Andhra Pradesh High Court - Amravati
M/S Transworld Garnet India Private Ltd vs The Government Of Andhra Pradesh on 10 August, 2022
Author: U.Durga Prasad Rao
Bench: U.Durga Prasad Rao
HON'BLE SRI JUSTICE U.DURGA PRASAD RAO
Writ Petition No.7470 of 2010
ORDER:
The petitioner prays for writ of mandamus declaring the impugned letter No.APMDC/VSP/Heavy minerals/09-10/384, dated 22.02.2010, issued on behalf of the 4th respondent corporation to the petitioner company as illegal, arbitrary and contrary to the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 (for short, 'the MMDR Act, 1957') and consequently to set aside the same.
2. The petitioner's case succinctly is thus:
(a) The petitioner is a Private Limited Company dealing in beach sand mining and Garnet production facility having technical facility in that regard. Beach Sand Mineral (BSM) deposits in our country contain seven important minerals viz., Ilmenite, Rutile, Leucoxene (Titanium minerals), Monazite (Thorium mineral), Zircon (Zirconium mineral), Garnet and Sillimanite (Industrial minerals) co-existing together. Of these, only Monazite is radio-active & Prescribed Substance. The Garnet and Sillimanite are non-scheduled minerals and are governed by the MMDR Act, 1957 and the Mineral Concessions Rules 1960 (for short, 'the MC Rules, 1960"). The other heavy minerals are classified as Prescribed Substances and were regulated by the Atomic Energy Act, 1962 and the Atomic Energy Rules, 1984 and also Beach Sand Policy, 1998. However, from 01.01.2007, Ilmenite, Rutile, Leucoxene and Zircon have been delisted from the Prescribed Substances vide Gazette notification dated 18.01.2006, published in the Gazette of India Extraordinary, Part II, Section 3, sub-section (ii). 2
(b) The petitioner company applied for mining lease for BSM in the State of Andhra Pradesh. The 2nd respondent issued its recommendation for grant of mining lease vide its letter No.3579/M.III-1/2000-5, dated 06.09.2000 for prior approval of the 1st respondent under Section 5(1) of the MMDR Act, 1957 and Rule 27(3) of the MC Rules, 1960. The 1st respondent vide its letter No.4/126/2000-M.IV, dated 12.04.2001 granted approval after consultation with the Department of Atomic Energy (DAE).
The DAE suggested certain conditions and accordingly, the Central Government issued prior approval imposing the following conditions:
(i) If, while mining Garnet, the lessee comes across the deposits of any Prescribed Substances / Atomic Minerals, the same shall be disposed of only after obtaining license from the DAE.
(ii) The tailings containing the Prescribed Substances shall be disposed of only to another entity which holds a valid license under the Atomic Energy (Working of Mines, Minerals and Handling of Prescribed Substances) Rules, 1984.
(iii) If Monazite is produced in the process of exploitation of BSM, the same shall be disposed of in accordance with the instructions of Atomic Energy Regulatory Board in accordance with the provisions of the Atomic Energy Act and Rules there under.
(iv) Since the applicant is not a wholly Indian owned company, the applicant cannot engage in the separation and sale of Prescribed Substances in accordance with the policy resolution of the Government of India, DAE No.8/1[1], 97-
PSU, dated 06.10.1998
(v) The applicant should have no objection to Atomic Minerals Directorate for exploitation and research exploitation activities and inspection by officials of the AMD / Government of India.
3With the above conditions, the 2nd respondent granted mining lease to the petitioner company for 95.085 hectors vide G.O.Ms.No.7, dated 05.01.2002 for a period of 30 years from 24.06.2002 to 23.06.2032. Under the said G.O., the 2nd respondent granted permission to the petitioner to mine the Garnet and also the right to dispose of tailings as per the conditions stipulated above. BSM are the group of minerals which exist together but not in isolation which is a well known geological fact. In view of their conglomeration, mining of one mineral, necessarily accompanies the mining of other minerals. When one of these minerals is extracted from the beach sand, the residual sand left over after the extraction is known as "Tailings".
