Karnataka High Court
M/S Katwa Udyog Limited vs Union Of India on 31 March, 2016
Equivalent citations: 2016 (4) AKR 84, (2016) 3 KANT LJ 91
Bench: Chief Justice, Ravi Malimath
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ON THE 31ST DAY OF MARCH, 2016
BEFORE
THE HON' BLE MR. SUBHRO KAMAL MUKHERJEE,
CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE RAVI MALIMATH
WRIT PETITION NO.9581 OF 2011(GM-MM-S)
BETWEEN:
M/S.KATWA UDYOG LIMITED
A COMPANY REGISTERED UNDER THE
COMPANIES ACT, 1956,
JYOTHI TOWERS, 251/A, KARABARAGALLI,
6TH CROSS, NAZAR CAMP, M.VADAGAOL,
BELAGAVI - 590 005
BY ITS MANAGING DIRECTOR
SRI VENKATESH KATWA. ...PETITIONER
(BY SRI UDAY HOLLA, SENIOR ADVOCATE FOR
SRI L.M.CHIDANANDAYYA, ADVOCATE)
AND:
1. UNION OF INDIA
REPRESENTED BY ITS
SECRETARY TO MINES,
SHASTRI BHAVAN, NEW DELHI.
2. JOINT SECRETARY
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MINES-CUM-REVISIONAL AUTHORITY,
MINISTRY OF MINES,
SASTRY BHAVAN,
NEW DELHI.
3. STATE OF KARNATAKA
REPRESENTED BY ITS SECRETARY,
COMMERCE AND INDUSTRIES DEPARTMENT,
(SSI, MINES AND TEXTILES),
VIKASA SOUDHA,
BENGALURU - 560 001.
4. THE DIRECTOR
DEPARTMENT OF MINES AND GEOLOGY,
NO.9, KHANIJA BHAVAN,
RACE COURSE ROAD,
BENGALURU - 560 009.
5. SHRI ATUL B.SHAH
S/O LATE B.N.SHAH,
NO.32/A, DAREKAR HEIGHTS,
KARVE ROAD,
PUNE - 411 004. ... RESPONDENTS
(BY SRI H.JAYAKARA SHETTY, CGC FOR R1 AND R2
SRI D.NAGARAJ, AGA FOR R3 & R4
SRI REUBEN JACOB, ADVOCATE FOR C/R5)
*****
THIS WRIT PETITION IS FILED UNDER ARTICLES
226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING
TO CALL FOR RECORDS FROM THE RESPONDENTS WHICH
ULTIMATELY RESULTED IN PASSING ORDER ANNEXURE-A
DATED 30.11.2010 PASSED BY THE R2 AND TO QUASH
THE ORDER VIDE ANNEXURE-A DATED 30.11.2010
PASSED BY THE R2, CANCELLING THE ORDER OF
TRANSFER OF ML.NO.1858 PASSED IN REVISION
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PETITION NO.561/2010 PASSED BY THE R4 AND ALSO TO
DIRECT THE STATE GOVERNMENT TO EXECUTE THE LEASE
DEED IN FAVOUR OF THE PETITIONER.
THIS WRIT PETITION HAVING BEEN HEARD AND
RESERVED ON 16.03.2016, COMING ON FOR
PRONOUNCEMENT OF ORDERS, THIS DAY, RAVI
MALIMATH J., PRONOUNCED THE FOLLOWING:
ORDER
The case of the petitioner is that it is a Company registered under the Indian Companies Act, 1956. It is established for the manufacture of cement. That M/s.Shree Quality Cements Limited., (hereinafter referred to as 'M/s.SQCL') promoted by Sri B.N.Shah and others desired to establish a cement plant and accordingly made an application to the Karnataka Industrial Area and Development Board (hereinafter referred to as "KIADB") to allot land for the said purpose. The KIADB acquired 35 acres of land and granted it in favour of M/s.SQCL., who established a cement plant in the said land. That in order to carry on manufacturing of cement, M/s.SQCL represented by its Managing Director Sri B.N.Shah made 4 an application on 6-10-1980 seeking grant of mining lease in respect of various patta lands measuring 305.07 acres situated at Muddapur village, Hebbal, Thimmapur and Naganapur situated at Mudhol Taluk, Bagalkot District. After the approval of the Central Government, the State Government issued a Notification on 7-6-1984 seeking grant of mining lease in respect of 388.36 acres. Thereafter, the Director of Mines and Geology executed a mining lease No.1858 in favour of M/s. SQCL. M/s. SQCL, approached the KIADB seeking acquisition of the land under the KIADB Act. Consequently, in terms of Section 28(1) of the Act, a Notification dated 14-6-1984 was issued notifying the acquisition of properties for Industrial purpose namely, for M/s.SQCL. In the interregnum M/s.SQCL, executed a deed of mortgage in favour of various banks in respect of various properties. Based on the creation of an equitable mortgage by the Company, the financial institutions led by IDBI granted a loan subject to mortgaging the leasehold rights in their favour. Since 5 M/s. SQCL defaulted in making payment of compensation to KIADB, they did not handover the land to them. Therefore, M/s. SQCL filed writ petition No.4892 of 1999 seeking for a direction to the KIADB to hand over possession of the land. Statement of objections was filed by the KIADB, stating that the land is acquired for M/s.SQCL and since the industrial operations are closed down, requested to dismiss the writ petition. It is therefore contended that this would indicate that the mining lease was acquired in the name of M/s.SQCL and the lease was granted in their favour which was mortgaged to IDBI for the purpose of raising a loan. Since M/s. SQCL defaulted in making payment to the financial institutions led by IDBI, recovery proceedings were initiated against the Company. Ultimately, a public notice was issued seeking to auction certain properties of the Company. The petitioner being the highest bidder, the sale certificate was issued in favour of the petitioner Company. Thereafter, IDBI wrote a letter to the State Government and the 6 Director of Mines & Geology requesting the State Government to transfer ML No.1858 in favour of the petitioner Company. In pursuance whereof, the Director of Mines and Geology based on the representation made by IDBI passed an order dated 5-9-2007 transferring ML No. 1858 in favour of the petitioner Company.
