Jharkhand High Court
The State Of Jharkhand Through Its Chief ... vs Steel Authority Of India Limited ... on 27 June, 2016
Equivalent citations: AIR 2017 JHARKHAND 13, 2016 (4) AJR 597
Bench: D. N. Patel, Amitav K. Gupta
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IN THE HIGH COURT OF JHARKHAND AT RANCHI
L.P.A No.487 of 2014
1. The State of Jharkhand, through its Chief Secretary
having office at Jharkhand Mantralaya, Project
Bhawan, HEC Township, Dhurwa, P.O. & P.S. -
Dhurwa, District - Ranchi
2. The Secretary, Department of Mines and Geology,
Government of Jharkhand, having office at Nepal
House, P.O. & P.S. - Doranda, District - Ranchi
3. The District Mining Officer, West Singhbhum at
Chaibasa, P.O. & P.S. Chaibasa, District - West
Singhbhum ..... Appellants
Versus
1. Steel Authority of India Limited, through the
General Manager (Liason) Mr. Debananda Marndi,
S/o Late Balai Marandi, R/o Room No.26, IEH, SAIL
Satellite Township, P.O. - Dhurwa, P.S. -
Jagarnathpur, District - Ranchi, Jharkhand, having
office at ISPAT Bhawan, Raw Materials Division,
Steel Authority of India Limited, Ranchi, P.O. & P.S.
- Doranda, District - Ranchi
2. The Jharkhand State Election Commission, through
its Secretary, Nirwachan Bhawan, P.O. & P.S. - Ratu
Road, District - Ranchi ..... Respondents
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CORAM: HON'BLE MR. JUSTICE D. N. PATEL
HON'BLE MR. JUSTICE AMITAV K. GUPTA
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For the Appellants : Mr. Ajit Kumar, A.A.G &
Ms. Debolina Sen, Advocate
For the Respondents : Mr. P. S. Patwalia, Addl. Solicitor
General of India, Mr. Ajay Sharma,
Mr. Indrajit Sinha,Mr. Jagmohan
Sharma, Advocates
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15/Dated: 27 June, 2016
th
Per D.N. Patel, J
1. This Letters Patent Appeal has been preferred against the order dated 13.11.2014, passed in writ petition being W.P.(C) No.5368 of 2014 whereby, the learned single Judge quashed an order dated 04.09.2014 passed by this appellant-State. By this order dated 04.09.2014, State of Jharkhand had directed respondent to stop mining activities. While quashing an order dated 04.09.2014, learned Single Judge has directed the State of Jharkhand to take a decision under Section 8(3) of Mines and Minerals (Development & Regulation) Act, 1957 (hereinafter referred to as "the Act, 1957" for the sake of brevity).
-2-2. Learned counsel appearing for the appellant-State has submitted that initially the lease was granted on 22.02.1949 for 30 years, which expired in the year 1979. An application for extension of the first lease was preferred and the same was granted for another 30 years. The said extended period for lease also expired on 21.02.2009. On 08.02.2008, an application for extension of the lease was preferred and the same has not been granted by the appellant-State. Meanwhile, Hon'ble Supreme Court has decided in the case of Goa Foundation Vs. Union of India & Ors. reported in (2014) 6 SCC 590, that there cannot be automatic extension of second lease period. Thereafter, an amendment has been brought and ultimately Section 8A has been added with effect from 12.01.2015 in the Act, 1957, which reads as under :-
"8A. Period of grant of a mining lease for minerals other than coal, lignite and atomic minerals - (1) The provisions of this section shall apply to minerals other than those specified in Part A and Part B of the First Schedule.
(2) On and from the date of the commencement of the Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015, all mining leases shall be granted for the period of fifty years. (3) All mining leases granted before the commencement of the Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015 shall be deemed to have been granted for a period of fifty years.
(4) On the expiry of the lease period, the lease shall be put up for auction as per the procedure specified in this Act.
