M/S Lohadri Mineral Enterprises vs The State Of Karnataka on 16 July, 2009

[Cites 8, Cited by 0]

Karnataka High Court

M/S Lohadri Mineral Enterprises vs The State Of Karnataka on 16 July, 2009

Equivalent citations: AIR 2010 (NOC) 813 (KAR.), 2010 (2) AIR KANT HCR 27 2010 A I H C 1902, 2010 A I H C 1902, 2010 A I H C 1902 2010 (2) AIR KANT HCR 27, 2010 (2) AIR KANT HCR 27

Bench: P.D. Dinakaran

IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 16" DAY OF JULY, 2009

PRESENT

THE HON'BLE MR. P.D. DINAKARAN, CHIEF Jus'i=1cef7I"'  ~

AND   ._ N
THE HON'BLE MRJUSTICE  s;{s'rsi¥iAH»1_Ti~'  T
WRIT PETITION No.1_9'_3_96'tV;)_f--_.%OOe7e"'(..Geeel~!,V  
Between:   it  I 1

M/s. Lohadri Mineral Enterprises 
A partnership firm having its ' V
Registered office at 25/XXV

Ciub Road, Beiiary 583 1.03, _ _ _ . _
Represented herein b\,4"its7;;,-'  2:   A ' 

Managing Partner, Sr'. M. :3,V.F{aju4

."PeUUoner

(By M/sf éundairasﬁfanwye}'Ra-mdas"'&"A4nand, Advocates,)

1. The State of Karnataka_ "  _ ._
Represented byits Secretary 
Department of Mines, SS} and Textiles

~'DepartVrne.nt of Comre'ercVe___and Industries
'AVM.'E3.¢BUi*!ding* " _
iEZ~.ar'.g_a'iere~i5v6'Op O01» __

 L» 2. The £3ire.ctor' ef"_M1iraee's'V..and Geoiogy
 Department of M-ines and Geoiogy

i<hani}'a"8ha-vanv 

 ,R'a;e Course 'Road
 Bayngaéoure ---*560 001

L.-J" 

Linippn 'cfindia

 __ "Represented by its Secretary

it '  "Ministry of Coat and Mines

"G0,ve'rnment of India,



'i:;:;ij':sin.,e,_.*s.s of mining iron ore.

Department of Mines
Shastri Bhavan, New Deihi

4. M/s. Jindai Vijayanagar Steeis Ltd.
PO. Toranagaiiu,
Sandur Taiui-< 583 123
Beilary District, Karnataka
Represented by its Managing Director   ._

5. M/s. Kaiyani Steeis Ltd.
Hospet Road
Ginigera ~ 583 228
Koppai Taiuk and District  
Represented by its Managing Director 

6. M/S. MSPL Limited
NC Coiony, Hospet
District Beiiary 583 202  _ v_ V'
Represented by its E,»;e'ci4tive'Dire'ctor_' 
  I      ...Respondents
(by Sri Ba-s'ayar'a-j .Ka'redd'y-.VGA'for'R1 and 2,
____ H '*~Sr'i"f«;_;.i~iaripi'sad, A36 for R3,
Smt. S. R. Anura'd.ha, and?IS'ri Harsh Desai'. Advocates for R4 and 5,
Sr:  S'wam_y';-..Ac'.vocate for R6)

This writ 'petition is 'ﬁ_ied"o.nder Articies 226 and 227 of the
Constitution of India pray-i_ng._tC«.,~iJUaSh the recommendation dated
31.1.2004 .vicle Annexure'--L;'- quash the recommendation dated
6._1--2.2004 wide Annexureﬂ/Viv; and etc.

_ This_writv.petit~§o_n coming up for finai hearing, the Court
deiivered Vthe..foi«!_owIng_:_ --' 'VJ

JUDGMENT

" ._:{-DeIivered"'by P.D. Dinakaran, C.J.) betitioner is a partnership firm engaged in the The business o petitioner is a partnership firm engaged in the f mining iron ore.

2. The uncontroverted facts of the case are:

(i) that on 17" July, 1987, they'appiiedrd--rg're'nteifiw.i,,i__i§-T

(ii) mining iease in an externt___0f anarea of't';2,i{),4.6 hectares of iand situated'i"'i.i_in Subttaaraiyafnahaiii viiiage, Kumarasiiramy éandur Range Forest, to which on 11"' t'he?i5o'rest'i'Department recomr:nenide«dV. area for grant ofamininig7i'ease3w.in -fa\'z=o__ur_o_i' the petitioner;

that "thuei reco_n§rnend..ation was rejected by the ..«¢iij.oVnservatVor"--..of ____ forests vide letter dated 3""

A A * -i 'i.9_88;

. (iéi.) ' tha_t'.a.gdrieved by the said rejection, the x T petitioner preferred a revision before the Principai Conservator of Forests, who in turn by order dated 20"' Juiy, 1992 directed the Deputy

