Andhra Pradesh High Court - Amravati
Trimex Pvt Ltd vs The State Of Ap on 3 January, 2020
Author: M.Satyanarayana Murthy
Bench: M.Satyanarayana Murthy
THE HON'BLE SRI JUSTICE M.SATYANARAYANA MURTHY
WRIT PETITON NO.3647 of 2019
ORDER:
This petition is filed under Article 226 of the Constitution of India to issue a Writ of Mandamus, declaring the action of respondent No.4 in issuing impugned letter dt.04-02-2019, as illegal, arbitrary and against the principles of natural justice, consequently set aside the same, thereby directing the respondents not to take any coercive steps in pursuance of G.O.Ms.No.134, dt.28-11-2018.
The petitioner obtained mining lease from the respondent authorities vide G.O.Ms.No.305, India & Com., (M.III) Department, dated 02-06-2001 for Beach Sand Minerals (including Heavy Minerals like Garnet, Ilmenite, Rutile, Zircon etc.,) over an area of 10.00 Sq. Kms from Sy.No.1042 of Srikurmam Village to Confluence of Vamsadhara River, Srikakulam District in favour of Trimex Industries Limited for a period of three years. After executing the prospecting license deed, the petitioner undertook detailed exploration in the area by conducting detailed drilling, sampling, analysis etc., as per the stipulations of the Indian Bureau of Mines (IBM).
The petitioner filed mining lease application on 14-03-2002 for Beach Sand Minerals over an extent of 822.98 Hectares in various survey number of Vatsavalsa and Tonangi Villages of Gara Mandal, Srikakulam District. The State Government recommended for grant of mining lease over an extent of 7.2 sq. kms (720 Hectares), after reducing 103.20 Hectares (in Tonangi Village) from the total applied area, which was found to be forest land. The Government of Andhra Pradesh with the prior approval of the Government of India granted mining lease vide G.O.Ms.No.31, I & C Department, dated 06-02-2004.
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As per the terms, the petitioner furnished bank guarantee in favour of the respondents under MMDR Act, 1957 and Rules framed there under and the petitioner required to furnish a mining plan for every five years during the entire mining lease period which is set to expire in the year 2034. It is contended that the current mining plan for the year 2014 to 2019 was approved by the Respondent No.4 and the modification of the said mining plan was also approved by the Respondent No.4 vide its letter, dt.02-03-2017 and it is valid till 31-03-2019.
At the same time as per the previous Mineral Conservation Development Rules, 1998 and the current Rules, 2017, the leaseholder is required to submit a progressive Mine Closure Plan as a part of the Mining Plan for every five years under Rule 23 of the MCDR, 2017 and submitted that while the progressive Mine Closure Plan forms part and parcel of every Mining Plan that is required to be submitted every five years. As per Rule 27 of the MCDR, 2017 casts an obligation on the petitioner to furnish financial assurance for the purpose of due and proper implementation of progressive Mine Closure Plan contained in the Mining Plan or the Final Mine Closure Plan, which would be submitted two years prior to the proposed closure of the mine i.e., 2032. It is further submitted that the MCDR, 2017 which substituted the MCDR, 1998 further casts an obligation on the leaseholders to furnish an additional financial assurance in the form of bank guarantee in compliance with new rules of MCDR, 2017. In compliance with the MCDR, 1998 and MCDR, 2017, the petitioner has furnished a financial assurance of Rs.15,23,19,000/- cumulatively in the form of bank guarantees as stipulated in the following table to the 4th respondent.
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Bank Guarantee No. Date Amount Expiry Date
0480414BG0000206 14-08-2014 1,23,66,000 31-03-2019
0480417BG0000031 31-01-2017 3,27,250 31-03-2019
0480418BG0000037 22-02-2018 13,96,25,750 31-03-2019
Total : 15,23,19,000
According to Rule 27 of the MCDR, 2017, if the Authorized Officer has reasonable grounds for believing that the protective, reclamation and rehabilitation measures as envisaged in the Progressive Mine Closure Plan contained in the Approved Mining Plan or the Final Mine Closure Plan in respect of which financial assurance was furnished has not been or will not be carried out in accordance with the mining plan or the Final Mine Closure Plan either fully or partially, the authorized officer as the case may be shall given the lessee a written notice of his intention to issue the orders for forfeiting the sum assured at least 30 days prior to the date of the order to be issued.
