Karnataka High Court
Chowgule And Company Private Limited vs The Joint Secretary on 21 January, 2014
Bench: Chief Justice, B.V.Nagarathna
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 21ST DAY OF JANUARY 2014
PRESENT
THE HON' BLE MR.D.H.WAGHELA, CHIEF JUSTICE
AND
THE HON' BLE MRS.JUSTICE B.V.NAGARATHNA
WP Nos.10536-10539/2012(GM-MMS)
BETWEEN
CHOWGULE AND COMPANY PRIVATE LIMITED
REGISTERED UNDER COMPANY ACT 1956
HAVING ITS REGISTERED OFFICE AT
CHOWGULE HOUSE, MORMUGAO HARBOUR, GOA
REP BY ITS CONSTITUTED ATTORNEY
SRI R B BILGUCHE S/O SRI BHIMA BILGUCHE
AGED 60 YAERS
... PETITIONER
(By Sri.VENKATESH P.DALWAI, ADV. FOR
M/S. SRIVAARU LAW FIRM, ADVS.)
AND
1. THE JOINT SECRETARY
MINISTRY OF MINES
GOVERNMENT OF INDIA
SHASTRY BHAVAN
NEW DELHI-1
2. STATE OF KARNATAKA THROUGH SECRETARY
(MINES, SSI & TEXTILES)
COMMERCE & INDUSTRIES DEPARTMENT
VIKASA SOUDHA
BANGALORE-560001
3. VISVESVARAYA IRON AND STEEL PLANT
(UNIT OF STEEL AUTHORITY OF INDIA LIMITED),
BHADRAVATHI, KARNATAKA-577301
REPRESENTED BY ITS MANAGING DIRECTOR
... RESPONDENTS
(By Sri.S.KALYAN BASAVARAJ, ASG FOR R.1
SRI.NARENDAR.G, AGA FOR R.2
SRI. K. SACHINDRA KARANTH, ADV. FOR R.3 )
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THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH
EXTRAORDINARY NOTIFICATION DATED 21.10.2011 ISSUED BY R1
IN GSR 778 (E) VIDE ANNEXURE-AM AND QUASH
RECOMMENDATIONS DATED 04.01.2010 AND 06.01.2011 ISSUED
BY R2 VIDE ANNEXURE-AF AND AH AND DIRECT R2 TO CONSIDER
THE APPLICATION OF THE PETITIONER FOR THE GRANT OF MINING
LEASE OVER AN AREA OF 359.73 HECTARES SITUATED IN VILLAGE
BAVIHALLI, SANDUR TALUKA, BELLARY DISTRICT, KARNATAKA AND
TAKE NECESSARY STEPS IN THIS REGARD IN TERMS OF THE ACT
AND THE RULES AND ANY OTHER LAW FOR TIME BEING IN FORCE.
THESE WRIT PETITIONS COMING ON FOR PRELIMINARY
HEARING THIS DAY, NAGARATHNA .J, MADE THE FOLLOWING:
ORDER
1. The petitioner has assailed Notification dated 21.10.2011 issued by respondent No.1 (Annexure-AM), as well as recommendations dated 04.01.2010 and 06.01.2011 made by respondent No.2 - State Government (Annexures-AF and AH respectively). A direction is also sought to respondent No.2 to consider petitioner's application for grant of mining lease over an area of 359.73 Hectares, situated in Bavihalli village, Sandur Taluk, Bellary District.
2. It is the case of the petitioner that Mining Lease No.130 in respect of iron ore over an area of 459.73 Hectares in Bavihalli village, Sandur Taluk, Bellary District, was granted by the then Government of Mysore in favour of -3- M/s.Lakshminarayana Mining Company, Bangalore, for a period of 20 years, by execution of a Mining Lease (ML) dated 23.09.1963. That company applied for permission to transfer the mining lease rights in favour of the petitioner herein on 09.02.1968. In exercise of power conferred under Rule 37 of the Mineral Concession Rules, 1960 (for short 'the Rules'), the Government of Mysore sanctioned transfer of mining lease in favour of the petitioner subject to certain conditions, by issuance of a notification dated 02.05.1968. A deed of Transfer and Assignment of lease was also executed by that Company in favour of the petitioner assigning absolutely all rights and title in ML No.130 in favour of the petitioner. Thereafter, the petitioner made exploration of the mining area by making substantial investments. On 31.05.1974, Government of Mysore granted sanction in ML No.1190 for inclusion of red oxide over the very same area for a period co- terminus with the original mining lease granted on 23.09.1963, which was to expire on 22.09.1983.
