Orissa High Court
M/S. Kjs Ahluwalia vs State Of Odisha & Others : Opp. Parties on 22 December, 2020
Equivalent citations: AIR 2021 (NOC) 343 (ORI.), AIRONLINE 2020 ORI 144
Author: Mohammad Rafiq
Bench: Mohammad Rafiq, Biswanath Rath
IN THE HIGH COURT OF JUDICATURE FOR ORISSA
AT CUTTACK
Writ Petition (Civil) No.26973 OF 2020
With
Writ Petition (Civil) Nos.27751, 27731, 27672, 28141, 28004, 29112
& 29311 OF 2020
WRIT PETITION (CIVIL) No.26973/2020
M/s. KJS Ahluwalia : Petitioner
-Versus-
State of Odisha & others : Opp. Parties
M/s.JSW Steels Ltd. : Intervener
WRIT PETITION (CIVIL) No.27751/2020
M/s. Kalinga Mining Corporation : Petitioner
-Versus-
State of Odisha & another : Opp. Parties
Jagat Janani Services Pvt. Ltd. : Intervener
WRIT PETITION (CIVIL) No.27731/2020
Ramesh Prasad Sao : Petitioner
-Versus-
State of Odisha & another : Opp. Parties
2
WRIT PETITION (CIVIL) No.27672/2020
M/s.Ghanashyam Misra & Sons Pvt. Ltd. : Petitioner
-Versus-
State of Odisha & another : Opp. Parties
WRIT PETITION (CIVIL) No.28141/2020
M/s. Serajuddin & Company : Petitioner
-Versus-
State of Odisha & others : Opp. Parties
WRIT PETITION (CIVIL) No.28004/2020
Khatau Narbheram & Company : Petitioner
-Versus-
State of Odisha & another : Opp. Parties
WRIT PETITION (CIVIL) No.29112/2020
Bajrang Sharda : Petitioner
-Versus-
State of Odisha & others : Opp. Parties
3
WRIT PETITION (CIVIL) No.29311/2020
M/s. Aryan Mining & Trading
Corpn.Pvt.Ltd. & another : Petitioners
-Versus-
State of Odisha & others : Opp. Parties
Advocate(s) who appeared in these cases through Video
Conferencing Mode :
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In WRIT PETITION (CIVIL) No.26973/2020
For petitioner : Mr. Mukul Rohatgi,
Senior Advocate with
M/s. S.K.Routray, S.Mohanty,
L.Mohapatra, S.Pattanaik
& P.Nayak, Advocates
For O.Ps : Mr. Ashok Kumar Parija,
Advocate General with
Mr. P. K. Muduli,
Additional Government Advocate
For Intervener : Mr. Harish Salve,
Senior Advocate with
Mr. S.S.Mohanty, Advocate
In WRIT PETITION (CIVIL) No.27751/2020
For petitioner : Mr. S.P.Mishra,
Senior Advocate with
Mrs.P.Rath, J.Mohanty & J.P.Behera,
Advocates
For O.Ps : Mr. Ashok Kumar Parija,
Advocate General with
Mr. P. K. Muduli,
Additional Government Advocate
4
For Intervener : Mr. Goutam Mukherji,
Senior Advocate with
Mr.R.K.Mahanta, Advocate
In WRIT PETITION (CIVIL) No.27731/2020
For petitioner : Mr. Parag Pr.Tripathy,
Senior Advocate with
M/s. U.C.Patnaik,
S.Patnaik, M.Sahoo
& R.Kumar, Advocates
For O.Ps : Mr. Ashok Kumar Parija,
Advocate General with
Mr. P. K. Muduli,
Additional Government Advocate.
In WRIT PETITION (CIVIL) No.27672/2020
For petitioner : Mr. P.S.Narasimha,
Senior Advocate with
M/s. S.P.Sarangi,
D.K.Das, G.Khanna,
& S.K.Sahu, Advocates
For O.Ps : Mr. Ashok Kumar Parija,
Advocate General with
Mr. P. K. Muduli,
Additional Government Advocate
In WRIT PETITION (CIVIL) No.28141/2020
For petitioner : Mr. R.K.Singh,
Senior Advocate with
M/s. S.K.Sahu,
A.Kanungo, A.Mohanty
& A.Das, Advocates
For O.Ps : Mr. Ashok Kumar Parija,
Advocate General with
Mr. P. K. Muduli,
Additional Government Advocate
5
In WRIT PETITION (CIVIL) No.28004/2020
For petitioner : Mr. S.P.Mishra,
Senior Advocate with
M/s. S.P.Sarangi,
D.K.Das, G.Khanna
& S.K.Sahu, Advocates
For O.Ps : Mr. Ashok Kumar Parija,
Advocate General with
Mr. P. K. Muduli,
Additional Government Advocate
In WRIT PETITION (CIVIL) No.29112/2020
For petitioner : M/s. Sreejit Mohanty &
S.K.Mishra, Advocates
For O.Ps : Mr. Ashok Kumar Parija,
Advocate General with
Mr. P. K. Muduli,
Additional Government Advocate
In WRIT PETITION (CIVIL) No.29311/2020
For petitioners : Mr. Naveen Kumar,
Senior Advocate with
M/s. S.Nanda, N.Kumar
& A.Mahanta, Advocates
For O.Ps : Mr. Ashok Kumar Parija,
Advocate General with
Mr. P. K. Muduli,
Additional Government Advocate
For Intervener : Mr. Asok Mohanty,
Senior Advocate with
Mr.S.S.Mohanty, Advocate
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For Union of India : Mr. P.K.Parhi,
Asst. Solicitor General of India
(in all cases)
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6
PRESENT :-
HONOURABLE THE CHIEF JUSTICE MR.MOHAMMAD RAFIQ
&
HONOURABLE MR. JUSTICE BISWANATH RATH
--------------------------------------------------------------------------------------------
Date of Hearing : 14.12.2020 Date of Judgment: 22.12.2020
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JUDGMENT
Per : Mohammad Rafiq, C.J.
Aforementioned eight writ petitions have been filed by the ex-lessees involving eight mining establishments whose leases, by virtue of statutory prescription contained in Section 8A(6) of the Mines and Minerals (Development and Regulation) Act, 1957 (for short 'the MMDR Act'), have come to an end on 31.3.2020.
2. There are in this batch of writ petitions three categories of cases. In the first category are those cases where, after expiry of the lease of the petitioners by statutory prescription under Section 8A(6) of the MMDR Act on 31.03.2020, the mining lease area was put to auction and new leases have come in picture. In this category, Writ Petition (Civil) No.26973 of 2020 has been filed by M/s. KJS Ahluwalia wherein the Intervener- M/s. JSW Steels Ltd. is 7 the new lessee. Writ Petition (Civil) No. 27751 of 2020 has been filed by M/s. Kalinga Mining Corporation in which M/s. Jagat Janani Services Pvt. Ltd. is the new lessee. Both the intervenors have contested the writ petitions by filing Intervention Applications. Writ Petition (Civil) No.29311 of 2020 has been filed at the instance of M/s. Aryan Mining and Trading Corporation Pvt. Ltd. In this case also a new lessee has been granted the mining lease but he has not filed any Intervention Application.
3. In the second category are the cases in which after expiry of the lease period of the old lessee, the leasehold area has been put to auction and the very same lessees having given the highest bid, have again became the fresh leaseholder. Writ Petition (Civil) No.27672 of 2020 falls in this category which has been filed by M/s.Ghanashyam Misra & Sons Pvt. Ltd. Writ Petition (Civil) No.28141 of 2020 filed by M/s. Serajuddin & Company also falls in this category.
4. In the third category are those cases where there is no new lessee but the petitioners are aggrieved by action/inaction of the opposite parties for variety of reasons which shall be discussed hereinafter separately. In this category, Writ Petition (Civil) No.27731 of 2020 has been filed by M/s.Ramesh Prasad Sao. Writ Petition (Civil) No.28004 of 2020 has been filed at the instance of 8 M/s. Khatua Narbheram & Company. Writ Petition (Civil) No.29112 of 2020 has been filed by Bajrang Sharda. In all these three cases too, the lease expired on 31.3.2020 by virtue of statutory prescription under Section 8A(6) of the MMDR Act.
5. What is common in all these writ petitions is that all the writ petitioners seek to challenge the identical orders passed by the Government of Odisha, Steel and Mines Department dated 1.10.2020 issued on invocation of Rule 12(1)(hh) of Minerals (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016, (for short 'the Rules of 2016') and most of them have also challenged the order of the Government of Odisha, Steel & Mines Department dated 09.10.2020 vide which their representations for extension of time, seeking permission to transport balance minerals, plants, machineries etc. lying on the leasehold area after 31.03.2020, has been rejected by identically worded orders holding their representations as not maintainable.
Writ Petition (Civil) No. 26973 of 2020:
6. Mr. Mukul Rohatgi, learned Senior Advocate appearing for the petitioner-M/S.KJS Ahluwalia in this writ petition, referring to the notice dated 1.10.2020 vide Annexure-2, contended that the lease period of the petitioner expired on 31.03.2020 under the provisions of Section 8A(6) of the MMDR Act. On the date of expiry 9 of the lease on 31.03.2020, the petitioner had significant quantity of legally excavated Iron ore, stacked and stored within the Mineral Block (stocked materials) along with engines, machinery, plant, building structures and other works, erections and conveniences, erected by the petitioner during the lease period. While admitting that petitioner was granted six months time after expiry of the lease to remove the stocked minerals, plant & machinery from the Mineral Block in terms of Rule 12(1) (gg) of the Rules, 2016; but despite the petitioner's best efforts, it could not fully remove the stocked minerals and plant & machinery within the period provided as this was severely affected by the restrictions, constrictions and hindrances on account of Covid-19 pandemic and subsequent lockdown, guidelines, restrictions imposed from time to time both by the State as well as the Central Government, in order to prevent spread of pandemic. Mr. Mukul Rohatgi, learned Senior Advocate submitted that in the above scenario, the State Government has failed to duly consider the situation which prevented and hampered transportation of minerals and shifting of the plant & machinery and it arbitrarily invoked Rule 12(1) (hh) of the Rules of 2016.
Learned Senior Advocate argued that the impugned orders are arbitrary, harsh, oppressive and unfair, aimed at depriving the petitioner of its stocked minerals and plant & machinery, which in his view would be a case of undue enrichment of the State. Referring 10 to Rule 12(1) (gg) of the Rues of 2016, learned Senior Advocate contended that according to the above provision, an ex-lessee is provided a period of six calendar months to take down and remove the legally excavated material during currency of the lease as well as taking away engines, machinery, plant, building structures etc. Learned Senior Advocate submitted that Rule 12(1)(ff) of the Rules of 2016 provides that in the event of failure of lessee to comply with any terms and conditions of the Act or Rules made thereunder or in the mining lease, which is considered by the Government to arise from a force majeure event, the period of delay on account of such force majeure event has to be added to the period fixed under the rules or the mining lease. Further elaborating this plea, learned Senior Advocate contended that this additional period can also be given even after expiry of period under Rule 12(1)(gg) of the Rules of 2016. It is thus contended that the State authorities have failed in appreciating the true purport of Rule 12(1) (ff) of the Rules of 2016. The petitioner clearly demonstrated before the State the reasons for its (the petitioner) failure to take away the minerals and the plant & machinery etc. in terms of Rule 12(1) (gg) of the Rules of 2016. The petitioner has a clear case of force majeure attracting Rule 12(1)(ff) of the Rules of 2016. Referring to Clauses-4, 5 and 6 of Part-IX from Form-K of the Mineral Concession Rules, 1960 (in short 'the M.C. Rules, 1960'), Mr. Mukul Rohatgi, learned Senior Advocate 11 submitted that the benefit under Rule 12(1) (ff) of the Rules of 2016 is inclusive and cannot be read in isolation. He further submitted that the petitioner has legitimate right to claim the benefit of Rule 12(1) (ff) of the Rule of 2016 even after expiry of lease. The State authorities were not justified in invoking Rule 12(1)(hh) of the Rules of 2016, while keeping the representation of the petitioner under Rule 12(1) (ff) of the Rules of 2016 pending. It is urged that in view of pendency of the representation under Annexure-2, the State authorities should have first taken a decision on such representation and could have only thereafter invoked the provision of Rule 12(1)(hh) of the Rules of 2016. It is thus contended that the opposite parties have not acted in the manner provided under the law and have acted in an unreasonable and arbitrary manner.
7. Referring to the order dated 9.10.2020, Annexure-A/1 at page 9 of the counter affidavit, Mr. Mukul Rohatgi, learned Senior Advocate submitted that this impugned order has been passed in a mechanical manner, without application of mind and without assigning any reason whatsoever, by only indicating that the representation is not maintainable. This order is per se not sustainable in the eye of law and is liable to be set aside. Relying on the decision of the Supreme Court in Mohinder Singh Gill Vrs. Chief Election Commissioner, (1978) 1 SCC 405, learned Senior 12 Advocate argued that opposite parties cannot justify the impugned orders by now citing further and additional reasons in their counter affidavit, not indicated therein. Learned Senior Advocate has drawn attention of the Court to the decision of the Supreme Court in Chowgule and Company Private Ltd. Vrs. Goa Foundation & Ors, 2020 SCC Online SC 103 granting time of six months for removal of iron ore relatable to Rule 12(1)(gg) of the Rules, 2016. Reference is then made to another order again involving the same parties, dated 30.10.2020 reported in 2020 SCC Online SC 830, granting three months time for removal of mineral on the ground of lockdown due to pandemic COVID-19 and delay in grant of transit permits. Reliance is also placed on the order of the Supreme Court dated 24.11.2020 in I.A.No. 101547 of 2020 arising out of Writ Petition (Civil) No.114 of 2014, where the Supreme Court has granted time of six months to M/s. Mideast Integrated Steels Ltd., from the date of order to lift and transport the minerals even after expiry of lease. It is argued that this was also case from the State of Odisha itself and extension of time was granted preciously on the same grounds on which the petitioners are claiming similar relief. In both the cases, the Supreme Court was persuaded to grant extra time, having considered the situation of lockdown due to pandemic COVID-19, which orders are binding on this Court. Learned Senior Advocate prayed for an identical relief in the present case. Taking 13 this Court through the order declaring lockdown by the National Disaster Management Authority of Ministry of Home Affairs, Government of India, Annexure-9 to the writ petition and the other orders on imposition of variety of restrictions at different level, reading through Annexures-10 series, 11 series, 13, 14 series, 15 series, 16 series, 17 series, 24, 25, 26 and Annexure- 27, 28, 29, 30,31, 32 dated 25.11.2020 to the additional affidavit and Annexure-42 to the reply to additional affidavit by the opposite party no.1, a notification dated 27.11.2020, the learned Senior Advocate contended that it is too late in this day to impart an impression that transportation and other activities were not at all affected by Covid-19 reasons in the State of Odisha.
8. Challenging the locus of the Intervener, the JSW Steels Ltd., Mr. Mukul Rohatgi, learned Senior Advocate submitted that the Intervener was all along having full information that the ex- lessee would still continue on the same leasehold area and also had full knowledge of the fact its transportation has been adversely affected for Covid-19 reasons. The Intervener has no locus to oppose to the prayer of the petitioner. On the aspect of Intervener being not put to notice by State Authority, Mr. Mukul Rohatgi, learned Senior Advocate contended that it is a matter between the Intervener and the State and same has nothing to do with the claim of the 14 petitioner. It is contended that if the intervener has suffered, then it has suffered for its own cause and he cannot hold the petitioner responsible for the same. However, on the plea of the Intervener, entering into low dispatch or no dispatch, Mr. Mukul Rohatgi, learned Senior Advocate contended that it is highly improper on the part of the State to maintain that new lessee has suffered for the pandemic situation due to COVID-19 and the petitioner did not suffer at all.
9. Mr. Mukul Rohatgi, learned Senior Advocate submitted that Rule 12(1)(ff) of the Rules of 2016 envisages exclusion of time in determining the period available to the lessee under Rule 12(1)(gg) of the said Rules, which provides for taking down and removing stocked minerals. The opposite party under Rule 12 (1)(ff), is duty bound to consider the representation of the petitioner so as to examine whether any default has occurred on account of force majeure event. Rules 12(1)(ff), 12(1)(gg) and 12(1)(hh) of the Rules of 2016 are in parimateria with Clauses 4, 5 and 6 of Part-IX of Form-K under MC Rules 1960, on which format the mining lease was executed in favour of the petitioner. Therefore, stipulations made in those clauses, which also includes force majeure event, form part of the terms and conditions of the mining lease. It was therefore highly improper on the part of the State authorities to foreclose the right of the petitioner to reclaim 15 minerals, plants & machinery etc. by resorting to Rule12(1)(hh) without adjudicating on the representation of the petitioner under Rules 12(1)(ff) of the Rules of 2016. The representation of the petitioner has been rejected belatedly by a mechanical order passed on 9.10.2020 after the opposite party had already invoked Rule 12(1)(hh) and the rejection was made not on consideration of the representation on merits, but by merely holding the representation not maintainable by a non-speaking order, without assigning any reasons which reflects total non-application of mind. Learned Senior Advocate contended that the force majeure event, which is a part of the conditions of the mining lease, has since received statutory recognition in Rule 12(1)(ff). The State Government was therefore wholly unjustified in holding the representation of the petitioner as not maintainable.
