Andhra Pradesh High Court - Amravati
Sirgys Cements vs The State Of Andhra Pradesh on 29 January, 2021
Author: Kongara Vijaya Lakshmi
Bench: Kongara Vijaya Lakshmi
HON'BLE SMT JUSTICE KONGARA VIJAYA LAKSHMI
Writ Petition No.9268 of 2018
Order:
This Writ Petition is filed to declare the Memo dated 01.06.2017
of the first respondent, permitting the Director of Mines and Geology to
issue notification for conducting e-auction for granting mining lease in respect of Lime Stone blocks, consequential notice dated 17.07.2017 issued by the Director of Mines and Geology inviting tenders and the Memo of the first respondent dated 30.10.2017 deciding to issue letter of intent in favour of the fourth respondent, as arbitrary and illegal.
Heard learned counsel for the petitioner Sri T. Sreedhar, learned Advocate-General appearing for respondents 1 to 3 and Sri Sivaraju Srinivas, learned counsel appearing for the fourth respondent.
The case of the petitioner Firm is that it was granted prospecting license for Limestone mineral over an extent of 288.87 Acres in USHB Yerragudi village in Survey No.20 of Hussainapuram village and in Survey No.340 of Yennakandla village, vide G.O.Ms.No.169, Industries and Commerce (M.III) Department dated 25.02.2000, for two years and the Assistant Director of Mines and Geology, Kurnool has permitted the petitioner to do prospecting over the granted area for two years from 28.04.2000 to 27.04.2002 and accordingly prospecting license was executed; petitioner sought for renewal of the said prospecting license, vide letter dated 15.01.2002 and the same was processed in 2008 and survey was done by the Department of Mines and Geology on 25.06.2008 and the renewal was recommended; thereafter, petitioner has been conducting prospecting operations and the petitioner applied for mining lease in accordance with the Mineral Concession Rules, 1960 on 21.05.2008 and submitted the prospecting report on 05.06.2008; 2
KVL, J WP No.9268 of 2018 when the petitioner noticed that the prospecting operations were done for more area of 387.52 Acres, it requested vide letter dated 16.04.2011 to consider grant of mining lease for 387.52 Acres; the said requisition was processed by the Zonal Joint Director of Mines and Geology, Kadapa on 21.06.2011 and the Director of Mines and Geology also addressed a letter dated 23.04.2012 to the petitioner seeking clarification on seven points regarding the interests of Abhijeet Cements Limited in the petitioner firm and the petitioner submitted its explanation by its letter dated 09.05.2012 and the Director of Mines and Geology also recommended grant of mining lease to the petitioner, but the mining lease application of the petitioner was not disposed of by the first respondent; the petitioner was pursuing the matter and also addressed letters on 19.09.2017 and 08.11.2017; petitioner came to know that the first respondent issued memo dated 01.06.2017 permitting the Director of Mines and Geology to issue notification for conducting e-auction and based on the memo dated 01.06.2017, the Director of Mines and Geology issued a notification dated 17.07.2017 inviting tenders for grant of mining lease including the applied area of the petitioner and that the Government also issued a memo dated 30.10.2017 deciding to issue letter of intent in favour of the fourth respondent as a preferred bidder for Yerragudi-Hussainapuram-Yennakandla limestone block over an extent of 146.676 Hectares in Survey No.USHB of Yerragudi, Survey No.20 of Hussainapuram, Survey No.390 of Yennakandla villages, Banaganapalli Mandal of Kurnool district in terms of Rule 10(2) of the Mineral (Auction) Rules, 2015; petitioner was not put on notice about the said decision and the petitioner's application is the first application for the said area for which it was already granted prospecting license and 3 KVL, J WP No.9268 of 2018 the petitioner has acquired a right even under the amended Act 10 of 2015. Hence, the Writ Petition.
This Court, on 22.03.2018, while admitting the Writ Petition, granted an interim direction directing the official respondents 1 to 3, not to grant mining lease to the fourth respondent over the subject land.