It is contended that within 30 days of the receipt of such notice if no satisfactory reply has been received in writing from the lessee, the authorized officer as the case may be shall pass an order for forfeiting the surety amount and a copy of such order shall be endorsed to the concerned State Government. But, in the present case, no such direction was issued, except by issuing the proceedings impugned in the writ petition by the 4th respondent directing the State Government to forfeit the bank guarantee under Rule 27(6) of MCDR, 2017, which is challenged in this writ petition.
The 3rd respondent i.e., the Assistant Director of Mines and Geology filed separate counter contending that as per Rule 27 of Rules, 2017 release of finance shall be effective upon the notice given by the 4 lease for the satisfactory compliance of the provisions contained in the final mine closure plan and certified by the authorized officer, as the case may be. If the authorized officer, as the case may be, has reasonable grounds for believing that the protective, reclamation and rehabilitation measures as envisaged in the progressive mine closure plan contained in the approved mining plan or the final mine closure plan, in respect of which financial assurance was furnished, has not been or will not be carried out in accordance with the mining plan or the final mine closure plan, either fully or partially, the authorized officer, as the case may be, shall give the lessee a written notice of his intention to issue the orders for forfeiting the sum assured at least thirty days prior to the date of the order to be issued. Within thirty days of the receipt of notice referred to in sub- rule (4), if no satisfactory reply has been received in writing from the lessee, the authorized officer, as the case may be, shall pass an order for forfeiting the surety amount and a copy of such order shall be endorsed to the concerned State Government. Upon the issuance of order by the authorized officer, as the case may be the concerned State Government may realize the bank guarantee provided or obtained as financial assurance for the purpose of performance of protective, reclamation and rehabilitation measures and shall carryout those measures, or appoint an agent to do so.
As per the above rule the petitioner has not submitted progressive mine closure plan or final mine closure plan to the competent authority for releasing of financial assurance the State Government has not issued any permission to I.B.M., under Rule 27(6) of Mineral Conservation and Development Rules, 2017 to encash the bank guarantee furnished by the petitioner against the non-compliance of the progressive mine closure plan or final mine closure plan.
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The Union of India i.e., 4th respondent also filed separate counter denying the letter invoking bank guarantee, which is impugned in this writ petition.
During the course of hearing, learned counsel for petitioner reiterated the contentions more particularly non-compliance of sub-rule 4 of Rules, 2017 and unless the procedure contemplated under sub-rule 4. The 4th respondent or the State or any authorized officer, are incompetent to invoke bank guarantee. The Assistant Solicitor General representing 4th respondent contended that the impugned proceedings sought to be set aside is only an inter-departmental communication between department and the same cannot be constituted order and this court cannot set aside such inter-departmental communication between two departments and requested to issue necessary direction to follow the procedure.
It is undoubtedly true that Rule 27 of Rules, 2017 prescribes the procedure of sub-rule (3) with regard to release of financial assurance as follows:-
Sub-rule (3) Release of financial assurance shall be effective upon the notice given by the lessee for the satisfactory compliance of the provisions contained in the final mine closure plan and certified by the authorised officer, as the case may be.
When the Assistant Director of Mines and Geology specifically contended that to invoke bank guarantee, the authorized officer has to follow the procedure under Rule 27 of Rules, 2017., the Assistant Solicitor General representing Union of India agreed that the procedure under Rule 27 of Rules, 2017 is required to be followed to invoke bank guarantee and at the same time he asserted that Rules 22 to 27 Rules, 2017 are applicable and therefore the learned counsel for petitioner also did not object for following the procedure contemplated under Rules 22 to 27 of Rules, 2017 to invoke bank guarantee. Therefore, the 6 competent authority prescribed under Rule 27(4) of Rules, 2017 is competent to invoke bank guarantee subject to compliance of Rules 22 to 27 of Rules, 2017.