10. It is argued that in the normal circumstances the petitioner could have utilized this time to remove all its minerals within six months under Rule 12(1)(gg), but that could not be possible due to outbreak of the pandemic. Therefore, the insistence of the respondent that the petitioner ought to have immediately arranged for another land for intermediate storage is wholly unreasonable. Argument of the learned Senior Advocate therefore is that petitioner's failure to fully remove the stocked minerals and plant & machinery is not on account of any inaction or default on its 16 part, but was attributable to the outbreak of the pandemic and the direct consequences flowing therefrom, which would certainly constitute a force majeure event due to following reasons:
i. Stoppage of transportation and movement of persons during the COVID 19 lockdown (Annexure-10 Series at Pg. 85-141; Annexure-11 Series at Pg. 142-170 and Annexure-13 at Pg. 173-174 of Petition);
ii. Restrictions imposed on extent of transportation (number of trips) to major ports even when allegedly transportation was allowed since most of the stock of petitioner comprises of low-grade fines which can only be exported in the absence of any domestic demand and market; (Annexure-15 Series at Pg. 179-197 of Petition) iii. Period of complete shutdown of the municipality area where the mine is situated (Annexure-14 Series at Pg. 175-178 of Petition);
iv. Limited availability of labour due to restriction on
passenger transportation and the hysteria
surrounding the pandemic (Annexure-17 Series at Pg. 210-253 of Petition);
v. Lastly, in view of the constricted transport and labour, if not complete inability to transport (Annexure-16 Series at Pg. 198-209 of Petition).
11. Mr. Mukul Rohatgi, learned Senior Advocate submitted that the spread of COVID-19 pandemic and its devastating consequences have been acknowledged and recognized by the Government of India as a force majeure event. The Government of India has in this behalf from time to time introduced several beneficial measures in the overall interest of the economy of the country. Reference is made to various orders/directions and 17 notifications issued in this regard by different Ministries of the Government of India, which are as follows:
a. Office Memorandum dated 19.02.2020 bearing No. F.18/4/2020-PPD by the Department of Expenditure Procurement Policy Division, Ministry of Finance, Govt. of India (Annexure-24 at Pg. 28 of Additional Affidavit by Petitioner dated 25.11.2020):
"Spread of Corona virus should be considered as a natural calamity and force majeure may be invoked"
b. Letters dated 27.03.2020, 14.04.2020, 25.04.2020 and 05.05.2020 issued by the Ministry of Railways, Govt. of India (Annexure-25 at Pg. 29-35 of Additional Affidavit by Petitioner dated 25.11.2020):
"Relaxation in Demurrage and Wharfage charges relying on Office Memorandum issued by Ministry of Finance, Government of India."
c. Orders by Ministry of Shipping, Govt. of India:
i. DO No. PD-13/33/2020-PPP/e-339106 dated 24.03.2020 (Annexure-26 at Pg. 36 of Additional Affidavit by Petitioner dated 25.11.2020):
"Major Port Trusts may consider COVID 19 pandemic as a valid ground for invoking force majeure clause"
ii. DO No. 14033/4/2020-PD-VII dated 24.03.2020 (Annexure-27 at Pg. 37 of Additional Affidavit by Petitioner dated 25.11.2020):
18"Acknowledgment that movement of trucks and trailers is being restricted resulting in congestion at the ports and affecting movement of goods"
iii. Letter No. PD-14300/4/2020-PD VII dated 31.03.2020 (Annexure-29 at Pg. 43-45 of Additional Affidavit by Petitioner dated 25.11.2020):
"Relaxation in relation to penalties/charges/fee etc. in relation to delays on account of causes attributable to lockdown measures"
d. Summary of relaxations offered by Central Board of Indirect Taxes and Customs (CBIC) as on 11.06.2020 (Annexure-28 at Pg. 38-42 of Additional Affidavit by Petitioner dated 25.11.2020):
"Relaxation in relation to detention charges on containers held up for reasons attributable to lockdown measures"
e. Order dated 01.04.2020 by the Ministry of Civil Aviation, Govt. of India (Annexure-30 at Pg. 46-48 of Additional Affidavit by Petitioner dated 25.11.2020):
"Relaxation on demurrage charges deal with sudden and unprecedented disruption caused by the lockdown due to the COVID-19 pandemic"
f. Circular dated 5th May, 2020 issued by the Government of India, Ministry of Mines, addressed to Principal Secretaries/Directors/Commissioners of the State Governments, which reads thus:19
"2. There is a demand from the industries to invoke the force manure clause of Mineral Development and Production Agreement and to re-assess the quantity of Mineral to be produced considering the ground realities. The production can be increased when the situation normalizes.
3. The said request of the industry appears considerable in the present situation. It is therefore suggested to consider such request of the leaseholders taking into account the ground realities and give relaxation accordingly."
g. Office Memorandum dated 13.05.2020 bearing No. F.18/4/2020-PPD by the Department of Expenditure Procurement Policy Division, Ministry of Finance, Govt. of India. (Annexure-31 at Pg. 49-50 of Additional Affidavit by Petitioner dated 25.11.2020):
"In view of the restrictions placed on the movement of goods, services and manpower on account of the lockdown situation prevailing overseas and in the country in terms of the guidelines issued by the MHA under the DM Act 2005 and the respective State and UT Governments, it may not be possible for the parties to the contract to fulfil contractual obligations."
h. Office Memorandums dated 12.11.2020 by the Department of Expenditure Procurement Policy
Division, Ministry of Finance, Govt. of India (Annexure- 32 at Pg. 51-56 of Additional Affidavit by Petitioner dated 25.11.2020):
"Government is in receipt of many representations that on account of slowdown in economy due to the pandemic, there is acute financial crunch among many commercial entities and contractors, which in turn is affecting timely execution of the 20 contracts. Accordingly, the Ministry of Finance has reduced the percentage of Performance Security"
i. Notification dated 27.11.2020 issued by Ministry of Environment, Forest and Climate Change, Govt. of India (Annexure-42 at Pg. 58-60 of Reply to Additional Affidavit by Opp. Party No. 1):
"And whereas, in view of the outbreak of Corona Virus (COVID-19) and subsequent lockdowns (total or partial) declared for its control, implementation of projects or activities in the field has been affected. Ministry is in receipt of number of requests for extension of the validity of prior environmental clearances beyond the maximum period allowed in the said Notification, as the COVID 19 pandemic has not yet come to an end. The matter has been examined in the Ministry and the concern is genuine keeping in view the fact that due to lockdowns (total or partial), continuation of activities in the field may be difficult."
j. OM. N0. 17024/230/2018 dated 13.05.2020 issued by Ministry of Housing & Urban Affairs, Govt. of India allowed for extension of registration of real estate projects due to force majeure i.e. impact of the COVID- 19 pandemic."
12. Mr. Mukul Rohatgi, learned Senior Advocate further contended that the petitioner has not pleaded a situation of impossibility but a situation of severe restrictions resulting in practical impossibility, some of which continue even as on date 21 which prevented the petitioner from removing Stocked Mineral, Plant & machinery within six month period from 31.03.2020. In this regard, learned Senior Advocate placed reliance on the judgment in Satyabrata Ghose Vs. Mugneeram Bangur & Co. & Anr., 1954 SCR 310, wherein the Supreme Court while interpreting Section 56 of the Indian Contract Act, has explained the use of the term "impossible" and held that "The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose which the parties had in view; and if an untoward event or change of circumstances totally upsets the very foundation upon which the parties rested their bargain, it can very well be said that the promisor finds it impossible to do the act which he promised to do."
13. It is contended that the Intervener has made a wrong comparison of dispatch figures of the petitioner for the current year against corresponding period of the preceding year, as mentioned in para-20 of the objections to Intervention Application, which rather clearly demonstrates the adverse effect of pandemic. The petitioner has been able to remove comparatively lesser quantity of iron ore from April to July, 2020, but removed significantly higher quantity after August, 2020 onwards when the situation improved. After expiry of the mining lease i.e. on 31.03.2020, the petitioner had 5.64 million MT as per closing balance indicated in the records 22 maintained in the online system of the opposite party, but during the currency of the statutory period of six months under Rule 12(1)(gg) of the Rules of 2016, the opposite party vide its letter dated 02.09.2020 allowed inclusion of 6.79 Million MT Iron-Ore (sub- grade) excavated prior to 2009 for dispatch to the closing stock of the petitioner as on 31.03.2020, pursuant to a request made by the petitioner much before the expiry of the lease. The sub-grade Iron Ore was earlier not allowed as a marketable commodity but was allowed later.
14. Mr. Mukul Rohatgi, learned Senior Advocate contended that the Intervener has wrongly submitted that pursuant to the amendment in the MMDR Act and the Rules of 2016, consequential vesting order issued by the opposite party is absolute, and that the mine and all permissions/approvals/clearances in favour of the Intervener being vested in new lessee, the petitioner has no right to enter the mine or remove iron ore legally excavated and stored by it during the currency of the lease. This is a fallacious argument and the fallacy of the argument is writ large in as much as despite the amendments in MMDR Act and the Rules of 2016, the provisions of Rule 12(1)(ff), 12(1)(gg) and Rule 12(1)(hh) of the Rules of 2016 remain unchanged. Rather the conditions of the lease executed on Form-K of the M.C. Rules 1960 have been given statutory force by including some of its clauses, particularly Part-IX 23 Clauses 4, 5 and 6 in the Rules of 2016 as relevant provisions. A bare perusal of the vesting order under Annexure-H/I of the Intervention Application makes it clear that the vesting of the permissions/clearances/approvals etc. in the new lessee, do not have the effect of transfer of ownership of infrastructure established and the ore and minerals raised by the ex-lessee. The said vesting order in Note-1 clearly states that "1. Vesting of clearances/ approvals/ licenses/ permissions/ rights as above does not have the effect of transfer of ownership of infrastructure established and the ore & minerals raised by the ex-lessee which shall be governed by the provisions of the rules 12(1)(gg) and 12(1)(hh) of the Mineral Concession Rules, 2016."
15. Per contra, opposing the stand taken by the petitioner and supporting the action of the State, Mr. Harish Salve, learned Senior Advocate appearing for the Intervener-M/s. JSW Steels Ltd., submitted that the intervener is a fresh lessee over the same leasehold area and has deposited various statutory amounts, such as upfront payment towards grant of mining lease, performance security and also deposited the net present value in respect of the forest area within the block, apart from depositing the stamp duty and registration fee involving execution of the mining lease. Then the letter of intent has been issued in favour of M/s. JSW Steels Ltd. 24 Consequent upon execution of the lease deed, the Intervenor has been granted the leasehold rights for 50 years. By operation of the provision of the MMDR Act and on the basis of vesting order, the Intervener has already stepped into the shoes of the ex-lessee in the matter of mining of the leasehold area. All the approvals/statutory permission/clearance other and rights that were all earlier continuing in favour of ex-lessee, have now been vested in the Intervener-M/s. JSW Steels Ltd as per mandate of law created under Section 8B of the MMDR Act.
16. Mr. Harish Salve, learned Senior Advocate, submitted that after the vesting order passed in favor of the petitioner, ex- lessee has no right to interfere with the working of the Intervener, M/s. JSW Steels Ltd. Learned Senior Advocate further contended that since the Intervener has already commenced its mining operation, in the event prayer in the writ petition is considered, the intervener's prospects will be highly prejudiced. Learned Senior Advocate further contended that if both the petitioner and the Intervener are allowed to operate from the same mining leasehold area, there will be severe disturbance to and dislocation of, the activities of the Intervener. In that event, loss to be suffered by the Intervener cannot be compensated, particularly keeping in view the condition of maintaining the pace of excavation of the mineral 25 MMDR, Act in view of Rule 12-A of the Rules of 2016. Referring to the notice served on the Intervenor by the State Government, learned Senior Advocate contended that the Intervener has already started facing difficulty in his mining operations on account of simultaneous activities of the ex-lessee on the same lease hold area. Referring to contents of reply to the notice served on the Intervener JSW Steels Ltd. on shortfall in the excavation of minerals, learned Senior Advocate contended that the Intervener has taken a definite stand that this has occurred due to the inconvenience created by co- existence of the ex-lessee on the leasehold area. Adverting to the claim of the petitioner on the reason of reduction in the transportation of the minerals, it is contended that there was neither any stoppage in the mining activities nor any restriction in the movement of the trucks carrying minerals in the lockdown Notification issued by the Central Government. Further, taking this Court to the statement appended at page 213 of the Intervention Application, learned Senior Advocate drew attention of the Court to the position of transported minerals by different 28 parties mentioned therein and contended that about 20 parties mentioned in the said list have already removed substantial part of minerals within the period of six months following the provision of Rule 12(1)(gg). On these premises, learned Senior Advocate submitted that the petitioner has suffered due to his own fault. Instances like 26 slow movement of transportation, traffic jam and transportation becoming more onerous, cannot attract the Forece Majeure event. Since the petitioner has failed to substantiate the ingredients required for invocation of Rule 12(1)(ff) of the Rules, 2016, the petitioner is not entitled to any relief. The petitioner is at best entitled to six months time beyond expiry of the lease period under Rule 12(1)(gg) of the Rules, 2016. There is no further scope after issuance of notice under Rule 12(1)(hh) of the Rules, 2016 for extending the period to enable the petitioner to thereafter remove the balance minerals stacked in the leasehold area and also shifting of the plant and machineries standing over the leasehold area. While contending that the claim of the petitioner for application of force majeure event is wholly misconceived, Mr. Harish Salve, learned Senior Advocate submitted that there is no factual basis and foundation to lay the claim for benefit of the force majeure clause. The facts available on record rather demonstrates that petitioner has not been affected by the restrictions due to the pandemic COVID-19.
17. Mr. Harish Salve, learned Senior Advocate submitted that Rules 12(1)(gg) and 12(1)(hh) of the Rules of 2016 do not admit of any ground of Force Majeure. The concept of Force Majeure is completely alien to the Rules 12(1)(gg) & (hh) and hence the notice dated 01.10.2020 cannot be questioned on the ground of 27 Force Majeure. It is contended that true construction of the Rule 12(1)(ff) would show that it provides for period to be extended on account of force majeure only for the obligations to be performed by the lessee as laid down under Rule 12(1)(a) to (ee) and cannot be extended to govern the statutory period of right conferred on the lessee under Rule 12(1)(gg) and (hh). Referring to different clauses under Rule 12(1)(a) to (ee) of the Rules of 2016, learned Senior Advocate submitted that intention of the rule making authority by use of the words "the lessee shall" therein was to make them mandatory, which means that Clauses 12(1)(a) to (ee) lays down the obligation what a "lessee shall" do during the subsistence of its lease. But Rule 12(1)(ff) provides that in the event the lessee is unable to perform its obligations under the lease deed or rules owing to force majeure event, then the period shall stand extended. Rule 12(1)(ff) is wholly inapplicable after the term of lease is over. Further, the force majeure cannot be extended to Rule 12(1)(gg) of the Rules of 2016, as it merely confers statutory rights on the lessee at his option and has been framed in directory form that "the lessee may" remove the extracted ore or infrastructure and machinery etc. lying on the leasehold area after the lease period expires within the statutory period. As per Rule 12(1)(hh) of the Rules of 2016, the State Government vide Notice No. 8460 dated 01.10.2020 required the petitioner to remove its excavated iron ore from the said lease 28 land along with any infrastructure & machineries etc. within one calendar month i.e. on or before 31.10.2020 failing which the same shall be deemed to become the property of the State Government.
18. Mr. Harish Salve, learned Senior Advocate relying on the judgment of the Supreme Court in Energy Watchdog Vs. Central Electricity Regulatory Commission & ors., (2017) 14 SCC 80, argued that the Supreme Court in that case has clearly held that loss of profit or reduction in business or increase in costs, etc., do not constitute Force Majeure event. It was also held that Force Majeure is governed by Section 56 of the Contract Act, 1872, and can be claimed only in the event of impossibility of performance/frustration of contract. Invocation of the force majeure by the petitioner in the present case is thus prohibited as per the ratio of the judgment of the Supreme Court in Energy Watchdog (supra). Referring to the notification / circular dated 25.03.2020 at page 201 of the Intervention Application I.A. No.12857 of 2020, it is contended that in this notification the Central Government has kept the coal and mineral production, transportation, supply of explosive and activities incidental to mining operation, out of the purview of lockdown. The petitioner therefore cannot take the benefit of circulars restricting certain activities, other than mining activities. Referring to rule 12(1)(ff) of the Rules of 2016, Mr. Harish Salve, learned Senior Advocate submitted that the said rule can be applied 29 to only subsisting lease and it does not apply to the expired leases. Inviting attention of the Court towards Rule 12A of the Rule of 2016, it is argued that this provision starts with a non-obstante clause and has overriding effect over other rules under Rules, 2016 and as such the Intervener is under a statutory obligation to abide by the minimum production requirements, failing which, it has to invite penalty. The petitioner having failed to take advantage of the option of intermediate storage by the State Government vide notification dated 4.10.2019, is not entitled to raise the present claim. The petitioner even in spite of the knowledge that its lease would be over on 31.03.2020 and it would have the advantage of time of only six months + one month, following the provisions under the Rules 12(1)(gg) and 12(1)(hh) did not act swiftly and its present attempt is aimed at circumventing the provisions of the Rules of 2016. Relying on the decision of the Supreme Court in Supreme Court Bar Association vs. Union of India & anr. : 1998 (4) 409 para 47, Union of India vs. The State of Maharastra : 2020 (4) SCC 761, para 70, it is submitted that the claim of the petitioner appears to be against law. It cannot invite this court into issuing a writ contrary to law thereby directing the opposite parties to act contrary to law. As against the prayer of the petitioner to grant the benefit of Chowgule- I, Chowgule -II and Mideast Integrated Steels Ltd., Mr. Harish Salve, learned Senior Advocate contended that those orders were 30 passed by the Supreme Court in cases having entirely different fact situation. Therefore, the petitioner is not entitled to the benefit of the said judgments/orders.