(c) While so, following the above conditions, the petitioner was separating the Garnet-lean Tailings rich in Ilmenite and keeping them separately while extracting out the main mineral Garnet and the quantity stocked was 8893.69 MTs. The petitioner applied for transport permit to transport the 60,000 MTs of Garnet sand which was extracted. Having regard to the fact that the Ilmenite was then a Prescribed Substance and as the petitioner was by then Foreign owned Company, it was not entitled to deal with the same. Hence, the Government passed orders vide Memo No.15426/M.III(1)/04-4, dated 15.04.2005 stating that the petitioner has to approach the DAE and till it get clearance from the DAE, mineral should be deemed to be in the custody of the 4th respondent.
(d) The above proceedings were issued depending upon the conditions prevailing at that time i.e., Ilmenite was a Prescribed Substance which falls under the Atomic Energy Act, 1962 and that the petitioner was a Foreign owned Company.
4
(e) However, all the above conditions no longer exist and they ceased to operate for the reasons:
i. Firstly, on and from 01.01.2007, Ilmenite, Rutile, Leucoxene, Zircon have been delisted from the list of "Prescribed Substances" vide Gazette Notification dated 18.01.2006, published in the Gazette of India Extraordinary, Part II, Section 3, sub-section (ii).
ii. Secondly, the Petitioner is no longer a foreign owned company, but is an Indian company w.e.f. 13.08.2008 through and through, and fully entitled to deal with all beach sand minerals.
iii. Thirdly, the Respondents themselves have taken cognizance of the delisting of Ilmenite as a "Prescribed Substance" and the change of ownership of the Petitioner Company, and have issued a Letter bearing Lr.No.192/M/2002, dated 04.07.2009, wherein it has been clearly stated that the restrictions imposed are no longer applicable.
iv. The Department of Atomic Energy license is no longer required as will be seen from a litigation between the Petitioner and the Department of Atomic Energy.
(f) Hence, the 4th respondent /APMDC no longer has the constructive custody over the tailings. Further, the DAE ceased to have any say over the handling of Ilmenite. As a result, the question of obtaining DAE's permission as envisaged in the order dated 15.04.2005 of the Government does not arise.
(g) Be that it may, the stock quantity of 8893.69 MTs is still intact.
The only change is that the 4th respondent's constructive custody over these tailings has been extinguished.
(h) While so, the Ministry of Mines (MoM), Government of India (GoI) vide its letter dated 18.08.2000 clarified that for disposal of Garnet tailings rich in Ilmenite, the inclusion of the Prescribed Substances in the existing mining lease of Garnet is not required for the purpose of dealing in 5 such minerals. In addition to that the DAE vide its D.O. letter No.7/3(11)/2000-PSU/37, dated 05.05.2000, has specifically mentioned that the DAE has no objection for those companies utilizing the accumulated tailings for production of Ilmenite etc., and sell thereof subject to satisfying the quantities indicated in the licenses obtained by them. In its letter, the DAE further clarified that there was no need of obtaining a separate mining lease or inclusion of Ilmenite in the existing mining lease for production of Ilmenite by the Garnet mining lessees. In further clarification the MoM, GoI in its letter No.7(30)/2000-M.IV, dated 16.08.2000, informed that for disposal of the Garnet tailings rich Ilmenite or some other substances, the inclusion of the Prescribed Substances in the existing mining lease of Garnet is not required.
(i) The petitioner company till 13.08.2008 was a subsidiary of Canadian based company and hence, the petitioner was not permitted to engage in mining and mineral separation of Prescribed Substances without value addition to the minerals. Now, subsequent to 01.01.2007, due to change of management of the petitioner, the petitioner became fully entitled to deal with the Ilmenite tailings. Be that it may, the 4th respondent has no right to interdict with the business of the petitioner. However, the 4th respondent is pursuing the respondents 2 & 3 not to issue transport permits to the petitioner company to handle Ilmenite tailings by the petitioner company. The petitioner company already paid advance royalty of Rs.20,52,000/- for 28,500 MTs of Ilmenite to the 3rd respondent as per the prescribed norms and after scrutinizing the application and confirming the receipt of royalty, the 3rd respondent issued permit and transit pass for transportation and disposal of Ilmenite from the factory of the petitioner 6 company. It is to be noted that Ilmenite tailings are generated during separation of Garnet from the beach sand. At this juncture, 4th respondent started making unlawful demand that the petitioner shall stop the transaction. However, the petitioner made it clear that 4th respondent has no authority to interdict the operations of the petitioner company. Therefore, the petitioner was constrained to file W.P.No.4611/2010 as the petitioner was committed itself with an international customer for supply of 15,000 MTs of Ilmenite. A learned single Judge granted interim directions for granting transit permits to the petitioner to export 16,000 MTs on petitioner furnishing Bank Guarantee for Rs.7.00 Cr. in favour of the Director of Mines & Geology. Ultimately, the writ petition was closed directing the respondents 2 & 3 therein to return the bank guarantee furnished by the petitioner.
