Madhya Pradesh High Court
Ultratech Cement Ltd. vs The State Of Madhya Pradesh on 4 August, 2014
Bench: A.M.Khanwilkar, Alok Aradhe
1
HIGH COURT OF MADHYA PRADESH
PRINCIPAL SEAT AT JABALPUR
Writ Petition No.11918/2011
Ultratech Cement Limited
Vs.
State of Madhya Pradesh and others
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Coram
Hon'ble Mr.Justice A.M.Khanwilkar, Chief Justice
Hon'ble Mr.Justice Alok Aradhe
Date of Hearing: 18/07/2014
Date of the Order: /08/2014
Whether approved for reporting? Yes
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Mr. Siddharth Gupta, learned counsel for the petitioner.
Mr.Samdarshi Tiwari, learned Government Advocate for the
respondent No.1.
None for the respondent No.2.
Mr.A.K.Sanghi, learned counsel for respondent No.3.
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O R D E R
( 04/08/2014) As per :Alok Aradhe,J
1. In this writ petition under Article 226 of the Constitution of India the petitioner, inter alia, seeks quashment of orders dated 16.9.2008 and 14.6.2011 passed by the State Government and Central Government respectively. The petitioner also seeks a writ of mandamus for directing the State Government to grant mining lease over the area in question to the petitioner. The petitioner has also prayed for an alternative relief by way of writ of mandamus seeking a direction to the respondents to re-hear and decide the various applications for grant of mining lease over the area in question.
2. The facts leading to filing of the writ petition lie in a narrow compass. On 02.3.2007 the State Government issued a notification inviting applications for grant of mining lease in 2 respect of an area admeasuring 2451.754 hectares situated in various villages in district Satna. In the aforesaid notification it was mentioned that preference will be given to the applicants who are willing to set up big industries on the basis of available minerals. In response to the aforesaid notification, 24 applicants including the petitioner and respondent no.3, submitted the applications for grant of mining lease. The petitioner submitted an application for grant of mining lease on 30.3.2007, whereas the respondent No.3 submitted its applications on 15.2.2007 and 02.4.2007. The State Government on 18.9.2007 afforded an opportunity of personal hearing to all the applicants including the petitioner and respondent No.3. Thereafter, by communication dated 06.6.2008, the applicants were asked to submit their written submissions. In pursuance of aforesaid communication, the petitioner submitted its written submissions. The State Government vide order dated 16.9.2008 recommended for grant of mining lease in favour of respondent No.3 and sought approval/relaxation of the Central Government under section 6 of Mines and Minerals (Development and Regulation) Act, 1957 [hereinafter referred to as the 'Act')]. Being aggrieved by the aforesaid order the petitioner filed a revision under section 30 of the Act read with Rule 54 of Minerals Concession Rules, 1960 [for short "Rules"]. The Central Government vide order dated 14.6.2011 dismissed the revision preferred by the petitioner. In the aforesaid factual background the petitioner has approached this Court.
3. Learned counsel for the petitioner submitted that hearing before the State Government took place on 18.9.2007 and thereafter by communication dated 06.6.2008 the State Government required various applicants to submit the written submissions, pursuant to which, the petitioner submitted its detailed written submissions. Yet, the State Government ignoring the written submissions chose to 3 decide applications on the basis of oral arguments after a period of one year from the date of hearing of the arguments. Thus, there was unreasonable delay between hearing of the arguments and delivery of the order. Rule 63A of the Rules was brought to our notice to contend that an application for mining lease should be disposed of within 12 months from the date of receipt of such an application. Second proviso to aforesaid rule mandates that the State Government shall give reasons for delay in writing, if the application so filed for grant of mining lease is not disposed of within the time limit stipulated under Rule 63A(c) of the Rules. Therefore, the delay in passing the impugned order is arbitrary and deserves to be quashed. In this connection, reference was made to the decision of Supreme Court in the case of Anil Rai and another vs. State of Bihar , (2001) 7 SCC 318 and Jagarnath Singh and others vs. Francis Kharia and others, AIR 1948 Patna 414.