Writ Petition (Civil) No. 27751 of 2020:
19. In this writ petition, the petitioner-M/s. Kalinga Mining Corporation was granted mining lease of iron ore over an area of 73.228 hectares in Barbil Tahasil of Keonjhar District in the State of Odisha. The said lease was renewed by operation of provision of law from time to time. Mines and Minerals Development and Regulation (Amendment) Ordinance, 2015 introduced Section 8- A in the MMDR Act. As per the amended provision, the mining lease continuing then were to be deemed extended only till 31.3.2020.
20. Mr. S.P.Mishra, learned Senior Advocate appearing for the petitioner challenges the impugned orders at Annexures-16 & 17 therein. Inviting attention of the Court to Annexure-15 (at page-
190) representation of the petitioner for extension of time for transportation of minerals under the provision under Rule 12(1)(gg) of the Rules, 2016 submitted before the competent authority on 25.8.2020, learned Senior Advocate contended that the competent authority has, while keeping the aforesaid representation pending consideration, passed order on 01.10.2020, vide Annexure-16 invoking the power under Rule 12(1)(hh) of the Rules of 2016. It is submitted that the competent authority, vide the impugned order at 31 Annexure-17 issued on 9.10.2020, has informed the petitioner regarding rejection of its representation, vide Annexure-15, not on merit but as not maintainable. None of the submissions of the petitioner has been considered. This order thus suffers from total non-application of mind. Learned Senior Advocate therefore contended that the action of the opposite parties in keeping the representation of the petitioner submitted vide Annexure-15 pending and passing the impugned order dated 1.10.2020, vide Annexure- 16, was wholly illegal and arbitrary. The rejection order dated 9.10.2020 vide Annexure-17 is bad in law also because it is a non- speaking order. Thus while assailing the impugned orders at Annexures-16 & 17, learned Senior Advocate referring to grounds recorded in the application at Annexure-15, contended that Rule 12(1)(ff) of the Rules, 2016 has a clear application to the case of the petitioner because availability of the means of transportation was badly affected due to Covid-19 pandemic situation. Had the arguments of the petitioner in application vide Annexure-15 been objectively considered, the competent authority would have certainly invoked the provision at Rule 12(1)(ff) of the Rules, 2016 in favour of the petitioner. It is contended that the minerals under stock in the leasehold area were lawfully raised during the validity of the lease, but the petitioner could not be in a position to transport the whole quantity due to constraints faced by him for Covid-19 reasons. 32 Since the minerals were validly raised during continuity of the lease period, the petitioner became the owner of the minerals. Invocation of power under Rule 12 (1) (hh) of the Rules, 2016 by the State authorities is highly arbitrary.
21. Giving reference of various documents available on record, Mr.S.P.Mishra, learned Senior Advocate contended that there was capping on the number of trucks on a particular route, which was a major factor in reduction in transportation of minerals during Covid-19 period. It is submitted that the country witnessed outbreak of Novel Corona Virus in March, 2020, as a result of global pandemic. The Prime Minister of India called Janata Curfew from 7 A.M. to 9 P.M. of March 21, 2020 (P-2). This was followed by an order of Government of India directing complete lockdown of the country for 21 days from 25.03.2020, bringing in several restrictive measures in the field of social, cultural and economic activities. No doubt, Industrial and Mining activities and transportation of essential goods were exempted from the lockdown but without the support of men power and logistics, it was impossible for the petitioner to transport the whole quantity of minerals. The lockdown continued up to the stage of Lockdown Phase VI, whereafter there happened a slow opening of the country from unlock-I and onwards. The country is even now reeling under the effects of the pandemic and there is still no complete freedom. Learned Senior Advocate 33 taking this Court through the conditions of the lease and the provision at Rule 12(1)(ff) of the Rules, 2016 contended that Annexure-16, the order dated 1.10.2020, has been issued by total non-consideration to the above situation. On the question of the new lessee coming into the leasehold area, learned Senior Advocate while not disputing that the new lessee has a right over the leasehold area, contended that keeping in view the difficulties faced by the ex- lessee, particularly under Covid-19 situation, the provision of Rule 12(1)(ff) of the Rules, 2016 would certainly be attracted.
22. Mr.S.P.Mishra, learned Senior Advocate relying on the decision of the Supreme Court in Chowgule & Company Pvt. Ltd. vrs. Goa Foundation & others : 2020 SCC Online SC 103 dated 30.1.2020 (Civil Appeal No.839 of 2020) and Chowgule & Company Pvt. Ltd. vrs. Goa Foundation & others : 2020 SCC Online SC 830 dated 13.10.2020 (M.A.No.1260 of 2020) submitted that the parties affected by the pandemic COVID-19 in those cases prayed the Supreme Court for extension of time for transportation of the balance minerals and were granted such extension. Similar relief ought to be granted to the petitioner in the instant case. Learned Senior Advocate therefore, submitted that the impugned order dated 9.10.2020 is liable to be set aside for being unreasoned one and being in non-compliance of natural justice. Learned Senior Advocate in support of his arguments relied on the judgments of the 34 Supreme Court in State of Orissa v. Dr. (Miss) Binapani Dei and others, AIR 1967 SC 1269, particularly on the aspect of principles of natural justice. Reliance is also placed on the judgment of the Supreme Court in Mohinder Singh Gill vrs. Chief Election Commissioner, reported in AIR 1978 SC 851 on the aspect of unreasoned order. Taking shelter of the protection granted under Articles 14 & 300A of the Constitution of India, learned Senior Advocate also submitted that property rights of the petitioner cannot be infringed in a summary manner. Drawing attention of the Court to the judgments of the Supreme Court in D.B.Basnett vrs. LAO :
2020 (4) SCC 572 & N.Padmamma vrs. S.Ramakrishna Reddy :
2008(15) SCC 517, learned Senior Advocate contended that the above decisions protect the right of the petitioner over the minerals.
Learned Senior Advocate also referring to another decision of the Supreme Court in Commissioner of Police vrs. Gordhandas Bhanji : AIR 1952 SC 16 submitted that orders made by public authority in exercise of statutory powers cannot be construed in the light of explanation subsequently given for making such order.
23. Mr. S.P. Mishra, learned Senior Advocate also referring to the position of transportation in the months of April, May, June and July, August, September and October 2020 submitted that it is clearly visible therefrom that the transportation of minerals in April, May, and June, 2020 got drastically reduced 35 and this position remained static in July and August, 2020 but, however, there was increase in transportation in the month of September and October, 2020, when the situation improved. Learned Senior Advocate therefore contended that there can be no gainsaying the fact that all this happened due to Covid-19 restrictions playing here and there. Prayer is therefore made for intervention by this Court in the impugned orders under Annexures- 16 & 17 respectively and for issuing suitable direction facilitating transport of balance minerals, plant and machineries.
24. Mr. Gautam Mukherji, learned Senior Advocate appearing for the Intervener-Jagat Janani Services Pvt. Ltd in this case, on the other hand, referring to page 75 of the Intervention Application, invited attention of the Court to the show cause notice marked as Annexure-F/1, issued by the State authority to the Intervener alleging breach of the conditions of lease deed. It is submitted that the State Government / the competent authority has blamed the Intervener-new lessee in the same leasehold area for showing nil production which in fact was result of occupation of same pit by the ex-lessee even till now. Learned Senior Advocate in the above premises submitted that occupation of the lease hold area by the ex- lessee till now has become an impediment for working of the mine by the Intervener. Learned Senior Advocate also contended that the 36 Intervener cannot get the advantage of having another pit for storing of minerals likely to be raised for requirement of various clearance being a converse issue. Referring to the transportation position involving the petitioner, learned Senior Advocate argued that the petitioner has deliberately adopted tactic of slow transportation. Even though the petitioner was provided with facility of intermediate storage, through the gazette notification dated 25.7.2019, and the subsequent order of the Government dated 4.10.2019, but he failed to take advantage of the facility of intermediate storage. Once the lease period has expired by statutory prescription of law under Section 8A(6), there can be no extension of lease period. Concluding his submissions, Mr. Gautam Mukherji, learned Senior Advocate referring to the Intervention Application bearing I.A.No.14796 of 2020, contended that unless the pit is vacated, the new lessee will not be in a position to undertake mining activity. In the above premises, learned Senior Advocate prayed this Court for dismissal of the writ petition.
Writ Petition(Civil) No. 27731 of 2020 :
25. This writ petition has been filed by Ramesh Prasad Sao challenging the order dated 1.10.2020, vide Annexure-1. Mr.Parag Pr. Tripathy, learned Senior Advocate appearing for the petitioner while admitting that the mining lease of the petitioner expired on 37 31.3.2020, but no fresh lease involving the leasehold area enjoyed by the ex-lessee has been granted therein. It is contended that the State Government, vide general order dated 31.3.2020 granted a period of six months in purported exercise of its power under Rule 12(1)(gg) of the Rules of 2016 to remove raised mineral, plant and machinery etc. In the meantime, Government of India clamped the lockdown at national level due to outbreak of Covid-19. The petitioner made all possible efforts to remove the entire quantity of minerals, however, due to supervening circumstance following lockdown imposed by the Government for the reason of Covid-19 pandemic, he could not do so. It is also claimed that the transportation got affected due to enumerable obstructions, such as due to sudden lockdown from the last week of March, the workers left to their native villages. There was also mass reverse migration.
Lockdown also severely affected all sorts of human activities resulting in reduction in the capacity of industries including Steel Industry. There also came vehicular restrictions thereby resulting trips to different Port areas being minimized due to capping on the number of trucks by the district administration. Even then the petitioner attempted to acquire plot for storage of minerals to take advantage of the circular dated 4.10.2019, but he could not succeed; particularly because entire stock of petitioner's mineral was to be transported to Port areas like Paradip and Gopalpur where 38 he had already acquired plots. Therefore, there was no occasion for the petitioner to divert its transportation elsewhere.
26. Referring to the documents at running pages-136, 139, 142 and 148 of the brief, Mr. Parag P. Tripathy, learned Senior Advocate contended that there was also capping for plying of trucks, which drastically reduced the transportation capacity of the petitioner. Drawing attention of the Court to the Notification issued in October, 2020 by the Ministry of Road, Transport and Highways at Annexure-18, Office Memorandum issued by Ministry of Finance, Government of India, vide Annexure-19 filed an additional affidavit dated 2.11.2020 and also referring to Annexures-21 to 24 with the rejoinder affidavit, Mr. Parag P. Tripathy, learned Senior Advocate submitted that there is universal acceptance of the pandemic arising out of outbreak of Covid-19 being a circumstance justifying invocation of Force Majeure clause. There cannot be a better position than this for application of Force Majeure to the case of the petitioner. Taking this Court to the impugned communication dated 1.10.2020, it is argued that this order has been passed without appreciating or even referring, to the application of the petitioner dated 29.9.2020, vide Annexure-3 pending consideration with the competent authority at the relevant time. It is thus alleged that there has been gross-disregard to principles of natural justice by not 39 providing opportunity of hearing to the petitioner so as to enable him to satisfy the opposite parties of its case before the order dated 9.10.2020 at Annexure-2 was passed.
27. Relying on the judgment of this Court in J. C. Budharaja v. State of Orissa and others: AIR 1990 Orissa 6, Paragraph-5 and that of the Supreme Court in State of Haryana v. Ram Kishan & Ors. in (1988) 3 SCC 416, Paragraphs-7 & 8; and Delhi Transport Corporation v. D.T.C. Mazdoor Congress, reported in 1991 Supp (1) SCC 600, learned Senior Advocate attempted to justify his argument of gross-violation of principle of natural justice and claimed direct application of all the above decisions to the case of the petitioner. Similarly referring to Nareshbhai Bhagubhai and Ors. v. Union of India and Ors., reported in (2019) 15 SCC 1 at paragraphs-26, 28 & 29, learned Senior Advocate contended that the order passed by the public authority must be judged on its own terms objectively and it cannot be improved by subsequent affidavit. Learned Senior Advocate in this context relied on the decision of the Supreme Court in Mohinder Singh Gill vrs. Chief Election Commissioner :(1978) 1 SCC 416. It is submitted that the petitioner faced enormous difficulty in arranging the means of transportation on account restrictions imposed due to Covid-19 pandemic. Learned Senior 40 Advocate submitted that Rule 12 (1)(gg), Rule 12(1)(hh) read together with Rule 12(1)(ff) would make it evident that there is no bar or embargo in providing extension of time to the ex-lessee for removal of remaining stock of minerals. In the peculiar circumstances of the case, it is contended that State is rather obliged to grant such extension, as the minerals sought to be removed were already raised at the time when the lease of the petitioner was subsisting. Referring to Clause-4 of paragraph-9 of Form-K of the M.C. Rules, 1960 and also Rule 12(1)(ff) of the Rules of 2016, learned Senior Advocate contended that that the State Government is duty bound to consider the Covid-19 suffering as a circumstance of force majeure. Relying on the decision of the Supreme Court in S. C. Udhawan v. Punjab University, reported in AIR 1982 SC 1212, National Textile Workers' Union etc v. P.R. Ramakrishnan and others, 1983(1) SCC 228, Swadeshi Cotton Mills etc. etc v. Union of India etc. etc, AIR 1981 SC 818, Mr. Parag P. Tripathy, learned Senior Advocate submitted that it is settled proposition of law that the competent authority ought to provide opportunity of hearing to the party likely to be affected before passing any order. Learned Senior Advocate also relied on the judgment of the Supreme Court in M/s. Dhanrajamal Gobindram v. M/s. Shamji Kalidas and Co., reported in AIR 1961 SC 1285 and that of the Bombay High Court in Esjay International Prt. Ltd. v. Union of India & Ors., reported 41 in 2011 SCC Online Bombay 1263 and submitted that the Force Majeure clause applies to the situation of unforeseen and unexpected circumstances, which happens suddenly over which a person has no control. Learned Senior Advocate taking this Court through the decision of Delhi High Court in Dharam Veer vs. Union of India : AIR 1989 Delhi 227 with reference to Clause-4 part-IX of Form-K of the M.C. Rules, 1960 contended that the period of interruption can be excluded from the period specified in the lease deed or the Rules. On this aspect, learned Senior Advocate also relied on the judgments of the Supreme Court in Mohd. Ayub v. State of Utter Pradesh: (2009) 17 SCC 70 and Delhi Development Authority v. Kenneth Builders and Developers Pvt. Ltd: (2016) 13 SCC 561 and submitted that ratio thereof has direct application to the case of the petitioner. Similarly, referring to order of the Supreme Court in Chowgule-II and Mideast, learned Senior Advocate argued that the Supreme Court in that case initially granted six months' time and subsequently extended the time till January, 2021, only on consideration of the pandemic situation following spread of COVID-19. It is submitted that the decision of the Supreme Court in Chowgule and Mideast have direct application to the case of the petitioner.
42
28. Advancing his submission that since the minerals were raised during the validity period of lease by the ex-lessee and as such are his property, if acquired by the State, will be hit by Article 300-A of the Constitution of India, Mr. Parag P. Tripathy, learned Senior Advocate relied on the judgments of the Supreme Court in B.K. Ravichandra and Ors. v. Union of India and Ors. reported in 2020 SCC Online SC 950, Plantation Private Limited and Anr. v. State of Karnataka, reported in (2011) 9 SCC 1, Nareshbhai Bhagubhai and Ors. v. Union of India and Ors., reported in (2019) 15 SCC 1 and contended that all these decisions fully support the above plea of the petitioner. Learned Senior Advocate submitted that the petitioner, vide his letter dated 29.9.2020 invoking the power under rule 12(1)(ff) of the Rules, 2016 sought extension of period equivalent to the period lost on account of reasons beyond his control. It is thus contended that keeping such application pending and yet issuing the order dated 1.10.2020 directing the petitioner to remove the minerals along with infrastructure within a period of one calendar month was wholly arbitrary and unreasonable. It is also contended that there is no meaning in rejecting such application, vide order dated 9.10.2020 after invocation of provision under Rule 12(1)(hh) through communication dated 1.10.2020, as by this time the competent authority could not have taken any other decision, after issuing the 43 communication dated 1.10.2020. Challenging certain averments in the counter affidavit in this case, learned Senior Advocate submitted that there is no proper application of mind even while filing the counter by the State Government. Seriously objecting to the submission of the State to the application of rule 12(1)(ff) of the Rules, 2016, learned Senior Advocate submitted that this is a clear case of approbation and reprobation. Taking this Court to the circular issued by the Central Government dated 5.05.2020 asking the Principal Secretaries/Directors of Mining Departments to consider granting the benefit of Force Majeure clause in the case of new lessee and the submission of State that such notification has not been accepted by the State even in the case of new lessee, learned Senior Advocate submitted that the State has no right to oppose such important decision taken by the Union of India. Benefit of this circular ought to be also extended to the petitioner on the premises that when relaxation is being granted in case of fresh lessee due to the situation arising after pandemic COVID-19, there is no justification in not according similar treatment to the ex- lessees.
Writ Petition (Civil) No. 27672 of 2020 :
29. This writ petition has been filed at the instance of M/s.Ghanashyam Misra & sons Pvt. Ltd., seeking to challenge the 44 order of the competent authority dated 1.10.2020, vide Annexure-3 as well as the order dated 9.10.2020, vide Annexure-4. While challenging the orders at Annexures-3 & 4, the petitioner also seeks a direction for grant of six months' time or such other time as this Court may deem appropriate, to meet with the loss of time sustained due to Covid-19 by applying Force Majeure clause.