(j) After filing of the above writ petition, the 4th respondent issued impugned proceedings vide Lr.No.APMDC/VSP/Heavy Minerals/09-10/384 dated 22.02.2010 instructing the Assistant Director of Mines & Geology / 3rd respondent not to issue permits to the petitioner to other heavy minerals except Garnet and prevent the petitioner from transporting other heavy minerals except Garnet. The 4th respondent has no such right and the impugned letter is illegal and arbitrary.
Hence, the writ petition.
3. The 2nd respondent filed counter contending thus:
(a) The petitioner company filed W.P.No.4611/2010 with the same averments as now made in this writ petition and the respondents already filed a detailed counter therein which may be treated as part of the present counter.7
(b) Under G.O.Ms.No.7, Industries & Commerce (M.II) Department, dated 05.01.2002, the petitioner was granted mining lease for the Garnet mineral only, though BSM also contain various proportions of heavy minerals viz., Ilmenite, Rutile, Leucoxene, Monazite, Silimanite etc. The petitioner was permitted to despatch Garnet only. For Garnet tailings enriched in Ilmenite, Rutile and Leucoxene, the 1st respondent vide Memo No.15426/M.III(1)/2004-4 dated 15.04.2005 issued instructions to the petitioner to preserve and store the heavy minerals separately by taking advice from the DAE, GoI. Till they were so duly disposed, the quantity of heavy minerals preserved in the petitioner's plant shall be deemed to be under the custody of APMDC / 4th respondent. Therefore, the impugned letter No.APMDC/VSP/Heavy Minerals/09-10/384, dated 22.02.2010 addressed by the 5th respondent to the 3rd respondent is well within the ambit of instructions issued by the 1st respondent.
(c) It is to be noted that as per the interim order dated 02.03.2010 in W.P.M.P.No.37259/2011 in W.P.No.4611/2010, permission was issued to the petitioner company to export 16000 MTs of Ilmenite subject to furnishing bank guarantee for a sum of Rs.7.00 Cr. in favour of 2nd respondent. However, on the basis of the said interim order, the petitioner cannot seek any permit for further quantity of Ilmenite produced by it during the process of beach sand. As long as the instructions issued by the 1st respondent vide Memo No.15426/M.III(1)/2004-4 dated 15.04.2005 exist, the Garnet tailings rich in Ilmenite etc. shall be under the custody of 4th respondent only.
(d) As per the Tripartite Agreement between the petitioner and respondents 1 & 2 to facilitate expeditious processing of mineral concession 8 applications filed for beach sand, one of the terms agreed upon was that the petitioner was already granted mining lease for Garnet over an extent of 95.085 Ha. in the confluence of Nagavali River upto Sy.No.1042 of Srikurmam Village and the application of the petitioner to include other tailing minerals in the lease was to be expedited. However, the petitioner misrepresented the facts and made baseless allegations against the 4th respondent.
(e) The petitioner filed mining lease applications for prominent potential areas bearing rich beach sand deposits to create a monopoly. The Government in order to break the monopoly of the petitioner entered into a Tripartite agreement with the petitioner which will benefit the interests of both respondent No.4 and petitioner for speedy disposal of mineral concession applications. As a part of the exercise, the petitioner unconditionally agreed for withdrawal of the applications filed in some areas, so that the 4th respondent through joint ventures can take up establishment of value added units with a Tamilnadu based company M/s. V.V.Minerals and Switzerland based company M/s. Bothli Trade JV. It is submitted that the 5th respondent addressed impugned letter dated 22.02.2010 to the petitioner as a sequel to letter No.APMDC/VC&MDDesk/2010/3528 dated 16.02.2010 of 3rd respondent instructing the 5th respondent to inspect the preserved stocks since APMDC is a custodian of heavy minerals other than Garnet.