4. It was further submitted that the authority dealing with the application for grant of mining lease is under an obligation to assign reasons for rejection of the application in view of Rule 26 of the Rules, which has not been done in the instant case, and the application submitted by the petitioner has been rejected in mechanical manner without even referring to the contents of written submission. It was also submitted that the rejection of application of the petitioner is contrary to statutory mandate contained in Section 11(3) of the Act as well as Rule 35 of the Rules. For the aforesaid proposition, reliance was placed on the decisions of Supreme Court in the cases of C.I.T. vs. Anjum M.H. Ganswala, (2002) 1 SCC 633 and Captain Sube Singh vs. Lt.Governor of Delhi, (2004) 6 SCC 440. It was further argued that the mining lease has been granted to the respondent No.3 on irrelevant considerations by the State Government. In this connection reference has been made to the decisions of the Supreme Court in Sandoor Manganese 4 and Iron Ores Limited vs. State of Karnataka and others, (2010) 13 SCC 1 and Union of India vs. Sandur Manganese and iron Ores Limited and others, (2013) 6 SCALE 257. It was further urged that the order passed by the revisional authority is ex facie unsustainable and the orders passed by the State Government and Central Government suffer from manifest error on record. Therefore, the impugned orders, in exercise of powers under Article 226/227 of the Constitution of India, are liable to be quashed. In this connection reliance has been placed on a decision in Kalinga Mining Corporation vs. Union of India, (2013) 5 SCC 252.
5. Learned counsel for the respondent No.1 has supported the impugned orders. Learned counsel for respondent No.3 at the outset raised an objection with regard to maintainability of the petition on the ground that the order passed by the Mines Tribunal is a quasi judicial order and, therefore, the petitioner ought to have filed a writ petition under Article 227 of the Constitution of India and the writ petition under Article 226 is not maintainable. In support of aforesaid submission, reliance is placed on the decision of a Division Bench of High Court of Jharkhand in Murliwala Minerals Pvt. Ltd. vs. Union of India, 2014 (2) J.L.J.R.
611. It is also pointed out that no ground has been mentioned in the writ petition to show as to how the order passed by the Mines Tribunal is illegal, so as to warrant interference of this Court in exercise of power under Article 227 of the Constitution of India. An objection with regard to territorial jurisdiction of this Court has also been taken on the ground that the impugned order dated 14.6.2011 ought to have been challenged before Delhi High Court. It is also urged that after the impugned order dated 14.6.2011, the State Government has passed an order granting the area in question to the respondent No.3 and the mining lease has also been executed in favour of the respondent No.3, which 5 has not been challenged and, therefore, the writ petition is liable to be dismissed.
6. It is further submitted that since the writ petition has been filed against the order of recommendation in favour of respondent No.3 for grant of mining lease, which has been upheld by the Central Government, therefore, the writ petition is premature. It is also submitted that this Court under Article 226 of the Constitution of India cannot act as a fact finding body and since the orders passed by the State Government as well as the Central Government are based on the relevant and material evidence adduced before the Tribunal, therefore, no interference is called for, and this Court in exercise of power under Article 226 cannot act as a Court of Appeal. It was urged that there is no scope of judicial review as new grounds were urged in the writ petition which were not urged before the revisional authority and, therefore, in view of principle of constructive res judicata the petitioner cannot be permitted to raise new grounds. It is also urged that decision to allow or reject an application for grant of mining lease is the prerogative of the State Government based on the interest of the State Government and the petitioner has failed to show any infirmity in the order passed, either by the State Government or the Central Government, warranting interference of this Court in exercise of power under Article 226 of the Constitution of India.