30. Mr. P.S.Narasimha, learned Senior Advocate appearing for the petitioner, taking this Court through the pleadings of the writ petition and referring to the provisions at Rules 12(1)(ff), 12(1) (gg) and 12(1)(hh) of the Rules of 2016 and different circulars issued by the Central Government as well as State Government, submitted that the accepted position is that the entire world has suffered due to Covid-19 pandemic. The basis for invoking Force Majeure clause to the case of the petitioner is very much available. Requesting the Court to take judicial notice of the pandemic situation prevailing in the country for quite long time, learned Senior Advocate submitted that there is absolutely non-application of mind by the competent authority to the overall situation before passing both the impugned orders at Annexures-3 & 4. It is contended that the petitioner's case is completely different than those of the old lessees in other cases. Here in the present case, the petitioner who is the old lessee, is also the new lessee for the very same leasehold area after expiry of the 45 previous lease on 31.3.2020. The competent authority had already issued Letter of Intent vide communication dated 18.3.2020 in favour of the petitioner for granting mining lease for the same leasehold area even prior to expiry of the term of earlier lessee. It subsequently executed a lease deed on 3.7.2020 in favour of the petitioner for fifty years. Present one is therefore a case where the old lessee has taken over the position of the new lessee. The provision contained in Rule 12(1) (gg) of the Rules of 2016 has thus no application to this case, for the requirement of plants and machineries used previously by the same lessee would still be there. Moreover, ownership of the minerals excavated by the petitioner as old lessee shall continue to be vested in the petitioner. Learned Senior Advocate therefore contended that there was in this case no question of new lessee transporting the minerals or the plant and machineries under Rule 12(1) (gg) and also visiting through the provision of Rule 12(1)(hh) of the Rules of 2016. On the issue of parties being provided with a scope for having intermediate storage in a nearby area to transport their stock of mineral there by virtue of Notification of the State Government dated 4.9.2020, Mr. P.S.Narasimha, learned Senior Advocate submitted that since herein the old lessee itself became the new lessee, there was no occasion for him to go for intermediate storage facility as he can very well manage the properties standing on the same leasehold area during 46 subsistence of the new lease. In these circumstance, learned Senior Advocate contended that the competent authority has mechanically applied Rules 12(1)(gg) and 12(1)(hh) of the Rules of 2016 to the present case and therefore, both the impugned orders are not sustainable in law.
31. Mr. P. S. Narsimha, learned Senior Advocate argued that the State Government through the Steel and Mines Department issued a notification dated 04.10.2019, with a view to ensure "smooth operation" of the mines by "new lesses", after the expiry of the leases on 31.03.2020, thereby the State Government allowed the establishment of Intermediate Storage Depots (stock yards) by the merchant mining lessees, whose leases were expiring on 31st March, 2020. The storage license under the said notification is valid for a maximum period up to 31st March, 2022. It is submitted that the petitioner is ready and willing to make upfront payment of royalty in advance with respect to the left over stock of mineral if he is permitted the "intermediate storage" of the same at it's own mining leasehold area in terms of notification dated 4.10.2019. In this regard, the petitioner has made repeated representations to the opposite party-State Authorities, requesting them to permit him to store the mineral excavated prior to 31.03.2020, at the very same mining leasehold area, beyond the period of six months as provided 47 for in Rule 12(1)(gg), as the petitioner itself is a "new lessee". This special feature of the case of the petitioner under these circumstances ought to have engaged the attention of the opposite party. However, the opposite party has not only mechanically invoked Rule 12(1)(hh) in the case of the petitioner but also mechanically and arbitrarily rejected the representations of the petitioner vide order dated 09.10.2020, describing the same as not maintainable. The impugned order dated 09.10.2020 is non- reasoned and non-speaking order besides having been passed without the application of mind.
32. Mr. P. S. Narsimha, learned Senior Advocate submitted that Rule 12(1)(hh) does not get automatically invoked on its own upon lapse of six months contemplated in Rule 12(1)(gg). Invocation of Rule 12(1)(hh) leads to a serious civil consequence of vesting of property of old lessee with the State Government and the same comes into operation only upon being "notified" by the State Government. As such, it requires discretion to be exercised on the part of the State Government. Any executive authority exercising discretion cannot act arbitrarily without the application of mind. The State Authorities were thus required to consider whether invocation of Rule 12(1)(hh) in the peculiar facts of the present case was at all required and also whether in view of the notification of the 48 State Government dated 04.10.2019, the petitioner should not have been allowed the intermediate storage of the minerals excavated prior to 31.03.2020 at the same leasehold premises on which the petitioner is again a new lessee. The decision of the executive authority in the present case is therefore amenable to judicial review and ought to be tested on the anvil of proportionality. Reliance in support of this argument is placed on the decision of the Supreme Court in the case of Teri Oat Estates (P) Ltd. v U.T., Chandigarh [(2004) 2 SCC 130].
At the same time, Mr. P.S.Narasimha, learned Senior Advocate submitted that even assuming that this request is at the instance of ex-lessee, the ex-less is also entitled to the benefit of extension of time on application of Force Majeure keeping in view the difficulties faced by the petitioner during Covid-19 situation and further keeping in view the orders of the Supreme Court in Chowgule-II and in Mideast.
Writ Petition (Civil) No.28141 of 2020:
33. This writ petition has been filed at the instance of M/s. Serajuddin and Co. seeking to challenge the order dated 01.10.2020 Annexure-16 therein. This is also a case where the old lessee has now also become the new lessee. Mr. Ramesh Singh, learned counsel appearing for the petitioner while adopting the arguments 49 advanced by Mr. P. S. Narasimha, learned Senior Advocate in W.P.(C) No.27672 of 2020, in his further submissions, contended that looking to the provision at 12(1)(gg) and 12(1)(hh) of the Rules of 2016, once the old lessee becomes new lessee, whatever plant and machinery are there over the pre-existing leasehold area would now be required by the new lessee for effective mining. This would also be the situation of the minerals. Learned counsel therefore submitted that the provision of Rule 12(1)(gg) and 12(1)(hh) of the Rules of 2016 can hardly be applied to the case of the petitioner. It is contended that the order dated 01.10.2020 under Rule 12(1)(hh) mechanically passed by the opposite party thus suffers from the vice of non-application of mind. Referring to representations of the petitioner, Mr. Ramesh Singh, learned counsel for the petitioner contended that once the petitioner submitted representations dated 10.07.2020 and 15.09.2020 vide Annexures-9 and 10 respectively, the order invoking Rule 12(1)(hh) should have awaited at least till consideration and disposal of such representations by the competent authority. Once the order invoking Rule 12(1)(hh) of the Rules of 2016 has already been passed on 01.10.2020, the order dated 09.10.2020 indicating rejection of the representations of the petitioner as not maintainable becomes redundant, academic and mechanical as well.
50
34. On the premises that petitioner has been granted a fresh lease for 50 years, Mr. Ramesh Singh, learned counsel has also taken this Court through the pleadings of the writ petition and contended that there is no question of invocation of either Rule 12(1)(gg) or Rule 12(1)(hh) of the Rules of 2016 to the case at hand. These two provisions, read together, would have the effect of forfeiting the right of the petitioner to his property, which has since been recognised as a constitutional right in the meaning of Article 300A of the Constitution of India. Relying on judgment of the Supreme Court in the case of ICICI Bank Ltd. v. SIDCO Leathers Ltd. & Ors, reported in (2006) 10 SCC-452, learned counsel argued that there cannot be any presumption under the statute to have taken away property right of a citizen. In fact, a contrary presumption has to be raised if not otherwise provided. In the above premises, learned counsel for the petitioner prayed this Court for interfering in both the impugned orders and upon setting aside them both, pass suitable directions.
Writ Petition (Civil) No.28004 of 2020:
35. Mr. S.P. Mishra, learned Senior Advocate appearing for the petitioner-Khatau Narbheram submitted that the petitioner by filing this writ petition has challenged both the order dated 01.10.2020, vide Annexure-3 invokes Rule 12(1)(gg) and the order 51 dated 09.10.2020, vide Annexure-4 invoking Rule 12(1)(hh) of the Rules of 2016. Learned Senior Advocate referring to the representation of the petitioner dated 14.09.2020, vide Annexure-2 submitted that for the peculiar situation involved herein, the competent authority before passing order dated 01.10.2020 ought to have considered the representation of the petitioner. Learned Senior Advocate contended that both the impugned orders have been passed without consideration of the inputs given by the petitioner in his representation dated 14.09.2020. The representation of the petitioner has thus been mechanically rejected by the competent authority. Learned Senior Advocate has taken this Court through the pleadings of the parties and referring to peculiar features available in this case submitted that while the petitioner according to the records maintained by the petitioner, was having 2,11,8668.437 M.T of stock position. The competent authority however in their record maintained the stock position at 205037 M.T., showing it be on a lower side. It is contended that only after the resistance made by the petitioner by repeated representations to correctly show the stock position on the lease hold area, the opposite parties belatedly corrected their record towards the middle of October, 2020. Owing to this reason, the petitioner was deprived of permission to remove the minerals from the stock point. 52
36. Mr. S.P. Mishra, learned Senior Advocate referring to the details of the transportation undertaken by the petitioner as on 30.09.2020, contended that had the stock position been shown correctly by the competent authority, the petitioner would have easily transported the balance stock of 6595.492 MTs. within the allowed time itself and there would not have been any occasion for the petitioner to request for extension of time. Learned Senior Advocate in this connection invited attention of the Court towards Annexure-3, page-20 of the brief which is petitioner's application for extension of time submitted on 14.09.2020 for lifting remaining quantity of minerals. It is argued that there is absolutely no consideration of the above reason, more particularly the reason of the difficulty created at the instance of the competent authority and as a consequence, there has been an improper rejection of the representation by order dated 09.10.2020, vide Annexure-4, which appears to be not only in total non-consideration of the facts brought through the representation of the petitioner but also being passed in total non-application of mind. This discrepancy in the records was illegally created by the competent authority and was corrected belatedly only upon persistent persuasion of the petitioner. Learned Senior Advocate contended that the provision of Rule 12(1)(gg) of the Rule, 2016 should have been in this case applied only after the correction was carried out by the competent 53 authority in their records. In these premises, learned Senior Advocate contended that there was no occasion for the opposite parties for invoking Rule 12(1)(gg) of the Rule, 2016 and to later issue order dated 01.10.2020, Anneuxre-3 on invocation of provision at 12(1)(hh) of the Rule, 2016. Learned Senior Advocate therefore prayed this Court for interfering in the impugned orders at Anneuxres-3 and 4 and granting appropriate time for transportation of the minerals involved therein.
Writ Petition (Civil) No.29112 of 2020:
37. This writ petitioner has been filed by the petitioner-
Bajrang Sharda challenging the order dated 01.10.2020 vide Annexure-1. Mr. Sreejit Mohanty, learned counsel for the petitioner submitted that petitioner made an application for transportation of the minerals already in stock before expiry of the lease on two grounds i.e. (1) difficulties faced by the petitioner on account of pandemic situation involving COVID-19 (2) for the delay caused by the authorities in the granting the permission for transportation. The request of the petitioner was rejected vide communication dated 10.02.2020. Taking this Court to the para-6 of the Chowgule-II decision and referring to the grounds of the application considered therein, learned counsel submitted that case of the petitioner is based on similar grounds. A clear statement has been made by 54 learned counsel for petitioner that there is no third party interest involved in this case. He then submitted that after amendment and incorporation of the Section 8(A) w.e.f. 12.08.2015, mining lease of the petitioner was declared to have lapsed on 12.08.2015. Being aggrieved by such lapsing order, the petitioner filed the Revision Petition before the Central Government. The Revisional Authority allowing the Revision Petition however remanded the matter to the appropriate authority of the State Government for its reconsideration. On reconsideration of the matter, the competent authority by order dated 8.03.2019 revoked the said lapsing order. It is next contended that pursuant to the revocation of the lapsing order, in spite of pendency of the earlier application of the petitioner for updation of the lease profile on the portal of the Mining Department as per the provision of the Rules, 2007, the same was not decided for a long time. The petitioner approached the competent authority again on 16.04.2019 vide application at Annexure-14, followed by yet another reminder on the same issue on 3.12.2019 at Annexure-3. It is contended that while the request of the petitioner was forwarded to State Government-opposite party No.1 on 20.12.2019 but in the meantime, the competent authority had already issued the impugned order at Annexure-1, which is a stereotype order and does not mention anything about the pending representation of the petitioner. The order dated 01.10.2020 was 55 passed on 1st October at 9.21 P.M. and 2nd, 3rd & 4th October, 2020 were holidays. Finding that there is no updation of the lease profile of the petitioner on i3MS on the portal of the Department, the petitioner was unable to pay either the royalty or place its application seeking permission for transportation. The petitioner was constrained to approach the competent authority for updation of the lease profile again on 5.10.2020. Learned counsel contended that the request of the petitioner for updation of the lease profile on the web portal of the opposite party was ultimately acceded to by the authority and as a consequence of which the lease profile of the petitioner was belatedly updated following the provision of the Orissa Minerals (Prevention of Theft, Smuggling & Illegal Mining and Regulation of Possession, Storage, Trading and Transportation) Rules, 2007 (for short, PTSIMRPSTT Rules, 2007) sometime in between 10th to 12th October, 2020, whereas the period referred to in order dated 01.10.2020 was to expire on 31.10.2020. Only after updation of the lease profile of the petitioner between 10th to 12th October, 2020, he could pay the royalty and also simultaneously apply for transport permission, which was ultimately granted on 16.10.2020. While effecting transportation of minerals petitioner submitted a representation on 20.10.2020 requesting therein to withdraw the impugned order dated 01.10.2020 passed on the premises of invoking Rule 12(1)(hh), without providing benefit under 56 rule 12(1)(gg) of the Rules of 2016. Petitioner also contended that transportation was slowed down and was affected for the restrictions due to the COVID-19 pandemic. On account of delayed updation of the lease profile between 10th to 12th October, 2020, the permission for transportation was granted only on 15.10.2020. Learned counsel for petitioner submitted that the impugned notice under the provision of the rule 12(1)(hh) could not have been issued prior to grant of benefit to the petitioner under the provisions of 12(1)(gg) of the Rules of 2016. Learned counsel for petitioner submitted that delay in lifting the minerals was caused for reasons entirely attributable to the competent authority of the opposite party. Learned counsel therefore submitted that the impugned order vide Annexure-1 being ex facie illegal and arbitrary, be set aside and the petitioner be granted at least six months time following the provision at Rule 12(1)(gg) and a direction may also be issued to the competent authority to invoke the provision of Rule 12(1)(hh) only after expiry of such six months.
Writ Petition (Civil) No.29311 of 2020
38. This writ petition has been filed at the instance of M/s. Aryan Mining and Trading Corporation Pvt. Ltd., challenging to the order dated 01.10.2020 vide Annexure-1 and also with a prayer for extension of time equivalent to the loss of time due to Covid-19. 57 Advancing his argument, Sri Naveen Kumar, learned Senior Advocate appearing for the petitioner at the outset fairly submitted that the lease hold area of ex-lessee was put to auction on expiry of lease on 31.03.2020 and a new lessee has come into place, who is being represented by way of Intervention Application vide I.A. No.12985/2020 herein. To cut short the issue involved in the writ petition, Sri Navin Kumar, learned Senior Advocate while adopting the submission of other learned Senior Advocates and learned counsels, straightway submitted that since the petitioner has already removed all the minerals before the lapse of time, the prayer in the writ petition is confined to only permission for transportation of plant and machinery of the petitioner lying over the lease hold area. Relying on Article 300-A of the Constitution of India, Sri Naveen Kumar, learned Senior Advocate submitted that plant and machinery in the present case were all put up by the petitioner, as the ex-lessee, investing huge money. Under no circumstance, these properties can become the properties of the State. Learned Senior Advocate submitted that it is undisputed fact that the new lessee had all along been showing interest in buying the plant and machinery of the petitioner-old lessee. The Intervenor kept the old lessee engaged for long time in the negotiation process for purchasing such plant and machinery and in fact issued a letter of intent dated 16.10.2020 for that purpose. However, the negotiations 58 failed very recently. Since the petitioner remained under bona fide impression that the Intervenor, who is new lessee, would buy the plant and machinery, lot of time was lost in the process. Learned Senior Advocate submitted had the negotiation process between the petitioner and the intervenor not taken place, the petitioner would have easily dismantled and transported the plant and machines in the meantime. Learned Senior Advocate also submitted that dismantling of the plant and machinery would have required about 40 skilled and unskilled men power from Hyderabad and would have also required heavy duty vehicles to carry them. However, due to loss of early phase of the time available with the petitioner because it was kept engaged by the Intervenor in negotiations for buying them, it could not remove them. Sri Naveen Kumar, learned Senior Advocate while praying this Court for interfering in the impugned order with further request to the Court for at least grant of fifteen days time to enable the petitioner for undertaking the exercise of dismantling and transportation of plant and machinery lying on the leasehold areas.
39. Sri Naveen Kumar, learned Senior Advocate also adopted the submission made by other Senior Advocates for the writ petitioners in regard to invocation of provision 12(1)(hh) without final consideration of the request of parties to apply Force Majeure clause keeping in view the Covid-19 pandemic situation. 59 Learned Senior Advocate in support of his argument relied upon the judgment of the Supreme Court in the case of Dhanrajamal Gobindram v. Shamji Kalidas & Co., reported in AIR 1961 SC 1285 and the judgment of the Bombay High Court in the case of Esjay International Pvt. Ltd. v. Union of India, reported in 2011 SCC Online Bom 1263 and contended that intention in providing a "force majeure" clause in the contract is to save the performing party from the consequences of anything over which he has no control. The "force majeure" condition is said to be something which is unforeseen, unexpected and which happens suddenly and over which a person has no control. Learned Senior Advocate further contended that in so far as the argument of the State Government with regard to the ownership of the minerals is concerned, it is not applicable to the case of plant and machineries, which always belonged to the petitioner. The same cannot be taken away by the State except by following due process of law. It is argued that the provisions of law, which had the effect to depriving a citizen of his property should be construed strictly. Such law should be reasonable and should not be arbitrary or excessive. The limitation or restriction must not be disproportionate to the situation or excessive. A legislation providing for deprivation of property must be just, fair and reasonable. In order to buttress in this argument, learned Senior Advocate has relied upon decisions of 60 the Supreme Court in the cases of B.K. Ravichandra and Ors. v. Union of India and Ors. reported in 2020 SCC Online SC 950, K.T. Plantation Private Limited and Anr. v. State of Karnataka, reported in (2011) 9 SCC 1, Delhi Transport Corporation v. D.T.C. Mazdoor Congress, reported in 1991 Supp (1) SCC 600 and Nareshbhai Bhagubhai and Ors. v. Union of India and Ors., reported in (2019) 15 SCC 1.
