Orissa High Court
Geomin Minerals & Marketing (P) Ltd vs A.H. Jaffar & Sons on 23 March, 2010
Author: B. P. Das
Bench: B. P. Das
B.P.DAS, J & B.P.RAY, J.
W.P.(C) NO.23 OF 2009. (Decided on 14.7.2010).
GEOMIN MINERALS & MARKETING (P) LTD. ....... Petitioner
.Vrs.
STATE OF ORISSA & ORS. ..... Opp.Parties.
MINES & MINERALS (DEVELOPMENT & REGULATION) ACT, 1957 - SEC.11(5) & 11 (3) r/w
Mineral Concession Rules, 1960 - Rule 59(1).
For Petitioner - Dr.A.M.Singhvi, H.N.Salve, A.Gupta, P.Pattnaik,
J.Mohanty, N.K.Kaul, Aswini Mata, Prashant Mehta.
For Opp.Parties - Mr. Anindya Ku. Mitra, M/s. S.K.Nayak, A.C.Baral,
D.Nayak,T.Routray, G.K.Nayak, (for O.P.1-State)
M/s. Mohan Parasaran, Farooq M. Razack,
J.K.Mishra, (for O.P.2 Union of India)
Mr. P.Chatterjee, M/s. D.Mohanty, S.Mohanty,
R.R.Sahoo, S.M.Patnaik,
S.Nanda, (for O.P.3- POSCO)
Mr. Sanjit Mohanty M/s. Milan Kanungo, D.Pradhan,
S.K.Mishra, S.N.Das
(for VISA Steel Limited-Intervener).
B. P. DAS, J.The petitioner, Geomin Minerals & Marketing (P) Ltd. which is a Company incorporated under the Indian Companies Act, 1956, has filed this writ petition, inter alia with the following prayers:
"Order the opposite parties to dispose of all pending applications for Mineral Concessions filed by the petitioner and set out in the petition in accordance with its vested right to preferential consideration in view of the fact that the petitioner's applications have been filed on the first date of availability and eligibility.
Issue a writ of prohibition or any other appropriate writ, order or direction restraining the opposite parties from considering applications for Mineral Concessions of later applicants to the petitioner until the applications of the petitioner are first considered and disposed of by according priority or preferential right based on the petitioner being a first day applicant having applied for the concerned Mineral Concessions set out in the petition on the first date of availability and eligibility."
2. The facts of the case are as given hereinbelow:-
2.1 On 29.10.1991, the petitioner-company filed several applications for grant of Prospecting Licence and Mining Lease. According to the petitioner, it has the preferential right for consideration of such applications for grant of Prospecting Licence and Mining Lease on account of the fact that it had filed the applications on the 1st day of availability and eligibility in pursuance of a notification dated 23.8.1991 issued by the Govt. of Orissa in the Department of Steel and Mines, (O.P.1), which was published in the Official Gazette on 13.9.1991, in terms of Rule 59 (1) of the Mineral Concession Rules, 1960 (in short "M.C. Rules") whereby applications for grant of Prospecting Licence and Mining Lease in respect of various areas were invited and consequently mineral concessions were made available with effect from 29.10.1991. The notification is annexed as Annexure-1 to the writ petition and the various applications submitted by the petitioner for grant of Prospecting Licence and Mining Lease are annexed as Annexure-2 series. One of such applications is in respect of an area of 186 hects. in village Rantha in the district of Sundergarh.
2.2 While the applications of the petitioner were pending for consideration of the State Government, M.C.Rules was amended in 2002 to include Rule 63-A, which required opposite party No.1 to dispose of the applications for Reconnaissance Permits, Prospecting Licence and Mining Lease within 6, 9 and 12 months respectively. Opposite party No.1 failed to take any action in disposing of the applications of the petitioner which had been pending since 1991 despite upteem number of reminders to opposite party No.1 and while the applications of the petitioner were still pending, POSCO India Pvt. Ltd, ('POSCO' hereinafter) which was subsequently impleaded as opposite party No.3 by virtue of our order dated 13.5.2009 on its application for impleadment, had filed various applications for mineral concessions in September 2005 over areas in the districts of Keonjhar and Sundergarh partially or wholly overlapping with the areas for which various applications were filed by the petitioner
2. 3 The further case of the petitioner is that when POSCO filed its applications for Mineral Concession, the petitioner's applications had been pending for approximately fourteen years. The petitioner and it's group of companies were in the process of setting up an Integrated Steel Plant in the State of Orissa with a capacity of 12 million tonnes per annum. It is further stated that petitioner came to know that on or about 22.6.2005 opposite party No.1 had entered into a Memorandum of Understanding (MoU) with POSCO, whereby opposite party No.1 agreed to grant Prospecting Licence and Captive Mining lease for 600 million tonnes of iron ore to POSCO after approval of Government of India. In the said MoU, as stated by the petitioner, it was agreed that opposite party No.1 would recommend to the Central Government (O.P.2) for grant of mineral concession and use its best efforts to obtain approval from opposite party No.2. After filing of the writ petition, on 9.1.2009, opposite party No.1 finally asked opposite party No.2 to accord prior approval for grant of mineral concession to POSCO-opposite party No.3 purportedly under Section 11(5) of the Mines and Minerals (Development and Regulation) Act, 1957 (in short "M.M.(D&R) Act") but without following proper procedure.
3. According to the petitioner, the area of 186 hects. in village Rantha in the district of Sundergarh applied for by it for Prospecting Lincence vide application no. 1334 dated 29.10.1991 for Iron Ore and Manganese Ore, is overlapping with the area applied for by POSCO.
3.1 The petitioner further submitted that the recommendation made in favour of POSCO was challenged by one Dhananjay Kumar Dagara before this Court in W.P.(C) No. 15315 of 2007 (hereinafter "Dagara's case") wherein it was pleaded that the petitioner therein was entitled to preferential consideration on account of the date on which he had filed application for Mineral Concession which was much prior to the application filed by POSCO. The present petitioner, on coming to know of the said writ petition, filed an application for intervention on 19.2.2008. During hearing of the aforesaid writ petition, opposite party No.1-State filed an affidavit before this Court on 19.2.2008 indicating therein that all pending applications concerning the notifications referred to above, would be heard afresh, considering the preferential rights of the applicants, if any. On 7.3.2008, the present petitioner received a notice from opposite party No.1 with regard to its application for Prospecting Licence, being P.L. Application No. 1334, whereby the petitioner was directed to appear for a hearing on 10.4.2008.
3.2 According to the petitioner, it had earlier received a notice on 17.9.2007 for personal hearing pursuant to which it appeared before opposite party No.1 on 3.11.2007. Opposite party No.1, in fact acted upon the affidavit filed by it before this Court in W.P.(C) No. 15315 of 2007 and started re- hearing of the applications filed by the applicants.
4. Vide order dated 22.2.2008, this Court dismissed the application for intervention filed by the present petitioner by recording that the petitioner did not have any cause of action and the dismissal order would not prevent the intervenor from taking steps independently in respect of his grievance, if any. Thereafter the judgment in WP.(C) No. 15315 of 2007 (Dagara's case) was delivered and in paragraph-42 and 43 of which it has been held thus:-
" 42. So far as the petitioner's grievance about return of his application for prospecting licence after the same was recommended with the approval of the Chief Minister is concerned, this has been dealt with in paragraph-15 of the counter affidavit dated 8.1.2008 filed by the State. In pargraph-15, it has been specifically stated that the contention of the petitioner that the petitioner's application for prospecting licence dated 29.10.1991 is without defect is not correct at all. The said application had several defects which are pointed out in paragraph-15. It was also stated that the Government of India after scrutiny of the proposal returned the same for fresh examination along with other applications which were proposed to have been recommended but were rejected. Accordingly, the petitioner was noticed under rule 12 (1) of the Rules to appear in person on 30.1.2001 and the petitioner attended the personal hearing. The said action taken by the Government in 2001 has not been challenged by the petitioner. Thus the said action of the Government in 2001 cannot be collaterally challenged in this writ petition in 2007. Such collateral and stale challenge without any explanation for the delay is not maintainable. In any event, the appropriate authority of the Government has not taken any final decision after the matter has been remanded by the revisional authority for hearing by the State. Hearing is continuing. It is open to the petitioner to appear before the Secretary in connection with his application for hearing. No final decision has been taken by the Secretary. So going by these facts, it cannot be said that the petitioner's case at the moment is ripe for interference by this Court. However, this Court considered all the points discussed above, since questions were raised about the competence and legality of the hearing process.
43. For the reasons discussed above, this Court is of the opinion that there is no merit in this writ petition and all the contentions of the writ petitioner fail. The writ petition is dismissed. There would be no order as to costs."
5. The petitioner's further case is that the judgment of this Court in the Dagara's case did not deal with the matter in controversy in the present case, i.e. consideration of the applications as the first day applications and their priority over the later applications. As the petitioner's applications were not considered, the petitioner filed W.P.(C) No. 6484 of 2008 on the allegation that the opposite parties failed to consider the applications of the petitioner within the time specified in Rule-63-A of the M.C. Rules. On 14.7.2008 this Court disposed of the aforesaid writ petition directing the opposite parties to dispose of the applications of the petitioner within six months, without any discrimination and in accordance with law. The relevant portion of the judgment is quoted hereinbelow.