The petitioner submitted its application for renewal on 18.09.1982 under Rule 28(1) of the Rules in respect of ML No.130 for iron ore and ML No.1190 for red oxide over the -4- said area. This was within one year prior to the expiry of the mining lease. As there was no response from the department, the petitioner filed a Revision Application under Rule 54 of the Rules against the implied deemed rejection under Rule 24(2) before the Under Secretary, Ministry of Steel and Mines, Government of India, New Delhi. Petitioner's Revision Application was rejected by order dated 13.07.1983 on the ground that it was pre-mature. Thereafter, petitioner filed another Revision Application on 23.05.1984 in Revision application No.2(355)/84-HV. By order dated 02.07.1984, the Revisional Authority set aside the deemed rejection of the petitioner's application for renewal of ML No.130/1190 and directed the State Government to pass final orders on merits within a period not exceeding 200 days from the date of the order. Thereafter, on 16.08.1984 the petitioner made a representation to the State Government and on 19.11.1985, petitioner furnished six sets of plan showing original mining lease area and the reduced area sought by the petitioner for next 20 years. The area was reduced to 110 Hectares from the original area of 459.73 Hectares, as the petitioner was asked to surrender the balance area to the Forest Department. -5- On 19.03.1993, petitioner made one more application for renewal of ML No.130 for iron ore and ML No.1190 for red oxide over an area of 110 Hectares to the Director of Mines and Geology, Government of Karnataka.
It is also noted that the earlier application made by the petitioner dated 18.09.1982 for renewal was pending consideration. On 17.06.1996, Ministry of Environment and Forests, Government of India conveyed its approval under Section 2 of the Forest Conservation Act, 1980 for renewal of iron ore mining lease in favour of petitioner over an area of 110 Hectares, subject to certain terms and conditions. Thereafter on 09.08.2002, the petitioner filed an application for second renewal of ML 130 for iron ore and ML No.1190 for red oxide for an area of 110 Hectares. It was stated that the earlier application dated 18.09.1982 and 19.03.1993 for renewal of the subject lease were pending consideration. ML No.130/1190 were renewed on 12.09.2003 for a period of 20 years with effect from 23.09.1983 i.e. till 22.09.2003 over an area of 110 Hectares vide ML No.2419. According to the petitioner, this was the first renewal for the period from 1983 to 2003.
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On 14.01.2005, the Ministry of Environment and Forests (F.C Division), Government of India, conveyed its approval under Section 2 of the Forest Conservation Act, 1980 for diversion of 100 Hectares of forest land for renewal of ML No.130/1190 in favour of the petitioner. The area was reduced from 110 to 100 Hectares. Thereafter, on 17.02.2006, Ministry of Environment and Forests accorded environmental clearance for iron ore mining by the petitioner under the provisions of Environment Impact Assessment Notification, 1994.
When matter stood thus, respondent No.3 approached Government of Karnataka by letters dated 16.02.2007 and 15.03.2007 for grant of fresh iron ore mining lease over an area of 140 Hectares at NEB range, Sandur Taluk, Bellary District, under Section 17A(1A) of the Mines and Minerals (Development and Regulation) Act, 1957 (for short 'the MMDR Act'). Thereafter, the Department of Mines and Geology, Government of Karnataka, on 19.04.2007 granted renewal of ML No.130/1190 in favour of the petitioner over an area of 100 Hectares for 20 years with effect from 23.09.2003, and mining lease agreement was also executed. This is in fact the second renewal.
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As the original extent of lease was 459.73 Hectares which was reduced to 100 Hectares subsequently, insofar as the balance of 359.73 Hectares, the petitioner made an application on 17.05.2007 for grant of mining lease over that area by requesting for relaxation under Rule 59(1) of the Rules, as according to the petitioner, this area was in fact not surrendered by it to the State Government. The Under Secretary to the Government of Karnataka (Mines), Commerce and Industries Department wrote to the Secretary to Government of India/respondent No.1 on 30.07.2007 to grant approval under Rule 59(2) of the Rules for exemption. Also, it was communicated that an area of 140 Hectares be reserved in favour of respondent No.3 under Section 17A(2) of the Act for a period of 30 years subject to forest and environmental clearances, as this area was earlier held by the petitioner and was taken back by the Forest Department.