Counter affidavit along with vacate stay petition has been filed by the first respondent on 19.04.2018. In the affidavit filed in support of the vacate stay petition, it is stated, inter alia, that the petitioner did not commence the operations pursuant to prospecting license and on 19.01.2002 the petitioner filed an application seeking renewal of prospecting license and that the petitioner has applied for mining lease on 21.05.2008; Under Rule 11(2)(b) of Mineral Concession Rules, 1960 the application for renewal of prospecting license shall be disposed of by the State Government before the expiry of the period of prospecting license and if the application is not disposed of within that period the license shall be deemed to have been renewed for a period not exceeding the period prescribed for renewal of prospecting license under Sub-section (2) of Section 7 of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter called as 'the Act of 1957') or the period for which an application is made whichever is less; but, the files could not be traced and the process of application of the petitioner was stalled; as per Rule 7 of the Mineral (other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016, the rights of a holder of prospecting license to obtain a mining lease are dealt with. According to said Section 7(1), the holder of a prospecting license granted (i) prior to January 12, 2015 or (ii) pursuant to Rule 5 may upon fulfillment of the conditions specified in sub-clause (iv) of Clause (b) of Sub-Section (2) of 4 KVL, J WP No.9268 of 2018 Section 10A, make an application to the State Government for grant of mining lease in the format specified in Schedule VI, within a period of three months after the expiry of the prospecting license, or within such further period not exceeding six months as may be extended by the State Government; the petitioner's prospecting license expired on 27.04.2004 and the petitioner has not filed an application for grant of mining lease within the period of three months, after the expiry of the prospecting license or within such period not exceeding six months as may be extended by the State Government; the petitioner applied for mining lease on 21.05.2008 and the prospecting report was submitted on 05.06.2008. Section 11(1) of the Act of 1957, prior to the amendment by Act 10 of 2015, reads as follows.
"11. Preferential right of certain persons:- (1) Where a reconnaissance permit or prospecting license has been granted in respect of any land, the permit holder or the licensee shall have a preferential right for obtaining a prospecting license or mining lease, as the case may be, in respect of that land over any other person."
The petitioner has failed to apply for grant of mining lease within three months after the expiry of prospecting license and accordingly the petitioner lost his preferential right for grant of mining lease over the subject area; pursuant to the amendment by Act 10 of 2015, all applications received prior to the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 shall become ineligible, hence the petitioner's application became ineligible as per the Act; subsequent to the notification, e-auction was conducted over the subject area and the Government vide memo dated 30.10.2017 issued letter of intent in favour of the fourth respondent. 5
KVL, J WP No.9268 of 2018 Counter affidavit along with vacate stay petition was also filed by the fourth respondent stating, inter alia, that a combined reading of Rule 11(2) (b) of Mineral Concession Rules, 1960 and Sub-Section (2) of Section 7 of the Act would mean that, an application for renewal, if not disposed of before the date of expiry of the prospecting license, it shall be deemed to have been granted for either the period for which the application is made for, for which, in the case on hand is two years, as per the request letter dated 15.01.2002, which period is to expire on 27.04.2004 or for the period prescribed under Section 7(2) of the Act, which imposes a condition that the total period under which a prospecting license can be issued is a maximum of five years, which therefore would mean that the grant period would have to be completed by 27.04.2005, since it was executed on 28.04.2000; As the Rule further says, "whichever is less", the deeming provision in the case of the petitioner has lapsed on 27.04.2004, therefore as on the date of making the mining lease application on 21.05.2008 or the date of the Mines and Minerals (Development and Regulation) Amendment Act of 2015 coming into force on 12.01.2015 or the date on which a notification for auction of the subject area was issued on 17.07.2017 the petitioner was not holding any prospecting license; the contention that the mining lease application dated 21.05.2008 is pending consideration is also not correct, as according to Section 10A(1) specifically provides that all the applications received prior to the date of commencement of the Amendment Act shall become ineligible and there are certain exceptions carved out under Sub-Section (2) of Section 10A, but the petitioner cannot be brought under special exceptions provided under Sub- Section(2)(b) of Section 10A for the reason that the prospecting license 6 KVL, J WP No.9268 of 2018 granted in favour of the petitioner has lapsed as far back as on 27.04.2004 and therefore, the petitioner is no longer a licensee; the correspondence made by the petitioner with the Department is after the date of notification; the fourth respondent was requested to pay first installment of upfront payment and they have paid the first installment on 03.10.2017 and a letter of intent was also issued to the fourth respondent on 31.10.2017 and basing on the said letter of intent, an application was made on 19.02.2018 for grant of environmental clearance and the same was rejected on the ground of pendency of Writ Petition and prayed to dismiss the Writ Petition.