(f) As a part of the policy decision, the 1st respondent vide Memo No.1546/M.III(1)/2004-4 dated 15.04.2005 issued instructions that the petitioner shall approach DAE, GoI for taking advice on the disposal of heavy minerals, since at that time heavy minerals were under the category of 9 "Prescribed Substance" for exploitation by DAE and till such time the heavy minerals were ordered to be under the custody of 4th respondent. The petitioner instead of pursuing the matter with DAE, mislead the 3rd respondent by producing certain outdated instructions issued by the MoM, GoI and obtained permits without inclusion of heavy minerals in the existing mining lease held by the petitioner. It should be noted that for issuing permits for Ilmenite, the then ADMG is being prosecuted. As per Rule 27(1)(b) of the MC Rules, 1960, if any mineral not specified in the lease is discovered in the leased area, the lessee shall not win and dispose of such mineral unless it is included in the lease or a separate lease is obtained therefore. In addition to it, Rule 66-A of the MC Rules, 1960 which deals with atomic minerals says that the prospecting or mining operations in respect of atomic minerals listed in Part-B of First Schedule of the Act shall be subject to the condition that the holder of a prospecting license or mining lease if discovers any atomic mineral in the area granted under license or lease, not specified in the license or lease, discovery of such mineral shall also be reported to the Director, Atomic Minerals Directorate for Exploration and Research, Hyderabad within 60 days from the date of discovery of such mineral. He shall not win or dispose of such atomic mineral unless the same is included in the license or lease.
(g) The clarification of MoM vide letter No.7(30)/2000-M.IV dated 16.08.2000 is as per the provisions of MC Rules, 1960 as they existed on the said date. However, by the time the mining lease for Garnet was granted on 05.01.2002 the petitioner company was not a wholly owned Indian company and therefore, it was not entitled to engage in the separation and sale of Prescribed Substances in accordance with the resolution of GoI dated 10 06.10.1998. Therefore, the 1st respondent vide its Memo No.15426/M.III(1)/2004-4 dated 15.04.2005 while granting permission for issue of transport permit to the petitioner for BSM, imposed a condition that the petitioner shall properly preserve and store the heavy minerals with utmost care to avoid untoward incidents and duly take advice from the DAE and until such time the quantity shall deemed to be under the custody of 4th respondent. Though the DAE delisted "Titanium ores and concentrates"
(Ilmenite, Rutile and Leucoxene) w.e.f. 01.01.2007, the petitioner ought to take necessary permission for disposal of Garnet tailings which is Ilmenite from the 1st respondent.
Above all, Rule 66 of the MC Rules, 1960 which was imposed by the date of letter issued by the MoM, GoI, on 16.08.2000, has been substituted by new rule 66-A w.e.f. 07.05.2005 and in that view, the clarification issued by the GoI will not be applicable any more. Therefore, the petitioner cannot unilaterally contend that the 4th respondent has no right or custody over the tailings. The instructions issued by the 1st respondent dated 15.04.2005 are a part of Government policy in respect of the custody of having minerals because at that time Ilmenite and other heavy minerals were Prescribed Substances. Hence, the writ petition may be dismissed.
4. The petitioner filed reply to the counter of the 2nd respondent.
(a) It is contended that the 4th respondent issued the impugned proceedings on the basis of the following:
a) That the Petitioner is a foreign-owned company, and is therefore, not entitled to undertake mining and mineral separation of beach sand minerals like Ilmenite, Rutile, Leucoxene, and Zircon;
b) That the Petitioner had a mining lease only for Garnet, and garnet-lean tailings;11
c) That the stocks of heavy minerals generated during the course of mineral processing activity should therefore be entrusted to APMDC, at the time of passing the Memo.
