Rajasthan High Court - Jodhpur
Birla Cement Works vs The State Of Rajasthan on 16 July, 2024
Author: Manindra Mohan Shrivastava
Bench: Manindra Mohan Shrivastava
[2024:RJ-JD:27903-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Spl. Appl. Writ No. 685/2024
Birla Cement Works, (A Unit Of Birla Corporation Limited),
Chanderia, Chittorgarh (Raj.), Through Power Of Attorney Holder
Shri Sunil Kumar Gadiya S/o Shri Dhanraj Gadiya, Aged About
54 Years, R/o Madhavnagar, Chanderia, Chittorgarh (Rajasthan).
----Appellant
Versus
1. The State Of Rajasthan, Through The Principal Secretary,
Department Of Mines And Geology, Government Of
Rajasthan, Secretariat, Jaipur (Raj.) 302 005.
2. The Director, Department Of Mines And Geology,
Government Of Rajasthan, Directorate Of Mines, Khanij
Bhawan, Udaipur (Raj.) 313 001
3. The Indian Bureau Of Mines, Through The Regional
Controller, Makhupura Industrial Area, , Ajmer (Raj.) 305
002
4. The Superintending Mining Engineer II (Major),
Directorate Of Mines And Geology, Khanij Bhawan,
Udaipur (Raj.) 313 001
5. The Mining Engineer, Department Of Mines And Geology,
Khanij Bhawan, Sector-4, Gandhi Nagar, Chittorgarh
(Raj.)
6. The Union Of India, Through The Secretary, Ministry Of
Environment, Forest And Climate Change, Indira
Parayavaran Bhawan, Jorbagh Road, New Delhi 110 003
----Respondents
For Appellant(s) : Mr. Vikas Balia, Sr. Advocate assisted
by Mr. Akhilesh Rajpurohit
For Respondent(s) : Mr. Mahaveer Bishnoi, AAG
HON'BLE THE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA
HON'BLE MR. JUSTICE SHREE CHANDRASHEKHAR
Judgment Reportable Reserved on : 09.07.2024 Pronounced on : 16/07/2024 (Downloaded on 22/07/2024 at 08:35:45 PM) [2024:RJ-JD:27903-DB] (2 of 14) [SAW-685/2024] Per, Hon'ble Shree Chandrashekhar, J :
This Special Appeal seeks to challenge the order dated 30 th May 2024 passed in S.B. Civil Writ Petition No.6217 of 2024 by which the order passed by the Mines Tribunal has been affirmed by the writ Court. Before the Mines Tribunal, the challenge laid by the Birla Cement Works (hereinafter to be referred as the "appellant-company") to the demand notice dated 26th December 2022 issued by the Mining Engineer, Chittorgarh imposing a penalty of Rs.2,77,05,522/- had failed.
2. The appellant-company is a mining leaseholder for captive use of limestone (cement grade) vide Mining Lease No.10/1983 near village Bherda, Jai, Surjana and Nagri within Tehsil and District of Chittorgarh. After online Annual Return for F.Y. 2018-19 was filed by the appellant-company on 19th June 2019 under Rule 45(5)(b)(viii) of the Mineral Conservation and Development Rules 2017 (in short, 'Mineral Conservation Rules of 2017'), a notice was issued to it by the Indian Bureau of Mines (in short 'the IBM') on 19th November 2019 on the ground of violations of the provisions of the Mineral Conservation Rules of 2017 which were found during inspection of the mine on 18 th and 19th October 2019. Accordingly, it was put to the notice of the appellant-company that violation of Rule 62 is an offence and the mining operations can be suspended for non-compliance thereof. The response of the appellant-company to the alleged violations was accepted on almost all counts except that the IBM did not agree with its stand that the total production of 'limestone' did not exceed the limit of 2.8 MT provided under the Environmental Clearance (in short 'EC'). Therefore, a notice was issued on 09 th January 2020 for (Downloaded on 22/07/2024 at 08:35:45 PM) [2024:RJ-JD:27903-DB] (3 of 14) [SAW-685/2024] initiating a proceeding against the appellant-company for violation of Rules 11(1) and 45(7) of the Mineral Conservation Rules of 2017.
