereafter, the State Legislature repealed the Rules of 1986 and enacted the Rajasthan Minor Minerals Concession Rules, 2017.
Rule 27 of the said Rules of 2017 reads as follows:
27. Transfer of mineral concession.-
(1) The lessee or licencee shall not, without the previous consent in writing of the competent authority,-
(i) assign, sublet, mortgage or in any other manner transfer the lease or licence or any right, title or interest therein; and
(ii) enter into or make any bona-fide arrangement, contract or understanding whereby the lessee or licencee will or may be directly or indirectly financed to a substantial extent by or under which the mining operations or undertakings will or may be substantially controlled by, any person or body of persons other than the lessee or licencee:
Provided that where the mortgagee is a state institution or a bank or a state corporation, the lessee or licencee shall inform the Mining Engineer or Assistant Mining Engineer concerned about any mortgage, within a period of one month from the date of mortgage or assignment.
(2) Every application for transfer of mining lease or quarry licence shall be submitted to Mining Engineer or Assistant Mining Engineer concerned along with,-
(i) a non-refundable application fee of rupees twenty five thousand for mining lease or ten thousand for quarry licence, as the case may be;
(ii) undertaking to pay one time premium on the basis of residual period of lease or licence as per sub-rule (9):
Provided that lease or licence granted through tender or auction shall not require to submit such undertaking.
(iii) a valid no dues certificate of transferor, transferee and their family members from the Mining Engineer or Assistant Mining Engineer concerned if they holds or has held any mineral concession, royalty collection contract or excess royalty collection contract in the State: Provided that in case the transferor and transferee is an association of person, a partnership firm or a private limited company, such certificate shall also be furnished by all the members of association of person, all the partners of the partnership firm or all the directors of the private limited company, as the case may be. No dues certificate is to be submitted by (Downloaded on 24/02/2022 at 08:49:38 PM) (6 of 13) [CW-12253/2019] the company or undertaking in case of limited company or government undertaking, as the case may be.
Provided further that no dues certificate shall not be required where, transferee has furnished an affidavit to the satisfaction of the Government, stating that he/she/it or his/her family member does not or did not hold any mineral concession or royalty collection contract or excess royalty collection contract in the State.
Provided also that where any injunction has been issued by the competent court or authority staying the recovery of the dues, non-payment thereof shall not be treated as a disqualification for transfer of lease or licence.
(iv) an affidavit giving particulars of mineral-wise areas already held under mining lease, prospecting licence or quarry licence by the transferor and transferee or with any person having joint interest or already granted but not executed or registered or applied but not granted;
(v) an affidavit by the transferee stating that he shall be abide by all the terms, conditions and liabilities of lease or licence; and
(vi) an affidavit by the transferor and transferee stating that the amount of transaction agreed between them for transfer of lease or licence in lieu of investment incurred by the transferor.
(3) The competent authority shall dispose off the application for transfer of mining lease or licence within a period of three months from the date of its receipt:
Provided that where application is not disposed off within time limits, the application shall be disposed by next higher authority.
Provided further that transfer of mining lease or quarry licence shall not be considered as a matter of right and the competent authority may refuse such transfer for the reasons to be recorded in writing and same shall be communicated to the lessee.
Provided also that where transfer application for mining lease or quarry licence is not complete in all material particulars or is not accompanied by the required documents or any additional information or documents as specified by the Government, a thirty days notice shall be given by the competent authority requiring the applicant to complete the application or provide documents, as the case may be, failing which the transfer application shall be rejected with forfeiture of application fee by the competent authority.(Downloaded on 24/02/2022 at 08:49:39 PM)
(7 of 13) [CW-12253/2019] (4) Where order for transfer of a mining lease has been issued, a transfer lease deed in Form -12 shall be executed within three months from the date of the order or within such period as the competent authority may allow:
Provided that in case of a quarry licence an entry to this effect shall be made in the licence and quarry licence register.
(5) The transfer of lease shall be effective from the day of registration of transfer lease deed whereas transfer of licence shall be effective from the date of entry in the quarry licence.
(6) Transfer lease deed in case of mining lease shall be registered within two months from the execution of transfer deed and shall be returned to the Mining Engineer or Assistant Mining Engineer concerned.
Provided that if transfer deed has not been executed or got registered within the stipulated time, the order for transfer shall be revoked by the competent authority with forfeiture of transfer application fee and premium.
(7) The following cases shall also be treated as transfer,-
(i) change from one form of business organization to another form of business organization i.e. partnership, limited liability partnership, private limited company, public limited company or any form of business activities recognized by any law to another form of business organization;
(ii) change in partner of a partnership firm;
(iii) the transfer of shares in a company, resulting in the change of control of management or ownership right of the said company;
(iv) merger or amalgamation of the lessee's or licensee's company into another company; and
(v) change of a private limited company to limited company:
Provided that in case of death of any partner or director in a firm or company and mutation has been made in favour of his legal heir, it shall not be treated as transfer but if application of mutation is not made, it shall be treated as transfer.