Learned counsel for the petitioner Sri T. Sreedhar contends that the application of the petitioner for mining lease does not become ineligible according to Section 10(A)(1) of the Act of 1957 and that it comes under the exceptions provided under Section 10-A (2)(b). Basing on the combined inspection report he submits that the application for renewal of prospecting license was misplaced by the Department and that it was recommended to grant renewal even on 04.07.2008 and that the petitioner applied for conversion of prospecting license to mining lease vide letter dated 21.05.2008 and hence the same is within time. He further contends that the Government did not say that its application is ineligible. He further contends that even after the auction balance left over area is there and that it may be granted to the petitioner. He also contends that no notice and opportunity has been given to the petitioner before issuing the auction notice and the impugned memo.
Learned Advocate-General Mr. S. Sriram, appearing for the official respondents, submits that the fourth respondent does not have any right to carry on the business and that the policy of the Government is to 7 KVL, J WP No.9268 of 2018 grant prospecting license-cum-mining lease through auction and that some of the rights of the prospecting licensees were protected under Section 10A of the Act of 1957, but the petitioner's application is not protected under the said Section. He further submits that the documents relied upon by the petitioner are only recommendation letters and no renewal as such has been granted and by operation of law the right, if any of the petitioner, got extinguished.
Learned counsel for the fourth respondent, while reiterating the contents of the counter affidavit, submits that the Government memo dated 25.03.2018 is not challenged by the petitioner through which the petitioner was informed that their application cannot be considered in view of Section 10A(1) of the Mines and Minerals (Development and Regulation) Act, 2015. He further contends that the letter of the Director of Mines and Geology dated 14.03.2012 to the Principal Secretary to the Government and the letter dated 23.04.2012 addressed by the Director of Mines and Geology to the petitioner are not recommendation letters as contended by the learned counsel for the petitioner and that the letters addressed by the petitioner dated 19.09.2017 and 08.11.2017 are subsequent to e-auction notification. He further contends that there is no pending application as on the date of amendment Act 10 of 2015.
In the light of the above pleadings and contentions, it has to be examined whether the petitioner's application for grant of mining lease should have been considered or not.
Rule 11 of The Mineral Concession Rules, 1960, which are framed by exercising powers conferred under Section 13 of the Act of 1957, deals with disposal of application for the grant and renewal of prospecting licence.
8
KVL, J WP No.9268 of 2018 Sub-Rule 2(b) of Rule 11 of the said Rules reads as follows.
"An application for the renewal for a prospecting licence shall be disposed of by the State Government before the expiry of the period of prospecting licence and if the application is not disposed of within that period, the licence shall be deemed to have been renewed for a period not exceeding the period for renewal of prospecting licence under sub-section (2) of section 7 of the Act, or the period for which an application is made, whichever is less."
Section 7 of the Act of 1957 deals with periods for which prospecting licences may be granted or renewed.
Section 7(2) of the said Act, inter alia, provides as under.
"A prospecting licence shall, if the State Government is satisfied that a longer period is required to enable the licensee to complete prospecting operations be renewed for such period or periods as that Government may specify:
Provided that the total period for which a prospecting licence is granted does not exceed five years."
A conjoint reading of the above provisions would mean that if an application for renewal is not disposed of before the date of expiry of the prospecting licence it shall be deemed to have been granted either for the period for which application is made or for the period prescribed under Section 7(2) of the Act of 1957 and in the present case a request was made by the petitioner vide letter dated 15.01.2002 for a period of two years and according to the said letter, the period for which the application is made would expire on 27.04.2004. But, according to Section 7(2) of the Act of 1957, the total period for which a prospecting licence can be issued is maximum of five years, according to which the grant period would have been completed by 27.04.2005, since it was executed on 28.04.2000. Rule 11(2)(b) of the Minerals Concession 9 KVL, J WP No.9268 of 2018 Rules, 1960, uses the word "whichever is less" and hence according to the deeming provision, period has lapsed on 27.04.2004 and not on 27.04.2005. In view of the same, as on the date of making of mining lease application on 21.05.2008 or on the date of Mines and Minerals (Development and Regulation) Amendment Act 2015 which came into force on 12.01.2015, the petitioner was not holding any prospecting licence.
Rule 7 of the mineral (other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 deals with rights of a holder of a prospecting licence to obtain a mining lease. The said Rule 7(1) reads as follows.
"7. Rights of a holder of a prospecting licence to obtain a mining lease.- (1) The holder of a prospecting licence granted (i) prior to January 12, 2015, or (ii) pursuant to rule 5 may, upon fulfilment of the conditions specified in sub-clause (i) to sub-clause (iv) of clause (b) of sub-section (2) of Section 10A, make an application to the State Government for grant of a mining lease in the format specified in Schedule VI, within a period of three months after the expiry of the prospecting licence, or within such further period not exceeding six months as may be extended by the State Government."