"xxx xxx xxx we dispose of this writ petition with a direction to the State of Orissa in the Department of Steel and Mines to consider the pending P.L./R.P. application of the petitioner for the area excepting the area which is subject matter of the writ petition before the Hon'ble Delhi High Court and for which the intervener is the applicant as expeditiously as possible, preferably within a period of six months from the date of production of a copy of this order without any discrimination and in accordance with law."
5.1 Thereafter the petitioner approached this Court in W.P.(C) No.15424 of 2008 with a prayer to direct the opposite parties to dispose of all pending applications for Mineral Concession filed by it in accordance with its vested right of preferential consideration in view of the fact that the petitioner's applications had been filed on the first date of availability and eligibility.
This Court disposed of the said writ petition on 12.11.2008 with the following orders:-
"This writ petition has been filed for seeking a direction to the opposite parties that they should consider and dispose of the application for mineral concession filed by the petitioner in accordance with law.
Heard Mr. Ranjit Kumar, learned counsel for the petitioner and Mr. S.K. Nayak, learned Senior Counsel for the opposite parties.
Mr. Nayak, learned Senior counsel assured us that the application of the petitioner shall be considered strictly in accordance with law by passing a speaking order within a period of three months from today.
In view of the above submission, we do not want to keep the writ petition pending and hence dispose of the same with a request to Opp. Party No.1 to consider the application of the petitioner for mineral concession by passing a speaking order within a period of three months from today."
Thereafter an application was filed by the State for extension of time to comply with the order of this Court dated 12.11.2008 and this Court by order dated 30.3.2009 passed in Misc. Case No. 2165 of 2009 extended the period by three months from the date of the order, i.e. 30.3.2009.
5.2 The petitioner by letter dated 28.11.2008 requested the State Government to consider its Mineral Concession applications in accordance with law as per the direction of this Court dated 12.11.2008. When the petitioner did not get any response to the said letter, it sent a reminder on 19.12.2008, but to no effect. Thereafter, when the petitioner came to know that the State Government is not going to accord priority or restrict the invocation of Section 11 (5) of the M.M.(D & R) Act to unique cases, as set out in the earlier petition, the petitioner filed the present writ petition on the ground that it is entitled to get the preferential right for obtaining a prospecting license and the opposite parties have not acted in terms of section 11 (5) of the M.M.(D & R) Act and there has been discrimination in the action of the State Government as because in many cases the State Government has processed the applications of the year 1991 in the years 2000, 2001, 2002, 2003, 2004 and 2005 by applying preferential right based on first day applicant status, which it has not done in the case of the petitioner. The opposite parties have favoured some other entities ignoring the application filed by the petitioner as well as the vested preferential right accrued in favour of the petitioner. Petitioner further submits that in Dagara's case opposite party No.1-State did not disclose before this Court that the State had granted at least 21 mineral concessions from 2000 to 2005, even after amendment of section 11 in December 1999, based on preferential right to applicants and applications filed pursuant to same notification dated 23.8.1991. All these grants were with the approval of opposite party No.2. Therefore both opposite party Nos. 1 and 2 were well aware that after amendment also preferential right, at least to consider, was very much existing as per section 11 and they had acted accordingly and change in their stand was only to favour POSCO.
6. The State Government, in its counter affidavit filed through the Commissioner-cum-Secretary to the Government of Orissa, Department of Steel & Mines, took the following stand.
6.1 The present writ petition is pre-mature on the ground that previously the petitioner had filed two writ petitions, the last one being W.P.(C) 15424 of 2008, which was disposed of on 12.11.2008 at the stage of admission and while disposing of the said writ petition, this Court directed the State Government to consider the applications of the petitioner for mineral concessions by passing a speaking order within a period of three months from the date of the order, i.e. 12.11.2008. Despite best effort, since the petitioner's applications could not be disposed of within the time stipulated by the Hon'ble Court, a petition was filed to extend the time by ten months' and this Court by its order dated 30.3.2009 granted another three months' time for disposal of the applications of the petitioner. The stand of the State is that before expiry of the time granted by this Court on 30.3.2009, the present writ petition has been filed on 5.1.2009, by which date the State had not taken any decision on the same. The writ petition is therefore premature and does not merit consideration of this Court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India. As this Court has already directed the State to pass a speaking order, the petitioner could have waited till passing of such an order and if aggrieved, it could have challenged the said order before the Central Government by filing Revision Petition as prescribed under Section 30 of the M.M. (D&R) Act read with Rule-54 of the M.C. Rules.
6.2 As to the contentions of the petitioner in regard to the amended provisions of Section-11 of the M.M.(D&R) Act, it is averred that after the amendment, the preferential claim of the petitioner is not sustainable as it is contrary to the scheme of the Act and contrary to the clear language of the provisions. The applicability of section-11 of the Act, as it stood before amendment, is totally misconceived. Further it relied upon the judgment passed by this Court on 2.5.2008 in W.P.(C) No. 15315 of 2007 (Dagara's case) wherein it was held that the applicants for prospecting licence or mining lease could not claim that their applications were to be disposed of first on the basis of their claim of preferential right under the provision of section 11 (2) of the Act after amendment.
6.3 Apart from that, certain legal questions were raised in the counter affidavit, which were also raised by the learned counsel for the State during the course of hearing and the same shall be dealt with in this judgment.
6.4 It is also indicated in the counter affidavit that mere filing of an application for mineral concession does not confer any accrued right on the applicant unless the application is decided for grant in its favour in accordance with the provisions of the Act and the Rules. Hence the allegation of violation of the petitioner's fundamental right guaranted under Articles, 14, 19 and 21 of the Constitution of India is a misnomer.
6.5 The further stand taken by the State in its counter affidavit is that the State Government has adopted a broad strategy to encourage value addition and end use of mineral inside the State. Due to enhancement of steel prices in the international market and demand of steel in recent past, a number of promoters were attracted to set up Steel Plants in the State due to its abundant reserve of iron ore. Regarding grant of prospecting licence over an area of 9.566 hectares in respect of the petitioner's application dated 29.10.1991, it is indicated that all the applications filed for the area on the date of its availability were considered simultaneously and the P.L. was granted in favour of the most meritorious applicants after determination of their merits under provision of sections 11 (2) and (3) of the M.M. (D&R) Act and the M.C. Rules. The State Government has received a good number of M.C. applications over the Khandadhar area which was notified on 23.8.1991. So far, 49 companies have signed MoU with the State Government to set up steel plants in the State, out of which, 28 have begun partial production. As per the MoU, the promoter company will be considered for allocation of Mining Lease for iron ore after achievement of specified criteria/milestone. Therefore, the State Government has considered all the applications for the area simultaneously and have decided to grant the area in favour of the most meritorious applicant in terms of the provisions of sections 11 (2), (3), (4) and (5) of the M.M. (D&R) Act. The State has further indicated that the mineral concession can be given to a later applicant out of turn under the provision of section 11 (5) of the Act. Therefore, according to the opposite party-State, the allegation of the petitioner that it has been discriminated in not considering its application is not correct.
6.6 So far as the interest of POSCO is concerned, it is indicated that the State is always entitled to override the preferential rights to earlier applicants subject to recording of special reasons under sub- section (5) of Section-11 of the M.M.(D&R) Act. Thus, from time to time, considering the applications of the applicants, the State Government has either granted mineral concessions to an applicant basing on the date of filing or for special reasons, in accordance with the provisions of Section-11 and keeping the State's interest in view.
6.7 Regarding the specific allegation of the petitioner about the recommendation of P.L. application of M/s. Action Ispat & Power (P) Ltd., it is indicted that the area applied for by the petitioner for P.L./M.L. is different from that of M/s. Action Ispat & Power (P) Ltd., though the area applied for by both are covered under the 1991 notification.
6.8 The sum and substance of the stand taken in the counter affidavit filed by the State is that the amendment made in 1999 to the M.M. (D&R) Act, 1957 clearly provides for a separate method of consideration of applications in respect of an area notified in the official gazette. As per the amended Act, the sole consideration for disposal of applications for the notified area is merit, as enumerated in sub-section (3) of Section-11. Any attempt to dislodge the meritorious credentials of an applicant in respect of an area notified in the official gazette is contrary to the meaning of plain reading of the section-11 and negation of merit and preferential treatment of applicants based on chronological order would be detrimental to the mining industry and lead to unscientific mining and wastage of scarce mineral resources. Preferential right, as used in section-11, is neither a vested right nor a substantive right as it is not an absolute right enforceable in law. At best, the use of the term "preferential right"
can only be resulted as an expectation of an earlier applicant that his application will be considered in preference to a later applicant. The State Government being otherwise empowered under the statute can act in a manner contrary to the expectations of an earlier applicant provided that special reasons are to be recorded subject to the test of reasonableness. The allegations of the petitioner are unfounded and without any basis of law. The allegation of the petitioner that the State acknowledged the existence of prior applicants only because POSCO's recommendation was made under Section 11 (5) of the Act is wrong and baseless. Though the earlier recommendation in favour of POSCO was made under Section 11 (5) of the Act, it had taken into consideration the other applications to determine the relative merits on the yardstick of section 11 (3) of the Act and in Dagara's case this Court has clarified that the preferential right in respect of the notified area, if any, does not survive after the 1999 amendment, for which the claim of the preferential right of the petitioner in this writ petition is not sustainable.