Thereafter, the following subsequent events have taken place:
a) The Petitioner has become a fully owned Indian Company, and therefore, there is no legal impediment for it to exploit heavy minerals;
b) The Petitioner has applied on 22.03.2007 for inclusion of the heavy minerals such as Ilmenite, Rutile, Leucoxene, Zircon and Sillimanite, into its existing mining lease and State Government vide letter dated 05.01.2009 forwarded said application to MoM, GoI.
c) The 4th respondent withdrew their application in respect of heavy minerals namely Ilmenite, Rutile, Leucoxene, Zircon and Sillimanite in 95.05 hectares vide letter dated 02.06.2011.
d) The 1st respondent rejected the ML application of 4th respondent in respect of the above minerals in 95.085 hectors vide letter dated 26.07.2011.
e) The Hon'ble High Court in WP. No.18600 of 2010 issued the order dated 02.08.2010 setting aside the orders of 3rd respondent dated 23.07.2010. The Hon'ble High Court directed the respondents to permit the petitioner to dispose of assemblage of these minerals namely Ilmenite, Rutile, Leucoxene, Zircon and Sillimanite.
f) The 1st respondent consequent to the above High Court order issued orders dated 31.03.2011, the 3rd respondent to issue permits to the petitioner for disposal of tailings and 3rd respondent accordingly issued permit.
g) The Department of Atomic Energy has given its approval / consent / no objection on 5.12.2011 for inclusion of these minerals in the existing mining lease of the petitioner.
Therefore, due to subsequent events the impugned Memo cannot stand and it is liable to be set aside.
(b) It is to be noted that subsequent to delisting the prescribed circumstances w.e.f. 01.01.2007, the Monazite test certificate which was the condition No.(ix) of mining lease order was dispensed with. Most recently the DAE has clarified on 05.01.2009 that the license from the DAE is not 12 required for handling of tailings containing heavy minerals. Hence, for all these reasons the proceedings of 4th respondent are illegal.
5. Heard arguments of learned counsel for petitioner Sri B.Chandrasen Reddy, and learned Government Pleader for Mines & geology representing the respondents.
6. The point for consideration is whether the impugned letter No.APMDC/VSP/Heavy Minerals/09-10/384, dated 22.02.2010 issued by 4th respondent to 3rd respondent instructing him not to issue transport permits to the petitioner in respect of other heavy minerals except Garnet extracted by the petitioner is sustainable in the eye of law?
7. Point: The argument of learned counsel for the petitioner in vehemence is that the impugned letter dated 22.02.2010 issued by the 4th respondent to 3rd respondent is unjust and illegal, inasmuch as, though at the time of granting lease to the petitioner for Garnet extraction a condition was imposed that it should obtain permission / instructions from DAE for transportation of the tailing minerals and till then they should be treated to be under the custody of 4th respondent, however, subsequently w.e.f. 01.01.2007, Ilmenite, Rutile, Leucoxene and Zircon were ceased to be the Prescribed Substances. Further, the DAE issued Circular No.8/1(2)2004- PSU/Vol.III/2631 dated 18.04.2007 stating that Monazite test certificate was not necessary. The DAE has also issued clarification on 05.01.2009 that the license from DAE was not required for handling of tailings containing heavy minerals and therefore, in the light of subsequent changed circumstances, the 4th respondent cannot claim the custody over the heavy minerals that were 13 segregated from the Garnet and stored in its godown by the petitioner. Hence, the impugned letter is illegal and unjust and liable to be set aside.
8. Per contra, learned Government Pleader for Mines and Geology argued that as per G.O.Ms.No.7 the petitioner was granted mining lease only for Garnet mineral though BSM contain various other heavy minerals like Ilmenite etc. Since all the heavy minerals co-exist with each other in the form of Garnet tailings, the 1st respondent vide Memo dated 15.04.2005 has given specific instructions to the petitioner that the lessee shall keep an account of quantity of heavy minerals which come across while processing beach sand and send weekly reports to the AD, Mines and DAE and preserve them separately in its premises. It shall take advice from the DAE and till then the preserved stock shall be deemed to be under the custody of the APMDC. Learned Government Pleader would argue that as per Rule 27(1)(b) of the MC Rules, 1960, the petitioner is not entitled to win and dispose of other heavy minerals except Garnet for which lease was granted, unless other minerals are included in the lease. Further, the petitioner if discovers any atomic mineral in the area granted under the license / lease, he shall report to the Director, Atomic Minerals Directorate within 60 days of such discovery, but he shall not win over the mineral by himself. However, the petitioner did not stick up to the above conditions and tried to dispose of the tailing based heavy minerals. Hence, in the light of the law in existence, the 4th respondent issued instructions to 3rd respondent through the impugned letter dated 22.02.2010 which is perfectly valid under law. He thus prayed to dismiss the writ petition.