(iv) (V) (Vi) Chief Conservator of Forests to inspect the area and reconsider the appiication;

that on 26"' August, 1992, the Secr_eta.:ryfft'oi' '% Government of Karnatakaiiiiinfornje-d petitioner that his appiication hasbeen regecited; it that the said rejection oruder'datedV"26i"ixiugiust, 1992 was ChaH.ﬁ:€JI}i'Q€d.T[ Ceratral Government in Revision i.v')§V\VPfVpii;fatio~:rfi:ii..i's£o.2/Kar- 66/92/M\¥'/;P;:ﬁi;II,/.FE-CI ; rv"':béro}eii it Central Goverri.n1e:hxt;;_ that by.Va'r:ie.{jidatei§iiti.20i" January, 2000 the decision "of theéisitate-vGovernment rejecting the ..a:p'pi';~cation "of:__th_e, petitioner was set aside and _ithe:__ was remanded to the State to consider the appiicatéon on 'u"iTi.ei?its','""after the applicant obtains forest " viacieairanceufrom forest authorities; 5

(vii) that pursuant to the said order dated 20"' January, 2000 passed in revision application, second respondent--[)irector of Mines__;'_""an'd~Q:_5;_. Geology, by his letter dated 7"' Ma_rc~h,--., 2000 directed the petitioner to :=obta.i.n,.fiv clearance;

(viii) that the Forest Depart'rn'e.n:t,.,VpyV"

dated 13"' March, petitioner that the Forest Deipartrnent the applica.tiQ3_n4't:i:i'l":. study is coh'd'uC'ts§f,v'V Nahtvilonal Environmental Eng;-s.neeri n.stitute (N & em);

(ix) th,at,xihovve'.I.e,i---,Al'not'il5ication dated 15"' March, e:arne"to"'b'e'Vissued under Rule 59(1) of the A "i~'ii'n.'e,rja»!4Concession Rules, 1957 ('MC Rules' for '' .__:'sho,rt._)''notifying the impugned area as available forvorant of mining lease;

(X)

(xi) that concedediy, in spite of having knowledge about the notification dated 15"' March, 2003,_..__ the petitioner had not chosen to apply for of lease pursuant to the said notification;

that after providing personala_hea~rrin3guitpi applicants as conternplated___under_ '¥'<iiEe the MC Rules and pursuanltto ewvaluation of the merits of the ap-plitcanits ;_as"~p'err"~t_lne criteria prescribed under Sec:l:Eo.n'V«1g1:w,g ('E'). otf_tiie MMDR Act and'_3SV::"of€rthe_:_MﬁV'"'i?§'u'les, the State 53-if'proceedinlgsdvated 315' January, 206-4,' recornmlendedan...-area of 200.73 hectares in favour' of]. M,{s'."~"'uJindaE Vijayanagar Steel 5::tint:-itedffourjth'respondent herein and an area of V " l':!?:3:C'i;.a!'eS in favour of M/s. Kalyani Steels '' respondent herein for mining iron ore and manganese in Kumaraswamy Range of V. _ "4'Sandur Taluk, Bellary District; 7

(xii)that the petitioner, having appiied for grant of mining iease as eariy as on 17"' July, 1987 which is much prior to the notification dated 1St'7V:."'*.g March, 2003, it is claimed that his appiicatAi.Q_n4:'V:iVs"ﬂ"'n..ﬂi"« entitied to be considered for grant of tease in preference over Votherg a--ppi.icaitVions~..". appiied pursuant to the notificat'i'_ori'iV date}:

March, 2003;

(xiii) that the State VGoverngri"i'ent:'hasnottcompiied with Rtiie 26(1) ofxthe M{:V§'i'it:uie:'sinvV:i'or'not having passed independent"rejecti.on:'iorder;:and

(xiv) that is contended by the petitioner t4h"e':"proceedings dated 6"' :¥.'Jecemifien.V"'2i)0¢i'- the State Government 5].reeomrrr.endi'rig""t'hVe names of fourth and fifth to the Centrai Government for .7[granét'fiofwiiilmining lease, are iliegai, arbitrary, uuunrieasonabie and vioiative of principles of if '*-ngatorai justice.

-- ":Hence, aggrieved by the said recommendation of the and fifth respondents to the Central Government for grant ,3 of mining iease in their favour, the petitioner approached this Court seeking the foiiowing reliefs:

(i) to issue a writ of certiorari to recommendation dated 31.1.2004 bearin.g__;\io'.' DMG/995/AML/2003; '

(ii) to issue a writ of ggcertiorari'~--:..:qiuas:h'--_ recommendation dated §3'.12'.'2.0g_0'-5-i .;«b.earinVg'*--i«' CI/III/MMM/2004; t -

(iii) direct the respondents-.__1 an"d_V'2 to appiication of petitio*n_er..pg dated '-1g7v_._7.'J.9'8'7 pending before the 2"" resporidwent; and '

(iv) direct responderits'-J. to'_:3 :n.o't;t_o._iAt'a.i<Ae anylaction pursuant to recomm.endiatio.vns 'dated 31.1.2004 bearing V Nos.VIv§)V_NlC3/9vV9_5,:/Ai7i'L/200.3' and 6.12.200-ﬁgbearing N'o;~CjI/'1'«1f1./MMM,/2004.

4. When__t.he"irna.t:ter 'came up for admission, Notice was ordered and 'res4ponde.nt"s.'N40':-ﬁidand 5, in whose favour the Governmesjthas recommended grant of mining lease. The said respo:nd.e_rits aupgpeiared and filed their statement of objections. of the fourth respondent--M/s. Jindai VvEi\V/iiayanaghar Limited and fifth respondent~M/s. Kaiyani i..i=.-n_i_tecV!'," it is contended:

U)

(ii)

(iii) that the petitioner has an aiternate and efficacious remedy under Section 30 of MM£DR:""»i.