(5) Notwithstanding anything contained in sub-sections (2), (3) and sub-section (4), the period of lease granted before the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, where mineral is used for captive purpose, shall be extended and be deemed to have -3- been extended up to a period ending on the 31st March, 2030 with effect from the date of expiry of the period of renewal last made or till the completion of renewal period, if any, or a period of fifty years from the date of grant of such lease, whichever is later, subject to the condition that all the terms and conditions of the lease have been complied with. (6) Notwithstanding anything contained in sub-sections (2), (3) and sub-section (4), the period of lease granted before the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015, where mineral is used for other than captive purpose, shall be extended and be deemed to have been extended up to a period ending on the 31st March, 2020 with effect from the date of expiry of the period of renewal last made or till the completion of renewal period, if any, or a period of fifty years from the date of grant of such lease, whichever is later, subject to the condition that all the terms and conditions of the lease have been complied with. (7) Any holder of a lease granted, where mineral is used for captive purpose, shall have the right of first refusal at the time of auction held for such lease after the expiry of the lease period.
(8) Notwithstanding anything contained in this section, the period of mining leases, including existing mining leases, of Government companies or corporations shall be such as may be prescribed by the Central Government.
(9) The provisions of this section, notwithstanding anything contained therein, shall not apply to a mining lease granted before the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015, for which renewal has been rejected, or which has been determined, or lapsed.".
(Emphasis supplied)
3. Learned counsel for the appellant-State has further submitted that before passing a renewal order in view of the provisions of the Act, 1957, quoted as above, and also -4- in the light of the decision rendered in the case of Goa Foundation (Supra), a letter was issued on 04.09.2014 to the respondent (original petitioner) for bringing to an end of their mining activities in absence of renewal of lease period for their mines, which they are using for their captive purpose, and by an interim order dated 16.10.2014, the State of Jharkhand was directed to take a decision under Section 8(3) of the Act, 1957 which decision is yet to be finally taken by the State of Jharkhand and meanwhile, State of Jharkhand has issued one more letter dated 22.10.2014 seeking consent of the lessee for imposing conditions for renewal of the lease. This has given birth to one more writ petition being WP. (C) No. 5640 of 2014. Meanwhile, the writ petition being W.P.(C) No.5638 of 2014 has been finally disposed of by the learned Single Judge by quashing and setting aside the order dated 04.09.2014, passed by the appellant state and also the learned single judge passed an order that if an order under Section 8(3) of the Act, 1957 is not passed by the appellant-State within a period of one week from the date of the order, the respondent was allowed to continue with the mining activities, and against this order the present Letters Patent Appeal has been preferred by the State of Jharkhand.
4. It is submitted by Mr. Ajit Kumar, learned Additional Advocate General, that ones there is no renewal of the mining lease, they ought not to have allowed to continue the mining activities. The State of Jharkhand is bound to take some time looking to the complex situation prevailing, so far as renewal of the mining lease period are concerned. One more judgment has been delivered by the Hon'ble Supreme Court in the case of Common cause Vs. Union of India & Ors in Writ Petition (Civil) No.114 of 2014, wherein Section 8A has also been amended after the letter dated 04.09.2014, i.e., on 12.01.2015 and now concept of extension of the lease for the 50 years have been incorporated. Nonetheless, looking to the past period, i.e., initially after 1979 the -5- lease was expired and there was no deemed renewal as per the old provision of Rule 24(A)(5) of the Mineral Concession Rules, 1960. Thereafter, the lease was renewed in the year 1987. Thus, for the intervening period, i.e., after the expiry of first lease and renewal of the lease, there was illegal mining, and hence, the respondent-company is bound to make the payment of the price of the excavation of the mines as per section 21(5) the Act, 1957 by way of penalty. This aspect of the matter has not been properly appreciated by the learned single judge while deciding the writ petition being W.P.(C) No. 5368 of 14 vide order dated 13.11.2014. and hence, the said order deserves to be set aside.