40. Sri Asok Mohanty, learned Senior Advocate appearing for the M/s. JSW Steel Ltd. by way of intervention while adopting the entire submissions of Sri Harish Salve, learned Senior Advocate referred to hereinabove, appearing in Writ Petition (Civil) No.26973/2020, however did not dispute the assertion of the petitioner that the M/s. JSW Steel Ltd. kept the petitioner engaged in the matter of negotiations on the plant and machinery belonging to petitioner standing on the leasehold areas. Sri Mohanty also did not dispute the claim of the petitioner about the failure of negotiation between the parties of-late. Sri Mohanty, in support of claim of the Intervenor-JSW Steel Ltd. and in opposition to the claim of the petitioner submitted that the provision at rule 12(1)(ff) has no application after the expiry of the contract between the parties on 31.03.2020. It is submitted that provisions at Rules 12(1)(gg) and 12(1)(hh) operates independent of Rules 12(1)(ff) of the Rules of 61 2016. On the claim of the petitioners on the basis of direction contained in Chowgule-I and Chowgule-II decisions, Mr. A.K. Mohanty, learned Senior Advocate contended that these decisions did not involve invocation of Rule-12(1)(hh) of the Rules of 2016 and were passed in the given fact situation of that case, which does not fit in the case of the petitioner. Further for the facts situation in Chowgule-II and the observation of the Supreme Court therein, learned Senior Advocate contended that decision vide Chowgule-II cannot be treated as precedent. It is contended that since in those cases payment of royalty was already made and minerals has already been shifted to jetty, being outside mining area and such minerals not being available in the leasehold area, those orders have no application to the case at hand. Similarly, as regard the order passed in Mideast, it is submitted that that case also involved an altogether different fact situation, being an offshoot of the Common Cause case. It is contended that none of the principles decided in Common Cause case so also in Mideast, a proceeding arising out of Common Cause case, has any application to the case at hand. It is in the above circumstance, Mr. A.K. Mohanty, learned Senior Advocate in his attempt to justify the impugned action of the State authorities sought for dismissal of the writ petition. 62
41. Mr. A.K. Parija, learned Advocate General while opposing all the writ petitions submitted that Rules 12(1)(ff), 12(1)(gg) and 12(1)(hh) of the Rules of 2016 were incorporated in the scheme of the Rules from the lease conditions of all these petitioners and also to give effect to the amendments in the MMDR Act brought in the year 2015, especially to give effect to the provision Section 8- A, whereby the period of lease was statutorily restricted till 31.03.2020. Therefore, provision at Rule 12(1)(gg) would automatically get attracted after 31.03.2020 and consequently, there is also automatic playing of Rule 12(1)(hh) of the Rules 2016. Learned Advocate General referring to the impugned orders dated 1.10.2020 contended that this was issued as a notice of one month, well assuming that period of six months envisaged in Rule 12(1)(gg) having been completed by that time, stage for invoking Rule 12(1)(hh) of the Rules of 2016 had reached. On reading through all these provisions, learned Advocate General contended that extension of lease and/or grant of additional time beyond what is statutorily envisaged in Section 8A(6) of the MMDR Act on expiry of period of the lease on 31.03.2020, beyond what is provided under Rules 12(1)(gg) and 12(1)(hh), will amount to granting extension of lease period in contravention of the Statute. No writ, which command the statutory authority to act contrary to the law, can be issued. Further, on reading through the provisions of the Rules 63 12(1) (gg) & 12(1)(hh) of the Rules, 2016, learned Advocate General answering to the arguments of the petitioners submitted that the intention behind such provisions was to provide to old lessee maximum period of six months after expiry of lease + one month after expiry of this six months. The petitioners have no right to claim minerals, plants and machineries etc. lying on the leasehold area after 31.10.2020 which have now become property of the State. There is no scope for now entertaining any such request for extension of time. It is submitted that action which is legally prohibited cannot be taken through other means. Refuting the arguments of the petitioners that all of them have suffered on account of the inconveniences caused by the pandemic situation due to the COVID-19, learned Advocate General invited attention of the Court towards notification of the State Government dated 4.10.2019 and contended that all the mine holders were well aware of the fact that their lease period would come to an end on 31.03.2020. The State Government visualizing that petitioners would not be in a position to transport the whole minerals stacked on the leasehold area, on consideration of representation at the instance of their Association, provided each of them the scope of intermediate storage, with a further additional period of two years upto 31.3.2022, with permission to sale all such minerals in the open market. Learned Advocate General contended that though 64 some of the parties were able to remove all the minerals to intermediate storage facility elsewhere, but it appears, the petitioners did not pay any heed to the notification dated 4.10.2019.
42. Mr. A.K. Parija, learned Advocate General disputing to the claim of the petitioners based on invocation of Force Majeure event, contended that petitioners having not be able to manage their affairs properly in terms of the lease agreement and not availed the benefit of an intermediate storage, after expiry of the period envisaged under Rule 12(1)(gg) and 12(1)(hh) of the Rules, cannot take this a component of force majeure. The petitioners have suffered for their own fault and should not be extended any relaxation in violation of statutory rules. Taking this Court to the circular of the Central Government dated 25.3.2020, it is contended that there was no prohibition in the mining operation or transportation of minerals at any time during lock down period. In spite of this, if the petitioners have suffered, then it is for their own reason and the State Government cannot be held responsible for the same. Referring to the statement of minerals removed during the period covered by Rule 12(i)(gg) of the Rules of 2016 at page 212 & 213 of the Intervention Application in the case of KJS Allhuwalia vide Writ Petition (C) No.26973 of 2020, learned Advocate General contended that at least 20 out of 28 leaseholders in the said list 65 have been able to transport substantial part of their minerals within the stipulated time. Looking to the fact that total quantity of mineral transported by these twenty lessees during this period was 90% of the whole stock, there is no reason why eight petitioners could not have transported their remaining minerals? Drawing attention of the Court to the provision at Section 8(A) (6) read with Section 21 of the Act, learned Advocate General contended that if any ex lessee is working beyond the period indicated therein, he shall invite criminal liability. Similarly, referring to the provisions in the Form 'K' prescribed under Rule 31 of the M.C. Rules, 1960, learned Advocate General contended that mining activities can be carried out only during the existence of the lease period. After expiry of one month from the date of notices envisaged under Rule 12(i)(hh), the State becomes automatic owner of the minerals, plant and machinery etc. standing on the leased area, as they stand confiscated and vested in the State. Relying on the Judgment of the Supreme Court in the case of Amritlal Nathubhai Shah and Ors. v. Union Government of India & Anr., reported in 1976 (4) SCC 108, learned Advocate General submitted that the State thereafter automatically becomes owner of the minerals, plant and machineries immediately after the exercise of such option under the Rule 12(1)(hh) and there is no scope to undo such statutory vesting. Learned Advocate General in support of his arguments also relied on the judgments of the 66 Supreme Court in A. P. Christians Medical Educational Society v. Government of Andhra Pradesh, reported in 1986 (2) SCC 667, Vice Chancellor, University of Allahabad & Ors. v. Dr. Anand Prakash Mishra & Ors.: 1997 (10) SCC 264, State of U.P. & Ors. v. Harish Chandra & Ors.: 1996 (9) SCC 309 and Union of India & Anr. v. Kirloskar Pneumatic Co. Ltd.: 1996 (4) SCC 453.
43. Mr. A.K. Parija, leaned Advocate General while also completely adopting the arguments of Mr. Harish Salve, learned Senior Advocate appearing for the Intervener-JSW Steel Ltd. in the W.P.(C) No.26973 of 2020, submitted that extension of time in favour of the petitioners, allowing them to lift the minerals, plants and machinery etc. now after the new lessees having entered the self same leasehold area, shall create interference in the operation of the new lessees in whom the leaseholds right have already vested. This position will ultimately lead to chaotic situation and may adversely affect the prospects of the new leaseholders. The claim of the petitioners that they suffered on the account of per day capping on number of trucks, imposed from time to time by the District Administration. Learned Advocate General contended that capping notices relating to number of trucks was only for the trucks destined to Paradeep Port and Gopalpur Port only. This had to be done for the reason of in- disciplined behavior of the drivers and the helper of 67 the trucks and further for the reason that a large number of trucks plying on one route created congestion in the movement. But that does not prove that there was total restriction on movement of trucks on other routes leading to other ports like Vizag and Dhamra or elsewhere. Learned Advocate General contended that petitioners have come to this Court with vague allegations and have not laid any foundation with proof so as to attract the force majeure event. The Writ Petition having no substance to support their claim, should be dismissed.
44. Taking this Court through the Rules 26, 27(5), 37(B) of the Rules of 2016, Mr. A.K. Parija, leaned Advocate General contended that these provisions come in the way of the relief prayed for by the petitioners. Similarly, referring to Sections 2, 3 (C) and 4(4) of the MMDR Act, learned Advocate General contended that there is no permission of mining except in the terms and conditions of the contract and the petitioners for the reason of their leases having expired, cannot get the relief as the same would be opposed to the above provisions. Learned Advocate General also contended that in the event there is extension of time in favour of the petitioners, for the State becoming the owner of the minerals of the plant and machineries by virtue of statutory provision, there will be definite loss of the revenue to the state exchequer. Further, giving a 68 comparison between the royalty at a lower rate fixed by the State and sale value required to be paid by the new lessees being at a much higher rate, it is submitted that there will be great loss of the revenue to the State, which may ultimately jeopardise the public at large. Learned Advocate General also contended that since the agreement between the parties has come to an end after expiry of the lease, all the petitioners are bound by the conditions thereof and have no right to claim the mineral; plant and machinery etc. once the State becomes the owner of the properties. Article 300 A of the Constitution of India is hardly attracted to the fact situation of the case at hand. In response to the submission of the respective counsels on claim of application of decision of the Supreme Court in Chowgule-I, Chowgule-II and also Mideast etc., learned Advocate General submitted that those orders were passed by the Supreme Court in the fact situation of totally different case and have no application to the case at hand. Reliance is also placed on the judgment of this Court in the case of Md. Scrajuddin v. State of Orissa, reported in AIR 1969 Orissa 152 wherein it was held that the reason of delay in setting up the plant does not attract the conditions to force majeure. On the issue of the scope of judicial review by this Court, learned Advocate General, placing reliance on the decisions of the Supreme Court in the cases of State of U.P. v. Johri Mal: (2004) 4 SCC 714 and Centre for Public Interest 69 Litigation v. Union of India: 2016 (6) SCC 408 submitted that in view of ratio of these decisions there is no case for this Court to interfere in exercise of its power of judicial review. Learned Advocate General submitted that the State has even declined to apply the circular dated 05.05.2020 issued by the Ministry of Mines, Government of India to the case of ex-lessee. Keeping in view the provision of Section 8A of the MMDR Act, the State Government has made provisions to have stock of the excavated minerals at another place for intermediate storage. The petitioners have no semblance of right to claim anything further. Leaned Advocate General took support of various orders passed for lockdown Phase I to Phase VI and thereafter under different phases of unlock dated 24.03.2020, 25.03.2020, 27.03.2020, 24.03.2020, 13.04.2020, 15,04.2020 1.05.2020, 17.05.2020, 3.05.2020, 31.08.2020 and submitted that there was never any restriction on the mining activities and on movement of minerals.
45. Mr. P.K. Parhi, learned Assistant Solicitor General appearing for the Union of India, on the suggestion of the learned Advocate General, was required by the Court to assist the Court in these matters, especially in view of various Official Memos, which were relied by the petitioners, were issued by the different departments of the Government of India including its Ministry of 70 Mines, suggesting invocation of force majeure clauses due to ongoing Pandemic Covid-19, filed a short affidavit in clear opposition to the case of the petitioners. P.K. Parhi, learned Assistant Solicitor General has taken the Court through various provisions of the MMDR Act, 1957 governing the mining sector and contended that mines and minerals are under the control of Union of India following Entry-54 of the VIIth Scheduled of the Constitution of India, 1950. Learned Asst. Solicitor General also brought to the notice of this Court the MMDR Amendment Act of 2015 which was enforced w.e.f. 12.01.2015, partially and referred to Section 8A(3) by virtue of which term of existing leases as on that date has been fixed to 31.03.2020 whereafter auction as a mode and method for allocation of natural resources came into picture. Referring to the provisions of the Rules of 2016, learned Asst. Solicitor General almost supported the stand taken by the State Government in the present matters and submitted that deviation from the same will amount to acting contrary to law. Clarifying his stand on the circular dated 5.05.2020 of Government of India issued by its Ministry of Mines addressed to the Principal Secretaries/Directors of the Mining Department of all the States, submitted that such direction was restricted to be applied only in the case of new lessees, who had to start operation during the period of the COVID-19 and has no application to the ex- lessees. Learned Assistant Solicitor General also submitted that the 71 decisions of the Supreme Court in Chowgule-I, Chowgule-II and Mideast etc. have no application to the case of the petitioners.
46. We have given our anxious consideration to rival submissions, carefully perused the materials on record and respectfully studied the cited precedents.
47. On consideration of the factual position and the legal submissions made by all the learned Senior Advocates and other counsels representing different parties, this Court finds that Writ Petition (C) No.26973/2020 filed by M/s. KJS Ahluwalia seeking to challenge the order dated 01.10.2020 on the ground that it was passed while keeping representation of the petitioner submitted on 19.09.2020, vide Annexure-19 pending, which was later rejected vide order dated 09.02.2020. Similarly, Writ Petition (C) No.27751/2020 filed by M/s. Kalinga Mining Corporation involves challenge to both the orders dated 01.10.2020 as well as 09.10.2020. The Competent Authority by order dated 09.10.2020 rejected the representation of the petitioner (Annexure-15) although it was pending when order dated 01.10.2020 was passed. Writ Petition (C) No.27672/2020 filed by M/s. Ghanashyam Misra & Sons Pvt. Ltd. also seeks to challenge both orders dated 01.10.2020 and the rejection of several representation submitted vide Annexure- 7 series, vide order dated 09.10.2020 on the similar ground. 72 Likewise, in Writ Petition (C) No.27731/2020 filed by Ramesh Prasad Sao, also the petitioner has challenged the order dated 01.10.2020 and the rejection of the representation Annexure-3 vide order dated 09.10.2020 by raising the same arguments. Writ Petition (C) No.28004/2020 filed by Khatau Narbheram & Company also involves challenge to order dated 01.10.2020 and the rejection of the representation dated 14.09.2020 of the petitioner vide order dated 09.10.2020 on the same premise. Writ Petition (C) No.28141/2020 filed by M/s. Serajuddin & Company though involves a challenge to order dated 01.10.2020 but this order too was passed while keeping the representations of the petitioner dated 10.07.2020 and 15.09.2020 respectively, pending. Writ Petition (C) No.29112/2020 filed by Bajrang Sharda and Writ Petition (C) No.29311 of 2020 filed by M/s. Aryan Mining & Trading Corporation Pvt. Ltd. & another again seek to challenge the order dated 01.10.2020.
From the factual narration indicated hereinabove, this Court finds the common thread running through all these cases is that there lease stood expired on 31.03.2020. All the parties have been served with notice dated 01.10.2020 upon invocation of power under Rule 12(1)(hh) of the Rules of 2016. In three out of eight writ petitions, there have come new lessees, whereas in two of them ex- 73 lessees have again become the new lessees. In one of the cases, it is observed that mine of the leaseholder is a non-performing mine. There is also a case where the lease hold area was not put to further lease. But surprisingly in all these cases, the competent authority of the State Government has passed stereotype identical orders to the effect that the time granted to the petitioners under the provision of Rule 12(1)(gg) for removal of excavated minerals, plant and machinary etc. commenced from 30.03.2020 and therefore notice under Rule 12(1)(hh) was served on 01.10.2020 granting them one month, which came to an end on 31.10.2020. All the writ petitioners have approached this Court with a common plea that they faced enormous difficulty in their affairs involving transportation of raised minerals, plant and machineries etc. and in some cases, only mineral. One of the cases involve only transportation of plant and machinery. A common argument has been advanced by the learned Senior Advocates appearing in all the writ petitions that towards the end of March, 2020, the country in the wake of Covid-19 pandemic faced unprecedented situation leading to six phases of lockdown, intended to avoid spread of corona virus. In the first stage, with implementation of full curfew, while in some part of the country there was weekend curfew and later in some other parts of the country witnessed night curfew, which process continued with some 74 modification or other up to stage VI lockdown. Then the country introduced Unlock-1 and onwards which still continues.