7. It was argued that even failure to record reasons for rejection of an application is acceptable as long as reasons are revealed at the revisional stage before the Central Government and the Rule 26 of the Rules is directory, and not the mandatory in nature. It is also argued that on the touchstone of criteria laid down under section 11(4) read with section 11(3) of the Act and taking into account the special knowledge of the experience as well as the available 6 resources and availability of the technical staff with the respondent No.3, the authorities have taken a decision to grant mining lease in favour of respondent no.3. It is also urged that Corporate veil of the holding company and its subsidiary company may pierced to reveal that they are two different concerns. Lastly, it is urged that the writ petition suffers from the vice of non-joinder of necessary party, as 22 applicants who had submitted applications for grant of lease have not been impleaded. In support of aforesaid submissions, reliance has been placed on the decisions in the cases of Geomin Mineral & Marketing (P) Ltd. vs. State of Orissa and others, AIR 2013 SC 2438, Harjinder Singh vs. Punjab State Warehousing Corporation, AIR 2010 SC 1116, M.P. Mineral Supply Co. Vs. Government of India, 2002 (4) MPLJ 60, Surya Dev Rai (supra), Ranjeet Singh vs. Ravi Prakash, (2004) 3 SCC 682, Abdul Razak (D) through L.Rs. and others Vs. Mangesh Rajaram Wagle and others, (2010) 2 SCC 432, Radhey Shyam and another vs. Chhabi Nathe and others, (2009) 5 SCC 616, Shalini Shyam Shetty vs. Rajinder Shankar Patil, (2010) 8 SCC 329, Shankara Coop. Housing Society Ltd. Vs. M. Prabhakar and others, (2011) 5 SCC 702, Kashiram Pandurang Rajguru vs. Maharashtra Revenue Tribunal, Bench at Nagpur and others, [ILR 1966 Bom.228], Dharambir Singh vs. Union of India and others, (1996) 6 SCC 702, Monnet Ispat and Energy Ltd. vs. Union of India and others, (2012) 11 SCC 1, Gem Granites vs. State of Tamil Nadu, 2010 (5) CTC 882, Exotic Granite Exports vs. The Government of Andhra Pradesh, 2009 (5) ALT 200, Brahmi Impex Limited, Kolkata vs. State of Jharkhand and others, 2012 (1) JCR 116 (Jhr.), Mineral Mining Co.Pvt. Ltd. v. State of Madhya Pradesh, Natural Resources Department, AIR 1968 MP 17, Ashapura Minechem Ltd. vs. Union of India and others, 176 (2011) DLT 327, S.L.Kapoor vs. Jag Mohan, AIR 981 SC 136, New Horizon Ltd. vs. Union of India, (1995) 1 SCC 478, State of 7 U.P. vs. Renusagar Power Co. & others, AIR 1988 SC 1737. Shriram Jhunjhunwala vs. State of Bombay and others, AIR 1962 SC 670, Collector of Customs, Calcutta vs. East India Commercial Co. Ltd. AIR 1963 SC 1124, S.S. Rathore vs. State of Madhya Pradesh, AIR 1990 SC 10, State of Orissa and others vs. Mesco Steels Ltd. And another, (2013) 4 SCC 340.
8. We have considered the respective submissions made by learned counsel for the parties. In M.P. Industries Ltd. vs. Union of India and others, AIR 1966 SC 671, the Supreme Court after taking note of Rules 54 & 55 of the Rules held that the Central Government is constituted as a tribunal to decide the revision, and while deciding the revision it is under an obligation to assign reasons. In Bhagat Raja vs. Union of India, AIR 1967 SC 1606 the Constitution Bench of the Supreme Court dealt with the question whether it is necessary for the Central Government while deciding revision to assign reasons and it was held that since the Central Government exercises quasi judicial powers, therefore, it is duty bound to assign reasons. The Supreme Court in Associated Cement Companies Limited vs. P.N.Sharma, AIR 1965 SC 1595 has held that, when the law under which the authority is making a decision itself requires judicial approach, the decision will be quasi judicial.
9. The Supreme Court while dealing with the question whether an award passed under section 10A of Industrial Disputes Act, 1947 is insulated from interference under Article 226 of the Constitution of India, in the case of Rohtas Industries Limited vs. Rohtas Industries Staff Union, 1976 (2) SCC 82, placing reliance on the constitution Bench judgment in the case of Engineering Mazdoor Sabha and another vs. Hind Cycles Ltd. AIR 1963 SC 874 has held that writ of certiorari can be issued under Article 226 against the orders of the Courts and Tribunals. It is equally 8 well settled legal proposition that if an authority exercises quasi judicial powers, its decisions are subject to jurisdiction of this Court under Article 226 of the Constitution of India and the role of this Court is limited to examine the question whether the orders suffer from manifest error, or if they are allowed to stand, the same will amount to perpetuation of grave injustice. It is equally well settled law that this Court while exercising jurisdiction in such matters cannot act as an appellate authority. [See: Nagendra Nath Bora and another vs. Commissioner of Hills Division and Appeals, Assam and others, AIR 1958 SC 398, M/sPioneer Traders vs. Chief Controller, AIR 1963 SC 734 and Ashok Kumar and others vs. Sita Ram, AIR 2001 SC 1692.