2. The said order of the Government of Karnataka was challenged by the 5th respondent before the revisional authority under Section 30 of the Mines and Mineral (Development and Regulation) Act, 1957 and Rule 55 of the Mineral Concession Rules, 1960. By the impugned order, the revision application was allowed and the order of the Government dated 5-9-2007 was set aside. Hence, the present writ petition challenging the order of the revisional authority.
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3. The learned counsel for the petitioner contends that the order of the revisional authority is erroneous and liable to be set aside. That the revisional authority committed an error in coming to the conclusion that the State Government does not have jurisdiction to accept the application for renewal, that the petitioner herein has not been declared as a legal heir of the mining lease etc. That the finding of the authority that the mining lease has been granted to Sri Atul Babulal Shah is also incorrect. The grant of mining lease is in favour of the Company and not to any individual. Therefore, the revisional authority committed an error in passing the impugned order.
4. The further plea of the petitioner is that the revisional authority failed to look into the material on record. That the revisional authority committed an error in proceeding on the basis that, originally the lease was granted to Late Babulal Nathuram Shah, namely, the father of the 5th respondent and not to a Company. This 8 premise has led to miscarriage of justice. The application for renewal was filed by M/s.SQCL and therefore the lease belongs to it. Once the lease is in the name of the Company, the individual Directors cannot seek renewal in their individual name. The property in question was mortgaged to M/s.IDBI Limited., by M/s. SQCL. The bank exercised its mortgage rights by requesting the State Government to transfer the lease in favour of the petitioner. Therefore, the 5th respondent cannot question the same. Hence, they seek for a writ of certiorari to quash the order of the revisional authority while dismissing the revision petition.
5. On the other hand, the learned counsel for the 5th respondent disputes the same. He contends that the statements made by the petitioner are factually incorrect. That during the pendency of the application before the DRT, the leasehold factory lands etc., measuring 35 acres 15 guntas which were mortgaged, were put up for auction. 9 It is that alone that was purchased by the petitioner. The claim of the petitioner that it had obtained the mining lease in respect of mining lease No.1858, is false and baseless. What has been sold is only an extent of 35 acres 15 guntas. Hence, the entire premise, on the basis of which the writ petition is filed, cannot be accepted. That the Director of Mines and Geology had recognized the 5th respondent as the legal heir of Babulal Nathuram Shah under Rule 25-A of the Minor Mineral Rules. Therefore, the 5th respondent is the legal heir of late B.N.Shah. Hence, he sought for dismissal of the petition.
6. The learned Government Advocates appearing for respondents 1 to 4 support the impugned order.
7. Heard Sri Udaya Holla, the learned Senior counsel appearing on behalf of the petitioner's counsel, Sri Ruben Jacob, the learned counsel appearing for respondent No.5 and the learned Government Advocates appearing for respondent Nos. 1 to 4.
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8. IDBI and others had filed a suit against M/s.SQCL and others before the High Court of Bombay, due to non re-payment of loans, in OA 3251 of 1993. The High Court appointed a Receiver and directed the Bank to appoint proper security etc. On the incorporation of the Debt Recovery Tribunal (DRT), the matter was transferred to DRT, Pune, where the case was re-numbered as OA 182 of 2002. A new Receiver was appointed by the DRT. During the pendency of the matter before the DRT at Pune, an application was filed by M/s.SQCL seeking sale of certain properties including the moveables, as mentioned therein. The application was allowed. Sale notice was issued. Bids were received. The petitioner was declared as a purchaser in the public auction held on 7-5-2007. The certificate of sale was also issued as per Annexure-N, which reads as follows:-
SPECIFICATION OF PROPERTY "Property admeasuring 35.15 acres Survey Nos.15/4, 88/1A, 88/1B, 88/2, 88/3, 88/4, 5 and 6 situated at Village Nagnapur, 11 Post Lokapur, Taluka Mudhol, District Bagalkot in the State of Karnataka, as per the MOU dated 27th July 1987 of which lease-hold rights have been renewed by the Karnataka Industrial Area Development Board for a period of two years from 25th May 2005 to 24th May 2007 as per their letter dated 1st December 2006, the properties comprising of lease-hold rights, along with structures standing thereon including plant and machinery etc. on "as is where is" basis, and more appropriately described in Schedule 'A', 'B' and 'C' of General Terms and Conditions of Auction."