14
9. The above is the crux of the lengthy pleadings of either side. I gave my anxious consideration to the respective pleadings and arguments.
10. Geographically the Beach sand minerals are a group of minerals which exist together and cannot be found in isolation. There are seven important minerals viz., Ilmenite, Rutile, Leucoxene (Titanium minerals), Monazite (Thorium mineral), Zircon (Zirconium mineral), Garnet and Silimanite (Industrial minerals) which exist together. Of them, Monazite is a radio-active and a Prescribed Substance. In view of their conglomeration, the mining of one mineral necessary accompanies the mining of other minerals. When one of these minerals is extracted from the beach sand, residual sand left over after extraction is known as "tailings". Of these sand minerals, Garnet is having industrial potentiality and therefore, the enthusiastic entrepreneurs seek for mining lease of Garnet from the BSM. Since, no single BSM can be extracted in isolation and further, as one of the tailings viz., Monazite is a concentrated atomic mineral, in order to balance the industrial requirement and also to safeguard the public interest and security, the respective State Governments will follow the directions issued by the Government of India before issuing mining lease of BSM to the enthusiastic miners. The terms and conditions imposed for issuing mining lease will be in consonance with the Atomic Energy Act, 1962 and rules and regulations thereof. The GoI, basing on the changes occasioned in political, scientific, technological and industrial fields, adopt its policy towards the BSM and its mining operations.
11. Be that it may, the petitioner company which is primordially deals with BSM mining and Garnet production, applied for mining lease and after 15 necessary formalities, the Government of A.P. granted mining lease for Garnet to the petitioner company over an extent of 95.085 Has. from the confluence of Nagavali River upto Sy.No.1042 of Srikurmam Village for a period of 30 years from 24.06.2002 to 23.06.2032 vide G.O.Ms.No.7 dated 05.01.2002 with certain conditions enumerated therein viz.,
(i) If, while mining Garnet, the lessee comes across deposits of any Prescribed Substances / Atomic Minerals, the same shall be disposed of only after obtaining license from the DAE as required under the Atomic Energy [Working of Mines, Minerals and Handling of Prescribed Substances] Rules, 1984.
(ii) The tailings containing the Prescribed Substances shall be disposed of only to another entity which holds a valid license under the aforesaid Rules.
(iii) If Monazite is produced in the process, the same shall be disposed of by the lessee on its cost in accordance with the instructions / directives of the Atomic Energy Regulatory Board.
(iv) Since the lessee is not a wholly Indian owned company, it cannot engage in the separation and sale of Prescribed Substances.
(v) The company shall have no objection for inspection by the officials of AMD / GoI besides the company shall obtain all necessary permission from the concerned Department.
Accordingly, a Lease Deed dated 24.06.2002 was entered into between the petitioner and 3rd respondent. The petitioner, after getting all permissions, started mining operations actively from 2004.
(a) While so, the petitioner during its mining operations started separating the Garnet-lean tailings rich in Ilmenite. The petitioner applied for transport permit to transport 60,000 MTs of Garnet sand which was extracted. Since at that time Ilmenite was a Prescribed Substance and 16 whereas the petitioner was a foreign owned company and not entitled to deal with it, the Government passed an order vide Memo No.15426/M.III(1)/04-4 dated 15.04.2005, whereunder, while granting permission to the Director of Mines & Geology to issue transport permit for 60,000 MTs, it imposed a condition that the lessee shall keep an account of quantity of heavy minerals which was generated while processing beach sand and send weekly reports to the Assistant Director of Mines & Geology concerned and also the DAE, Hyderabad and preserve the heavy minerals separately in its premises and obtain clearance from the DAE and till then the aforesaid quantity of heavy mineral shall be deemed to be under the custody of 4th respondent herein.