(8) The lessee or licencee shall inform regarding any change as mentioned in sub-rule (7) to the Mining Engineer or Assistant Mining Engineer concerned within sixty days along with the application fee and premium amount as per sub-rule (9). In such case, the transfer shall be effective from the date of such (Downloaded on 24/02/2022 at 08:49:39 PM) (8 of 13) [CW-12253/2019] change of partner or director, as the case may be, under relevant law.
(9) Transfer of lease or licence shall be permitted subject to payment of one time premium at the time of transfer and shall not be adjusted against dead rent, annual license fees or royalty, as the case may be, as mentioned below, Provided that amount of premium shall not be more than ten lacs.
Provided further that lessee or licencee who obtained lease or licence through tender or auction shall not be required to pay additional premium amount over and above the existing premium amount.
(10) Mining lease or quarry licence granted before the commencement of these rules to a person under any category by way of lottery shall not be transferred to any other category.
(11) Lock-in period for transfer of mineral concession granted other than through auction shall be one year and subsequent transfer shall be allowed subject to condition that at least one year has elapsed since last transfer:
Provided that above lock-in period shall not be applicable in cases specified in clause (i) to (v) of sub-rule (7).
(12) Mining lease of bajri (river sand) shall not be transferred.
10. In pursuance of the direction of the Hon'ble Supreme Court in the aforementioned S.L.P. No. 23311/2015, the petitioner sought the permission for transfer of the mining lease in question which was rejected vide on 28.11.2017 passed by the Joint Secretary, Department of Mines whereby the petitioner's representation dated 10.05.2017 was rejected and earlier order dated 16.12.2014 declaring the transfer of mining lease in question as null and void, was upheld.
11. Mr. Sandeep Shah, learned Senior Counsel & Additional Advocate General assisted by Ms.Akshiti Singhvi, appearing on behalf of the applicant respondents states that the application was (Downloaded on 24/02/2022 at 08:49:39 PM) (9 of 13) [CW-12253/2019] rightly rejected on the ground that the newly enacted Rules of 2017, wherein Rule 27 sub rule (1) to sub rule (8) would require the concerned Company, seeking a transfer of mining lease, to obtain the appropriate consent (in writing) from the competent authority and that the parameter of seeking the said permission is applicable in the case of such transfer across the board as enumerated under Rule 27 of the Rules of 2017. Learned Additional Advocate General further submits that since the same process was not followed, therefore, the entire transaction was rightly deemed to be illegal and wrong.
12. Learned Additional Advocate General further submits that the Hon'ble Apex Court adjudicated the matter on merits and concluded that the said mining lease in question was transferred by devising an illegal method. He also submits that the mining lease had been cancelled, and that there was no provision for transfer of such lease. He further submits that the order dated 16.12.2014 was upheld by the Hon'ble Apex Court.
13. Learned Additional Advocate General thus submits that the said order dated 28.11.2017 was passed on sound and logical reasoning.
14. Learned Additional Advocate General also submits that since the State of Rajasthan has changed its policy with the enactment of the Rules of 2017, therefore the grant of mining lease was only made through an auction process, and thus, the grant of any lease afresh would be in violation of the said Rules. (Downloaded on 24/02/2022 at 08:49:39 PM)
(10 of 13) [CW-12253/2019]
15. Mr. Kamlakar Sharma, learned Senior Counsel assisted by Ms.Alankrita Sharma appearing on behalf of the petitioner submits that the said order dated 28.11.2017 was passed without any application of mind by the concerned authority, and that sub rule (7) of Rule 27 of the Rules of 2017 stands independent to sub rule (1) and sub rule (11). Learned Senior Counsel thus submits that the said order has not rightly appreciated the clear legislative intent as laid down in the provision of law under Rule 27 sub rule (7).
16. Learned Senior Counsel for the petitioner further submits that the mining lease in question is only a continuation of the earlier lease already issued by the concerned authority of the State Government and not a new lease issued afresh under the newly enacted Rules of 2017.
17. Learned Senior Counsel for the petitioner submits that the Hon'ble Apex Court had directed the State to make a meaningful adjudication of the right to transfer of a mining lease, which has not been made, in fact. As per learned Senior Counsel, the correct interpretation of the Rules of 2017 has not been made by the State/respondents.
18. On 16.02.2022, Mr. Sudhir Gupta, learned Senior Counsel assisted by Mr. Ramit Mehta, Mr. P.K. Bhalla, Ms.Shweta Chauhan and Mr. Saurabh Maheshwari, representing the petitioner-J.K. Cement Ltd., sought permission of this Court to make a short address on the merits of the case, which was permitted. Thereafter, learned Senior Counsel submitted before this Court that the present petition of the petitioner-Company (M/s. Gotan (Downloaded on 24/02/2022 at 08:49:39 PM) (11 of 13) [CW-12253/2019] Limestone Khanij Udyog Pvt. Ltd.) is in fact an attempt to circumvent the new law (Rules of 2017), wherein a mining lease may only be granted through the process of auction and therefore, JK Cement Pvt. Ltd. would also have a right to participate in the auction.