At this stage, it is also relevant to mention that sister concern of the petitioner's company M/s.Minas E Minerais De Goa Private Limited, had applied for an extent of 359.73 Hectares previously held by the petitioner. That application was not yet disposed of when the aforesaid recommendation -8- was made in favour of respondent No.3 herein. Petitioner being aggrieved by the above representation along with Minas E Minerais De Goa Private Limited, filed Revision Application before the Central Government. The petitioner was notified to appear before the Secretary to Government (Mines), Commerce and Industries Department, Bangalore, 07.11.2009 to make a presentation. The Secretary then conducted the hearing and ordered that respondent No.3 being a Government of India Public Sector Unit may be considered for grant of mining lease over an area of 140 Hectares by relaxation of Rule 59(1) under Rule 59(2) and the remaining surrendered area of the petitioner may be notified under Rule 59(1) as two blocks containing 220 acres and 200 acres each and inviting applications from the public for grant of mining lease. Thereafter on 04.01.2010, Under Secretary, Government (Mines), Commerce and Industries Department requested the Secretary, Government of India to approve under Section 5(1) of the Act for grant of mining lease in favour of respondent No.3 over an area of 140 Hectares at Jog Thimmappanagudi, Bavihalli Village, NEB Range, Sandur Taluk, Bellary District, by relaxing Rule 59(1) under Rule -9- 59(2) of the Rules for iron ore for a period of 20 years. The aforesaid communication was followed by another communication dated 06.01.2011. The Revision filed by the petitioner was disposed of on 22.10.2010 by the Central Government directing the State Government to dispose of petitioner's application for a mining lease within a period of 100 days. The petitioner challenged the recommendation of respondent No.2 made favour of respondent No.3 before the Revisional Authority on the premise that it was made by ignoring the direction of the Revisional Authority. During the pendency of the Revision Petition, respondent No.1 issued the Gazette Notification under Section 17 A(1A) of the Act on 21.10.2011, in respect of 140 Hectares in favour of respondent No.3. Consequently, the petitioner withdrew the revision with liberty to avail such other legal remedies, in view of subsequent developments. According to the petitioner, the effect of the aforesaid Notification dated 21.10.2011 issued in favour of respondent No.3 had rendered the Revision Petition infructuous and hence the petitioner has filed these Writ Petitions seeking quashing of the notification dated 21.10.2011 issued in favour of respondent No.3.
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3. Having regard to the prayers made in the petitions, we note that the petitioner is mainly aggrieved by the notification issued by the Central Government dated 21.10.2011 at Annexure-AM. That notification has been issued by the Central Government in exercise of its power under sub-section (1A) of Section 17A of the MMDR Act. The said sub-section reads as follows;
"17A. Reservation of area for purposes of
conservation.- (1) xxx
(1A) The Central Government may in consultation with the State Government, reserve any area not already held under any prospecting licence or mining lease, for undertaking prospecting or mining operations through a Government company or corporation owned or controlled by it, and where it proposes to do so, it shall, by notification in the Official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such area will be reserved.
4. The grievance of the petitioner in this case is that the petitioner as well as respondent No.3 had made applications for consideration of their respective cases for grant of mining license. While the matter was under consideration of the State Government, the Central Government exercised its
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power under sub-section (1A) of Section 17A of the Act in favour of respondent No.3. Therefore, the notification at Annexure-AM is challenged.
5. We have heard learned counsel for the petitioner, learned Assistant Solicitor General for respondent No.1, learned Additional Government Advocate for respondent No.2 and learned counsel for respondent No.3 and perused the material on record.
6. Learned counsel for the petitioner mainly contended that the impugned notification has been issued in violation of sub- section (1A)) of Section 17A of the Act, inasmuch as there has been no consultation between the Central Government and the State Government before issuing the notification in favour of respondent No.3. In support of this argument, learned counsel pressed into service a decision of learned Single Judge of this Court in H.G Rangangoud and etc. vs. Ministry of Coal and Mines, Department of Mines, New Delhi & others etc (2007 (5) AIR Kar R 534).
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7. Per contra, learned counsel for the respondents drew our attention to a decision of a Division Bench of the High Court of Delhi in the case of M/s. B.Kumaragowda & Sons vs. Union of India and others (W.P. (C) 9000/2011), wherein the very same notification was impugned in that Writ Petition and the Division Bench of the Delhi High Court has dismissed the Writ Petition with cost. It has also been brought to our notice that as against the judgment of the Delhi High Court, SLP No.7639/2013 was filed before the Hon'ble Supreme Court of India, which has been dismissed by order dated 02.09.2013. Therefore, it is contended that the Writ Petition could be disposed of in terms of the order of the Delhi High Court, which has been upheld by the Hon'ble Supreme Court.