7. Though several adjournments had been granted to the Union of India to file counter affidavit, it did not file its counter affidavit in time and ultimately when this Court passed order dated 13.5.2009 to the effect that "if the Union of India fails to file counter affidavit by 10.6.2009, this Court will proceed with the matter in absence of any counter affidavit", the Union of India filed its counter affidavit. In the said counter affidavit the stand taken by the Union of India was that in terms of the provisions of M.M. (D&R) Act, 1957 and M.C. Rules, 1960, applications for grant of Mineral Concessions including Reconnaissance Permit, Prospecting Licence and Mining Lease are filed with the State Government, which is the owner of the minerals. The State Government evaluates the proposal in terms of the provisions of the M.M.(D&R) Act and M.C. Rules and accords preferential rights in terms of Section-11 of the M.M.(D&R) Act read with Rule-35 of M.C. Rules for grant of Mineral Concession to an applicant. Only in case of a mineral listed in the First Schedule to the M.M.(D&R) Act, prior approval of the Central Government is obtained by the State Government before granting the Mineral Concession. Thereafter in the counter affidavit, the Union of India ultimately explains the different procedures of M.M.(D&R) Act and further contended that Iron Ore is the First Schedule mineral. The proposal under section-11 of the Act falls under two categories, i.e. notified and non-notified. In case of notified area, applications are invited by the State Government through gazette notification and all these applications received in pursuance of the said notification during the period specified in such notification are examined in terms of the provision of 11 (3) of the M.M.(D&R) Act and the State Government grants the Mining Leas / Prospecting Licence / Reconnaissance Permit to such one of the applicants, as it may deem fit. In case of non-notified area, the underlying principle is "first come first serve". However the area can be considered in favour of a later applicant in terms of section 11 (5) of the Act provided the same is supplemented with 'special reasons' for grant of the area in favour of such applicant. It is also indicated in the counter affidavit that the petitioner is confusing the principles of "preferential right" and "first come first serve" by citing Hoda Committee Recommendation, which is totally out of place and in a wrong context.
8. During the pendency of the writ petition, M/s. POSCO India Pvt. Ltd filed Misc. Case No. 5480 of 2009 praying inter alia to be impleaded as a party to this proceeding. The prayer for intervention was allowed and subsequently POSCO filed its counter affidavit. In the counter affidavit filed by POSCO through its Director (Mining Division), it is indicated that POSCO, Korea has entered into a Memorandum of Understanding (MoU) dated 22.6.2005 with the Government of Orissa for setting up an integrated steel plant for a total production capacity of 12 million tonnes per annum at Paradeep in Jagatsinghpur District. Through this MoU, POSCO has proposed an investment of about US $ 12 billion or approximately Rs.54,000 crores for the said plant for carrying value additions in the State for a 100% export project. It is further stated that this investment is the largest ever Foreign Direct Investment in India. The MoU which spells out requirement of iron ore mines for captive use at the plant, POSCO applied on 27.9.2005 for grant of Prospecting Licence for Khandadhar Block in Sundargarh district in accordance with the M.M.(D&R) Act, 1957 and M.C.Rules,1960. It is further indicated that parts of the Khandadhar area were thrown open for re-grant vide notification No. SRO 647/1991 dated 23.8.1991 published in Official Gazette dated 13.9.1991 issued under Rule 59 of the M.C.Rules. Pursuant to the said notification dated 23.8.1991, a number of applications have been filed for grant of Prospecting Licence and Mining Lease over the said area and the State Government after considering all the applications found POSCO to be the most meritorious amongst all the applicants and recommended its case to the Central Government for prior approval under Section 11 (5) of the M.M.(D& R) Act vide its letter dated 19.12.2006. The recommendation dated 19.12.2006 made by the State Government was challenged by Kudremukh Iron Ore Company Ltd (in short 'KIOCL') before this Court in W.P.(C) No. 1775 of 2007 and this Court by order dated 16.4.2007 disposed of the writ petition filed by KIOCL and directed the KIOCL to approach the Revisional Tribunal established under Section 30 of the M.M.(D&R) Act. The Revisional Application of the KIOCL was disposed of on 27.9.2007. Thereafter the State Government acting in compliance with the directions of the Revisional Authority issued notices under Rules 12 and 26 of the M.C.Rules to the applicants requiring them to furnish deficient/additional information and to appear for personal hearing. During the course of hearing of those applications before the State Government, a writ petition was filed by one Dhananjaya Kumar Dagara (supra) challenging the order dated 27.9.2007 passed by the Revisional Tribunal. In the said writ petition, the State of Orissa, the Union of India and the Director of Mines (Government of Orissa), POSCO and KIOCL were the opposite parties. The petitioner therein claimed the preferential right under section 11 of the M.M.(D&R) Act and in alternative claimed that its application having been filed on 29.10.1991, ought to be disposed of in accordance with the law in force at that time by according preferential rights of a first applicant. This Court disposed of the writ petition filed by Dhananjaya Kumar Dagara (supra) vide judgment dated 2.5.2008 with the observation as indicated in the foregoing paragraph.
8.1 With regard to the survival of preferential right under the pre-amended provision of Section 11 (2) of the M.M.(D&R) Act after its amendment in 1999, it was submitted that the same is no more res integra after the judgment in Dagara's case. After such decision, the State Government considered all the applications basing on personal hearing and determination of inter-se merits and decided to recommend the POSCO's application for grant of Prospecting Licence over a contiguous area of 2500 hectares (comprising of 2085 hectares of notified area and 415 hectares of non-notified available area) to the Central Government for approval under Section 11 (5) of the M.M.(D&R) Act. The recommendation made vide communication dated 9.1.2009 sets out the special reasons for which POSCO has been preferred over other applicants for the area. The special reasons cited in favour of such recommendation include the details of the investment proposed by POSCO, ability to carry out scientific exploration and mining, financial capability, eco-friendly, resource efficient technology, potential to generate high order revenue and employment opportunities in the State. The communication dated 9.1.2009 also indicates that before recommending the application of POSCO, the State Government had determined the individual merits of all other applicants on the basis of personal hearing and additional information furnished by the respective applicants.
8.2 The further ground taken in the counter is that the manner of disposal of applications over the Khandadhar area was the subject matter of challenge in Dagara's case, wherein this Court has in no uncertain terms ruled that the applications for the areas notified under Rule 59 of the MC Rules deserve simultaneous consideration and that no applicant can have any preferential right of prior consideration solely on account of the fact that his application was filed on the first available date or a prior date. It is indicated that the principle of "first come first serve" is not absolute and also does not apply to the areas notified in the Official Gazette.
8.3 The sum and substance of the contentions of POSCO is that no preferential right is available to the petitioner as claimed and the said position has already been clarified by this Court in the judgment rendered in Dagara's case as the preferential right of the first applicant does not survive after 1999 amendment.
8.4 It is further submitted that if at all the petitioner in any manner is aggrieved by the action of the State Government in recommending the case of POSCO under section 11 (5) of the M.M.(D & R) Act, it can seek a revision of the order passed by the State Government before the Revisional Authority of the Central Government.
9. Though M/s VISA Steel Ltd. has filed an application for intervention, the same has not yet been considered. But we have heard the learned counsel for the intervener.
10. In the aforesaid factual background and rival contentions made in the writ petition as well as counter affidavits, the following issues emerge for consideration.
1. Whether the writ petition is maintainable due to availability of alternative remedy ?
2. Whether the writ petition is premature ?
3. Whether the writ petition is maintainable due to delay and laches ?
4. Whether the writ petition is barred by res-judicata ?
5. Whether the area in question was earlier reserved or it is a non-reserved area?
6. Whether the petitioner has any preferential right under Section-11 of the M.M. (D&R) Act ?
7. Whether recommendation made by the State Government under section 11 (5) of the M.M. (D&R) Act in favour of POSCO is valid ?
The question of res-judicata shall be considered while dealing with other issues as it is intrinsically related to other issues. Some other miscellaneous issues raised in this case shall also be considered herein below.
11. Issue no.1 Whether the writ petition is maintainable due to availability of alternative remedy ?
11.1 Admittedly, under section 30 of the M.M. (D&R) Act, 1957 read with Rule 54 of M.C. Rules, 1960, revision lies to the Central Government. Section 30 empowers the Central Government to revise any order made by the State Government or other authority of its own motion or on application made within the prescribed time by an aggrieved party, whereas Rule 54 of the M.C. Rules provides that "any person aggrieved by any order made by the State Government or other authority in exercise of the powers conferred on it by the Act or these Rules may, within three months of the date of communication of the order to him, apply to the Central Government in triplicate in Form-N, for revision of the order".
11.2 To the question raised by the opposite parties regarding maintainability of the writ petition, Dr. A.M. Singhvi, learned Senior Counsel for the petitioner, submitted that since the circumstances under which the petitioner approached this Court has been taken into consideration, it can be safely concluded that the petitioner does not have an alternative remedy.
Learned counsel further submitted that no order whatsoever on the petitioner's P.L. application or in respect of opposite party No.3's application for grant of mineral concession has been passed till date, giving any scope to the petitioner to approach the Revisional Authority and several applications filed by different parties for P.L. and M.L. application over the area are pending for consideration of the State Government and no order has been passed. So the question of alternative remedy does not arise.