5. Learned senior counsel Shri P. S. Patwalia, appearing for the respondent-company has submitted that no error has been committed by the respondent in preferring the application for extension of lease after the first lease period was over in the year 1979 and the said lease was renewed by the State of Jharkhand with retrospective effect, i.e., form 1979. The extension/ renewal was granted in the year 1987. The second lease period has also expired on 21.02.2009 and prior to one year of such expiry, an application was preferred on 08.02.2008 for extension of lease period, this application has not been decided by the appellant-State. Meanwhile, the judgment has been delivered by the Hon'ble Supreme Court reported in (2014) 6 SCC 590 in the case of Goa Foundation (Supra). Thereafter, the law has also been amended especially Section 8A of the Act, 1957. Rule 24A(56) of Mineral Concession Rules, 1960 has also been substituted and latest judgment delivered by the Hon'ble Supreme Court in the case of Common cause (Supra) passed in Writ Petition (Civil) No.114 of 2014 in paragraph no.17 onwards and specially in paragraph no.32 thereof, which reads as under :-
"32. Based on the considerations recorded above, we summarise our conclusions as under:
(i) A leaseholder would have a subsisting -6- mining lease, if the period of the original grant was still in currency on 12.1.2015. Additionally, a leaseholder whose original lease has since expired, would still have a subsisting lease, if the original lease having been renewed, the renewal period was still in currency on 12.1.2015. Such a leaseholder, would be entitled to the benefit of Section 8A of the amended MMDR Act.
(ii) A leaseholder who had not moved an application for renewal of a mining lease (which was due to expire, prior to 12.1.2015), at least twelve months before the existing lease was due to expire, under the provisions of the unamended MMDR Act and the Mineral Concession Rules, will be considered as not a valid/subsisting leaseholder, after the expiry of the lease period.
The provisions of the amended MMDR Act will therefore not enure to the benefit of such leaseholder.
(iii) A leaseholder who has moved an application for renewal (of the original/first or subsequent renewal) of a mining lease, at least twelve months before the existing lease was due to expire, and on consideration, such an application has been rejected, will be considered as not a valid/subsisting leaseholder. The provisions of the amended Section 8A of the MMDR Act will not enure to the benefit of such leaseholder, because of the express exclusion contemplated for the above exigency, under Section 8A(9) of the amended MMDR Act.
(iv) A leaseholder who has moved an application for "first renewal" of the original mining lease, at least twelve months before the original lease was due to expire, and such application has not been rejected, will be considered to be a valid leaseholder having a subsisting right to carry on mining operations, till the expiry of two years after 18.7.2014, i.e., up to 17.7.2016, as is apparent from a conjoint reading of the unamended and amended Rule 24A of the Mineral -7- Concession Rules. Such leaseholder would have the benefit of sub-sections (5) and (6) of Section 8A of the amended MMDR Act.
(v) A leaseholder who had moved a second (third or subsequent) renewal application under Section 8(3) of the unamended MMDR Act, at least twelve months before the renewed lease was due to expire, and whose application had not been considered and rejected (though not entitled to any benefit under the unamended Section 8A of the MMDR Act and the amended Rule 24A(6) of the Mineral Concession Rules) up to 12.1.2015, would still have the benefit of sub-sections (5) and (6) of Section 8A of the amended MMDR Act, in view of the situation sought to be remedied by the Mines and Minerals (Development and Regulation) Amendment Act, 2015.
(vi) Consequent upon the amendment of Section 8A of the MMDR Act, the regime introduced through sub-sections (5) and (6) thereof, provides for three contingencies where benefits have been extended to leaseholders whose lease period had earlier been extended by a renewal. Firstly, for a leaseholder whose renewal period had expired before 12.1.2015, and the leaseholder had moved an application for renewal at least twelve months before the leaseholder's existing lease was due to expire, and whose application has not been considered and rejected, the lease period would stand extended up to 31.3.2030/31.3.2020 (in the case of captive/non-captive mines, respectively). Additionally, a leaseholder whose period of renewal would expire after 12.1.2015, but before 31.3.2030/31.3.2020, the lease period would stand extended up to 31.3.2030/31.3.2020 (in the case of captive/non-captive mines, respectively). Secondly, where the renewal of the mining lease already extends to a period beyond 31.3.2030/31.3.2020 (in the case of captive/non- captive mines, respectively), the lease period of such leaseholders, would continue up to the -8- actual period contemplated by the renewal order. Thirdly, a leaseholder would have the benefit of treating the original lease period as of fifty years. Accordingly, even during the renewal period, if the period of the mining lease would get extended (beyond the renewal period) by treating the original lease as of fifty years, the leaseholder would be entitled to such benefit.