12. Now, the contention of the petitioner is that the conditions imposed in the Memo dated 15.04.2005 no more in existence in view of the following subsequent changes and thereby 4th respondent cannot exercise constructive custody over the tailings.
(i) w.e.f. 01.01.2007 Ilmenite, Rutile, Leucoxene and Zircon were de-listed from the list of Prescribed Substances vide Gazette notification dated 18.01.2006 published in the Gazette of India Extraordinary, Part II, Section 3(ii).
(ii) The petitioner is no longer a foreign owned company, but became Indian company w.e.f. 13.08.2008 and fully entitled to deal with all varieties of beach sand minerals
(iii) The respondents issued letter No.192/M/2002 dated 04.07.2009 mentioning that restrictions imposed were no longer applicable.
(a) Thus, the petitioner's main contention is that since four of the tailing minerals including Ilmenite are no more Prescribed Substances, neither the direction of the DAE nor the constructive custody of the 4th respondent is operational. It also heavily banks upon the letter 17 No.192/M/2002 dated 04.07.2009 addressed by the Assistant Director of M&G / 3rd respondent to the Director of Mines & Geology / 2nd respondent. The said letter is concerned, the petitioner company addressed letter dated 27.06.2009 seeking amendment to the conditions imposed in G.O.Ms.No.7 pursuant to the delisting of certain heavy minerals from the Prescribed Substances and also due to petitioner became Indian company. The 3rd respondent having noted those facts and also the clarification issued by DAE that no additional handling license was required to handle the Prescribed Substances, recommended to the 2nd respondent for effecting amendments to G.O.Ms.No.7 and to issue permit to the petitioner to mine 695000 MTs of ROM.
13. Be that it may, the contention of the respondents is that despite some of the heavy minerals were delisted from Prescribed Substances, however, since the lease was granted to the petitioner only in respect of BSM-Garnet, it cannot deal with other minerals, for which no lease was granted. In this regard, the respondents rely on 27(1)(b) and Rule 66-A of the MC Rules, 1960. Rule 27(1)(a) and (b) reads thus:
27. Conditions:- (1) Every mining lease shall be subject to the following conditions :-
(a) the lessee shall report to the State Government the discovery in the leased area of any mineral not specified in the lease, within sixty days of such discovery;
(b) if any mineral not specified in the lease is discovered in the leased area, the lessee shall not win and dispose of such mineral unless such mineral is included in the lease or a separate lease is obtained therefor;
So, according to the above provision, if the lessee discovers any mineral in the leased area which was not specifically leased as per the Lease Deed, he shall report to the Government within 60 days of such discovery 18 and he shall not win and dispose of such mineral unless it is included in his lease or a separate lease was granted therefor.
14. Whereas, Rule 66A of the Mineral Concession Rules, 1960 which was amended w.e.f. 07.05.2005 reads thus:
66A. Special provisions relating to atomic minerals: (1) Notwithstanding anything contained in these rules, the prospecting or mining operations in respect of atomic minerals listed in Part B of the First Schedule of the Act shall be subject to following conditions:-
(i) if the holder of prospecting licence or mining lease discovers any atomic mineral in the area granted under licence or lease, not specified in the licence or lease, discovery of such mineral shall also be reported to the Director, Atomic Minerals Directorate for Exploration and Research, Hyderabad within 60 days from the date of discovery of such mineral;
(ii) the licensee or lessee shall not win or dispose of such atomic mineral unless such atomic mineral is included in licence or lease or a separate licence or lease for the purpose has been obtained;
The above provision imposes a condition that in case lessee discovers any atomic mineral which is not specified in the license or lease, he shall report the same to the Director, Atomic Minerals Directorate within 60 days and he shall not win or dispose of such atomic mineral without the same being include in the license or lease or obtaining a separate license or lease for that purpose. The above provisions fortify the contention of the respondents.
15. Added to above, certain new policy decisions and new statutory provisions and amendments were brought forth by the GoI subsequent to the filing of the present writ petition which are also germane in the present context.