Act and Rule 34 of MC Rules by revision;

that the petitioner cannotV"i<:lai_jm inasmuch as the petitio'ner has also appiication dated 16"' p'u~r.s:uant7 to the notification Vd'atedg LS'?l§1'a'rVcvh;'l20O3, as in the case offourth-and::'fifth_;2:espondents; that " proceedings dated Wm disciose that the procedure under Ruie 26(1) of , the Riuiesrhaiveibveen duly foilowed;

--the.said respondents have established an V".-__iintelgir-atehdxusteei plant investing huge sums of m'oune'v.Vand employed skilied labourers and are V " entireiy dependent on Iron ore, and therefore V' "the State Government has rightiy recommended grant of mining lease in favour 10 of fourth and fifth Respondents, applying the procedure prescribed under Section 11(3) of the MMDR Act and Ruie 35 of the MC Ruiesgj'-.g and .

(iv) that the writ petition is not maintainagbie. t the same has raise to be:;.Jdisrni'ssed ground of delay and iaches ontime v"th'en petitioner in approachingthis CoV.urt,_V_

6. The iearned sobrnitsvvthat the State Government, after of aii the appiications as per the provisions under Ruie of and foiiowing the procedure prescribed lAi'{3iA).""of the MMDR Act and Rate 35 of by proceedings dated 31" January 2004, reco2m.nienVdedf'ﬂieéytfaapvpiications of the fourth and fifth respondent the Centraiv_.€3oyjernment for grant of mining lease. We: have given our careful consideration for the made by the learned counsei appearing for the .3 3 er

13. In the facts and circumstances of the case, foilowing issues arise for our consideration:

Whether the procedure contemplated (1) (11) (III) Rule 26 (1) of the MC Rules has beerr.

followed while evaluating the inter . the the petitioner and the contezétingllrespon-t:ieri"ts.E,_'"i Whether the petitioner, ébalsed ivonilyhiis appiication made on :7t"i.juiy, 198.7; the application dated 1,6.-th:"April~,g' 20(j3','vapp.ii'ied pursuant to the notifiAc'aticjgr:vV'. d"atVe.d*.1;5"' March, 2003 issued unde'r;_F§ui;e Ruies notifying of mining iease; *i's"-:-2__n%i_tied" fo_r_;__pr.efe'ren~ce_?» ViF~he'ther proceedings dated 31"

3ani;i'a_ry, _2xOO4' 'ar'id:'_"'_the recommendation dated 4;'6"T.Dece"ml:V>er, 2004 made for grant of mining it .{'lease"i-in favourof fourth and fifth respondents A " = V from :

.. ""(iii) Li)'; 'irregularity;

' iilegality;

discrimination;

arbitrary and unreasonable exercise of power; and UV) 12

(v) violates the principles of naturai jusﬁce?

91.ISSUEI:

Whether the procedure contemplated under (1) of the MC Ruies has been duty foEio\_5.feo'~..whii_ie evaiuating the inter se merits of:~th'e-peti'tion.er'~anci the contesting respondents? V ' it ' 1' V' 9.2. The validity of issuance:"of Notsrgcatgon 'dtarteizr 'j15*""V March, 2003 under Ruie 59(1) of r_.rie'l'i»ic'=Ru:es'and at/aiuation and consideration of the a4poisi'cat§_oVhéj;v, prior to the notification and ou.rs.Liavn_t N:ot.i'ficationfVas well as the aﬂeged:

(2) arrehgmartity;t:

(ii) iiiega|iVty..;_Vtt -

(iii)'€1isc_rimxinatio'n:;VH %%%%% unreasonabie; and :"(~v)'C'.._y«io'ia«t'i3.r.e oftirincipies of natural justice, " the iighi:.. of criteria prescribed under Section 11(3) of the Act' and Rule 35 of the MC Ruies, came up for in'4'V_'j<:ohs'ideratiAon before the Division Bench of this Court in Writ 13 Appeal i\lo.5026 of 2009 which was disposed of by order dated 5"' Bune, 2009. In the said decision, this Court uphel'3._' the procedure foliowed by the State Government under Ruiej2'6:h("yt)"'o<f the MC Rules in evaluating the inter Se merits of the-'..'part§eVs's"

9.3. In the instant case, conce'dedry,y_the.;«{39o'verVn'rn«ent'i heard all the applicants and aiso evaluated the inte'r_-use~n:er%:ts-~.oF~, the applicants for grant of mining least:-i,0f the.;mpu'gnVed'V'Va'rea as 9 per the procedure prescribed~.under"Sect:oVnsr.;1(3)'of the MIVEDR Act and Ruie 35 of the MC Ruﬁes.lbeltoleiarr:ivi--in;}'"a_t a decision, by evaluation proceedi:ng's.:dated_ 3§1"5'_:"c.«t3a~niua'_rfy,V.2004 to recommend the names offo'urth'1;an.d*gf§ﬁth'"respondents. 9.4. Inpthis 'conr--:.e:ct§ovnV['*%tit 1.3 apt to refer to the relevant extract of the evaiuatéon"V-.pro.ce'edings dated 31" January, 2004:

. Noticemuhnder Rule 26(1) of MCR, 1960 was 2 issued to all! -t4h'e.,appiicants to appear before the Hon 'bie Chief Wyiviinistecrlof Karnyataka on 12"' October, 2004 at 4.00 pm. to "'i*i7aié,~: presentationior sanction of mining iease in their favour.