According to him, the recommendation dated 9.1.2009 in favour of POSCO, could not have been the subject-matter of revision before the Central Government because even the said recommendation has not been produced before this Court by any of the opposite parties. The petitioner could only know about the alleged recommendation from the averments made in the counter affidavit filed by O.P.3 and according to it at best it can be said to be an application by the State Government to the Central Government in order to seek the Central Government's prior approval under section 11 (5) of the M.M.(D&R) Act to enable the State Government to pass an order in favour of O.P.3 overriding the preferential right of the earlier applicant, such as the petitioner, because the prior approval is a necessary re-condition to the passing of any order under Section 11 (5) of the Act. It is only after approval of Central Govt. under section 11(5) if any order is passed and communicated rejecting petitioner's application for prospecting licence, the petitioner can file revision before the Central Government.
He further submitted that the aforesaid recommendation cannot be construed to be an order attracting the provisions of Rule-54 of the M.C. Rules. According to him, the petitioner has taken a stand that it has cause of action against opposite parties 1 and 2 to the extent that O.P.1 has taken a stand that the petitioner has no preferential right for consideration of its applications and there is no other alternative remedy available other than by way of writ petition. The further argument of Dr. Singhvi is that existence of an alternative remedy is not a bar to file writ petitions in appropriate cases and when principles of natural justice are violated or jurisdictional issues arise or constitutionality of State action is challenged or issues regarding fundamental rights are raised or vires of statutes are put to judicial scrutiny, the question of maintainability of writ petition cannot be raised as a bar.
11.3 On the other hand, Mr. Pratap Chatterjee, learned Senior Counsel for O.P.3- POSCO, strongly objected to the aforesaid submission of learned counsel for the petitioner and submitted that as recommendation was made in favour of POSCO, the petitioner should have approached the revisional authority challenging such recommendation.
11.4 Mr. Mohan Parasaran and Mr. Farooq M. Razack, learned Addl. Solicitors General of India, referring to the decisions in the case of State of Goa and ors. Vs. A.H. Jaffar & Sons, AIR 1995 SC-333 and State of Goa and ors. Vs. A.H. Jaffar and Sons, AIR 2008 SC-1840, took the same stand, as has been taken by learned counsel for POSCO, and submitted that the writ petition should be dismissed in limine being not maintainable. Their further stand was that the petitioner should be allowed to agitate this matter before the Revisional Authority in revision application and time limit should be fixed for deciding the revision application by the Revisional Authority.
11.5 The State Government has also taken the same stand so far as availability of alternative remedy is concerned.
11.6 Perused the decisions reported in AIR 1995 SC-333 and AIR 2008 SC-1840 (supra) and more particularly the observations made in paragraph-6 of the latter judgment, which is not applicable to the facts and circumstances of the present case as in that case rejection order had been passed and communicated to A.H.Jaffar & Sons and no constitutional or other issues were raised for consideration of the Court.
We may also refer to the decision of the Apex Court in the case of Whirlpool Corporation v. Registrar of Trade Marks, (1998) 8 SCC-1. In paragraph-15 of the said judgment it was observed thus:-
"Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order of proceedings are wholly without jurisdiction or the vires of an Act is challenged. xxx xxx xxx"
11.7. Perusal of Section 30 and Rule 54 would show that revision lies against an order passed by the State Government in exercise of the powers conferred on it under the M.M.(D&R) Act and M.C. Rules. Such order must be communicated to the party concerned.
11.8 Petitioner's grievance is that its applications have not been decided and that no orders have been passed on those applications. It is the admitted position that as on date the Petitioner's applications have not been rejected. They could not have been rejected without following the procedure set out in Rule 12 in respect of prospecting licence applications and Rule 26 in respect of mining lease applications. The said rules expressly provide for an opportunity of hearing ("after giving an opportunity of being heard") before rejection. They also provide that the refusal to grant or rejection must be "for reasons to be recorded in writing and communicated to the applicant".
11.9 That apart, as opposite party No.1 & 3 have stated that the recommendation made on 9.1.2009 seeks the Central Government's prior approval under Section 11(5) of the Act, the Central Government is bound to reject the recommendations as no "special reasons" could have been given following the hearing and its minutes as produced before this Court. The reasons recorded in the minutes are on the basis of inter-se merit consideration under Section 11(3) conditions. Opposite party No.1's case is that POSCO was found best on section 11(3) criteria. Central Government having laid down guidelines must follow them unless held by Court of law to be inapplicable or ultra vires.
11.10 Apart from that, in the present case the Government seeks to exercise powers under section 11(5). The provisions of Section 11 (5) makes it very clear that no order can be made until the Central Government grants its approval. In the present case, from the minutes of the hearing, it is seen that the reasons cited by the State Government for recommending the case of opposite party No.3 are the very criteria of Section 11(3). Those are not the "special reasons" in terms of section 11(5). Even the Central Government in its Policy formulated in June 2009 has made it clear to the State Governments that "special reasons" under Section 11(5) cannot be the same as indicated in Section 11(3) but must be much stronger reasons.
Paragraph 8.13 of that policy is quoted herein below:-
"It has been generally noticed that the State Governments have been invoking the parameters given in Section 11(3) of MMDR Act while giving priority to later applicants under Section 11(5) of MMDR Act. It is pointed out that conditions at Section 11(3) are appropriate to choose from amongst applicants applying on the same day [real or deemed under Section 11(2)], and the conditions under Section 11(3) are not the same as the 'special reasons' mentioned in Section 11(5) of the Act. Xxx xxx xxx and these special reasons have to be stronger than the matters referred to in Section 11(3) of die MMDR Act. Moreover, 'special reasons' have to be exceptional by their very nature and not routine or obvious".
In our considered opinion, the writ petition is maintainable. This answers the issue no. 1.
12. Issue no.2, Whether the writ petition is premature ?
This issue is answered in favour of the petitioner as the petitioner has approached this Court at a time when its right to be considered along with POSCO has been threatened to be infringed by the action of the State, which, according to the petitioner, is illegal and contrary to the statutory provision. So the petitioner prayed for preferential right under Article 226 of the Constitution of India.
Hence the writ petition cannot be said to be premature as the petitioner could not have waited till the harm is caused to him (See Bengal Immunity Co. Ltd., v. State of Bihar and others, AIR 1955 SC-661).
13. Issue No.3 Whether the writ petition is maintainable due to delay and laches ?
13.1 According to learned counsel for POSCO, in the un-amended writ petition, the petitioner did not seek any declaration as regards the validity of the notifications dated 5.6.1962, 6.12.1962 and the notification dated 23.8.1991 under which the petitioner had made the Mineral Concession applications. The prayer for declaring the above notifications as void and for quashing of the same were added to the writ petition by way of an amendment in June 2009 with an intent to overcome the embargo imposed by the judgment of this Court in Dagara's case.
He further submitted that the vested right to preferential consideration as claimed by the petitioner is no longer available to anyone under the M.M. (D&R) Act after its amendment on 18.12.1999. The petitioner has not challenged the said amendment. So, long delay is manifest on the face of the records. It is also much beyond the period of limitation for filing a revision application as provided under section 54 of the M.C. Rules, i.e. three months.
His further contention was that such a long delay is a good ground for dismissal of the writ petition as the delay is unreasonable and much beyond the period of limitation prescribed by a civil action for the remedy. In this regard learned counsel for the POSCO placed reliance on the case of State of Madhya Pradesh v. Bhailal Bhai, AIR 1964 SC 1006. Learned counsel further placed reliance on paragraph-21 of the judgment in the case of State of Maharashtra v. Digambar, AIR 1995 SC 1991, wherein it has been held that "where a High Court in exercise of its power vested under Article 226 of the Constitution issues a direction, order or writ for granting relief to a person including a citizen without considering his disentitlement for such relief due to his blameworthy conduct of undue delay or laches in claiming the same, such a direction, order or writ becomes unsustainable as that not made judiciously and reasonably in exercise of its sound judicial discretion, but as that made arbitrarily".
13.2 Learned counsel for the Union of India submitted that the petitioner has invoked the writ jurisdiction after inordinate delay of over one and a half decades, which is not justified. So the writ petition should not be entertained. Learned counsel placing reliance on the decision in Dagara's case submitted that the petitioner is not entitled to any relief whatsoever and his further contention was that though the petitioner has filed applications on 29.10.1991, admittedly it did not do anything till 2004 save and except sending representations, as stated by the petitioner, to the State Government for consideration of its applications. The petitioner did not do anything till 1999, when Section-11 of the M.M.(D&R) Act was amended.
Therefore, if at all any preferential right was in existence in favour of the petitioner on the strength of its application dated 29.10.1991, the same does not survive after amendment to Section-11 of the Act.
13.3 The same was also the plea taken by the State Government.
13.4 On the other land, learned counsel for the petitioner submitted that prior to the judgment of this Court in Dagara's case, the State Government was invariably proceeding with the applications according to the preferential right to the first applicants throughout, i.e. prior to and after the 1999 amendment, both for notified and non-notified areas.