Out of the above three contingencies provided under sub-sections (5) and (6) of Section 8A, the contingency as would extend the lease period farthest, would enure to the benefit of the leaseholder.
(vii) Based on the interpretation placed by us on Section 4A(4) of the MMDR Act, and Rule 28 of the Mineral Concession Rules, we can draw the following conclusions. Firstly, unless an order is passed by the State Government declaring, that a mining lease has lapsed, the mining lease would be deemed to be subsisting, up to the date of expiry of the lease period provided by the lease document. Secondly, in situations wherein an application has been filed by a leaseholder, when he is not in a position to (or for actually not) carrying on mining operations, for a continuous period of two years, the lease period will not be deemed to have lapsed, till an order is passed by the State Government on such application. Where no order has been passed, the lease shall be deemed to have been extended beyond the original lease period, for a further period of two years. Thirdly, a leaseholder having suffered a lapse, is disentitled to any benefit of the amended MMDR Act, because of the express exclusion contemplated under Section 8A(9) of the amended MMDR Act.".
6. In view of the aforesaid decision, the State of Jharkhand should have no objection to take decision upon extension of lease and no such decision has ever been -9- taken despite the direction was given by the learned Single Judge. It further appears from the facts of the case that the respondent-company is wholly owned, managed and controlled by the Central Government and its 80 percent shares are with the Central Government. The conditions referred for extension of lease in the letter dated 22.10.2014 has also been challenged in the writ petition being W.P.(C) No.5640 of 2014, which is also pending before the Division Bench of this Court. Out of total 12 leases, 7 have been extended/ renewed and this has not been extended because of the pendency of the writ petition. In view of the amendment in Section 8A of the Act, 1957 and also keeping in mind that no final decision has been taken yet by the appellant-State for extension of lease period and fanciful condition has been suggested for extension of lease, hence, no error has been committed by the learned single Judge in quashing the order dated 04.09.2014 and passing an order that if decision is not taken by the State of Jharkhand under Section 8(3) of the Act, 1957 within one week from the date of the order, then the respondent can continue with the mining activities. It is further submitted by the learned counsel for the respondent (original petitioner) that the respondent has maintained all the data with respect to mining operation. They are also paying royalty, Central Sales Tax, Jharkhand Value Added Tax in accordance with law. It is further submitted that never any objection has been raised by the appellant- State that the respondent has defaulted in making the payment of royalty, Central Sales Tax and Jharkhand Value Added Tax. It is further submitted by the counsel for the respondent that in fact, it is now high time for the State of Jharkhand to take decision, upon an application preferred by the respondent (original petitioner) for extension of mining lease, especially when this respondent a public sector undertaking is using for captive consumption. More particularly when rules framed by the Government of India namely Mineral
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(Mining by Government Company) Rules, 2015 enacted under Section 13 of Mines and Minerals (Development & Regulation) Act, 1957 read with Section 8A(8) of the Act, 1957, and hence, this Letters Patent Appeal may not be entertained.
REASONS
7. Having heard learned counsels for both the sides, and looking to the facts and circumstances of the case, we see no reason to entertain this Letters Patent Appeal mainly for the following reasons and facts :-
(i) The respondent is a public sector undertaking wholly managed and controlled by the Central Government having 80 per cent shares of the company.
For its captive consumption initially the lease was granted for mining purposes on 22.02.1949 for 30 years
(ii) This lease expired in the year 1979 and an application was preferred for first extension/ renewal for further period of 30 years.
(iii) This extension/ renewal of the lease was granted in the year 1987 with retrospective effect from 1979.