Due to unavozidahie circumstances the hearing couid not be held on that day and was adjourned to 16"' October 2004. Again on 16", the proposed hearing couid not be held due to unforeseen ﬁcircumstanhces. The applicants were again issued notice to appear before the Hon 'bie Chief Minister on 25"' October, 2004 ﬁat 4.00 pm. Again a hearing notice was issued on 29.10.2004 _ to's--:.~:h of those appiicants who did not attend the hearing on ' 25"' October, 2004 to attend the hearing on 4.11.2004 at 11.30 ejf'Z37"*\i§ 14 am. The i-!on'ble Chief Minister heard the applicants who attended the hearing in person.

5. On 12.10.2004, the hearing was adjourned. OutWof._ 111 applicants, 85 applicants attended the hearing and"_75_"aV " A' applicants gave their written representations. On 16.10.~;2--0Q'4,.__ 1' C . the hearing was again adjourned, P22 applicants attended, applicants submitted their written representations. The"hearing was held on 25.10.2004, .75 applicants attende'd'v--an'd 27 applicants submitted their written repres(:ntati'ons.

6. Out of 111 applications, 55 are'comApanies)'firms' 30 are individuals. Out of 111 applications,u_11 ha.v'e.given more than one application in"the name. of' their v..s'i'v3ter companies/partner firms etc. All applications 'were.ye:{amined under Section 11(5) of MM(D&R) Act. 1957 wi'th_ ah viewi to provide an opportunity to allthe ap.DiiC;3f'ifS who have 'f;'led..tnei'r applications on subsequent "d.ays,j' i.e_. after' 15.4.2003. The specified in Section 11( 3 ) fo'r--grant--of .1ninin'g lease-.,are.*~

(a) any special l<nowl.e--dgie'=. o'f,--.A or .e..><pé"ri€'nce in reconnaissance. operations; prospecting "opera tions, mining operations,. as thecase .may"i3e,.v'possessed by th-s.ap;'0liC3é*1t.:';'. " ._:

as'?-

( b ) The fi'i:ancifgal re:sfpurces»of the'applicant,'

(c) the =n'ature"'anAdt of the technical staff employed o'rto'be_emplo~yed by the applicant.

(0') the in"vestment_ which...-'tithe applicant proposed to ; 'make in tl-:.e_ mines and in the industry based on the ~ ' 5', mine rals. "

' (e) su_ch.oth'er.. matters as may be prescribed. o 7.' x;<2%' ivkx

8. ..'<x><_ Xxx xxx E, A}: total number of 55 companies/firms have ';*.,applied for mining lease. The particulars/details of the _ 0 company/firms.'-- W /1 1,1- 1 N 17 requested for allotment of the mining lease. But these applicants have not yet established their units for value_.__ addition. Some of the companies have already established "

their units in the State and they have requested for sanction of * '' mining lease for using the ore for captive purpose i_'_or3. valu'e.:'h:"* addition to the ore. The interest of such compani'es._t,yhe.have ' already established their units linked to th'e'se--anch_'or units and are in need of raw material for their use,,5ne'eds-. to considered. It also helps the State Government to eaijn more "

revenue if there is value additionto_ the ore." The employm'e'nt opportunities will be increased not otniybyhdirect-empioymient offered by the compani'e"s,__ but;i'a'isot_:"by"'-vtyyay ot'"ii'idirect employment facilities caused-hay establifsr;i'ng'-pmdu-cti'on units.

11. Some of the firms who Aare.,.Wi'lli'ng to_in"vest 'huge. amount in mining industry have' ah'-so i'ndi'cated that"th_'eyh_recjuire the mines for export and«--i'o'r 'supply/ing¢i't__to the local market. Some of the companies ha are aiireadybbetstabiished 'their}uni'ts in Karnataka by investing huge A'abn_1ouhn't..V Atv.p~resent~ they are depending upon local market for theirV"i:aw».materials i.e. iron~ore. They have requested thatiisince they.- have invested huge amount and established th'eirg_Vun.i.ts'-- in "the" state, they be given preference

-V , & over 'eathers for allotti-nen_t__of mining leases. Since the request of 'suchmof the companies is for captive consumption and for value L additi<3n,"'they. dese'rve consideration over others.

12. Kar'n}a_ta,5<a, the following industries have established steel"plan__ts.' ~r "

(L1. " xxx xxx xxx '';(2) M/s. Jindal Vijayanagar Steels l_imited:- They " have established an integrated steel plant at Toranagallu at a cost oi' about Rs.7000.00 crores and a power and oxygen plant at a cost of

;.a;~ 18 Rs.2000.00 crores. It is a public limited company in which the Government of Karnataka holds Rs.50.00 crores as equity. While approving the project of M/s. J1/Si_, Government have committed to allot iron ore mines within the__ reserves of about 100 million tones per annum; The plant is under production since the last four", For the installed capacity of the plant."-Qﬂ " ' years.

about 2.8 to 3 million tones of iron oi annum is required. 5 They have also commissioned the -benei'i?c?i"a.tion plant to treat low grade high"aliirnina.;iron' ore ' fines. In view of this the larger-qtiiavntum o.f"ore"is"-.,_ _ required for the sustainable. working of"the--._ola.nt' for another 50 years; They at?! planniriﬂ» min vest around Rs.100.00 ' Creates for sy3.temati'cg_V'and scientific mining.