The applications of the petitioner were also being considered in accordance with the preferential rights. The cause of action arose for the first time during the pendency of the Dagara's case when the petitioner learnt that the State Government in collusion with POSCO was considering the post-1999 application of POSCO after considering the post-1999 amendment and not considering the applications of the petitioner even though its applications were of the year 1991 for preferential right of being first applicant. Thereafter the petitioner moved an application to be impleded itself in Dagara's case. The intervention application was dismissed vide order dated 22.2.2008 on the ground that the petitioner had no cause of action and the matter had to be decided between the parties to that petition. However, it was expressly recorded that the order will not prevent the intervenor from taking steps independently in respect of his grievance, if any. Thereafter, the petitioner filed W.P.(C) No. 6484 of 2008 in July 2008 to assert its rights to non-discriminatory treatment. Thereafter another writ petition being W.P.(C) No. 15424 of 2008 was filed and ultimately on 5.1.2009, the present writ petition has been filed.
Learned counsel further submitted that right from the beginning, the petitioner has taken steps which is evident from different communications made to the effect that the applications of the petitioner were under consideration. In this regard, learned counsel for the petitioner drew our attention to a communication dated 5.11.2004 issued by the Directorate of Mines to the Joint Secretary to Government of Orissa, Department of Steel & Mines on the Revision Application filed by M/s Larson & Tubro Ltd. In paragraph 2 (iii) of the aforesaid communication views have been given in regard to the P.L. Application filed by the petitioner over an area of 173.00 hects in village Khajuridihi R.F. of Sundergarh district.
13.5 Fact remains, though the above communication, is not related to Khandadhar block, which is the subject-matter of dispute in the present writ petition, from said document it is clearly evident that the applications of the petitioner for P.L. and M.L. were under consideration on 5.11.2004. That apart, this Court in its order passed on the intervention application filed by the petitioner in Dagara's case has categorically held that there is no cause of action for the intervener to file the intervention petition, but observed that the said order will not prevent the intervenor from taking steps independently in respect of his grievance, if any. The State Government was considering the applications of the petitioner. No adverse order was passed on its applications. The question of approaching the Court did not, therefore, arise then. That apart, a bare reference to the order passed by this Court in W.P.(C) No. 6484 of 2008, wherein the petitioner prayed for a writ of mandamus as against the opposite party- State to consider its P.L./R.P. applications, which were pending before the State since 1991, reveals that this Court, without expressing any opinion on the merits of the case of the petitioner one way or the other disposed of the writ petition directing the Department of Steel and Mines to consider the pending P.L./R.P. applications of the petitioner as expeditiously as possible, preferably within a period of six months. This being the order of this Court, if at all any laches are there, that has been washed away by the aforesaid order of this Court and that too, as we have stated earlier, no decision till date, i.e. for about 19, years has been taken by the State Government on the applications of the petitioner, though the same were under active consideration of the State Government, as evident from different communications, one of such being dated 5.11.2004 as indicated above. Then, in W.P.(C) No. 15424 of 2008 wherein a direction was sought by the petitioner to the opposite parties to consider and dispose of the applications for mineral concession filed by it in accordance with law, this Court passed the order dated 12.11.2008 to the following effect.
"xxx xxx xxx Mr. Nayak, learned counsel assured us that the application of the petitioner shall be considered strictly in accordance with law by passing a speaking order within a period of three months from today.
In view of the above submission, we do not want to keep the writ petition pending and hence dispose of the same with a request to Opp. Party No.1 to consider the application of the petitioner for mineral concession by passing a speaking order within a period of three months from today.
Xxx xxx xxx"
So the reliance placed by the opposite parties on the decision in the case of B.S. Bajwa v. State of Punjab, (1998) 2 SCC page-523, in which it has been held that issues of seniority in service matters should not be reopened after considerable lapse of time if inter-se rights of other have crystallized, has no effect to the facts and circumstances of this case. In our considered opinion, the writ petition does not suffer from any laches or delay and merits consideration. So the plea of the opposite parties to reject the writ petition on the ground of delay and laches is rejected.
14. Issue no. 5 Whether the area in question was earlier reserved or it is a non-reserved area ?
One of the prayers of the petitioner in this writ petition is to quash Notification No. 5988-MG dated 5.6.1962, Notification No. 11791/MG dated 6.12.1962 (hereinafter called "1962 Notifications") and the Notification bearing S.R.O. No. 647/91 dated 23.8.1991 published in the official gazette on 13.9.1991 (hereinafter called "1991 Notification").
14.1 According to learned counsel for the petitioner, there is no reserved area in the eye of law because in 1962, when the notifications were issued, the State Government had no power or jurisdiction or authority to reserve the minerals over the areas either for itself or for exploitation in the public sector. 1962 notifications, according to the petitioner, are therefore, ultra vires of the M.M. (D & R) Act as it stood then. Since the 1962 notifications are void, the 1991 notification having been issued under Rule-59 could be of no effect. In order to substantiate its argument, the petitioner submitted that the M.M. (D & R) Act came into effect on 10.6.1958. It contained a declaration in Section 2 thereof, that the control of the regulation and development of mines and minerals had been taken over by the Central Government in public interest, and according to the petitioner, as a result of such declaration in the light of Entry 54 of List I, the State Government was denuded of all legislative competence in respect of mines and minerals for the reason that the extent of the control was all pervasive as the totality of the field was taken control of by the Central Government. No part of the field of mines or minerals development or regulation was left out or not covered for there to be any scope for legislation by the State Government.
In this regard, learned counsel for the petitioner placed reliance on the decisions of the Apex Court in the case of Hingir Rampur v. State of Orissa, AIR 1961 SC 459, State of Orissa v. M.A. Tulloch, AIR 1964 SC 1284 and Baijnath Kadio v. State of Bihar, (1969) 3 SCC 838.
His further argument was that prior to amendment of the M.C. Rules made on 16.1.1980, there was no provision in the M.M. (D & R) Act, which permitted the State Government to reserve minerals over areas either for itself or for exploitation in the public sector.
Reliance was placed by the petitioner on an unreported judgment of Karnataka High Court in the case of M/s J.S.W. Steel Ltd. v. State of Karnataka in Writ Appeal No. 807 of 2007 disposed of on 12.3.2007, wherein it was observed that in the case of Amritlal Nathubhai Shah v. Union Government of India (1976) 4 SCC 108 (hereinafter Amritlal's case), the decisions of M.A. Tulloch (supra) and Baijnath Kadio (supra) have not been taken note of and in view of the decisions in the case of M.A. Tulloch (supra) and Baijnath Kadio (supra), the State has no legislative competence in the field of mines and minerals.
14.2 On the contrary, learned counsel for POSCO referring to the decision in the case of Amritlal (supra) submitted that Amritlal's case has been followed in the cases of Indian Metals & Ferro Alloys Ltd. v. Union of India & others, AIR 1991 SC 818 and Orissa Mining Corporation Ltd. and another v. Union of India, AIR 1992 Orissa 61, wherein it was observed that the State is the owner of the mines and minerals within its territories. The State Government has inherent power to reserve any land bearing minerals and this right has been recognized in Amritlal's case and in the followed up judgments mentioned above.
14.3 Learned counsel for the Union of India submitted that the principle as enshrined in the Constitution is reflected in the M.M. (D & R) Act and the principle employed as well as Section 2 of the M.M. (D & R) Act clearly amplifies this provision. The Preamble to the M.M. (D & R) Act, 1957 clearly states that the Act provides for the development and regulation of mines and minerals under the control of the Union. Section 2 of the M.M. (D & R) Act contains the declaration that in the "public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided".
It is submitted by the learned counsel for the Union of India that from the scheme of M.M. (D & R) Act and MC Rules, it is abundantly clear that the State Government is the owner of the minerals. However the Union, in public interest, for the purpose of development and regulation of mines and mineral has retained control to itself in the matter of regulation of mines and development of minerals, where in respect of grant of a Reconnaissance Permit or licence for prospecting of Mineral or Mining Lease concerning specified in the First Schedule to MMDR Act, its previous approval is necessary and in respect of minor minerals and other major minerals, which have not been specified, the powers have been delegated to the State Government. It was further argued that as per Section-5 of the M.M. (D & R) Act, the State Government grants the Reconnaissance Permit or a Prospecting Lease or Mining Lease. However, in respect of minerals specified in First Schedule to the M.M. (D & R) Act, previous approval of the Central Government is necessary. Section-10 of the M.M. (D & R) Act provides that an application for Reconnaissance Permit or a Prospecting Lease or Mining Lease "in respect of any land in which the minerals vest in the Government shall be made to the State Government concerned". The sum and substance of the argument of the learned counsel for the Union of India is that Amritlal's case still holds good and the argument of learned counsel for the petitioner that it is par incuriam is not correct.
14.4 Now, let us examine, whether the State has any power to issue the notifications of 1962. A bare perusal of the 1962 notifications, which simply say that "it is hereby notified for information of the public that the following mineral-bearing areas in this State whose descriptions are given in the Annexure are reserved for exploitation in the public sector". Argument was advanced by the opposite parties that the notifications are made under Rule 59 of the M.C. Rules, which has been made under section 13 of the Act, and our attention was drawn to paragraphs-4, 6 and 7 of the judgment in the case of Amritlal's case. Pragraphs-4, 6 and relevant portion of paragraph-7 of the said judgment are quoted hereinbelow:-
"4. Section 4 of the Act provides that no person shall undertake any prospecting or mining operations in any area, except under and in accordance with the terms and conditions of a prospecting licence or, as the case may be, a mining lease, granted under the Act and the rules made thereunder, and that no such licence or lease shall be granted "otherwise than in accordance with provisions of the Act and the rules". But there is nothing in the Act or the Rules to require that the restrictions imposed by Chapters-II, III or IV of the Rules would be applicable even if the State Government itself wanted to exploit a mineral for, as has been stated, it was its own property. There is therefore no reason why the State Government could not, if it so desired, "reserve" any land for itself, for any purpose, and such reserved land would then not be available for the grant of a prospecting licence or a mining lease to any person.