(iv) Time and tide waits for none. This further period of 30 years is also over, on 21.02.2009 and before the expiry of the extended lease period, on 08.02.2008 an application was preferred for further extension of the lease period and this application is pending with the appellant-State of Jharkhand.
(v) The State of Jharkhand has also sought an opinion of the report of the Indian Bureau of Mines, which has been given in favour of the respondent on 28.08.2014/ 01.09.2014.
(vi) Meanwhile, the judgment was delivered by Hon'ble Supreme Court reported in (2014) 6 SCC 590 and it has been held by the Hon'ble Supreme Court that there cannot be any automatic extension for second lease period. A letter was written by the appellant-State on 04.09.2014 for stopping the mining activities by the respondent, which has been challenged by this respondent in writ petition being W.P.(C) No.5368 of
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2014. In this writ petition interim order was also passed by the learned Single Judge on 16.10.2014 and ultimately the writ petition was allowed vide order dated 13.11.2014 whereby the letter issued by the appellant-State dated 04.09.2014 for stopping of the mining activities by the respondent, has been quashed and set aside.
(vii) The learned Single Judge has further pointed out in the impugned order that the State of Jharkhand is at liberty to take a decision under Section 8(3) of the Act, 1957 for extension of lease within a period of one week from the date of the order and if no such decision is taken by the appellant-State, the respondent/ public sector undertaking was permitted to continue with the mining activities.
(viii) It appears that now Section 8A of the Act, 1957 has been inserted with effect from 12.01.2015 in the Mines and Minerals (Development & Regulation) Act, 1957, for the ready reference the said Section 8A is quoted hereinabove.
(ix) Looking to the provisions of this amendment in the Mines and Minerals (Development & Regulation) Act, 1957, there is deeming provision for grant of further 50 years of lease with several permutations and combinations of the fact. There is also further development of the enactment of rules by the Central Government namely, Mineral (Mining by Government Company) Rules, 2015 enacted under Section 13 of the Mines and Minerals (Development & Regulation) Act, 1957 to be read with Section 8A(8) thereof.
(x) The Hon'ble Supreme Court has further decided in the case of Common cause Vs. Union of India & Ors in Writ Petition (Civil) No.114 of 2014 from paragraph no.17 onwards and summarized in paragraph no.32, as stated hereinabove and as per this decision also, the appellant-State has to take decision about extension of the lease period for which an application was pending with the appellant-State, preferred by the respondent- company. No such final decision has been taken by the
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appellant-State for extension of lease and, hence, there is no illegality in the order dated 13.11.2014 passed by the learned Single Judge while deciding W.P.(C) No.5368 of 2014 and there is no illegality, in the order of the learned Single Judge that if the State is not deciding the renewal/ extension application, preferred by the respondent- company, within a period of one week, the respondent- company is permitted to continue with the mining activities.
(xi) It appears that the State of Jharkhand is seeking consent of the lessee for imposition of the conditions vide letter dated 22.10.2014. This letter has also given birth to one another writ petition being W.P.(C) No.5640 of 2014, which is also pending before this Court.
(xii) It further appears from the facts of the case that the respondent-company is paying sizable amount of royalty by maintaining data of excavation activity/ mining activity. The respondent-company is also paying Central Sales Tax as well as Jharkhand Value Added Tax respectively. As and when this appellant-State is taking a final decision upon the extension of lease period, the accounts can be settled between the State of Jharkhand and the respondent-company and there is no justifiable reason as on today to stop the mining activities by the respondent-company which was captive consumption.
8. As a cumulative effect of the aforesaid facts, reasons and judicial pronouncements, there is no illegality committed by the learned Single Judge in the order dated 13.11.2014 while deciding the writ petition being W.P.(C) No.5368 of 2014 and this Court is not taking any other view than what has been taken by the learned Single Judge. Thus, there being no substance in this Letters Patent Application and the same is hereby, dismissed.
(D. N. Patel, J) (Amitav K. Gupta, J) Fahim - Chandan/-