10. In the instant case the petitioner has sought a writ of certiorari as well as writ of mandamus. The Supreme Court in the case of Surya Dev Rai vs. Ram Chander Rai and others, (2003) 6 SCC 675 has held that any authority or the body of persons constituted by law or having legal authority to adjudicate upon the questions affecting the rights of a subject and enjoined with a duty to act judicially or quasi judicially, is amenable to the certiorari jurisdiction of the High Court. It has further been held that distinction between two jurisdiction stands almost obliterated in practice. The view taken in Surya Dev Rai (supra) has been relied in the case of Mani Raju vs. State of Karnataka, (2008) 4 SCC
451. Therefore, we are not inclined to accept the view taken by Jharkhand High in the case of Murliwala Minerals Pvt. Ltd. (supra). For the aforementioned reasons, in our considered opinion the writ petition filed by the petitioner under Article 226 of the Constitution of India is maintainable.
11. Now, we shall deal with the objection with regard to maintainability of the writ petition in the absence of challenge to the order granting mining lease in favour of the respondent No.3. In the instant writ petition, the petitioner 9 has challenged the validity of the recommendations made in favour of respondent No.3 for grant of mining lease. The aforesaid order has been upheld by the Central Government in exercise of revisional powers under section 30 of the Act, pursuant to which, the State Government has issued consequential order of grant of lease in favour of respondent No.3 and subsequently mining lease has been executed in favour of respondent No.3. However, the petitioner has not assailed the aforesaid order. The Supreme Court in the case of Banglore Development Authority vs. M/s.Vijaya Leasing Ltd. and others, AIR 2013 SC 2417 while dealing with powers of the High Court under Article 226 of the Constitution of India to correct errors which are apparent on the face of record, though not specifically challenged by a party, held that the Court while exercising power under Article 226 can reach injustice wherever it is found and upheld the action of the High Court in quashing a notification which was not challenged, before it. While placing reliance on the decision in the case of Dawarkanath vs. Income Tax Officer, AIR 1966 SC 81 it was held that Article 226 also enables the High Courts to mould the reliefs. Similarly, in the case of State of Kerala vs. Puthenkavu. S.. Karayogam and another, (2001) 10 SCC 191 the Supreme Court has held that once the main order is quashed, the order consequently made pursuant to main order, would automatically vanish. Therefore, we hold that writ petition cannot be held to be not maintainable in the absence of challenge to consequential order passed by the State Government in granting lease to respondent no.3.
12. So far as the objection raised by respondent No.3 with regard to non-joinder of 22 applicants who had submitted applications for grant of mining lease is concerned, the aforesaid objection deserves to be mentioned to be rejected, as aforesaid 22 applicants were not parties before the Central Government. The respondent No.3 in the return has 10 not raised an objection in this regard. Therefore, the respondent No.3, for the first time, cannot be permitted to raise a new plea in the instant writ petition. There is no material on record to show that aforesaid 22 applicants, whose applications were rejected, had ever challenged the order before the Central Government. Thus, their absence in the instant writ petition is of no consequence. Accordingly, we hold that writ petition does not suffer from the vice of non-joinder of necessary parties.
13. The respondent No.3 has also raised an objection with regard to territorial jurisdiction of this Court. It is well settled in law that after amendment of Article 226 of the Constitution in the year 1962, the writ petition can now be instituted in the High Court within the territorial jurisdiction of which, cause of action, in whole or in part, has arisen. [See: Alchemist Limited and another vs. State Bank of Sikkim and others, (2007) 11 SCC 335]. In the instant case, the land in question over which the mining rights are being claimed is situated within the territorial jurisdiction of this Court. Similarly, the order has been passed by the State Government within the territorial jurisdiction of this Court. Thus, the part of cause of action has arisen within the territorial jurisdiction of this Court and, therefore, the objection raised in this regard is rejected.