9. The KIADB also executed a lease-cum-sale agreement with respect to the said property. Thereafter, the petitioner wrote letters to the Director of Mines and Geology seeking transfer of mining lease in their favour since they were successful bidders. The petitioner also wrote letters to the Government indicating that leasehold rights in respect of about 305 acres were given to M/s.SQCL. On that basis the Department of Mines and Geology issued an order dated 5th September, 2007, 12 restoring ML No.1858 in favour of the petitioner herein. It is this order that the 5th respondent challenged before the revisional authority under Section 30 of the Mines and Mineral (Development and Regulation) Act, 1957.
10. The revisional authority heard the petitioner, the 5th respondent as well as the State of Karnataka and examined the material on record. It came to the view that the mining lease deed was granted to Sri Babulal Shah. After his death, the Director of Mines and Geology, by the order dated 23rd May, 2002, has accepted the 5th respondent as his legal heir. That the sale certificate of the immoveable property issued by the Registrar, DRT does not speak about the mining lease No.1858. Therefore, the State Government could not have any jurisdiction to accept the application of the petitioner for renewal of ML No.1858. Therefore, the order of the State Government being erroneous was set aside. 13
11. The sale certificate as indicated hereinabove, indicates the confirmation of sale to an extent of 35 acres 15 guntas in respect of various survey numbers as narrated. It is this property alone, that the petitioner has purchased. In the guise of the sale certificate, letters were addressed to the various authorities and the banks also wrote various letters indicating that the mining lease pertaining to ML No.1858 have been purchased by the petitioner.
12. However, ML No.1858 was never the subject matter of sale before the DRT. The lease deed executed by KIADB as a consequence to the sale certificate also narrates the extent of 35.15 acres of land of the same survey Numbers. Therefore, the contention that ML No.1858 has been granted to the petitioner, is without any basis and cannot be accepted.
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13. Only because, the petitioner as well as the banks entered into various correspondences with one another, the State Government etc., and have narrated that ML No.1858 has also been purchased by the petitioner, does not give any right to the petitioner. The right of the petitioner cannot be considered based on communications. The only document with regard to the transfer of property in favour of the petitioner is the sale certificate issued by the DRT, Pune, which is referable only to an extent of 35.15 acres. To claim any land beyond that, is opposed to facts and records.
14. The revisional authority also considered the order passed by the Director of Mines & Geology accepting the 5th respondent as the legal heir under Rule 25-A of the Karnataka Minor Mineral Concession Rules in granting renewal of ML No.1858. Therefore, the contention of the petitioner that the mining lease was obtained by the Company and not by the individual cannot be accepted. 15
15. Even the application filed seeking renewal, would indicate that the applicant was Babulal Nathuram Shah, namely, the father of respondent No.5. As stated in the application, the name of the applicant is shown as Babulal Nathuram Shah.
16. A perusal of the mining lease executed by the Government vide Annexure-E to the writ petition indicates that the lessee therein is an individual namely, Sri Babulal Nathuram Shah. The lease deed indicates various kinds of lessees namely, when the lessee is an individual, when the lessee is more than one individual, whether the lessee is a registered firm or when the lessee is a Company. The document indicates that lessee is an individual namely, Babulal Nathuram Shah and the remaining portion of the lease deed as to whether there is more than one lessee, whether the lessee is a firm, or a Company is left blank. Therefore this too indicates that 16 the lessee is not a Company but Sri Babulal Nathuram Shah.
17. The petitioner's counsel relies upon the pleadings in writ petition No.4892 of 1999. They contend that in the statement of objections, it is admitted that the land has been acquired for M/s.SQCL. The writ petition was disposed off without going into the merits of the claim of either the petitioner or the respondents. Respondents therein were directed to consider the representation made by the writ petitioner and to pass appropriate orders in accordance with law. There was no finding recorded at all. Therefore, no reliance could be placed on the pleadings in the writ petition.
For the aforesaid reasons, we are of the considered view that the impugned order passed by the revisional authority is just and appropriate and based on the facts and circumstances of the case. We do not find any error 17 that calls for any interference. Consequently, the writ petition being devoid of merit, is rejected.
SD/-
CHIEF JUSTICE SD/-
JUDGE Rsk/-