8. Sub-section (1A) of Section 17A has been inserted by an Amendment Act 25/1994 with effect from 25.01.1994. The object of this sub-section is to give an over-riding power to the Central Government to reserve any area not already held under any prospecting license or mining lease for undertaking prospecting or mining operations through a Government company or corporation owned or controlled by the Central
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Government, and where the Central Government proposes to do so, it has to notify the same in the Official Gazette, specifying the boundaries of such area and the mineral or minerals in respect of which such area would be reserved. The mandatory requirement, however, is that the Central Government can issue such a notification in consultation with the State Government. In this context, the argument of the learned counsel for the petitioner is that there has been no consultation with the State Government and therefore the impugned notification is vitiated. It was contended that respondent No.3 had made an application to the State Government and thereafter the State Government corresponded with the Central Government and the Central Government subsequently issued the impugned notification. In that context it was stated that the Central Government had not initiated the process of consultation with the State Government and therefore the impugned notification is illegal.
9. We have perused the notification impugned in these Writ Petitions dated 21.10.2011 (Annexure-AM). The said notification clearly states that the Central Government has exercised powers under sub-section (1A) of Section 17A of the
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Act and after consultation with the Karnataka Government an area of 140 Hectares in North Eastern Block Range, Joga Village, Sandur Taluk, Bellary District, has been reserved for a period of 20 years for undertaking prospecting or mining operations through respondent No.3. Respondent No.3 is a public sector undertaking under Steel Authority of India Limited, which is a Government Company. Under sub-section (1A) of Section 17A of the Act, it is stipulated that the Central Government can reserve the land only for the purpose of operating it through the Central Government company or corporation owned by it. As far as there being no consultation between the Central Government and State Government is concerned, there has been no material placed on behalf of the petitioner in that regard. That apart, the impugned notification itself states that there has been consultation between the two Governments before the issuance of the notification. Therefore, a presumption has to be raised in favour of consultation having taken place between the two Governments prior to the issuance of the notification.
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10. That apart, we also note that there have been recommendations made by the State Government in favour of respondent No.3. In this regard, the grievance is that those recommendations could not have been made by the State Government when the application of the petitioner was pending. Be that as it may. We are of the view that the exercise of power by the Central Government under sub- section (1A) of Section 17A of the Act is one which has been given solely to the Central Government for the purpose of exploiting the land for prospecting or mining operations through Government company or corporation owned or controlled by it. Such exercise of power, we think is a reserve of right in favour of public sector enterprises which is the welfare requirement of the State.
11. As far as the challenge to the impugned notification is concerned, we find that the Division Bench of the Delhi High Court has repelled the contentions made by the petitioner therein by placing reliance on a decision of the Hon'ble Supreme Court in the case of M/s.Indian Charge Chrome Ltd. & Another vs. Union of India and others {JT 2007 (1) SC 558}. That apart, the order of the Division Bench
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has not been interfered with by the Hon'ble Supreme Court inasmuch as SLP filed against the said order has been dismissed. In fact, the Division Bench of the Delhi High Court has not agreed with the order of the learned Single Judge in H.G.Rangangoud's case.
12. We find that the reliance placed by learned counsel for the petitioner on the decision of the learned Single Judge in H.G.Rangangoud's case is of little assistance. In that case, learned Single Judge found that there was already recommendation made by the State Government in favour of petitioner therein. Thereafter, Central Government had exercised its power under sub-section (1A) of Section 17A of the Act. Learned Single Judge in that case had perused the pleadings as well as the records and had stated that on examination of the same, it was very clear that the Central Government had not acted in accordance with law, and therefore, the relief was granted to the petitioner in that case. It was not because the Central Government had no power to issue the notification, but the manner of exercise of power by the Central Government as was revealed from the records and affidavits placed on behalf of the Central Government was
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considered by the learned Single Judge, and therefore the notification was quashed. That decision can be distinguished in the instant case by the fact that there was no recommendation made in favour of the petitioner in the instant case at the time when impugned notification was issued rather the recommendation was made by the State Government in favour of respondent No.3. Although those recommendations were assailed by the petitioner and revision petitions were pending, the Central Government exercised its power under sub-section (1A) of Section 17A of the Act. There being no illegality pointed out by the petitioner except that there had been no consultation which has also not been demonstrated in the instant case, we do not think that a different view as has been taken by the Delhi High Court can be taken in these Writ Petitions. Therefore, the Writ Petitions are dismissed.
Sd/-
CHIEF JUSTICE Sd/-
JUDGE mv