M/s. Jindal \/ijayanaga'r":'}teel Li'-mited hasentered into a joint venture with,Mysore Minerals Limited, a Government' 'or iK'arnatal<a"uridertaldng. The joint venture compariy"Mfs. L%i;ia'y:=in.agar Minerals Limited is mini'ng-ov'er an area of 87;:5'0 hectares. l€ail.jvani;"-Ferrousdlndustries Limited.'-- M/s. Kalyani' Ferrous~,Ind_us--tries Limited has merged 'with 'Fl/'s, Kalya.ni;"'-Steels Limited. The company has 'establ.ish'e.d "a.n.='integrated iron and special steel man'ufactu"r.<'ng uni't at Ginigera, Koppal Dist.

"They are rri..anufacturing pig iron. The installed cap.-7ci'ty' of the plant is 0.4 million tones per annurnand have plans to enhance this to about "-9.5 million tones per annum. They have invested

-about Rs.550.00 crores for the plant and the T ..ai?_F1ual turn over is about Rs. 700.00 crores. The p,'.~:irit" was commissioned during 1998 and at 'fpre'sent, it is producing pig iron. For the captive * _ ,r.--onsumption, they need about 1 million tonne of iron ore per annum. They have plans to invest about Rs.10. 00 and scientific mining.

crores for systematic At present, they do not have any mining lease in the State for iron ore. However, M/s. Kalyani Ferrous Industries Limited has been given a raising contract by M/s Mysore Minerals <7".

.. ._ V 2009 heﬁd as hereunder:

satisfied that there is no procedural frregufarfty. The learned Single Judge, in our considered opinion, erred in rendering a finding that the State Government had not acted legaffy and bonaﬁde white considering the variouafdt. applications. "

9.6. Therefore, we are satisfied that the Gov'e.;§nrn'_e:nt strictly foétowed the procedure contempEated"und~er the MC Rules. i t. A. n 9.7. Issue I is answered accor'd,:.i:n'gly. 3 10.1. ISSUE 11:

Whether the on his application it":/,':V""'~A.',,}uE_y_, 1987 much less the appticati-on 2003, applied pursuant to the no't§-f[ca.tio'n__'dated-"Th15"' March, 2003 issued underesute 5"9(1_,):Vof:the MC Ruies notifying area fo:<.,_.grant""'ot mining Eease, is entitfed for ' c_re:m:,e " '_,

10.-.?___. In-~§dejntica! facts and circumstances, this Court, in ""t.--1\Iv'a*1t';f\ppeaJ"N_o.S026 of 2008 and connected cases disposed of (3?) 22 "26.18. Once a notiﬁcation is pubiished notifying the area avaiiabie and inviting appiications for grant, ail':

the applications, whether appiied prior to the pubiicatioiie.f"",."

of such notification notifying the area avaiiab_ief__.and'V:'----., -1- inviting applications for grant of reconnaissance ' prospecting iicence or mining iease"anci*«had no.t_Ali')e_en disposed of, as weii as the appiications;"received the period specified in the notiﬂcanon sh.aii'*be deenied to 3 have assig 10.3 been received on the same«vr.ggd'a,v for theh purpose of ning priority under section 1g_1.(;:3A').oi'rvthe Mil/i'ﬁR_AcHt.7"

.Therefore, the peti.ti'onge.;«1lt"Jis__.'noi:=_en_tit!ed for any preferentia! right. i};cco:rtl--ing;y, 1ss.ue-4.IAI">v§s_~~ansviered in negative.

11.1 . ; J Whether 'the v'e'§ial:i3atii4'o'n_:Eiroceedings dated 3:"

Janu ary,é"2Q04 a-rad".'Ati1.é"'"----recommendation dated 6"' December, 420.(V)4*Vrr'1acl'e for grant of mining lease in fetirth an'd--fifth respondents suffer from:

(ii) _ nan ir're'g.gla ri*tyV;j..

""ilEeg.aliVty_;.i:' clist:.rirnination;

arbi't'rary and unreasonabie exercise of power; violates the principles of natural justice? 24 operations, prospecting operations or mining operations, as the case may be, possessed by the applicant,'

(b) the ﬁnancial resources of the a pplican t,'

(c) the nature and quality of_."t:he:f'--.i',:' technical staff employed orh__to'r,be employed by the applicant; " '

(d) the investment which _thej,ap,piic_an.:t"--. it V proposes to make in the "mines and e in the industry based onfithe' mineral,' V V

(e) such other mhastters as"'~m:ay': bee l3rescri'bed."

Rule 35. Preferérrtié'i!_j3'fof certain persons- where two oreltrnore pers.on's."hai/'e."applied for reconnaissance" 'pi3rrni't, "._prc':spectin;_f; '-.iice_nr::e or mining lease in respe'ct,_ofeethe land, the State Government shall forxethe pu.rpos'e.:of_:su,b{section (2) of Section 1.:

consider besides the "m.a::éis mentioned in clauses ( a )' to

(d) or sub--sect:ioAn'{3) of §ection 11, the end use of the V' "l7'il'l'-.7':§"l':8/ ;_by the applic'ar« "

inter se merits of the petitioner and of the fourf:hj'.»*and fifth respondents, it is apt to refer to the ""b.-ihteeiieyante po'rti_.o'n of the application filed by the petitioner in

-.1,' -vxihéch is as foilowsz 25 "FORMLI ,»-4ppIIa'z.':'Ionﬁrr' .11. [Al- I}') I5'I:" XI "I3 \IIIwI'I:'I) [V I'I?II'I.I{ I II.' (iawr-'mIrmI r.g/'I\'c.'I'I7ct!uIu.I Ap/II Ic'c1IIm1_,1'i)r' .1fIr:ir15: I,cuf»'c' [Sec Rafe 320') rgfihc :1-firm-'(II (."um:e.s"s'im7 RI.'I£>.s'. I 961)] I)c1[¢'*cIII2e I 7"' (fay Q/'Jz.'I3= I 98."