48. All learned Senior Advocates appearing for the petitioners were unanimous in their submission that situation in the country as a whole was so chaotic that everybody was under
trauma. It is in reference to the different notifications introduced at the national level as well as state level that almost all Advocates admitted that though there was no restriction on paper insofar as mining activities and transportation of minerals are concerned but on the ground the situation was totally different. Looking to the nature of direction issued at both levels from time to time, there has been tremendous fear amongst the citizens of the country. Bringing to the notice of the Court some of the Circulars it has been argued that in view of the variety of restrictions, there has been different type of dislocations. Instances have been cited showing shortage of the manpower, rampant migration of labourers, closure of eateries on the roadside on the National Highways as well as State Highways for indefinite period, making it horrible for the drivers and other persons engaged on trucks transporting such minerals thus causing immense difficulties thereby resulting reduction in the availability of the trucks, menpower, stoppage of movement of citizens due to lack of means of transport and several other restrictions almost bringing 75 the entire Nation to grinding halt at least for first three months. As the time passed, some District Administrations imposed day curfew, some imposed night curfew and some imposed week curfew, some imposed weekend curfew. It is also commonly urged that the State/District Administration introduced capping on the movement of trucks to different destinations creating uncertainty involving transportation to other areas. Fall in the market position in the whole world created deterioration in the financial condition of every individual. It is urged that this all resulted due to Covid-19 pandemic. Therefore, the State Government cannot be allowed to contend there was no effect whatsoever on ex lessees. In this situation, when the National Disaster Management Authority declared this pandemic to be a natural calamity and the Central Government taking into consideration of the situation, issued various notifications and circulars providing relaxation to different types of business activities, financial incentives, introducing relaxations in variety of areas suffering due to the pandemic situation in the country from March to October, 2020, including the one issued by the Ministry of Mines, this Court is inclined to hold that the State Government was under a statutory obligation to examine the grievance of the petitioner whether or not they have made out a case for invoking Force Majeure clause in Rule 12 (1)(ff) of the Rules of 2016.76
49. This Court is inclined to uphold the argument that the representations of the petitioners could not have been rejected as not maintainable because Force Majeure Clause is very much included in the lease deed as one of the conditions and it is also available in Rule 12(1)(ff) of the Rules of 2016, to be invoked at the stage of Rule 12(1)(gg). The competent authority of the State Government ought to have therefore examined such application/representation of the petitioners, on the basis of whatever material they relied, in support of their claim, on case to case basis, and decided them by speaking and reasoned order rather than hushing them up by describing as not maintainable. The petitioners have therefore challenged the impugned orders dated 01.10.2020 and 09.10.2020 on the ground of such orders having been passed by the State authorities mechanically, the first one by invoking Rule 12 (1) (hh) while keeping the representation pending and the second one, again by a cryptic and non-speaking order, rejecting their representation, not on merit, but as not maintainable. Total non application of mind by the State authority is thus writ large on the contents of the order dated 09.10.2020. This also includes the cases where parties are not at latches but suffered due to wrong functioning of state machinery or delay in attending to their complaints by the competent authority. Of course, these parties are also attempting to get additional time by 77 simultaneously relying on force majeure clause for their also suffering due to COVID-19 but primarily they suffered due to lackadaisical approach on the part of the State functionaries. The writ petitioners have thus successfully demonstrated that the competent authority of the State Government has mechanically invoked Rule 12(1)(hh) in passing order dated 01.10.2020 at a stage when their representations raising various arguments were still pending. And later those representations too were rejected mechanically be describing them as not maintainable, which shows how arbitrarily the respondents have acted.
50. This Court on examination of the individual cases finds that the petitioners in the first category of cases, made representation seeking additional time for transportation of mineral as well as plant & machineries whereas the claim of the petitioners falling in second category was based on the fact of old lessee becoming new lessee. This group of ex-lessees claimed mineral, plant and machineries, etc. for their own requirement. There case is that Rule 12 (1) (gg) and 12(1) (hh) of the Rules of 2016 would not be applicable to them because they would continue as the leaseholder in the same leasehold area for another 50 years. These questions have not at all been examined by the State authorities while deciding their representations. Their case is that if the 78 opposite parties have allowed the facility of intermediate storage to old lessees in other cases, why similar facility not be given to them on the ground of parity to store the mineral in the same leasehold area. Further, they contend that they would still require plant, machinery and other equipments for running the mines, if they are compelled to remove them, to ultimately bring them back, would implementation of Rule 12(1)(gg) in such a manner not lead to absurd consequences.
51. For convenience, this Court here takes note of order dated 1.10.2020 and order dated 9.10.2020 passed by the competent authority impugned in almost all cases, from one of the cases in Writ Petition (Civil) No. 27751 of 2020 of Kalinga Mining Corporation, as sample, which reads as follows:-
"Government of Odisha Steel and Mines Department ***** No.8355/SM, Bhubaneswar dated the 01.10.2020 To M/s Kalinga Mining Corporation, Samanta Niwas, Sheikh Bazar, Cuttack-753008, (Odisha) Email:[email protected],[email protected] Whereas the validity of the Jururi lease of Iron mineral in the village Jururi, District Keonjhar granted in your favour has expired on dated 31.03.2020 pursuant to the provisions contained in section 8A(6) of MMDR Act,1957.79
And, whereas the Director of Mines has reported that 728,702 Metric Tonnes of Iron ore minerals was lying undisposed in the said lease land as on date of expiry of the lease period viz dated 31.03.2020. In addition, infrastructure, erections and conveniences set up by you were also existing in the said lease land on the date of expiry of the lease period.
And whereas as provided u/r 12(1) (gg) of the Minerals (Other than Atomic and Hydrocarbons Energy Minerals) Concessions Rules, 2016 (herein after called as MCR 2016), the ore mineral excavated during the currency of the lease together with engine, machinery, plant, buildings structures, tramways, railways and other works, erections and conveniences set up by you upon the said leased land are required to be completely taken down and removed by you within the stipulated six calendar months as further provided u/r 12(1) (gg) of the said Rules' 2016.
Whereas the Director of Mines has reported that 523,855 Metric Tonnes of Iron ore minerals is still lying undisposed in the said lease land as on date of expiry of stipulated 6 (six) months period viz dated 30.09.2020. In addition, all infrastructure, erections and conveniences set up by you are also not removed from the said lease land within the aforesaid dateline.
And whereas rule 12(1) (hh) of MCR 2016 provides that if at end of six calendar months after the expiry or sooner termination of the lease term there shall remain in or upon the leased land, any ore or mineral, engines, machinery, plant, buildings structures, tramways, railways and other work, erections and conveniences or other property which are not required by the lessee in connection with operations in any other lands held by it under prospecting licence or mining lease, the same shall, if not removed by the lessee within one calendar month of being notified to do so by the State Government be deemed to become the property of the State Government and may be sold or disposed of in such manner as the State Government shall deem fit without liability to pay any compensation or to account to the lessee in respect thereof.
Therefore, in view of the above, you are hereby notified u/r 12(1) (hh) of MCR' 2016 to remove the aforesaid remaining quantity of mineral along with all/any infrastructure, erections and conveniences, if any, set up by you within one calendar month of issue of this notice failing which the same shall be deemed to become the property of the Government and may be sold or disposed of in such manner as the State Government shall deem fit without 80 any liability to pay any compensation or to account to you in respect thereof.
By orders of Governor Sd/-
Additional Secretary to Government No.8356/SM, dated 01.10.2020 Copy forwarded to the Addl. Chief Secretary, Forest & Environment Department/ Member Secretary, Odisha State Pollution Control Board for favour of information and necessary action.
Sd/-
Additional Secretary to Government Memo No.8357/SM, dated 01.10.2020 Copy forwarded to the Director of Mines, Odisha/Collector, Keonjhar District/DDM, Joda Mining circle for favour of information and necessary action.
Sd/-
Additional Secretary to Government Memo No.83587/SM, dated 01.10.2020 Copy forwarded to the RCoM, IMB, Bhubaneswar for favour of information and necessary action.
Sd/-
Additional Secretary to Government"
"Government of Odisha Steel and Mines Department ***** No.8727/SM, Bhubaneswar dated the 09.10.2020 IV(AB)SM-36/2020 From:
Sri B.K.Dehury, IAS Additional Secretary to Government. To M/s Kalinga Mining Corporation, Samanta Niwas, Sheikh Bazar, 81 Cuttack-753008, (Odisha) Email:[email protected],[email protected] Sub: Extension of time for removal of the stocks of mined out ore and other assets after the expiry of the lease period.
Ref: Your representation dated 25.08.2020.
Sir With reference to the subject cited supra, I am directed to say that after careful consideration Government have been pleased to reject your representation dated 25.08.2020 seeking time extension under rule 12(1)(ff) of Mineral Concession Rules, 2016 as being not maintainable.
Further, you have already been notified vide Notice No.8355/SM, dated 01.10.2020 under rule 12(1) (hh) of MCR, 2016 issued to remove the remaining quantity of mineral alongwith all/any infrastructure, erections and conveniences, if any, set up by you within one calendar month of issue of the said notice failing which the same shall be deemed to become the property of the Government and may be sold or disposed of in such manner as the State Government shall deem fit without any liability to pay any compensation or to account to you in respect thereof.
Yours faithfully Sd/-
Additional Secretary to Government No.8728/SM, dated 09.10.2020 Copy forwarded to the Director of Mines, Odisha for favour of information and necessary action.
Sd/-
Additional Secretary to Government"
52. Reading both the orders quoted hereinabove and availability of similar orders filed in each writ petition taken up for consideration, this Court finds these orders are not only stereotype orders but also can be termed as copy paste orders, as contents of 82 all these orders are identical except that in the order dated 1.10.2020 there is change in the name of party addressed to and the stock position of concerned parties as on 31.3.2020 on the date of expiry of lease and on 30.9.2020, prior to the date of issuing on invocation of Rule 12(1)(hh) of Rule,2016. Similarly, looking to the communication/order dated 9.10.2020, it is found that these orders are also not only stereotyped and issued with only change of address of the concerned parties but also rejected by citing one common reason of rejection "being not maintainable" irrespective of different facts and claims by different parties.
53. Let us now examine the argument advanced on behalf of the State that even if reasons are not reflected in the impugned order, such order can be supported by citing the noting form the relevant file that the competent authority has passed them after due application of mind. For sake of convenience, this Court takes note of reasons recorded in the Department's file which are as follows:
" REASONS RECORDED IN THE FILE "1. None of the lessees have mentioned in their representation about exact date from which they started dispatch and other activities and what quantity mineral and assets they have dispatched/ removed and for how many days/months they were prevented from taking up removal activities due to lockdown restrictions.
2. In this case, the time extension on force majeure ground may not be permissible as mining activities have been 83 exempted from the country wide COVID-19 lockdown Order dated 24.3.2020 issued by MoHA, Gol and addendum to guidelines issued on 25.03.2020.
7. In subsequent lockdown orders, mining operation, mineral production, transportation and all activities incidental to mining operation are exempted from lockdown restrictions.
8. The applicant lessees were free to take up removal activities u/r 12(1) (gg) after the expiry of lease period. Virtually the applicants have no bar to continue the removal activities by availing full six months time in clearing their respective lease areas.
9. Time as prayed for under force majeure reasons u/r 12(1) (ff) of MCR 2016 may not be applicable as during the Covid-19 lockdown period, the applicants' removal activities in the lease area are not affected by any such restriction imposed on COVID ground.
10, The provisions of force majeure clause as provided u/r 12(1) (ff) of MCR 2016 are perhaps limited to existing leases/lessees ONLY. Hence, this provision may not be applicable in case of the leases already expired for removal of stock being done u/r 12(1) (gg) and 12(1) (hh) of MCR 2016."
54. The file noting indicating "the Reasons recorded in the file" appearing at page-32 of written note of submission filed on behalf of the State of Odisha clearly demonstrates that the competent authority has not applied its mind to the individual cases, rather it appear that there is mechanical disposal of all the representation by identically worded observations, firstly in the file notings and then, in the orders rejecting representations. Looking to the observations in the file noting, this Court is inclined to observe that if any further particulars/clarification/ information, was 84 needed, nothing prevented the competent authority to call upon the parties with appropriate notices to do so. Instead of closing their request as not maintainable, it could have decided the matter on merits. Significantly enough, when force majeure event is not only a part of the conditions of the lease deed but also later found statutory recognition in the scheme of the Rules of 2016, how such representations can be termed as not maintainable is beyond comprehension. On account of drastic consequences the impugned order would have on the petitioners, this Court has no hesitation in holding that the competent authority was duty obliged to provide opportunity of hearing to the affected parties prior to passing such orders. Both the orders dated 1.10.2020 and 9.10.2020 thus suffer from gross violation of the principles of natural justice, besides suffering from non-application of mind. Moreover these orders also suffer from illegality and arbitrariness on account of not assigning any reason whatsoever to come to such abrupt conclusion, without dealing with any of the arguments put forth by the petitioners in their representations.
55. Learned Advocate General appearing for the State Government has argued that the competent authority in coming to observe that force majeure clause has no application to the case at hand, hence it has mentioned its conclusions in the concerned file 85 and, therefore, the impugned orders cannot be construed to be orders involving absolute non-consideration of the case of the respective parties. But examination of the note sheet does not reflect examination of individual cases by the competent authority on case to case basis. Apart from various decisions on this aspect already discussed alone, reference may be made to judgment of the Supreme Court in Nareshbhai Bhagubhai and others Vrs. Union of India and others with three other cases reported in (2019) 15 SCC 1 in paragraph 21, 26, 27 and 28 of which it was held as follows :-
"21. In the present case, it is the undisputed position that no order as contemplated in the eye of the law was passed by the competent authority in deciding the objections raised by the appellants. A statutory authority discharging a quasi-judicial function is required to pass a reasoned order after due application of mind. In Laxmi Devi v. State of Bihar [Laxmi Devi v. State of Bihar, (2015) 10 SCC 241 : (2016) 1 SCC (Civ) 119] , this Court held that: (SCC pp. 254-55, para 9) "9. The importance of Section 5-A cannot be overemphasised. It is conceived from natural justice and has matured into manhood in the maxim of audi alteram partem i.e. every person likely to be adversely affected by a decision must be granted a meaningful opportunity of being heard. This right cannot be taken away by a side wind, as so powerfully and pellucidly stated in Nandeshwar Prasad v. State of U.P. [Nandeshwar Prasad v. State of U.P., AIR 1964 SC 1217] So stringent is this right that it mandates that the person who heard and considered the objections can alone decide them; and not even his successor 86 is competent to do so even on the basis of the materials collected by his predecessor. Furthermore, the decision on the objections should be available in a self-contained, speaking and reasoned order; reasons cannot be added to it later as that would be akin to putting old wine in new bottles. We can do no better than commend a careful perusal of Union of India v. Shiv Raj [Union of India v. Shiv Raj, (2014) 6 SCC 564 : (2014) 3 SCC (Civ) 607] , on these as well as cognate considerations." (emphasis supplied) File notings and lack of communication
26. It is settled law that a valid order must be a reasoned order, which is duly communicated to the parties. The file noting contained in an internal office file, or in the report submitted by the competent authority to the Central Government, would not constitute a valid order in the eye of the law. In the present case, there was no order whatsoever passed rejecting the objections, after the personal hearing was concluded on 30-7-2011. It is important to note that the competent authority did not communicate the contents of the file noting to the appellants at any stage of the proceedings. The said file noting came to light when the matter was pending before the High Court, and the original files were summoned. The High Court, upon a perusal of the files, came across the file noting recording rejection of the objections only on the ground that the matter pertained to an infrastructure project for public utility.
27. In Bachhittar Singh v. State of Punjab [Bachhittar Singh v. State of Punjab, AIR 1963 SC 395] a Constitution Bench held that merely writing something on the file does not amount to an order. For a file noting to amount to a decision of the Government, it must be communicated to the person so affected, before that person can be bound by that order. Until the order is communicated to the person affected by it, it 87 cannot be regarded as anything more than being provisional in character.
28. Similarly, in Shanti Sports Club v. Union of India [Shanti Sports Club v. Union of India, (2009) 15 SCC 705 : (2009) 5 SCC (Civ) 707] this Court held that notings recorded in the official files, by the officers of the Government at different levels, and even the Ministers, do not become a decision of the Government, unless the same are sanctified and acted upon, by issuing an order in the name of the President or Governor, as the case may be, and are communicated to the affected persons."
56. Reading the above decisions, this Court finds that the proposition advanced by the State is clearly opposed to the law enunciated by the Supreme Court in the above judgment which rather fits to the case of all the petitioners involved herein. In the circumstances, this Court has no hesitation to hold that the orders dated 1.10.2020 and 9.10.2020 impugned herein are liable to be declared bad in the eye of law.
57. Before proceeding further, we deem it appropriate to seek guidance from some of judicial pronouncements on the aspect of scope of judicial review with the High Court, which shall be discussed presently.
In Chief Constable of the North Wales Police v.
Evans, (1982) 3 AII ER 141 at 154 Lord Brightman said :
"Judicial Review, as the words imply, is not an appeal from a decision, but a review of the manner in 88 which the decision was made. Judicial Review is concerned, not with the decision, but with the decision making process. Unless that restriction on the power of the Court is observed, the Court will, in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power."
Taking into consideration the above broad principles in the matter of judicial review of administrative decisions, the Supreme Court in Tata Celluar v. Union of India, (1994) 6 SCC 651 in para -74, 77 observed as follows:
"74. Judicial review is concerned with reviewing not the merits of the decision in support of which the application of judicial review is made, but the decision-making process itself
77. The duty of the court is to confine itself to the question of legality. Its concern should be:
1. Whether a decision-making authority exceeded its powers?
2. Committed an error of law,
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal would have reached or,
5. abused its powers.
Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:
(i) Illegality : This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it.
(ii) Irrationality, namely, Wednesbury
unreasonableness.
89
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind [(1991) 1 AC 696] , Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention".
In Rameshwar Prasad (VI) v. Union of India, (2006) 2 SCC 1, in paragraph-232 and 240, on survey of previous case law on the subject, the Supreme Court observed thus:
"232. The common thread running through in all these decisions is that the Court should not interfere with the administrator's decision unless it was illogical or suffers from procedural impropriety or was shocking to the conscience of the Court, in the sense that it was in defiance of logic or moral standards. In view of what has been stated in Wednesbury case [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1948) 1 KB 223 : (1947) 2 All ER 680 (CA)] the Court would not go into the correctness of the choice made by the administrator open to him and the Court should not substitute its decision to that of the administrator. The scope of judicial review is limited to the deficiency in decision-making process and not the decision.