3. After considering the show-cause reply of the appellant- company, the IBM held that the appellant-company had committed violations of the environmental laws and issued directions in this regard to the Director, Department of Mines and Geology, Government of Rajasthan. This followed inter-departmental communications and a demand notice was issued to the appellant- company for Rs.2,77,05,522/- as penalty for excess production. Aggrieved thereby, the appellant-company approached this Court in S.B. Civil Writ Petition No.1881/2023 and that writ petition was disposed of by an order dated 04 th April 2023 with liberty to the appellant-company to avail the remedy of revision before the Central Government. However, the Mines Tribunal dismissed the revision petition filed by the appellant-company under Section 30 of the Mines and Minerals (Development and Regulation) Act, 1957 read with Rule 36 of the Minerals (Other Than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 (hereinafter referred as 'Mineral Concession Rules of 2016'). In the order dated 03rd April 2024, the revisional authority held that the expression 'run of mine' as defined under Rule 2(f) of the Mineral Concession Rules of 2016 is the relevant provision for the purpose of deciding total production by the appellant-company and its reliance on Rule 2(viia) of the Mineral Concession Rules, 1960 was misplaced inasmuch as the said definition was brought through amendment vide notification dated 01st October 2021. The revisional authority observed as under:
(Downloaded on 22/07/2024 at 08:35:45 PM)
[2024:RJ-JD:27903-DB] (4 of 14) [SAW-685/2024] "(i) The demand notice of Rs.2,77,05,522/-
imposed by the State Government on the Revisionist is on the account of production of the mineral limestone by the Revisionist in years 2004-05, 2005-06, 2006-07 and 2018- 19 being in excess of the quantity permitted under the EC, as determined to be so by the State Government.
(ii) However, the contention of the Revisionist is that the production of the mineral is to be calculated after excluding the mineral rejects.
(iii) Hence, the crux of the matter is really the way "run of mine' is defined.
(iv) The Revisionist has relied on the definition of "run of mine" provided under rule 2 (viia) of the Mineral Concession Rules, 1960, which defines "run of mine" as under:
"the raw, unprocessed or uncrushed material in its natural state obtained after blasting, digging, cutting or scrapping from the mineralized zone of a lease area."
(v) The above reliance of the Revisionist on this definition is fallacious, since the said definition was inserted through amendment in the said rules vide Ministry of Coal's notification dated 01.10.2021.
(vi) On the other hand, "run of mine" has been defined under rule 2 (f) of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 issued vide Ministry of Mines' notification dated 04.03.2016. The definition of "run of mine" as per the 2016 rules is as under:
"the raw, unprocessed or uncrushed material in its natural state obtained after blasting or digging, from the mineralized zone of a lease area."
(vii) in the instant revision application, the definition of "run of mine" as given in the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 should apply. From a reading of the above rule, it is clear that run of mine shall include even the mineral rejects also.
(viii) There seems to be no legal impropriety in the fact that the impugned order/demand notice was issued as per the applicable rules and provisions. This authority accepts the submission of the State Government that the EC was issued for the annual capacity of Limestone production, and that in Limestone production, mineral rejects are also a part of the production along with Limestone which is used by the Revisionist in cement manufacturing. Therefore, the interpretation (Downloaded on 22/07/2024 at 08:35:45 PM) [2024:RJ-JD:27903-DB] (5 of 14) [SAW-685/2024] that only the Limestone released/ used for cement manufacturing as limestone production stands contrary to the definitions provided for under various laws.
(ix) In the above circumstances, I do not find any infirmity in the impugned order/ demand notice of the State Government. Also, there exists no ground to interfere with the said impugned order. There appears to be no merit in the Revision Application. The Revision Application filed by the Revisionist deserves to be dismissed and is hereby accordingly dismissed.