I19.' I'I.rc I):'rcc'I()r-2 Dem. Q/ﬂ==1«~IIIIc'.s 6} (.}ca:)IrJg}' Bangc'.rI0rr" Km'.

Sir, "

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11.6. At the risk .A¥_'g.:!TVC'»'J;§_ose to extract paragraphs 9 to orﬂ t:_he wherein the Government has? of the parties including «o'f"m;ining lease in favour of fourth and fifth the criteria prescribed under Section Vi1~(3V)' ofam»%:wDR Act and Rule 35 of the MC .....

number of 55' companies/firms have appfied Vforrmining lease. The particu/ars/detai/5 of the ' V compa ryyv/f1'rrns.' ~ H Name of the 0* individuals / Details Companies/Firms XXX XXX XXX XXX XXX XXX .;--4w~w«»_ W' me ~ ' .. " )"'om1§J?i*;7MfiiA.-':i'&',' 'V F-"cL'.r Lulmu'ri §-1-.{fI1c>a'r.z/ 5f?icJ"_'[J! ..,s'c.s".' .

13.

14.

15. & "diJriia''§r the oral hearing, gand their I-iroposed investments, 3} Torangallu with a capacity of 9 lakh tones per annum. They have already invested about Rs..23O Crores in the plant.

At present, they do not have any "

iease in the State for iron ore.

XXX XXX XXX (5) Rule 35 of Minerai Concession Rules, 11960, iprovidees 'for:

The Rule states. as preferential rights for certain persons. foilows:-- u "Where two or more pers_on's,_naye appiie.d for V reconnaissance ,OEl'i'fM'_lT or aiprospectiiig licence"or~' a mining iease in respect of s;,an1e'~-.larzd,«.:he State Government shall, for the purposes of sub' section (2) of Section 11, consi'der,_besides tn.e*r__natters mentioned in._ciau:ses '(a):to '(d)..of sub section 3 of section .":1,- 'tneiﬁend use of the"--.'ninerai by the It is desi'rai3ie'*-to:'.;aliot the rn_inin'g"lareas to applicants who have~"aireadyj; estaIhi'.ish'ed'--.tneir'~-plants in the State by investing _hug_e _'amounts;.._ The Ore requirement for production of 1 ion-.steei'i5_a"'--out -1.6 tones of iron ore.

In view. of, the=.prov:'sions'of Rule 35 of the Mineral Concession v Ru_les,._ ',¢1"'960, and taking into consideration Wall 7 the documentary evidence stibmitted byxthe applicants, their representations their existing investments mining lease under MM (D&R) Act, 1957, in favour St.-tctiont 11(3) of the "-"of the"'folio_wirig applicants is recommended:-

_..f1)_iE'art A of Sketch measuring an extent of 200.73 hectares in favour of:

(2) Part B of Sketch measuring an extent of 1 79. 70 hectares in favour of:

however, captive mines are a reality in India and many of them are run efficiently,' at the same time, there are benefits that large-scale stand--alone mining can brin-gV"--.""'-- "

huge foreign exchange, which the country cannot ar'fo'r'Q~'« to ignore, such as, induction of advanced technology in exploration as well as optimum mining-'operations; and it it would be in the country's interest to l'i'ave' ais».min'ing'S"'n regime in which space exists forrboth capt'i've andvstand alone mines.

11.3. The said High Leve'l'~(:omrn'ittee,';after considei"i'ng the arguments in favour of 'iand"agiai§i7st"captive mining, has made the following recommjendatiionsf. --

"1. Stand '~.aloh'e ._.mining:. and , capt'.'ve""'mining shoiuld ,'*--co'ntinueﬁf-tVo"~._co~exist' in the country;-. :The pos.iti'o_n sh'oluldfbe reviewed 2_0'ij;6--1"?::_; Vein"-..lig.ht o"f~...tl'ie emerging Sl'fUafl'Ol.l"v of egstablishment of steel

--capacity 'infthe.co'unt'ry, on the one hand, and" accretio_ns_ to, the' level of iron ore re'soui'ces"i.n the»'co'untry, on the other. A

-- , view" can, be Ktaiien at that time on whether-. the balance of advantage in the ;_grant of LAPL,1PL/M1, should be changed in favour of Steel mines.

: V2', --,V4i7h.roug.h'Qappropriate changes in Section 1.2{f3)(,d) it should be clarified that in a sit_ua..~tion of multiple applications for grant 'of 'iron ore LAPL/PL/ML, the existing "_i.nvestment in Steel plants that have "exhausted their current captive mines should also be a consideration. However, the applicant must independently qualify under other criteria, including Section l1(3)(a) relating to prior experience.

'i I 34 This is necessary to ensure efficient mining.