240. A person entrusted with discretion must, so to speak, direct himself properly in law. He must call his attention to matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules he may truly be said to be acting unreasonably. Similarly, there may be something so absurd that no sensible 90 person could ever dream that it lay within the powers of the authority.
In State of U.P. v. Johri Mal, (2004) 4 SCC 714, in paragraph-29 and 30 the Supreme Court held as follows:
"29. In Wade's Administrative Law, 8th Edn., at pp. 33-34, it is stated:
"Review, legality and discretion The system of judicial review is radically different from the system of appeals. When hearing an appeal the court is concerned with the merits of a decision: is it correct? When subjecting some administrative act or order to judicial review, the court is concerned with its legality: is it within the limits of the powers granted? On an appeal the question is 'right or wrong?' On review the question is 'lawful or unlawful?' Rights of appeal are always statutory. Judicial review, on the other hand, is the exercise of the court's inherent power to determine whether action is lawful or not and to award suitable relief. For this no statutory authority is necessary: the court is simply performing its ordinary functions in order to enforce the law. The basis of judicial review, therefore, is common law. This is nonetheless true because nearly all cases in administrative law arise under some Act of Parliament. Where the court quashes an order made by a minister under some Act, it typically uses its common law power to declare that the Act did not entitle the minister to do what he did, and that he was in some way exceeding or abusing his powers.
Judicial review thus is a fundamental mechanism for keeping public authorities within due bounds and for upholding the rule of law. Instead of substituting its own decision for that of some other body, as happens when on appeal, the court on review is concerned only with the question whether the act or order under attack should be allowed to stand or not. If the Home Secretary revokes a 91 television licence unlawfully, the court may simply declare that the revocation is null and void. Should the case be one involving breach of duty rather than excess of power, the question will be whether the public authority should be ordered to make good a default. Refusal to issue a television licence to someone entitled to have one would be remedied by an order of the court requiring the issue of the licence. If administrative action is in excess of power (ultra vires), the court has only to quash it or declare it unlawful (these are in effect the same thing) and then no one need pay any attention to it. The minister or tribunal or other authority has in law done nothing, and must make a fresh decision."
30. It is well settled that while exercising the power of judicial review the court is more concerned with the decision-making process than the merit of the decision itself. In doing so, it is often argued by the defender of an impugned decision that the court is not competent to exercise its power when there are serious disputed questions of facts; when the decision of the Tribunal or the decision of the fact- finding body or the arbitrator is given finality by the statute which governs a given situation or which, by nature of the activity the decision-maker's opinion on facts is final. But while examining and scrutinising the decision-making process it becomes inevitable to also appreciate the facts of a given case as otherwise the decision cannot be tested under the grounds of illegality, irrationality or procedural impropriety. How far the court of judicial review can reappreciate the findings of facts depends on the ground of judicial review. For example, if a decision is challenged as irrational, it would be well-nigh impossible to record a finding whether a decision is rational or irrational without first evaluating the facts of the case and coming to a plausible conclusion and then testing the decision of the authority on the touchstone of the tests laid down by the court with special reference to a given case. This position is well settled in the Indian administrative law. Therefore, to a limited extent of scrutinising the decision-making process, it is always open to the court to review the evaluation of facts by the decision-maker."
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58. In S.N. Chandrashekar v. State of Karnataka, (2006) 3 SCC 208, the Supreme Court in paragraph-33 has made the following observation:
"Judicial review
33. It is now well known that the concept of error of law includes the giving of reasons that are bad in law or (where there is a duty to give reason) inconsistent, unintelligible or substantially inadequate. (See de Smith's Judicial Review of Administrative Action, 5th Edn., p. 286.)"
59. In the case at hand, this Court finds that the impugned orders dated 1.10.2020 as well as 9.10.2020, both for its nature and taking into account the arguments in assailing them, suffer on account of committing breach of rules of natural justice, where State authorities arrived at a decision, being totally mechanical, without in the least assigning any reason whatsoever, which reflects total non-application of mind, and further they also suffer from being irrational and passed in gross abuse of powers and attaining to procedural impropriety. The first order involving Rule 12(1)(hh) was passed without considering representation of the petitioners in which they requested the respondent-State authorities to invoke Rule 12(1)(ff) in their favour and the second order dismissing the representation of the petitioners as not maintainable. This in our opinion is a fit case where High Court needs to exercise of its power on judicial review.
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60. This Court does not deem it appropriate to discuss in detail on the aspect of applicability of Force Majeure clause due to Covide-19 reasons in the case of the petitioners as in our view this matter should be left for reconsideration by the competent authorities of the State. Considering however that arguments have been made by learned Senior Advocate on the law of Force Majeure and submitted that this requires impossibility in working out the terms and condition of the Form-K inasmuch as terms of statute namely, MMDR Act and the Rules of 2016, we shall refer to only one leading judgment of the Supreme Court in Energy Watchdog Vrs. CERC, reported in (2017) 14 SCC 80. in paragraph-36 in which it was held as under:-
"36. The law in India has been laid down in the seminal decision of Satyabrata Ghose v. Mugneeram Bangur & Co. [Satyabrata Ghose v. Mugneeram Bangur & Co., 1954 SCR 310 : AIR 1954 SC 44] The second paragraph of Section 56 has been adverted to, and it was stated that this is exhaustive of the law as it stands in India. What was held was that the word "impossible" has not been used in the section in the sense of physical or literal impossibility. The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose of the parties. If an untoward event or change of circumstance totally upsets the very foundation upon which the parties entered their agreement, it can be said that the promisor finds it impossible to do the act which he had promised to do. It was further held that where the Court finds that the contract itself either impliedly or expressly contains a term, according to which performance would 94 stand discharged under certain circumstances, the dissolution of the contract would take place under the terms of the contract itself and such cases would be dealt with under Section 32 of the Act. If, however, frustration is to take place de hors the contract, it will be governed by Section 56."
61. This decision has been noticed here only for the reason that most of the petitioners through their representations have already brought their difficulties to the notice of the competent authority which ought to have examined their cases separately on individual merits. But no individual attention was paid to each type of cases. It therefore follows that all cases though are different in nature but have been dealt with alike. Unequals have thus been treated equally thereby attracting the breach of Article 14 of the Constitution. We make this observation in that limited context which may not be construed to be a direction to dispose of the cases in hand one way or the other.
62. On the allegation that for different fact and situation obtaining in so many cases, all the representations could not have been disposed of by one stereotype order, contention of the petitioners in the above regard finds support from the judgment of the Supreme Court rendered in Excise Commissioner and another Vrs. Chander Sekhar and others, reported in (1983) 4 SCC 224 which reads as hereunder:
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"These five civil appeals relate to the auction of the exclusive privilege of selling bhang in the shops in Allahabad District. Ordinarily these five appeals should be allowed on the same lines as Civil Appeals Nos. 5997, 6017 etc. of 1983 but Shri Mridul, learned counsel for the respondents, drew our attention to the circumstances that the Excise Commissioner while purporting to set aside the auction of foreign liquor, country liquor and bhang shops by a single order did not address himself separately to the question whether there was any reason whatsoever to set aside the auction of bhang shops. Shri Mridul is right. There is not a sentence in the order of the Excise Commissioner to indicate that he addressed himself to and considered separately the question whether there was any ground, the interest of the revenue or any other reason, to set aside the auction of bhang shops. In these circumstances, we set aside the judgment of the High Court but instead of restoring the order of the Excise Commissioner, we direct the Excise Commissioner to reconsider the question of setting aside the previous auction and ordering reauction in so far as bhang shops are concerned. The appeals are allowed as indicated. No order as to costs."
63. It is well settled that reasons are the link between the order and the mind of the authority who passes the order. Proper reasons, even in administrative order, are the necessary concomitant for a valid order passed by the administrative authority or its instrumentality. The purpose of indicating such reasons in the administrative order is to be conveyed to the affected parties by the authority arrived at the conclusion with it, so that the aggrieved person will have the 96 opportunity of testing the correctness of the said order before the appropriate forum.
In Mohinder Singh Gill v. Chief Election Commr., (1978) 1 SCC 405, highlighting the importance of reasons even in administrative orders, the Supreme Court in paragraph-8 of the report observed thus :
"8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji [Commr. of Police, Bombay v. Gordhandas Bhanji, AIR 1952 SC 16] :
"Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself."
64. The Supreme Court in Assistant Commissioner, Commercial Tax Department, Works Contract and Leasing, Kota vs. Shukla & Brothers, (2010) 4 SCC 785 held that the principle of natural justice has twin ingredients; 97 firstly, the person who is likely to be adversely affected by the action of the authorities should be given notice to show cause thereof and granted an opportunity of hearing and secondly, the orders so passed by the authorities should give reason for arriving at any conclusion showing proper application of mind. Violation of either of them could in the given facts and circumstances of the case, vitiate the order itself. Such rule being applicable to the administrative authorities certainly requires that the judgment of the Court should meet with this requirement with higher degree of satisfaction. The order of an administrative authority may not provide reasons like a judgment but the order must be supported by the reasons of rationality. The distinction between passing of an order by an administrative or quasi-judicial authority has practically extinguished and both are required to pass reasoned orders.
65. The Wharton's Law Lexicon says, reason is the very life of law, when the reason of a law once ceases, the law itself generally ceases. Referring to the said depiction, the Supreme Court in paragraph 24 in Shukla & Brothers (supra), observed as under:
98
"24. Reason is the very life of law. When the reason of a law once ceases, the law itself generally ceases (Wharton's Law Lexicon). Such is the significance of reasoning in any rule of law. Giving reasons furthers the cause of justice as well as avoids uncertainty. As a matter of fact it helps in the observance of law of precedent. Absence of reasons on the contrary essentially introduces an element of uncertainty, dis- satisfaction and give entirely different dimensions to the questions of law raised before the higher/appellate courts. In our view, the court should provide its own grounds and reasons for rejecting claim/prayer of a party whether at the very threshold i.e. at admission stage or after regular hearing, howsoever precise they may be."
66. The Supreme Court in Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India and Anr., (1976) 2 SCC 981, highlighting the importance of reasons, albeit in the context of arbitral award, but also emphasizing on need of giving reasons by the administrative authorities, in paragraph 6 of the judgment held as under:
"6. ......If courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation of Administrative Law, they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then alone administrative authorities and tribunals exercising quasi-judicial function will be 99 able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law. ..."
67. The Supreme Court in Gurdial Singh Fijji v.
State of Punjab, (1979) 2 SCC 368, while dealing with the matter of selection of candidates who could be under review, if not found suitable otherwise, explained the reasons being a link between the materials on which certain conclusions are based and the actual conclusions and held, that where providing reasons for proposed supersession was essential, then it could not be held to be a valid reason that the concerned officer's record was not such as to justify his selection. In this context, in paragraph 18 of the judgment, the apex Court held as under:
"18... "Reasons" are the links between the materials on which certain conclusions are based and the actual conclusions. The Court accordingly held that the mandatory provisions of Regulation 5(5) were not complied with by the Selection Committee. That an officer was "not found suitable" is the conclusion and not a reason in support of the decision to supersede him. True, that it is not expected that 100 the Selection Committee should give anything approaching the judgment of a Court, but it must at least state, as briefly as it may, why it came to the conclusion that the officer concerned was found to be not suitable for inclusion in the Select List."
68. The Supreme Court in State of Orissa vs. Dhaniram Luhar, (2004) 5 SCC 568, while dealing with the cardinality of recording of reasons, referred to its earlier decision in Raj Kishore Jha v. State of Bihar and Ors. (2003) 11 SCC 519, wherein, highlighting the necessary of giving reasons, the Supreme Court held that "reason is the heartbeat of every conclusion, and without the same it becomes lifeless."
69. Even in respect of administrative orders, Lord Denning, M.R. in Breen Vs. Amalgamated Engineering Union (1971) 1 All E.R. 1148, observed that "the giving of reasons is one of the fundamentals of good administration".
70. In Alexander Machinery (Dudley) Ltd. v.
Crabtree (1974) ICR 120 (NIRC) it was observed: "Failure to give reasons amounts to denial of justice". Reasons are live links between the mind of the decision-taker to the controversy in question and the decision or conclusion arrived 101 at". Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the "inscrutable face of the sphinx", it can, by its silence, render it virtually impossible for the Courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system; reasons at least sufficient to indicate an application of mind to the matter before Court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made; in other words, a speaking out. The "inscrutable face of a sphinx" is ordinarily incongruous with a judicial or quasi-judicial performance."
71. The Supreme Court in S.N. Chandrashekar and Anr. vs State Of Karnataka And Ors., (2006) 3 SCC 208, relying on its earlier decision in Bangalore Development Authority Vs. R. Hanumaiah, (2005) 12 SCC 508, held that the order passed by the statutory authority, it is trite, must be judged on the basis of the contents thereof and not as explained in affidavit.
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72. It is settled proposition of law that non-application of mind is one of the facets of arbitrariness. Reference in this connection may be made to the judgment of the Supreme Court in East Coast Railway & Anr. Vs. Mahadev Appa Rao & Ors., (2010) 7 SCC 678, wherein the Supreme Court, relying on the judgment of Shrilekha Vidyarthi (supra), observed that non application of mind as well as not giving proper reasons should be held to be arbitrary. The Court in paragraphs 23 and 24 of the judgment held as under:
"23. Arbitrariness in the making of an order by an authority can manifest itself in different forms. Non-application of mind by the authority making the order is only one of them. Every order passed by a public authority must disclose due and proper application of mind by the person making the order. This may be evident from the order itself or the record contemporaneously maintained. Application of mind is best demonstrated by disclosure of mind by the authority making the order. And disclosure is best done by recording the reasons that led the authority to pass the order in question. Absence of reasons either in the order passed by the authority or in the record contemporaneously maintained is clearly suggestive of the order being arbitrary hence legally unsustainable.
24. In the instant case the order passed by the competent authority does not state any reasons whatsoever for the cancellation of the typing test. It is nobody's case that any such reasons were set out even in any contemporaneous record or file. In the absence of reasons in support of the order it is 103 difficult to assume that the authority had properly applied its mind before passing the order cancelling the test."
73. There is no precise statutory or other definition of the term "arbitrary". Black's Law Dictionary describes the term "arbitrary" in the following words:
"1. Depending on individual discretion; specif., determined by a judge rather than by fixed rules, procedures, or law. 2. (Of a judicial decision) founded on prejudice or preference rather than on reason or fact. This type of decision is often termed arbitrary and capricious."
74. The Corpus Juris Secundum, explains the term "arbitrary" in the following words:
"ARBITRARY - Based alone upon one's will, and not upon any course of reasoning and exercise of judgment; bound by no law; capricious; exercised according to one's own will or caprice and therefore conveying a notion of a tendency to abuse possession of power; fixed or done capriciously or at pleasure, without adequate determining principle, non-rational, or not done or acting according to reason or judgment; not based upon actuality but beyond a reasonable extent; not founded in the nature of things; not governed by any fixed rules or standard; also, in a somewhat different sense, absolute in power, despotic, or tyrannical; harsh and unforbearing. When applied to acts, "arbitrary" has been held to connote a disregard of evidence or of the proper weight thereof; to express an idea opposed to administrative, executive, judicial, or legislative 104 discretion; and to imply at least an element of bad faith, and has been compared with "willful".
75. The Supreme Court in Shrilekha Vidyarthi Vs. State of U.P., (1991) 1 SCC 212, observed that the true import of the expression "arbitrariness" is more easily visualized than precisely stated or defined and that whether or not an act is arbitrary would be determined on the facts and circumstances of a given case. The observation of the apex Court at paragraph 36 of the judgment are apt to quote:-
"36. The meaning and true import of arbitrariness is more easily visualized than precisely stated or defined. The question, whether an impugned act is arbitrary or not, is ultimately to be answered on the facts and in the circumstances of a given case. An obvious test to apply is to see whether there is any discernible principle emerging from the impugned act and if so, does it satisfy the test of reasonableness. Where a mode is prescribed for doing an act and there is no impediment in following that procedure, performance of the act otherwise and in a manner which does not disclose any discernible principle which is reasonable, may itself attract the vice of arbitrariness. Every State action must be informed by reason and it follows that an act uninformed by reason, is arbitrary. Rule of law contemplates governance by laws and not by humour, whims or caprices of the men to whom the governance is entrusted for the time being. It is trite that `be you ever so high, the laws are above you'. This is what men in power must remember, always."105
76. Considering the case of the petitioners from the perspective that despite peculiar and different facts of different cases, non-consideration of each individual case separately invoking Rule 12(1)(gg) while representations of the petitioners were pending, vide order dated 1.10.2020 and then rejecting all the representations by identically worded cryptic and non-speaking orders vide order dated 9.10.2020, this Court is inclined to hold that this is a fit case for it to exercise its power of judicial review by requiring the respondents to reconsider the representations of the petitioner, at least in the first five of the above writ petitions, anterior to the stage of invocation of Rule 12(1) (gg) of the Rules of 2016 when such representations were pending with them and straightaway allow last three writ petitions, wherein the petitioners have either not invoked force majeure event or have been otherwise able to make out a case, independent of application of Force Majeure clause, on account of arbitrary exercise of power and lackadaisical approach and abject apathy on the part of the State functionaries to their cases by not applying their mind to their representations and mechanically rejecting them as not maintainable.