16. It should be noted that the GoI having regard to the prevailing conditions changed its policies in relation to atomic minerals. Section 11B 19 was introduced to the MMDR Act, 1957 by virtue of Amendment Act 10 of 2015 w.e.f. 12.01.2015. As per Section 11B, the Central Government was conferred powers to make rules for regulating the grant of mining leases or other mineral concessions in respect of minerals specified in Part B of the First Schedule and the State Government shall follow such rules framed by the Central Government.
17. It is to be noted that Part B of the First Schedule of the MMDR Act, 1957 relates to Atomic Minerals. Sl.No.12 relates to Beach sand minerals i.e., economic heavy minerals found in the Teri or beach sands which include Ilmenite, Rutile, Leucoxene, Garnet, Monazite, Zircon and Sillimanite. Therefore, the Central Government was vested with power to make rules relating to the Atomic Minerals contained in Part B of First Schedule regulating the grant of mining leases in respect of those minerals.
(a) While so, in exercise of the power conferred under Section 11B of the MMDR Act, 1957, the Central Government brought forth the Atomic Mineral Concession Rules, 2016. Rule 7 specifies that if a holder of a mineral concession, discovers any atomic mineral, he shall report the findings to the Directorate and the State Government in the prescribed format and the atomic minerals so discovered shall be handled and disposed of in accordance with the directives issued by the Department. Further, the mining lease will be continued with the prior approval of the Department and in case of refusal by department, the mining lease shall be terminated by the State Government.
(b) In addition to the above rules, the Central Government in exercise of the powers conferred on it under Section 13 of the MMDR Act, 1957, 20 issued rules called as the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 [M(OTAHEM) CR, 2016]. Rule 12 deals with the terms and conditions of the mining lease. As per Rule 12(2), the lessee shall report to the State Government, the discovery in the leased area of any mineral not specified in the lease within a period of 60 days from the date of such discovery and shall not win and dispose of such discovered mineral.
18. It should be further noted that after introduction of above policy decisions and the statutory rules, the Director of Mines & Geology pursuant to the directions of the MoM, GoI dated 22.08.2018 issued show cause notice to the petitioner company to show cause as to why the minerals available with it shall not be confiscated under Rule 12(2) of the M(OTAHEM) CR, 2016, for failure of the petitioner to comply with Rule 12(2) of the AMCR, 2016. He further stated in the notice that the MoM, GoI directed the GoAP to prematurely terminate all existing mineral concessions of beach sand minerals held by the private persons / companies and in that regard the AD M&G already submitted proposals to the Government for premature termination of the leases including that of the petitioner. Challenging the above show cause notice, the present petitioner filed W.P.No.10705/2021. While the said matter is pending, the APMDC which was entrusted with the seized minerals has issued e-auction notification and challenging the same the petitioner filed W.P.No.10773/2021. In both the aforesaid writ petitions, a common order has been passed by this Court today directing the 3rd respondent therein to furnish the relevant documents sought for by the petitioner to enable it to file 21 a detailed reply challenging the show cause notice and thereupon to conduct enquiry and hear the petitioner, APMDC and others concerned and pass an appropriate order with regard to the premature termination of the lease and also with regard to the proposed confiscation of the minerals as per the governing law and rules.
19. Now, coming to the present writ petition, since the petitioner questions the right of APMDC / 4th respondent to have the constructive custody, in my considered view, a direction can be issued to the Director of Mines & Geology / 2nd respondent to invite the objections of the petitioner company in this regard and pass an appropriate order having regard to the governing law and rules.
20. Accordingly, this Writ Petition is disposed of directing the petitioner to submit its objections to 2nd respondent against the impugned letter No.APMDC/VSP/Heavy Minerals/09-10/384, dated 22.02.2010 issued by 4th respondent to the 3rd respondent and upon receiving such objections, the 2nd respondent shall fix a date and conduct enquiry and after hearing the petitioner, the 4th respondent and other concerned, pass an appropriate order in accordance with the governing law and Rules by duly considering the objections of the petitioner and respective submissions of the parties within four (4) weeks from the date of holding enquiry.
As a sequel, interlocutory applications pending, if any, shall stand closed.
_________________________ U.DURGA PRASAD RAO, J 10.08.2022 krk / mva 22 HON'BLE SRI JUSTICE U.DURGA PRASAD RAO Writ Petition No.7470 of 2010 10th August, 2022 mva/krk