Existing Captive mines should be renewed if they have complied with the conditions V of the lease and the life of the steel plantt so warrants taking into account existing'-._ _ and planned capacities. In the cas.e""of---- V new capacities, the recommendations of _ Chap-ter5 will apply. » A ..

Steel making capacities already ' existence on 15' July --.2_G~9_6 thatdo no-it have captive mines 'zmay also "be given preferential _....a'i'lo_c'ation "of adequate iron'ore reserves within the"

State without "the .need"{,tp gofthrough the process of tender/auctionyyas a one-time measureto 'provide a' vvgievel playing « .._fi_eld. 'l'h_V'e'se._ existing' steel compan.-_;e-s_. would have -to enter into tie!-4up_sy "'-with '~._'ex'per'*ien.ced' mining companies 'so, "5t_ha"t'" they become =* eligible in; terms, of Section 1 1(3) (a) of the'VMM'DR .4c:._ Due regard should be given tofthe._size'"of the steel making >capacity_whien considering allocation of a specific ore body.

ir.Scientificy and vigorous prospecting in the i.'-~,C0'Ui'Il.'l'y sh'ould be encouraged. LAPLs ' .and"a_Pl_s for magnetite may be freely git/'en'to both stand alone and captive :'mirlefrs_,--v*'whether Indian or foreign. LAPLs for haematite may be given only after strictly ensuring that GSI or another state agency has not already done the requisite " _ _ exploration.

Captive Iron ore mines allotted to Steel makers should use the are from these mines for their own steel and 36 manufacturers is recognized for encouragement and in view of the time limit fixed for processing thehhzg applications by the State Government under 63-11 of the Rules, it is clear that the Government -1- Karnataka is interested in implementing _the'~-.Sta_te< Mineral Policy by giving priorityjto 'capth/e_. and to dispose of the applicationsofor 'grant mining lease by the Steel maanyfacttirers withii2.time prescribed under Rule 63-A of"-th"eRules. . V 13.2. The learned Assista.n't 'Soi.'citor General 'fairly agrees that the National" {Policy also contemplates encouragement' to lbe"'g.iiie3g~- to Captive Mining by con'siclering;=the appiicaltionsgiiytiled by Steel manufacturérs_««.forv---grant--.,_oF.._minin_g lease for captive mining and 'forrvalue hough no time limit is preslfiribedl[bfthe'l::?ien.tral'_'Governrnent to dispose of the applications 'for 'approval, as recommended by the State Goyernrnent,.:.'t'h.e' same should be done within reasonable time. 'Steps are also being taken for fixing '~ _{'l'rT:..k:_~7,§:LJ'.'Ti_(3'el' thevﬂtlies, by amending the Rules. V V' s. »int:ei'preting the above provisions of the MMDR A*ct"andV Rgiles, particularly Section 18 and Rule 26, which about the systematic development of mineralsand procedure to be followed in the matter while VA rei'us.ing to grant or renew the lease, this Court, in the V_ __ "'cas'e"of M/S. JINDAL VIJAYANAGAR STEELS LTD. V. MSPL LIMITED [Writ Appeal No.502?£t 2009 and tttttttttt e 39 14.3. Thus Section 11(3)(d) of the MMDR Act siﬂeciffcalhl contemplates to take into consideration the investment which the applicants propose to make in the' mines and the industries based on minerals; and Rule -1- of the MC Rules provides for preferential rights of I persons, considering the end use of thefnineral, by, it 15.1. Industrialization, :whicl'1.__is"intencledfor it mass production of goods, .changes- the ﬁ(ay._"o!... business and the very lifestyle.'i"MvIi:il% globaliiation takes over, the local<._and:'traditional economy slowly disappears.

15.2. Iron.-.lore 'naturaliyhvoccurring iron bearin'g,..i.;1in;§e:jérals. iwhich c.éi_:obe:"'économically extracted for iro.n am steel. Almost all the ~'iron _ Aand%s;t'eei-.»in thirs~~planet have been derived:.,_initiallyV'ufr'onilironuore excepting a few small occurrences' of m_ei'eorites"containing from coming from ._Space."«. I'ron'.ore is.-"a major raw material for steeﬂinvdustry. 1?n215'_century, around 85% of iron Aland Visteel:'ra:n_e from iron are directly, the rest from ,re'«:ycled~.steeistfrap, which in turn came from iron o'res'=o'ver the last four centuries. ' Iron and steel is the backbone of .t,nm;d_ernV"" societies and economies. Per capita V."c.jc-tasulmption of steel is a direct index of degree of i development of a nation. As per the available it "statistics, the present per capita steel consumption f""/'mt 40 is 50 kg per annum in India. Time has come to compare India 's per capita steel consumption with that of 400 kg in developed countries, a world average of 180 kg and Chinese current consumption of 340 kgs. country, from a mere domestic per capita i.- consumption of 35 kg in 2000, is projected to gro_v§/gitowggl L' kg by 2020. This corresponds to the voroductiofz targetedi' ' steel consumption of 200 million ton.'~:_ per ahnum,'i.a'fter'if-..__ factoring in imports/exports. 60°/o of t-he'=producti'on' is expected to come through blasvtigilturnace._rou.te;, through sponge iron -- __e-lectric __arc..V_t"wfnaces ~ and 7% through other routes. "i'h'is4_ivoulclAhregu'ire_ vailability of 290 million tones per annum;_'oflmediurn/high"grade iron ore, after discouriting Blast furnaces have grades (62- 54% Fe) ancifriiiesi""('th_rr§ug5-.sirztéif V'5i~:rb7d.- pellets) without loss of Zroductivitiv and yefficiencir. j 15.5% iron constitutes"/o of earth 's crust, but is not evenly distribusted. Iron ore reserves are largely in__Austra'i;'a,......F3razil, India, Russia and Ukraine. Indian Iron --ore,is rich in Fe and has moderate silica, Vlalumihapiiosfphorus. India ranks fifth in terms of ironore reserﬁvees and is a leading producer and exporter