But, in the present case, according to the deeming provision, the prospecting licence lapsed on 27.04.2004 and the mining lease application was made on 21.05.2008 and hence the application of the petitioner for grant of mining lease is beyond the period of three months after the expiry of the prospecting licence.
10
KVL, J WP No.9268 of 2018 Section 11(1)(a)(b)(c) and (d) of the Act of 1957, prior to the amendment by virtue of Act 10 of 2015, reads as follows.
"11. Preferential right of certain persons.- (1) Where a reconnaissance permit or prospecting licence has been granted in respect of any land, the permit holder or the licensee shall have a preferential right for obtaining a prospecting licence or mining lease, as the case may be, in respect of that land over any other person:
Provided that the State Government is satisfied that the permit holder or the licensee, as the case may be,-
(a) Has undertaken reconnaissance operations or prospecting operations, as the case may be, to establish mineral resources in such land;
(b) Has not committed any breach of the terms and conditions of the reconnaissance permit or the prospecting licence;
(c) Has not become ineligible under the provisions of this Act; and
(d) Has not failed to apply for grant of prospecting licence or mining lease, as the case may be, within three months after the expiry of reconnaissance permit or prospecting licence, as the case may be, or within such further period, as may be extended by the said Government."
The petitioner failed to apply for grant of mining lease within three months after the expiry of prospecting licence and hence he cannot claim any preferential right for grant of mining lease, even according to un-amended section 11 of the Act of 1957.
Section 10A(1) of Act of 1957 reads as follows.
"10A. Rights of existing concession-holders and applicants.- (1) All applications received prior to the date of commencement of the Mines and Minerals 11 KVL, J WP No.9268 of 2018 (Development and Regulation) Amendment Act, 2015, shall become ineligible."
Hence, all applications received prior to the Amendment Act 10 of 2015 i.e., 12.01.2015 shall become ineligible. However, certain exceptions are carved out under sub-section 2 of Section 10A, which inter alia reads as follows.
"(2) Without prejudice to sub-section (1), the following shall remain eligible on and from the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015:--
(a) applications received under section 11A of this Act;
(b) where before the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 a reconnaissance permit or prospecting licence has been granted in respect of any land for any mineral, the permit holder or the licensee shall have a right for obtaining a prospecting licence followed by a mining lease, or a mining lease, as the case may be, in respect of that mineral in that land, if the State Government is satisfied that the permit holder or the licensee, as the case may be, --
(i) has undertaken reconnaissance operations or prospecting operations, as the case may be, to establish the existence of mineral contents in such land in accordance with such parameters as may be prescribed by the Central Government;
(ii) has not committed any breach of the terms and conditions of the reconnaissance permit or the prospecting licence;
(iii) has not become ineligible under the provisions of this Act; and
(iv) has not failed to apply for grant of prospecting licence or mining lease, as the case may be, within a period of three months after the expiry of reconnaissance permit or 12 KVL, J WP No.9268 of 2018 prospecting licence, as the case may be, or within such further period not exceeding six months as may be extended by the State Government;
(c) ....................."
The petitioner's case does not fall under the exceptions provided under Section 10A(2) of the Act of 1957, as the prospecting licence of the petitioner lapsed on 27.04.2004 and the petitioner is no longer a licensee and the words used under Section 10A(2) are that "the permit holder or the licensee shall have a right for obtaining a prospecting licence followed by a mining lease".
The letter relied upon by the petitioner dated 14.03.2012 addressed by the Director of Mines and Geology to the Principal Secretary to Government is not a recommendation letter as contended by the petitioner. He only referred to the letters of Assistant Director of Mines and Geology and Zonal Joint Director of Mines and Geology. Apart from that, recommendation to renew prospecting licence will not amount to granting renewal of prospecting licence. Apart from that, as discussed in the previous paras, period of prospecting licence is over in 2004 itself according to the petitioner's application and deeming provisions.
Hence, the case of the petitioner cannot be brought under the exceptions provided under sub-section 2(b) of Section 10A of the Act, as the prospecting licence which was granted in favour of the petitioner elapsed on 27.04.2004 and the petitioner cannot be called as a licensee. Application of the petitioner for grant of mining lease is dated 10.05.2008, but the acknowledgment is dated 21.05.2008. And, the letter of the petitioner dated 16.04.2011, which was acknowledged on 23.04.2011, reads as follows.
13
KVL, J WP No.9268 of 2018 "Meanwhile, we have also applied for conversion of prospecting licence (PL) to mining lease (ML) vide letter dated 21.05.2008. In said application we have applied for an extent of 288.87 acres as the PL was granted for the same extent.