14. Sections 11(3) and 11(4) of the Act read as under:-
"11. Preferential right of certain persons.-
(3) The matters referred to in sub-section (2) are the following:-
(a) any special knowledge of, or experience in, reconnaissance operations, prospecting operations or mining operations, as the case may be possessed by the applicant;
(b) the financial resources of the applicant;11
(c) the nature and quality of the technical staff employed or to be employed by the applicant;
(d) the investment which the applicant proposes to make in the mines and in the industry based on the minerals.
(e) Such other matters as may be prescribed.
(4) Subject to the provisions of sub- section (1), where the State Government notifies in the Official Gazette an area for grant of reconnaissance permit, prospecting licence or mining lease, as the case may be, all the applications received during the period as specified in such notification, which shall not be less than thirty days, shall be considered simultaneously as if all such applications have been received on the same day and the State Government, after taking into consideration the matters specified in sub-
section (3), may grant the reconnaissance permit, prospecting licence or mining lease, as the case may be, to such one of the applicants as it may deem fit.
Rule 26 of the Rules which deals with refusal of application for grant and renewal of mining lease reads as under:-
"26. Refusal of application for grant and renewal of mining lease.- (1) The State Government may, after giving an opportunity of being heard and for reasons to be recorded in writing and communicated to the applicant, refuse to grant or renew a mining lease over the whole or part of the area applied for.
(2) An application for the grant or renewal of a mining lease made under rule 22 or rule 24A, as the case may be, shall not be refused by the State Government only on the ground that Form I or Form J as the case may be, is not complete in all material particulars, or is not accompanied by the documents referred to in sub-clauses (d),
(e), (f), (g) and (h) of clause (i) of sub-rule
22. 12 (3) Where it appears that the application is not complete in all material particulars or is not accompanied by the required documents, the State Government shall, by notice, require the applicant to supply the omission or, as the case may be, furnish the documents, without delay and in any case not later than third days from the date of receipt of the said notice by the applicant."
15. From conjoint reading of the relevant extract of Section 11 of the Act and Rule 26 of the Rules, it is evident that State Government has to take into account the factors mentioned in sub-section (3) of Section 11 while granting the mining lease and has to record reasons for refusal to grant mining lease. In Sandur Manganese & Iron Ores Limited (supra) the Supreme Court has held that once an area is notified for regrant, applications are invited from public for grant of mining lease, the applications must be disposed of in terms of provisions of the Act and the Rules and not de hors the same. The State does not have any power to frame any policy de hors the Act. In other words the State Government is required to evaluate the merits and de-merits of the respective applications while taking decision to grant mining lease. The duty to give reasons "is function of due process" and therefore of justice. Its rationale has two principal aspects. The first is that fairness surely requires that the parties- especially the losing party- should be left in no doubt why it has won or lost.- The second is that a requirement to give reasons concentrates the mind and if it is fulfilled, the resulting decision is much more likely to be soundly based. [See: Flanery vs. Halifax Estate Agencies Ltd., (2000) 1 All ER 373.-Principles of Statutory Interpretation by Justice G.P. Singh, 13 t h Edition Page 454]. The Supreme Court has held that people must have confidence in the judicial or quasi judicial authorities. While emphasizing the need for assigning reasons, it was held that giving of reasons minimizes the chances of arbitrariness and 13 hence, it is an essential requirement of the rule of law. [See: S.N. Mukherjee v. Union of India, (1990) 4 SCC 594]. Similarly, in Secretary and Curator, Victoria Memorial Hall v. Howrah Ganatantrik Nagrik Samity and Others, (2010) 3 SCC 732, it has been held by the Supreme Court that reason is the heartbeat of every conclusion. Absence of reasons renders the order indefensible/ unsustainable particularly when the order is subject to further challenge before a higher forum. It has further been held that recording of reasons is a principle of natural justice. It ensures transparency and fairness in decision making. Therefore, the impugned order has been passed contrary to the statutory mandate contained in Section 11(3) of the Act and Rule 26 of the Rules as well as in violation of principles of natural justice. Therefore, it cannot be sustained in the eye of law.