77. On analysis of the entire materials on record, we are inclined to hold that the petitioners in five writ petitions i.e. Writ Petition (Civil) Nos. 26973, 27751, 27672, 28141 and 106 27731 of 2020, wherein they have mainly prayed for invocation of force majeure clause, with reference to Clauses 4, 5 and 6 of Part-IX of the lease deed executed on Form-K under the M.C. Rules 1960 and Rule 12(1)(ff) of the Rules of 2016, the impugned order dated 01.10.2020 passed by the opposite party-authority invoking Rule 12(1)(hh), while keeping representation of the petitioner pending and order dated 09.10.2020 while dismissing the representations of the petitioners as not maintainable, having been passed without considering any of arguments of the petitioners that the force majeure event is attracted in the circumstances of their case, deserves to succeed in part. We therefore, while partly allowing all the aforesaid five writ petitions, set aside the order dated 01.10.2020 invoking Rule 12(1)(gg) of the Rules of 2016 and the order dated 09.10.2020, rejecting the representations, and remand the matters to the Principal Secretary, Steel and Mines Department, Government of Odisha for considering representations of the writ petitioners afresh, in the light of discussions made above. Petitioners would be at liberty to place all such materials, which they have relied before this Court and may place any other material which they seek to 107 rely, to substantiate their case for invocation of the force majeure clause before the competent authority, within seven days, who shall then decide such representation by separate speaking and reasoned orders in each case, within 45 days there from after providing opportunity of hearing to the petitioners. It is directed that till disposal of the representations afresh by the competent authority, status quo with regard to minerals excavated by the old-lessees during the subsistence of their lease period, the plants and machineries etc. lying in the respective leasehold areas, shall be maintained by the parties, which shall abide by the final outcome of their representations to be decided by the competent authority afresh.
Writ Petition (Civil) No. 28004 of 2020 :
78. Now coming to three individual cases which in our view can be decided without recourse to Force Majeure Clause, the first writ petition in that category has been filed by the petitioner-M/s. Khatau Narbheram & Co., who had a balance stock of 2,11,579 MT of minerals as on 30.09.2020, but in the notice dated 01.10.2020 under Rule 12(1)(hh) this stock was indicated as only 205037 MT. The petitioner 108 submitted a representation to the opposite parties vide e-mail that the opposite parties in their record have shown lesser stock position than actual and again reiterated that request by another representation dated 12.10.2020. The opposite party then finally rectified the mistake in the calculation of the closing stock of the petitioner in their record as on 30.09.2020 and now reflected it to be 2,11,579 MT. Such discrepancy was corrected by the competent authority only after a joint investigation by both the parties much after passing of the impugned notice/order dated 01.10.2020 under Rule 12(1)(hh) of the Rules of 2016. In the notice dated 01.10.2020, the closing stock balance of mineral at the mine of the petitioner as on 30.09.2020 was shown as 2,11,579 MT, however, just after five days the opposite party-State Government issued the corrigendum dated 5.10.2020 wherein it was stated that the quantity of iron ore mentioned as "2,11,579 MT" in the notice dated 01.10.2020 may be read as "2,05,037MT". The petitioner vide its email dated 10.10.2020 (under Annexure-17) intimated the opposite parties that the closing stock mentioned in both the communications, namely, notice dated 01.10.2020 and corrigendum dated 05.10.2020 does not match with the actual 109 quantity of iron ore lying on the site of petitioner's mine. It was clarified by the petitioner that the closing stock as on 30.09.2020 was 2,11,668.437 MT, and therefore, petitioner requested the opposite party-authority to rectify the mistake and accordingly issue a fresh corrigendum. When no action was taken by the competent authority, the petitioner on 12.10.2020 submitted yet another representation under Annexure-18, to the opposite party No.2 clarifying further that the closing stock as on 30.09.2020 was 2,11,668.437 MT and once again requested to rectify the discrepancy. Not having received any response thereon, the petitioner vide letter dated 30.10.2020 intimated the opposite party No.2 that despite the repeated request of the petitioner, the rectification has not been made. The opposite parties had created Integrated Mines and Mineral Management System (i3MS) on the web portal of the department as an online solution is to enable the Department of Steel & Mines officials to regulate the mining activities through electronic mode. The petitioner could not have dispatched the balance quantity unless the rectification of figures was done online. It was conveyed by the petitioner that till such time the discrepancy of 2,11,668.437 MT - 205037 MT 110 = 6,631.47 MT is rectified and regularized in i3MS system, the petitioner would not be able to dispatch the differential quantity of ore from the leasehold area.
79. It is contended that the petitioner by way of his representations specifically mentioned that non-rectification of the discrepancy and non-regularization of the same in i3MS system was a situation beyond its control and since the same was not regularised by the opposite party, it should be granted extension of time. The closing stock as on 30.10.2020 in the books of the petitioner is 6,633.683 MT which is evident from Annexure-20 of the additional affidavit. In the course of argument, a statement was made on behalf of the State Government that only 90.78 MT of iron ore is left at the mines of the petitioner, which is contrry to the record. On 19.11.2020 physical measurement of iron ore stock was carried out jointly by the officials of Orissa Mining Corporation Ltd. In the presence of Junior Mining officer, Circle Mining Office, Keonjhar and the Mines Manager of the Petitioner's mine, wherein it was found that 6,595.492 MT of iron ore stock lying in the petitioner's mine, which is evident from Annexure-
21 of the additional affidavit. It is thus clear that the petitioner-111
Khatau Narbheram & Co (W.P(C) No. 28004 of 2020) has substantiated its case having proved the availability of stock as jointly been made by the petitioner and the opposite party- authority, therefore, it was necessary to update the correct figures in the i3MS system. The petitioner contended that he would have easily transported the balance stock of minerals within the stipulated time but it could not do so due to the fault of the opposite party who did not update the correct figures in the i3MS portal. Therefore, it could not be possible for the petitioner to remove the stock.
80. In our considered view, the opposite party-
authority in the instant case has arbitrarily and unreasonably invoked Rule 12(1)(hh) of the Rules of 2016 by passing the order dated 01.10.2020 despite repeated representations of the petitioner, pointing out the discrepancies in their stock, requiring for necessary corrections. In that view of the matter, the Writ Petition No. 28004 of 2020 deserves to succeed and is accordingly allowed. The impugned order dated 01.10.2020 invoking Rule 12(1)(hh) and the order dated 9.10.2020 rejecting the representation of the petitioner, are liable to be set aside and the same are accordingly set aside. Accordingly, the 112 opposite party No.2 is directed to update the stock position of the petitioner in the i3MS system within a week hence and the petitioner shall be granted 45 days, from the date of updation of stock in the system, to remove the minerals from the mining area in question. It is made clear that upon failure of the petitioner to do so within the aforesaid period, it would be open for the opposite party-State to again invoke Rule 12(1)(hh) of the Rules of 2016.
Writ Petition (Civil) No. 29112 of 2020:
81. Writ Petition (Civil) No. 29112 of 2020 has been filed by Bajrang Sharda, which involves peculiar facts. In this case also and therefore the order invoking Rule 12(1)(hh) dated 01.10.2020 has been passed mechanically. The leasehold area of the petitioner in this case was a non-working mine. On 10.04.2016, the Deputy Director Mines issued a direction suspending the mining operations, and at the time of suspension of mining operations 16,101.285 MT of Iron ore and 981.520 MT of Manganese ore was lying in the mining lease area. The petitioner filed application for third renewal of mining lease for Iron and Manganese ore over an area of 31.566 hectares on 24.08.2006. In the meantime, Mines and 113 Minerals (Development & Regulation) Amendment Act, 2015 came into force on 12.01.2015 whereby Section 8A(6) was inserted in the MMDR Act. The mining lease of the petitioner, for which renewal application was pending, was deemed to have been extended up to 31.03.2020 under Section 8A (6) of the MMDR Act. However, the mining lease of the petitioner was declared to have lapsed under Section 4A(4) of the MMDR Act read with Rule 28 of the M.C. Rules, 1960, which was challenged by the petitioner before the Revisional Authority (the Central Government). It is not in dispute that the Revisional Authority by setting aside the order of the State Government remanded the matter back to the State Government, which thereafter vide order dated 8.3.2019 declared the mining lease of the petitioner as not lapsed. After receipt of the order dated dated 08-03-2019, the petitioner made a representation to the Opp. Party No. 2 for up-dation of lease profile on i3MS system, for issuance of permissions for removal/transportation of minerals under the Odisha Minerals (Prevention of Theft, Smuggling & Illegal Mining and Regulation of Possession, Storage, Trading and Transportation) Rules, 2007, and for payment of royalty etc. When nothing was done, 114 the Petitioner made another representation dated 03.12.2019 to the Opp. Party No. 2 for permission under Rule 12(1)(gg) of the Rules of 2016 for removal of 16,101.285 MT of Iron-Ore, 981.520 MT of Manganese Ore and approximately 80,000 MT of waste dump having average iron-ore of 49.8% grade that were lying within the lease area as resumption of mining operations by 31.03.2020 appeared to be bleak. The opposite party No.2 forwarded the said representation to the O.P. No.1 vide letter dated 20.12.2019 for order, but the petitioner did not receive any communication from the opposite parties on such representation till 31.03.2020 and even until 01.10.2020 when the impugned notice was issued. The petitioner on 27.07.2020 submitted another representation to the opposite party No.1 reiterating the request made by him in his representation dated 03.12.2019 pointing out that oppoite party No.2 had forwarded the representation dated 03.12.2019 to Opp. Party No.1 and the petitioner is yet to receive any communication from any of the opposite parties. However, as no development took place the petitioner submitted further representation dated 12.08.2020 to the opposite party No.1 seeking permission to remove the excavated minerals lying 115 within the mining lease area as on 31.03.2020. The Petitioner submitted a representation dated 27.09.2020 to the Opp. Party No. 2 and expressed his grievance on the fact that his earlier representations had neither been dealt with nor permission as sought had been issued. The Petitioner requested the Opp. Parties to consider his request for permission to remove the excavated materials keeping in view the provisions of Rules 12(1)(ff), 12(1)(gg) and 12(1)(hh) of the Rules of 2016, however, the opposite party No.1 in purported exercise of power under Rule 12(1)(hh) of the Rules of 2016 issued the impugned notice dated 01.10.2020 to the petitioner vide email to remove 16,101.285 MT of Iron Ore and 981.520 MT of Manganese ore with infrastructure, erections etc within one month of the notice, failing which the same shall be deemed to become the property of the State Government. The case of the petitioners is that no doubt the Opp. Party No. 3 allowed the removal of minerals as sought for, however, actual removal of minerals was not possible until up-dation of i3MS profile and issue of Transit Permit. On 12.10.2020, after up-dation of lease profile on i3MS in the second week of October, 2020, the petitioner applied for Transit Permit. On 15.10.2020 the petitioner 116 received Transit Permit for removal of minerals and applied for linking a weighbridge to his profile so that he could remove minerals. Then petitioner again submitted a detailed representation dated 20.10.2020 to the opposite party No.1 seeking withdrawal of the impugned notice dated 01.10.2020 and prayed for extension of time by six months for removal of minerals. It was specifically contended therein by the petitioner that all his earlier representations has been ignored and the notice dated 01.10.2020 was issued in a common standard format for all ex-lessees without considering the individual issues of different lessees.
82. Considering the above facts situation of the matter, we are of the opinion that the Writ Petition (Civil) No. 29112 of 2020 filed by the petitioner, Bajrang Sharda, also deserves to succeed and the impugned order dated 01.10.2020 deserves to be set aside and the same is accordingly set aside. Accordingly, the opposite party No.2 is directed to update the appropriate stock position of the petitioner in the i3MS system within a week hence and the petitioner shall be granted 45 days, from the date of updation of stock in the i3MS system, to remove the minerals from the mining area in question. It is 117 made clear that upon failure of the petitioner to do so within the aforesaid period, it would be open for the opposite party- State to again invoke Rule 12(1)(hh) of the Rules of 2016.
The opposite party No.1 is further directed to consider and take a decision on the request of the petitioner for permission to remove the waste dump in terms of his representations dated 03.12.2019, 27.07.2020, 12.08.2020, 27.09.2020 and 20.10.2020, within 45 days hence, after providing opportunity of hearing to the petitioner. Writ Petition (Civil) No. 29311 of 2020:
83. Though the petitioner in the Writ Petition No. 29311 of 2020 (M/s. Aryan Mining & Trading Corporation Pvt.
Ltd.) is a new lessee but the fact situation of this case is different from the other two writ petitions i.e. Writ Petition (Civil) Nos. 26973 and 27751 of 2020, where new lessees have come to acquire the lease hold right through the auction regime. In this case also, M/s. JSW Steels Ltd. has entered as new lessee on the same leasehold area. The petitioner in this writ petition is seeking extension of time only for the purpose of dismantling and removing its plants and machineries listed under Annexure-17 of the reply dated 04.12.2020 to the 118 affidavit dated 03.12.2020 filed by the opposite party No.1 in W.P.(C) No. 26973 of 2020, as it has already completed the process of transportation of minerals before 31.10.2020. The mining lease of the petitioner in this case expired on 31.03.2020 in terms of the statutory prescription under Section 8A(6) of the MMDR Act and Rule 12(1)(gg) of the Rules of 2016. As per Clause(4) of Part-IX of the lease deed in Form- K of MC Rules 1960 the petitioner had to remove the minerals, plant and machinery and other properties from the leasehold area within a period of six months after expiry of the terms of the mining lease. Accordingly, the State Government by its letter dated 31.03.2020 granted six months time i.e up to 30.09.2020 for removal of the stock of excavated minerals. According to the petitioner, however, the process of removal of said minerals was slowed down due to restrictions imposed by the Central Government as well as the State Government for outbreak of COVID-19 pandemic. This Court does not deem it necessary to discuss in greater details all the aspects with regard to invocation of force majeure clause which have been mentioned elsewhere in this judgment. This is because we are persuaded to dispose of this writ petition on a different ground. 119 The petitioner herein has assailed the impugned notice dated 01.10.2020 issued by the opposite parties under Rule 12(1)(hh) of the Rules of 2016 seeking to initiate a process for forfeiture of its properties, which consist of Two Minerals Beneficiation Plants, One Stationary Crusher Plants and other infrastructures, erections or conveniences including Weighbridges, Lightning, Pollution equipment's etc. It is contended that even though period of six months, according to the petitioner, under Rule 12(1)(gg) was sufficient for the petitioner to remove all its plants and machineries, but it could not remove such plant and machineries within the said stipulated period due to restrictive measures imposed by the government due to Covid-19 pandemic. The dismantling of the infrastructure/plant and machinery requires considerable time as the plants are having two channels of feed hopper for operation. There was requirement of different manpower comprising of skilled and unskilled, electrical, mechanical and supervisorial personals. Apart from that, there was also requirement of heavy duty machineries comprising of Crane, Hydra, Trailer, trucks etc. for the purpose. It is contended that the delay in removal of the aforesaid remaining plants and 120 machinery from the lease hold area is also attributable to the duplicitous conduct on the part of the Intervener which issued a Letter of Intent dated 16.10.2020 in favour of the petitioner for purchase of plants and machinery but suddenly backed out at the last moment leaving the petitioner helpless, which would be apparent from I.A. No.12985 of 2020 filed by the JSW Steel Limited annexed as Annexure-16.
84. Mr. Naveen Kumar, learned Senior Advocate appearing on behalf of the petitioner, relied upon a judgment of the Supreme Court in B.K. Ravinchdnara & Ors. Vs. Union of India & ors., 2020 SCC Online SC 950 at para 29, and argued that the petitioner cannot be deprived of its properties without following due process of law. On this aspects, he has also relied on the judgments of the Supreme Court in K.T. Plantation Pvt. Ltd. 7 Anr. Vs. State of Karnataka (2011) 9 SCC 1 and Nareshbhai Bhagubhai & Ors. Vs. Union of India & Ors. (2019) 15 SCC 1, wherein it has been held that the provisions of law depriving a person of his property must be reasonable and should not be arbitrary or excessive. The limitation or restriction must not be disproportionate to the situation or excessive and should be strictly construed. A 121 legislation providing for deprivation of property must be just, fair and reasonable.
85. This court, so far as arguments in these writ petitions, on force majeure event is concerned, has decided to remit the matter back to the competent authority of the State Government albeit in the context of five other writ petitions for it has not applied its mind to any of the arguments of the petitioners in those case in their representations. In the present matter, however, this Court has been persuaded to grant the relief prayed for, considering the peculiar reasons on account of the fact that the new lessee kept the petitioner engaged in negotiations for purchase of its plant and machinery and in the process, the petitioner has lost the valuable time, after receipt of notice dated 01.10.2020 under Rule 12(1)(hh). Therefore, considering the fact situation of the present case, this Court is persuaded to allow this writ petition for the limited purpose. Accordingly, the impugned order dated 01.10.2020 is set aside and the opposite parties are directed to grant transport passes/permits to the petitioner for removal of all its plant and machineries etc. within seven days hence and the petitioner shall be granted 45 days time thereafter to 122 remove all its plants, machineries, crushers, weighbridges and other equipments etc. It is made clear that upon failure of the petitioner to do so within the aforesaid time, it would be open for the opposite party-State to again invoke Rule 12(1)(hh) of the Rules of 2016.
86. Upshot of the above discussion is that Writ Petition (Civil) Nos. 26973, 27751, 27731, 27672 and 28141 of 2020 are allowed in part in the terms indicated above, and the Writ Petition (Civil) Nos. 28004, 29112 and 29311 of 2020 are allowed in toto.
87. All the writ petitions are accordingly disposed of but without any order as to costs.
(BISWANATH RATH) (MOHAMMAD RAFIQ)
JUDGE CHIEF JUSTICE
// M.K. Rout,AR-cum-PS;
A.Dash,PS, S.K.Jena & M.K.Panda,PA//