The relief claimed in this writ petition is to set aside the letter dt.04- 02-2019 declaring the same as illegal and arbitrary. But, as seen from the letter dt.04-02-2019 it was addressed to the Director of Mines and Geology, State of A.P., by the Regional Controller of Mines dt.04-07-2019 with a specific direction as follows:-
"Since the lease has been terminated by the State Government, M/s Trimex Sands Pvt., Ltd., is not the owner for the said lease as on date. This office is of firm opinion that M/s Trimex Sands Pvt., Ltd., (Formerly known as East West Mineral Sands Pvt., Ltd.,) cannot comply the provisions of the final mine closure plan. Hence this office proposes to forfeit the Bank Guarantee as per statute, which is in the name of M/s Trimex Sands Pvt., Ltd., "
Even according to this letter, the competent authority specified under rule 27 Rules, 2017 can invoke bank guarantee subject to compliance of mandatory provisions under Rule 27 of the rules framed there under. It is only an inter-departmental communication between Regional Director of Mines and Geology, Department of Mines and Geology, Government of Andhra Pradesh. Such letter being the inter- departmental communication cannot be set aside by this court since it cannot be constituted as an order to invoke bank guarantee.
Similarly, in the case of Messrs. Ghaio Mal and sons v. State of Delhi and others1, the Supreme Court had an occasion to decide an identical question of issuing memos. The Apex Court while deciding the question as to whether the letter in question was the order of the Chief Commissioner or not and held as follows:
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AIR 1959 SUPREME COURT 65 7 "In the first place it is an inter-departmental communication. In the second place it is written with reference to an earlier communication made by the Excise Commissioner, that is to say, ex facie, it purports to be a reply to the latter's letter of August 31, 1954. In the third place the writer quite candidly states that he had been "directed to say" something by whom, it is not stated. This makes it quite clear that this document is not the order of the Chief Commissioner but only purports to be a communication at the direction of some unknown person-of the order which the Chief Commissioner had made. Indeed in paragraph 7 of the respondents' statement filed in the High Court on February 2, 1955, this letter has been stated to have" conveyed the sanction of the Chief Commissioner of the grant of license to the 5th respondent". A document which conveys the sanction can hardly be equated with the sanction itself. Finally the document does not purport to have been authenticated in the form in which authentication is usually made. There is no statement at the end of the letter that it has been written "by order of the Chief Commissioner". For all these reasons it is impossible to read this document as the order of the Chief Commissioner." In view of law, memo is only a interdepartmental communication and can never be construed as an order, thereby a memo cannot be directed to be implemented by the parties, since it is only a request. Hence, a memo cannot be directed to be enforced or implemented. However, it is for the petitioner to approach competent authority, if the land of the petitioner is totally disconnected with other land from all four sides, subject to issue of certificate by Executive Engineer, Polavaram Project. But in the present facts of the case, disconnection of land from all four sides is in dispute. Therefore, this Court while exercising power of judicial review under Article 226 of Constitution of India, cannot issue direction to respondents, as the jurisdiction of this Court is limited, in view of law declared by the Apex Court in West Bengal Central School Service Commission v. Abdul Halim2.
2 2019 (9) SCALE 573 8 Applying the same principle to the present facts of the case claiming that the letter impugned in this writ petition is only an inter- departmental communication, the same cannot be set aside. However, it is made clear that unless the procedure prescribed under Rules 22 to 27 of Rules, 2017 is applied, the 4th respondent or any other competent authority is not entitled to invoke bank guarantee. Accordingly, I hold that the respondents are entitled to invoke bank guarantee subject to compliance of Rules 22 to 27 of the Rules, 2017.
With the above observation, this writ petition is disposed of. There shall be no order as to costs.
As a sequel, Interlocutory Applications pending, if any, in this Writ Petition, shall stand closed.
___________________________________ JUSTICE M. SATYANARAYANA MURTHY Date: 03-01-2020 IS 9 THE HON'BLE SRI JUSTICE M. SATYANARAYANA MURTHY WRIT PETITION No.3647 of 2019 Date: 03-01-2020 IS