--V of iron ore in the world after Australia, Brazil and CIS :"Countries..--and contributes to around 7.6% of world iron 'Wo_re_ production. Some iron ores in India are the best * naturally occurring grades in the world. With 207 million 4} tones of iron ore production in 2008, iron ore tops the metailic mineral production in the country. 15.5. In the meantime, countries like Japan..~«and.:'__' China have been importing iron ore from India and'..yalue,V' it adding/converti'ng it to high endfhtigh priceoi'----:§'teeli. ' products and also exporting to all other countries,' i_to=_the it benefit of their society. Generaliy,.__ countries.., have V' adopted to the idea of conserylihg rayv*~ materii5.'lsr»{and,,, other inputs for the purpose of Viidomestic iiidustry and only value added item. "have bleienitiegrpcrted, ierisur"iVng economic growth right i'iom- root ..iev.el. All the economically d€'~Vei0Peqr...nhcouiitries become developed by ;piLl'i"7:§3'V'i:_i,il.i'Jg' ::thi,s_; .:route,i"v'i3xcepti"nig Australia who have i'_arge';i--_Vmirieral--s..resources and retain very small pop_uiation.-- has"Vi.adop'ted:ja 'different strategy now, (j¥+~'6;Ci0/ci Feicontributed to 60 MT per year addi'tio"n,ai»s.inyentory there, which is more thai2,t1'ndiai"s 'aniiua'l--.:producti'on. This, in turn correspondingly iinproves the competitiveness of Chinese ste.ei'«:.i'n,dustry for"ev.e_ritual export possibly back to India .and this ~A1(V-'!i4A.'v"ifOFl< against the overall interest of Indian A ec_ono'm.ic«._groyvth_i.~in the long term.

15.'5,,ii.3Tihe Steei industry is the engine that drives, ":.manufacturers in industries such as automobile, machinery, white goods, appiiances i '-ianciconstructions. Steel Industry is the back bone of "Economic Development of the Nation" and 44 mineral development. But still greater role by State Governments is the need of the hour.

15.9. While ratifying the value addition criteriaV.'__'__i"V.j' adopted by certai'n mineral--rich Indian States, Liitmcrstwwi priority for granting of mining lease_,sha_ll be"give:n': to» ' those companies who have set up Isteel,_piants':

benefit of the society at large.

1 5.1 0. Prudent pre--qualifica.tions allocation of mining ieases,_--witi1in--~..a reasonagbiie time, to those steel cor_n:,iJan«ies,t_aaih~a"h.a-are invested and operating, could be thel',appropriajte__'_route to trigger higher growth;_'rate _sectto'r, thereby ensuring value aio'dit=ion, 1' generation, infrastructure pre-requisite to become"a'cdeveIop'ad angibaiancedz society.

16"'..g"l"i:e niain'«ot1iect_.Vocf ,ec_onomi'c development is to improve th"e.__'lev,el"of"'living.-» The living standards are measured, by 'ti;-egg a'vailat2ili'ty of food, shelter, education, V' heallthi, sa._nitati'on a'no'*--soci'ai services, etc. _ rvéévhﬂpproving the decision of the State Central Government giving preference to l"capti_ve vconsumption of iron ore for the existing industrywrand captive consumption for the proposed industry or mining as a stand--aione industry, this Court hiayhlhorder dated 5"' June, 2009 in WA No. 5025 of 2009 h V. connected matters held as hereunder:

/:w,\3 45 30.4. H. the fhst respondent herehw (writ petitioner) in its representations dated 16"' August, 2003, 315' May 2004 and 12"' October 2004 has specificaiiy claimed that it » amends to use the Hnpugned hon ore asK_' "

captive consumption for the p'roposed 'steeix industry. On the other hand, the herein (respondents 4 and 5 «in_ the writﬁ. 1 petkknu requne the Hnpugned Hon cve as Kit captive consumption for..u:'t*hei;<_V ex.isting"

industry. It is, under ,c'ircu..r_nsta'nces, the Government ,.>,ightIy,7 'into consideration all the respechve pardesyXpreﬂaredxthe°appeHants herein ( in the writ pedﬂnni and ieconwﬁended then? to the Centrai AVVC-io'x,{ernrnei7.t_'"fc2_r the grant of mining If iease.

l1.¢8_;' 'Testing' vaiidity of the evaluation proceedings dated, 3135' .1a'n0aViry.,._12004 and aiso the recommendation of the State"f3ohiie.rn'.ﬁ'entdated 6"' December, 2004 made in favour of VV'i:-Ttou_rth and fittih respondents for grant of mining Eease from any ~we_ aresatisfied that both the evaiuation proceedings and "V'--.xrther~__re::o'mmendations made for grant of mining Eease has been the light of the criteria prescribed under Section 11(3) of

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