6. We have gone through sub-sections (2) and (4) of Section 17 of the Act to which our attention has been invited by Mr. Sen on behalf of the appellants for the argument that they are the only provisions for specifying the boundaries of the reserved areas, and as they relate to prospecting or mining operations to be undertaken by the Central Government, they are enough to show that the Act does not contemplate or provide for reservation by any other authority or for any other purpose. The argument is however untenable because the aforesaid sub-sections of Section 17 do not cover the entire field of the authority of refusing to grant a prospecting licence or a mining lease to anyone else, and do not deal with the State Government's authority to reserve any area for itself. As has been stated , the authority to order reservation flows from the fact that the State is the owner of the mines and the minerals within its territory, which vest in it. But quite apart from that, we find that Rule 59 of the Rules, which have been made under Section 13 of the Act, clearly contemplates such reservation by an order of the State Government. That rule deals with the availability of areas for the grant of a prospecting licence or a mining lease in such cases, and provides as follows:
59. Availability of certain areas for grant to be notified:- In the case of any land which is otherwise available for the grant of a prospecting licence or a mining lease but in respect of which the State Government has refused to grant a prospecting license or a mining lease on the ground that the land should be reserved for any purpose, the State Government shall, as soon as such land becomes again available for the grant of a prospecting or mining lease, grant the licence or lease after following the procedure laid down in rule 58.
7. xxx xxx xxx. It clearly contemplates reservation of land for any purpose, by the State Government, and its consequent non-availability for the grant of a prospecting licence or mining lease during the period it remains under reservation by an order of the State Government. A reading of Rules 58, 59 and 60 makes it quite clear that it is not permissible for any person to apply for a licence or lease in respect of a reserved area until after it becomes available for such grant, and the availability is notified by the State Government in the Official Gazette."
The decision in Amritlal's case was subsequently followed in Indian Metals & Ferro Alloys Ltd. v. Union of India & others, AIR 1991 SC 818, Orissa Mining Corporation Ltd. and another v. Union of India, AIR 1992 Orissa 61, MSPL Ltd v. Union of India & others, MANU/ DE/0928/2008 and State of Orissa and others v. Union of India and others, AIR 2001 SC 410.
Perused the decisions referred by the petitioner in support of its stand in the case of Hingir Rampur (supra), M.A. Tulloch (supra), Baijnath Kadio (supra) and the India Cement Ltd v. State of Tamil Nadu, AIR 1990 SC. 85.
14.5. Before going into the rival contentions made on the applicability of the Judgment of Amritlal (supra), let us examine whether 1962 notifications issued in terms of Rules-58 and 59 of M.C. Rules, as they stood in 1962, survived after Rule 58 of M.C. Rules was obliterated from the statute book by virtue of subsequent amendment to Rule. It is worthwhile to mention here that in terms of the GSR 449 (E) dated 13.4.1988, Rule-58 of M.C. Rules stood omitted from 1960 Rules. There was no saving clause with regard to any action taken under the said rule.
Rule-58 did not have any saving clause and it having being wiped out from the statute book, any action taken under it having not been saved, the 1962 notifications also lost their force after 13.4.1988. In this regard, we may refer to paragraph-19 of the decision of the Apex Court in the case of M.A. Tulloch (supra), which is quoted herein below:-
"19. Before proceeding further it will be convenient to clear the ground by adverting to two matters: (1) The effect of a Central Act under its exclusive legislative power which covers the field of an earlier State Act which was competent and valid when enacted is not open to doubt. The Parliamentary enactment supersedes the State law and thus it virtually effects a repeal, (2) the effect in law of a repeal, if it is not subject to a saving as is found in Section 6 of the General Clauses Act is also not a matter of controversy. Tindal, C.J. stated this in Kay v. Goodwin 4:
"I take the effect of repealing a statute to be to obliterate it as completely from the records of the Parliament as if it had never been passed; and it must be considered as a law that never existed except for the purpose of those actions which were commenced, prosecuted and concluded whilst it was an existing law."
Added to this, in our considered opinion, the omitted Rule-58 is also repugnant to the inserted section 17-A of the Act because of the reason that the omission of Rule-58 did not require the approval of the Central Government, Rule-58 also inconsistent and repugnant to Section 4 (3) of the Act.
At this stage, the changes took place in the Act should not be lost sight of, which are.
(a) The sub section 3 of Section 4 of the Act was inserted by Act 37 of 1986 with effect from 10.2.1987.
(b) By Section 17-A a new provision was inserted in the Act by enactment of Act 37 of 1986 with effect from 10.2.1987.
The above two provisions came into force on one day, i.e. 10.2.1987.
By sub-section (3) of Section 4 of the M.M.(D&R) Act, for the first time power was conferred with the State Government to reserve mineral exploitation for itself but only after prior consultation with the Central Government.
Section 17-A of the Act provides for reservation of an area for the purpose of conservation. Sub-section (2) of Section 17-A provides for reservation by the State Government for Public Sector Corporations with prior approval of the Central Government.
In view of the above statutory changes, even if for the sake of argument we accept the submission of the learned counsel for the opposite parties that 1962 notifications survived after Rule 58 was wiped out from the statute book, it cannot survive after 10.2.1987, when section 17-A of the Act came into force, as 1962 notifications have not received the approval of the Central Government.
Hence on the day 1991 notification was issued 1962 notifications were not in operation at all. As the 1962 notifications lost their force with the wiping out of Rule-58 of M.C. Rules due to incorporation of Section 3 (4) and Section 17-A on 10.2.1987, there is no requirement of issuance of the notification under Rule-59 of M.C. Rules in the year 1991. Hence, it will be construed to be an un- reserved area, resulting notifications of 1991 issued on 23.8.1991 as non-est in the eye of law.
In view of the aforesaid findings, there is no need to delve into the merits of the argument advanced by the petitioner that the decision of the Apex Court Amritlal (supra) contradicts with the views taken by larger Bench in the case of Hingir Rampur (supra), M.A. Tulloch (supra) and Baijnath Kadio (supra) and also per-incuriam and hence not binding. The question becomes academic.
15. Issue No.6, and 7 are:-
Whether the petitioner has any preferential right under
Section-11 of the M.M. (D & R) Act ?
Whether recommendation made by the State
Government under Section 11 of the M.M. (D&R) Act in favour of POSCO is valid ?
15.1 According to the petitioner, it has applied for the area in question on 29.10.1991 and it stands on a better position so far as the merit is concerned in terms of the criteria set out under Section 11 (3) of the Act, read with Rule 35 of the M.C. Rules.
15.2 So far as preferential right, as claimed by the petitioner, is concerned, which it claims on the basis of its application made on 29.10.1991, was under the pre-amended provisions of Section 11 (2) (3) and (4).
The pre-amended provisions of Section 11 (2) (3) (4) and the post amended provisions of 11 (2) (3) (4) are quoted hereinbelow.
Pre-amended provisions of Section 11(2),(3) and (4) are as follows:
11(2). Subject to the provisions of sub-section (1), where two or more persons have applied for a prospecting licence or a mining lease in respect of the same land, the applicant whose application was received earlier shall have a preferential right for the grant of the licence or lease, as the case may be, over an applicant whose application was received later:
Provided that where any such applications are received on the same day, the State Government, after taking into consideration the matters specified in sub-section (3), may grant the prospecting licence on mining lease, as the case may be, to such one of the applicants as it may deem fit.
11(3). The matters referred to in sub-section (2) are the following:-
(a) any special knowledge of, or experience in, prospecting operations or mining operations, as the case may be, possessed by the applicant;
(b) the financial resources of the applicant;
(c) the nature and quality of the technical staff employed or to be employed by the applicant;
(d) such other matters as may be considered.
11(4). Notwithstanding anything contained in subsection (2) but subject to the provisions of sub-section (1), the State Government may for any special reasons to be recorded and with the previous approval of the Central Government, grant a prospecting licence or a mining lease to an applicant whose application was received later in preference to an applicant whose application was received earlier.
Post amended provisions of Section 11(2), (3) and (4) are as follows:
11(2). Subject to the provisions of sub-section(1), where the State Government has not notified in the official gazette the area for grant of reconnaissance or prospecting licence or mining lease as the case may be and two or more persons have applied for a reconnaissance permit prospecting licence or a mining lease in respect of any land in such area, the applicant whose application was received earlier shall have the preferential right to be considered for grant of reconnaissance permit, prospecting licence or mining lease, as the case may be, over the applicant whose application was received later:
Provided that where an area is available for grant of reconnaissance permit, prospecting licence or mining lease, as the case may be, and the State Government has invited applications by notification in the official gazette for grant of such permit, licence or lease, all the applications received during the period specified in such notification and the applications which had been received prior to the publication of such notification in respect of the lands within such area and had not been disposed of, shall be deemed to have been received on the same day, the State Government for the purposes of assigning priority under this sub section.