In the instant case, from perusal of paragraph 8.4 of the order passed by State Government it is axiomatic that the State Government has failed to assign reasons for rejection of the application of the petitioner by comparing the merits and de-merits of cases of other applicants qua the petitioner. The State Government has also not taken into account the material furnished by the petitioner alongwith the written submissions, while rejecting the applications submitted by the petitioner. No reasons worth the name have been recorded by the State Government except stating that application of the petitioner is not found suitable under section 11(3) of the Act.
16. At this stage, we may advert to the issue of unexplained delay between hearing of the arguments and passing of the order by the State Government. From perusal of paragraph 8 of the order dated 16.9.2008 passed by State Government it is evident that hearing in the matter was conducted on 18.9.2007. Thereafter by communication dated 06.6.2008, the applicants were asked to submit their written 14 submissions. The petitioner in compliance of aforesaid communication submitted its written submissions. However, from paragraph 8 it is also evident that State Government took a decision to decide the applications for grant of mining lease on the basis of hearing which took place on 18.9.2007. In other words, the written submissions filed by the applicants including the petitioner were discarded. The relevant extract of Rule 63A of the Rules reads as under:-
"63A. The State Government shall dispose of the application for grant of reconnaissance permit, prospecting license or mining lease in the following period:-
(c ) Mining Lease- within twelve months from the date of receipt of the application for mining lease under rule 22 Provided that the aforesaid periods shall be applicable only if the application for reconnaissance permit, prospecting lilcense or mining lease, as the case may be, is complete in all respects:
Provided also that in case the State Government is not able to dispose of the application for grant of reconnaissance permit, prospecting license or mining lease within the period as specified above, the reasons for the delay shall be given in writing."
From perusal of relevant extract of Rule 63A it is evident that the State Government is under an obligation to dispose of the application for grant of mining lease within 12 months from the date of receipt of application and in case it is not able to dispose of the application within the stipulated time period, the reasons for the delay, have to be recorded in writing. In the instant case, the petitioner had submitted an application on 30.3.2007, whereas the respondent No.3 had submitted applications on 15.2.2007 and 02.4.2007. The State Government was under an obligation to decide the pending applications latest by April, 2008. However, the applications for grant of mining lease were decided on the basis of oral submissions after a period of one year from the 15 date of hearing of applications. No reasons have been placed on record to show the inordinate delay in deciding the applications. The Supreme Court while approving the view taken in Bhagwandas Fatechand Daswani and others vs. HPA International and others, (2000) 2 SCC 13 and Kanhaiyalal and others vs. Anupkumar and others, (2003) 1 SCC 430 in Telestar Travel Pvt. Ltd. vs. Enforcement Directorate, (2013) 9 SCC 549 has held that any Court or authority hearing the matter must, within the reasonable time frame, pronounce the orders, as the inordinate delay gives rise to unnecessary apprehensions in the minds of the litigants. However, the question which still remains to be decided is whether the delay by itself would constitute a ground for setting aside the order. In the instant case, after hearing the arguments, the State Government sought written submissions from the applicants. The petitioner submitted its written submissions. However, the State Government without considering the written submissions proceeded to decide the revision, on the basis of oral arguments advanced by parties and while doing so, it did not examine the case of petitioner on merits vis-a-vis' respondent No.3. Thus, apparently the petitioner has suffered a prejudice on account of delay in passing the order. Therefore, for this additional ground also the impugned order cannot be sustained.
17. In view of preceding analysis, the inevitable conclusion is to remit the matter for fresh hearing to the State Government. Therefore, it is not necessary for us to deal with any other points urged by the parties. Accordingly, the impugned orders dated 16.9.2008 and 14.6.2011 passed by State Government and Central Government respectively in so far as it pertains to petitioner and respondent No.3, are hereby quashed. The matter is remitted to the State Government to afford an opportunity of hearing to the petitioner and respondent No.3 and to take decision by a reasoned order bearing in mind the mandate contained in the 16 Act and the rule as well as the observations made in preceding paragraphs with regard to grant of mining lease in respect of the area in question expeditiously preferably within a period of three months from the date of receipt of copy of the order passed today.
18. Accordingly, the writ petition is disposed of. However, there shall be no order as to costs.
(A.M.Khanwilkar) (Alok Aradhe)
Chief Justice Judge
RM