18.1 Learned Senior Counsel further submits that limestone has been notified as a 'major mineral', and for this reason also, the mining lease may only be granted through a process of auction as laid down under Section 10 of the Mines & Minerals (Development and Regulation) Act, 1957 read with the Mineral Auction Rules, 2015.
19. Heard learned counsel for the parties as well as perused the record of the case, alongwith the aforementioned judicial verdicts.
20. This Court has taken note of the fact that the issue in the present application under Article 226 (3) before this Court is whether the order dated 28.11.2017 passed by the Joint Secretary, Department of Mines, State of Rajasthan suffers from non application of mind and unsound reasoning.
21. This Court has also taken note of the order dated 06.08.2021, wherein the following was observed:
" mijksDr fo'k;kUrxZr lUnfHkZr i= ls funs'kky; }kjk i= dzekad funs/i.2 ¼,p&1½ vt 2019@1257 fnukad 18-12-2019 ls tkjh funsZ'k dk iqu% ijh{k.k dj jktLFkku viz/kku [kfut fj;k;r fu;e] 2017 ds fu;e 27 ¼7½ ,oa 27 ¼8½ ds rgr [kuu iVVk iwjd lafonk ds iath;u ds lac/k esa fn'kk&funsZ'k pkgs x;s gSA bl lEcU/k esa funsZ'kkuqlkj ys[k gS fd vki }kjk i= fnukad 18-12-2019 ls jktLFkku viz/kku [kfut fj;k;r fu;e] 2017 ds fu;e 27 ¼7½ esa mYysf[kr izdj.kksa ds iath;u ds lEcU/k esa fu;e 27 ¼6½ ds (Downloaded on 24/02/2022 at 08:49:39 PM) (12 of 13) [CW-12253/2019] vUrxZr dk;Zokgh djus ds funsZ'k fu;e 27 ¼8½ ls fojks/kkHkk"kh gksus ds dkj.k "void ab initio" gSA vr% bUgsa rRdky foMªks fd;k tkosA lUnfHkZr i= esa vafdr izdj.k fu;e 27 ¼7½ ds vUrxZr vkus ls fu;e 27 ¼8½ ds vuqlkj [kfut fj;k;r dk gLrkUrj.k lqlaxr fof/k ds v/khu ifjorZu dh fnukad ls izHkkoh gksxkA bl izdkj ds izdj.kksa esa fj;k;r /kkjd }kjk foHkkx dks ek= lwfpr fd;k tkuk vko';d gS] buesa i`Fkd ls gLrkUrj.k vkns'k ,oa vkxkeh vU; dk;Zokgh dh vko';drk ugha gSA bl lEcU/k esa fu;e Lor% Li"V gSA lkFk gh funs'kky; ds mDr funsZ'k fu;eks ds izko/kkuksa ds lEcU/ k esa gksdj uhfrxr funsZ'k dh Js.kh esa vkrs gSA Hkfo"; esa 'kklu i= fnukad 18-09-2020 ls tkjh funsZ'kksa dh ikyuk lqfu'pr dh tkosA mDr vuqlkj dk;Zokgh fd;k tkuk lqfuf'pr djsA mDr funsZ'k l{ke Lrj ls vuqeksfnr gSSAa A"
22. In view of the above, this Court is of the opinion that the aforementioned judgment rendered by the Hon'ble Supreme Court clearly lays down that the application of the petitioner-Company for transfer of the mining lease in question must be considered afresh in light of the new transfer policy so framed by the concerned Department of the State.
23. This Court further observes that the Hon'ble Supreme Court, apprised of the fact that the mining lease in question was held to be cancelled by the concerned Department of the State, directed that the status quo, as it exists on the date of passing of the verdict, with regard to the mining lease in question be maintained.
24. The contention of the State respondents that the mining lease in question was already terminated and therefore, rejected the application of the petitioner-Company stating that a terminated lease could not be transferred, does not hold water in the opinion of this Court, as it would then amount to circumventing the directions of the Hon'ble Supreme Court, which (Downloaded on 24/02/2022 at 08:49:39 PM) (13 of 13) [CW-12253/2019] cannot be permitted. Thus, the State/respondents cannot do that indirectly, which may not be lawfully done directly.
25. There lies a statutory distinguishing feature between Rule 27 sub rule (1), sub rule (7) and sub rule (8), as is clear from a bare reading of the provisions of law under the said sub rules. Under sub rule (1), the lessee or licensee shall seek the consent of the competent authority in writing before engaging in the actions mentioned therein, which does not apply to a case of transfer as enumerated under Rule 27 sub rule (7).
However, under sub rule (8), the lessee or licensee shall inform the Mining Engineer or Assistant Mining Engineer concerned within a period of sixty days.
26. For the foregoing reasons, this Court does not find a case to be made out warranting interference in the ex-parte interim order dated 21.08.2019, at this stage. However, without being prejudiced by this order, all the parties concerned shall be free to address this Court on merits at the time of final hearing of the writ petitions.
27. Consequently, the instant application preferred under Article 226 (3) of the Constitution of India by the applicants/respondents (in above-numbered CWP No.12253/2019) is hereby dismissed.
(DR.PUSHPENDRA SINGH BHATI),J.
SKant/-
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