Provided further that where any such application are received on the same day, the State Government, after taking into consideration the matter 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.
11(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;
(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.
11(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." 15.3 The aforesaid will show that sub section (2) of section 11 has undergone a substantial change by way of amendment with effect from December 1999 (20.12.1999). The principle of "first come first serve" still remains in respect of non-notified areas.
15.4 Perused the judgment rendered in Dagara's case again. This Court after setting out section 11 before and after amendment observed as follows:
13. It appears that sub- section (2) of section 11 has been substantially amended in 1999.
Under the amended provision after 1999, the principle of first come, first served does not survive and consequently no preferential right exists in respect of notified area. As such the assertion made by the petitioner is contrary to section 11(2) as amended. It may be true that at the time when the notification was gazetted on 13.9.1991, Section 11(2) did not contemplate any difference in respect of application for notified area and non-notified area. The 1991 notification has not provided for any fixed date of receipt of application for an area notified by the State Government. But after the amendment on 18.12.1999 a new proviso to sub-section (2) of section 11 was added. A new sub-section (4) was also added. Admittedly no preferential right of the petitioner, if any, survives after the amendment."
15.5 Even otherwise, it is pertinent to mention here that in Dagara's case, the validity of 1962 notifications was not challenged and the present case differs from the Dagara's case as the validity of 1962 notifications had never been questioned by both the parties in that case and Dagara's case proceeded on the premises that the area was reserved and notified one. So, what would be the effect of amendment where the area is non-notified area ? In the pre-amended section-11 (2), one will find that the person who has applied for a P.L. or M.L. in respect of the an area and whose application was received earlier, shall have preferential right for grant of Licence and Lease, as the case may be, over the applicant whose application was received later. Whereas, in the post amended section of 11 (2) as referred, the provision is that the applicant whose application was received earlier shall have preferential right to be considered for grant of R.P., P.L. and M.L. as the case may be.
We, therefore hold that the petitioner is entitled to preferential right of consideration over later applicants whose applications were filed after 29.10.1991.
In this regard, we may refer to the decision of the Apex Court in the case of Indian Metals (supra). The relevant paragraph, i.e. Paragraph-16 of the said judgment, is quoted herein below:- "16. Now, to turn to the contentions urged before us: Dr. Singhvi, who appeared for ORIND, vehemently contended that the rejection of the application of ORIND for a mining lease was contrary to the statutory mandate in S. 11(2); that, subject only to the provision contained in S.II(1) which had no application here, the earliest applicant was entitled to have a preferential right for the grant of a lease; and that a consideration of the comparative merits of other applicants can arise only in a case where applications have been received on the same day. It is no doubt true that S. 11 (2) of the Act read in isolation gives such an impression which, in reality, is a misleading one. We think that the sooner such an impression is corrected by a statutory amendment the better it would be for all concerned. On a reading of S.11 as a whole, one will realize that the provisions of sub-section (4) completely override those of sub-section (2). This sub-section preserves to the S.G. a right to grant a lease to an applicant out of turn subject to two conditions : (a) recording of special reasons and (b) previous approval of the C.G. It is manifest, therefore, that the S.G. is not bound to dispose of applications only on a "first come, first served" basis. It will be easily appreciated that this should indeed be so for the interests of national mineral development clearly require in the case of major minerals, that the mining lease should be given to that applicant who can exploit it most efficiently. A grant of M.L, in order of time, will not achieve this result."
The only thing to be noted here is that Section-11 (4) of the pre-amended M.M.(D & R) Act provides for grant of prospecting licence to an applicant whose application was received later by giving any special reason to be recorded. In the post-amended Act the same was incorporated in Section-11 (5). In view of the aforesaid dictum of the Apex Court, the petitioner may not have a vested right for grant of Mining Lease, but it has a vested right to be considered. The State Government has a right to grant lease to an applicant out of turn as provided under Section 11 (5) of the Act, subject to certain conditions.
15.6 Fact remains, in the case of POSCO, its application though later, was considered pressing into service the provisions of section 11 (5) of the Act. Two conditions are required to be satisfied as per section 11(5), i.e. (i) that there must be "special reasons" recorded in writing, and (ii) the prior approval of the Central Government (for minerals specified in the 1st Schedule) must be obtained before passing an order under Section 11(5) of the M.M.(D&R) Act. Similar was the position under Section 11 (4) prior to the amendment in December 1999.
15.7 The term "special reasons" has not been defined in the M.M.(D&R) Act. As to what would constitute a "special reason" for grant of mineral concession to a later day applicant in preference to an earlier day applicant must, therefore, be seen from the objects and reasons of the M.M.(D&R) Act. What is abundantly clear is that Section 11(5) provides for an exception from the general rule, that is, an earlier day applicant being given preference over a later day applicant. It also follows from the use of the term "special" that the reasons must be out of the ordinary or exceptional as even mentioned by the Central Government in its Guidelines of June 2009, the relevant paragraph, i.e. paragraph-8.13 has already been quoted in this judgment in paragraph No. 11.10.
15.8 The term "special reason" must necessarily have nexus with the objects of the M.M.(D&R) Act i.e. mineral development and/or its conservation. That "special reasons" under Section 11(5) cannot be the same as Section 11(3) reasons is evident, as section 11(3) is the criteria for same day applicants' inter-se merit. Moreover, section 11(5) is an exception for later applicant to be given preference. Special reasons must be something "different and stronger" or "exceptional" in the words of the Central Government also.
15.9 Lastly there is no cogent reason ascribed in the recommendation nor any justification has been given justifying the application of Section 11(5). A bare reading of the recommendation would show that it is like that of section 11 (3). Hence, in our considered opinion, application of section 11(5) has not been made in the spirit of legislative provision. At the cost of repetition, we may quote hereinbelow the direction of the Central Government dated 27.9.2007 while dealing with the matter of Kudremukh (supra).
" xxx when a number of applications were lying pending for grant of mineral concession, it was obligatory on the part of the State Government to have examined all the pending applications before it and pass order thereon after examining their inter-se-merits and then come to the conclusion for granting mineral concession, which in the case, the State Government has failed to do. As regard setting up of pellestisation plant by the petitioner, the State Government could have put the same as a condition while granting PL to the petitioner as has been done in case of POSCO while sending their proposal to the Central Government for prior approval.
In view of the foregoing, we are of the opinion that State Government has erred in not considering all the mineral concession applications simultaneously that were pending with them for the area and instead State Government has without passing order on those applications has recommended the case of impleaded party for grant of PL. Therefore, State Government's order dated 19.12.2006 is set aside with the direction to consider all the pending applications simultaneously and examine inter-se merit of all the applications and then pass an order as per law after affording an opportunity of hearing to all the applicants.
15.10 The aforesaid order of the Revisional Authority was challenged before this Court in Dagara's case. This Court while dealing with the writ petition disposed of the same with the following observation/ direction:
"In any event, the appropriate authority of the Government has not taken any final decision after the matter has been remanded by the revisional authority for hearing by the State. Hearing is continuing. It is open to the petitioner to appear before the Secretary in connection with his application for hearing. No final decision has been taken by the Secretary. So going by these facts, it cannot be said that the petitioner's case at the moment is ripe for interference by this Court. However, this Court considered all the points discussed above, since questions were raised about the competence and legality of the hearing process"
15.11 So, the matter was left to the State Government to carry out the direction of the Revisional Authority, wherein it was categorically directed to consider the pending applications simultaneously and examine inter-se merit of all the applications and then pass an order as per law after affording an opportunity of hearing to all the applicants.
15.12 The present petitioner also filed a writ petition earlier being W.P.(C) No. 6484 of 2008 inter alia with a prayer to direct the opposite parties for expeditious disposal of the pending applications for mineral concessions filed by the petitioner in accordance with law. This Court by order dated 14.7.2008 disposed of the writ petition, which has already been quoted in the foregoing paragraph.
Subsequently, the petitioner filed a writ petition being W.P.(C) No. 15424 of 2008 with similar prayer as prayed in the previous writ petition. The writ petition was disposed of by order dated 12.11.2008 which has already been quoted in the aforesaid paragraph.
Thereafter, when the State Government could not dispose of the applications within the stipulated period of three months, an application being Misc. Case No. 2165 of 2009 was filed by the State and this Court disposed of the said application by its order dated 30.3.2009, which is quoted hereunder:-
"Under exceptional circumstances, the period is extended by three months from today to dispose of the application as directed by this Court earlier vide order dated 12.11.2008. With this observation, the petition stands disposed of."
15.13 It is a fact that no order has been passed till date by the State Government on the application of the petitioner in question and other applications in terms of the order of the Revisional Authority as well as the order passed by this Court, but a recommendation has been made in favour of POSCO.
Now, we have to examine from the records, which were produced before us by the State, as to whether the State Government has complied with the order of this Court as well as the Central Government, as the case may be, by dealing with the applications of the petitioner and others in their comparative merit and whether the recommendation made in favour of POSCO taking recourse to sub-section-5 of Section-11, is correct.