However, recently we have undertaken contour survey of the area as per PL sketch by total station for preparation of mining plan. In accordance with the latest requirements of Indian Bureau of Mines (IBM), we have entrusted the work of taking DGPS readings of lease area to M/s. Techdatum Info Services Pvt. Limited. The total station readings, DGPS readings with Cadastral Maps as per the approved sketch were superimposed on latest high-resolution satellite data (cloud-free) obtained from NRSC. The above said surveys revealed that USHB of Erragudi covered by the sketch is about 299-300 acres against 200 acres arrived initially with manually survey at the time of PL application. (cadastral Maps, Cortostat-2, Superimposed drawing on Satellite image enclosed as Annexure-III and IV).
If we restrict USHB area to 200 acres, there would be significant change in the shape and difference in boundary readings. On the other hand if the stick to the grant sketch the physical area comes to 299-300 acres.
In view of the above, we wish to bring to your kind attention that there is a difference of acres 100 acres in the actual physical area as represented in the sketch and the grant area. In this context, we wish to take the actual area represented by the sketch which is about 156.26 Hectares or 387.52 acres. Therefore, we request you to consider our representation and do the needful in this regard."
Pursuant to that request of the petitioner, a letter has been addressed by the Zonal Joint Director of Mines and Geology to the Assistant Director on 21.06.2011 to cause inspection and survey. 14
KVL, J WP No.9268 of 2018 Prospecting Licence deed was executed on 28.04.2000 and the deemed extended period also expired on 27.04.2004. Petitioner applied for mining lease vide application dated 10.05.2008, after a delay of more than three years. Hence, as on the date of application, his status is as that of any other fresh applicant. Hence, the application falls under Section 10A(1) and not under Section 10A(2) of the Act.
His yet another contention is that the petitioner's application is not rejected on the ground that it is ineligible. But, as seen from the impugned memo dated 25.03.2018, though it is not specifically stated that it is ineligible, it states that application of the petitioner cannot be considered in view of Section 10(A)(1) of the Act of 1957. Petitioner is also not entitled for the balance left over land after the auction, as it is ineligible under Section 10A(1) of the Act of 1957. Even though it is contended that no notice is given to the petitioner before issuing the memo dated 25.03.2018 and auction, no notice is required to the petitioner before issuing the auction notice, as the Act or the Rules does not contemplate issuance of such notice. The said memo dated 23.03.2018 was issued pursuant to the application of the petitioner dated 21.05.2008 stating that the application of the petitioner cannot be considered in view of Section 10A(1) of the Mines and Minerals (Development and Regulation) Amendment Act, 2015. But, the same is not challenged. As discussed above, by operation of law the right of the petitioner is extinguished and the petitioner's application does not come under Section 10A(2)(b) of the Act of 1957.
As seen from the counter affidavit filed by the fourth respondent it has participated in the e-auction and has been declared as a preferred bidder with final price of 10.6% value of mineral despatched and vide 15 KVL, J WP No.9268 of 2018 letter dated 26.09.2017 it was asked to pay the first instalment of 10% of upfront payment i.e., Rs.22,00,000/- on or before 26.10.2017 and accordingly the said payment was made for Erragudi - Hussainapuram - Yenkandla Limestone Block vide challan dated 03.10.2017. And as seen from the Government Memo dated 30.10.2017, which is filed along with the counter affidavit of the Government, the Government has decided to issue the letter of intent in favour of the fourth respondent in terms of Rule 10(2) of Mineral (Auction) Rules, 2015 as it is the successful bidder. As certain errors have crept in, an errata was also issued on 07.12.2017 and based on the letter of intent issued by the State of Andhra Pradesh an application was made on 19.02.2018 for grant of environmental clearance, but the same was rejected on the ground of pendency of the present Writ Petition with an observation that the fourth respondent can apply afresh after disposal of the Writ Petition.
In view of the facts and circumstances of the case, I see no merit in the Writ Petition and the same is, accordingly, dismissed. There shall be no order as to costs.
As a sequel thereto, the miscellaneous petitions, if any, pending in this Writ Petition shall stand closed.
_________________________ KONGARA VIJAYA LAKSHMI, J Date: 29th January 2021 Nsr 16 KVL, J WP No.9268 of 2018 HON'BLE SMT JUSTICE KONGARA VIJAYA LAKSHMI Writ Petition No.9268 of 2018 Date: January 2021 Nsr