15.14 Perused the records.
On perusal of file bearing No. 11 (B) SM-2/2006 dealing with the subject "P.L. application No. 2122 dated 27.9.2005 of POSCO India Pvt. Ltd", we find that after personal hearing of all those applicants, the Secretary has concluded thus:-
"As the area applied for has not been prospected, the ML applications filed by some M0U signed companies cannot be considered. Further as per Government guidelines two MoU signed companies i.e M/s Jindal Stainless Ltd. (formerly M/s Jindal Strips Ltd.) and M/s POSCO India (P) Ltd. have achieved the milestones vis-à-vis their respective MoUs. The case of JSL is being considered elsewhere. POSCO India (P) Ltd. on account of its ability to carry out scientific exploration and mining, capability to mobilize adequate financial resources needed to be invested in prospecting and mining and setting up of value addition facilities including a 12 MTPA steel plant based on eco-friendly and resource-use efficient technology, that will generate high order revenue and employment deserves precedence over all other applications filed both for notified and non notified areas. Hence, it can be safely concluded that M/s POSCO India (P) Ltd. stands out as the most meritorious among all the MoU signed applicants as well as other non-MoU applicants.
Further, none of the ML applicants (whether M0U signed or not) has submitted legally acceptable prospecting report. Therefore, all the ML applications filed over the area do not satisfy the condition as prescribed under section 5(2)(a) of the Act. Hence, all the applications are liable for rejection even when found meritorious otherwise".
Thereafter it was approved by the Government of Orissa for recommendation of Prospecting licence for a period of three years in favour of POSCO.
15.15 Now, let us look to the manner in which the comparative merit was dealt with as per the direction of the Central Government in file No. 11 (B) SM-4/2007 under the subject "Determination of Relative merits of prior applications of the P.L. application dated 27.9.2005 of POSCO India (P) Ltd.".
We are only dealing with the manner in which the case of the petitioner has been dealt with. Following is the comments on the petitioner's application:-
"P. Hota the Director of the company attended the personal hearing on 10.4.2008 and submitted the deficient documents and additional information. He stated that his above company is a Joint Venture between Navayug Group and T.P. Minerals Group. It was submitted that the company proposes to invest Rs.4400 to Rs.7800 crore in mining and Rs.34,000 crore in industry and are interested to have one port based steel complex of 12 mtpa capacity on the east coast of Orissa. The applicant company possesses merit for consideration but the area is not large enough to meet the huge demand of the proposed 12 mtpa plant. The steel plant project is till under consideration by High Level Clearance Authority (HLCA) and therefore a decision needs to be awaited."
15.16 On a bare reading of the order of the Central Government and the decision of the Apex Court in Indian Metals (supra), it can be said that the dictum of Apex Court can only be achieved if all the applications are considered simultaneously and the interse merit of all the applicants is examined, as rightly directed by the Revisional Authority.
From the record it appears that there is absolutely no examination of inter se merit save and except the conclusion arrived at, as quoted hereinbefore. The decision taken by the State Government is not in terms of the directions of the Revisional Authority and has been passed in hot haste and without due application of mind.
The aforesaid answers issue nos. 6 and 7 against the State Government.
16. Now we like to deal with the question of discrimination and/or mala fide. Mala fide, though raised in the writ petition, yet the same has not been proved by cogent materials, but we are surprised to note that the State Government has taken different stands at different points of time for different applicants.
17. In the case of Shiv Kumar Agrawal v. State of Orissa (W.P.(C) No. 9775 of 2008), the counter affidavit filed by the State reveals that the applications received till 20.12.1999, i.e. the effective date of amendment, including those undisposed of applications received before 29.10.1991 were considered for determination of interse merit. Accordingly, the State Government recommended the P.L. Application of M/s Bhushan Steel and Strips Ltd pursuant to 1991 notification for grant to the Central Government and the Central Government accorded its due approval.
18 Now in the present case, if we accept the statement made in the counter affidavit filed in the case of Shiv Kumar Agrawal (supra), 20.12.1999 being the closing date, then POSCO's application could not have been considered, which was filed on 27.9.2005.
19. We are unable to accept the contention of the learned counsel for the State that the aforesaid statement made in the affidavit is a mistake committed by the officer and does not bind the Government.
20. This is not the only infirmity. The consistent argument of learned counsel for the State as well as the Union of India is that no preferential right is available to the petitioner. Though we have summed up the same in issue no. 6, we will be failing in our duty if we do not bring the materials available on the record produced by the State Government. As it appears, after 20.12.1999, which is stated to be the effective date of amendment, pursuant to the notification bearing S.R.O. No. 647 dated 23.8.1991, P.L and M.L. have been granted to 15 (fifteen) applicants on the basis of preferential right.
21. So the argument of opposite parties 1 and 2 is that there is no preferential right after the 1999 amendment and even if we have settled that no such preferential right is available, surprisingly in 15 (fifteen) cases, the State Government, after the amendment has taken a conscious decision to grant P.L. and M.L. on preferential basis.
22. This clearly shows that the stand taken by the Government is totally inconsistent and the Mineral Policy of the State is totally in a mess and the State Government has adopted a policy that would suit to the situation and suit to favoured parties.
23. We, therefore, while expressing our grave dissatisfaction in the manner in which the mineral resources of the State have been dealt with, reject the stand taken by the State that the so called affidavits as well as the things done in the past are due to the wrong action of some Government officials, because we find from the record that the aforesaid decision is the conscious decision of the State Government not in one case but in 15 cases and no Government official has committed any mistake as pleaded.
24. In view of the findings recorded in the foregoing paragraphs, we have no hesitation to allow the writ petition and set aside the recommendation made by the State Government dated 9.1.2009 in favour of POSCO-O.P.3 and direct the State Government to take a fresh decision, as directed above, and in terms of the order dated 27.9.2007 passed by the Revisional Authority in Revisional Application File No. 22 (41)/2007-RC-I by giving the petitioner the preferential right of consideration. In the event the State Government decides to invoke the provisions of Section 11 (5) of the M.M.(D&R) Act, "special reasons" for the same in terms of the guidelines dated 24.6.2009 issued by the Ministry of Mines, Government of India, be recorded in writing. The State Government shall complete the entire exercise within a period of four months from today.
25. In view of the aforesaid conclusion, so far as intervention application of M/s VISA Steel Ltd. is concerned, we are of the view that if VISA has any cause of action, it is open to it to file independent writ application, if so advised. We reject the intervention application.
We make no order as to cost.
B. P. DAS, J.
B. P. RAY, J. I have had the privilege of going through the judgment prepared by my esteemed brother Hon'ble Justice Das. While I am in complete agreement with the conclusion reached by Hon'ble Justice Das, I feel it necessary to amplify in regard to issue no.5. I have gone through the judgment of the Gujarat High Court in the case of Amritlal Nathubhai Shah v. Union Government of India and another AIR 1973 Guj. 117 passed by the Hon'ble Chief Justice P.N. Bhagwati of the Gujarat High Court (as His Lordship the then was), which was affirmed by the constitutional Bench of the Apex Court and paragraph-11 of the judgment has noted the distinction of Rule-59 before 1963 amendment of M.C. Rules, 1960 and it would be profitable to quote the paragraph-11 of the said judgment.
"11. There is also inherent evidence in the Mineral Concession Rules, 1960 which strongly supports this conclusion. Rule 59 contemplates a case where the State Government has refused to grant a prospecting licence or a mining lease on the ground "that the land should be reserved for any purpose" and thus clearly recognizes the executive power of the State Government to reserve land for any purpose. Prior to amendment of Rule 59 by the notification dated 9thJuly, 1963, the words used in the rule were "land should be reserved for any purpose other than prospecting and mining minerals" but by the amendment the words "other than prospecting or mining minerals" were omitted, so that it is now sufficient to attract the applicability of the rule, that the land is reserved for any purpose which may include even reservation for mining minerals. The words "land should be reserved for any purpose" are highly significant and they clearly postulate that the State Government has executive power to reserve land for any purpose which would include exploitation of bauxite in the public sector. The respondents sought to explain away these words by suggesting that the reservation referred to in these words must be read to mean reservation under a rule framed by the Central Government under Section 13 or Section 18. But this suggestion is wholly untenable. There is no rule made by the Central Government under Section 13 or Section 18 reserving land for any purpose or empowering the State Government to do so and if there is no such rule, it is difficult to imagine why the Central Government should have framed Rule 59 dealing specifically with the case where a prospecting licence or mining lease has been refused by the State Government on the ground that the land should be reserved for any purpose. There is also no reason why the Central Government should have found it necessary to amend Rule 59 by omitting the words "other than prospecting or mining for minerals". If the contention urged on behalf of the petitioners were correct, not only would the enactment of Rule 59 but also its amendment be rendered an exercise in futility on the part of the Central Government. Xxx xxx xxx."
It need be reiterated that so far as the State of Orissa is concerned, reliance was placed on 1962 notifications (Notification No. 5988-MG dated 5.6.1962, Notification No. 11791/MG dated 6.12.1962). It would, therefore be abundantly clear that such notifications were prior to 1963 amendment of Rule 59 of M.C. Rules and therefore were clearly without necessary legislative competence.
In view of the conclusion of the Gujrat High Court which has been affirmed by the Apex Court in Amritlal Nathubhai Shah Vs. Union Government of India (1976) 4 SCC 108, I have no hesitation to hold that the State Government had no legislative competence to reserve the land as on 1962 prior to 9th July, 1963 when the amendment to Rule 59 came into force.
Writ petition allowed.