Parties concerned be communicated accordingly."
4. In this second round of litigation, the respondents have taken a stand that an inquiry was conducted to examine whether the appellant-company had carried production in excess to the approved limit and it was found that the total production of limestone exceeded the permissible limit for the years 2004-05, 2005-06, 2006-07 and 2018-19 and, that the demand notice for payment of penalty was issued after affording proper opportunity of hearing to the appellant-company. The writ Court referred to the rival stand of the parties and after having considered the definition of "ROM" and "production" formed an opinion that 'ROM' which includes the raw, unprocessed or uncrushed materials in its natural state obtained through blasting or digging from the leasehold area shall include the so-called 'mineral rejects'. The writ Court held as under:
"30. It is seen that the respondent-Mining Department in the reply filed have placed reliance upon para 10 (a) of the order dated 23.05.2003 issued by respondent No.3 approving the mining plan and progressive mine closure plan while submitting that a bare perusal of para 10 (1) would reveal that the petitioner is using +12 mm size of limestone for production of cement and -12 mm size of limestone separately in stock as crusher reject. They have further stated that in chemical examination of crusher reject, it is found that the reject is having 60% CaCo3 and in the bench scale study carried out by IBM, Ajmer, CDE Asia and Derrick Corporation, USA 70% (Downloaded on 22/07/2024 at 08:35:45 PM) [2024:RJ-JD:27903-DB] (6 of 14) [SAW-685/2024] recoverable mineral has been mentioned. This Court finds considerable force in the submission made by counsel for the respondents that since the petitioner has also proposed to install washing plant to up-grade the reject in the mining plan, the said 'mining rejects'/waste are utilized by the petitioner in cement manufacturing. The contention of the petitioner that the 'mineral rejects' is of no use for it, cannot be countenanced and for the mineral limestone excavated in excess to the limit prescribed under the EC, the petitioner has rightly been held guilty and thus is liable to the pay the penalty.
31. This Court finds that the revisional authority in its order dated 03.04.2024 (Annex.30) has observed that the petitioner is relying upon definition of 'ROM' provided under Rule 2 (viia) of Mineral Concession Rules, 1960, whereas after publication of the notice dated 04.06.2016, the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 have come into force and the definition of 'ROM' has to be applied as per Rules of 2016. The definition of 'ROM' as laid down under the Rules of 1960 and under the Rules of 2016 reads as under:
Definition of 'ROM' under the Rules of 1960: "the raw, unprocessed or uncrushed material in its natural state obtained after blasting, digging, cutting or scrapping from the mineralized zone of a lease area."
Definition of 'ROM' under the Rules of 2016:
"the raw, unprocessed or uncrushed material in its natural state obtained after blasting or digging, from the mineralized zone of a lease area."
32. This Court finds that a close scrutiny of the definition of 'ROM' as laid down under the Rules of 2016 very specifically includes the 'raw, unprocessed or uncrushed material in its natural state, which has been obtained after blasting or digging, from the lease area and thus any material, which has been obtained after blasting or digging' and the raw, unprocessed or uncrushed material, has to be construed under the definition of 'ROM' and not under the definition of 'mineral rejects'; and the petitioner is utilizing the mineral limestone, which is contended by it, as mineral rejects, for production of cement. The revisional authority after applying its mind and examining all the material placed before it, has held that 'mineral rejects' are also part of production along with limestone, which is used by the petitioner in cement manufacturing and, therefore, the petitioner's contention that the production of limestone is to be calculated after deducting the crushed rejects from ROM, is found to be contrary to the definitions of 'ROM' and 'Mineral Rejects' as laid down under the Rules of 2016 and the Rules of 2017 respectively.
33. This Court finds that petitioner's contention is absolutely misplaced and fallacious, as definition of 'mineral rejects' can be applied to the excavated material that do not constitute useful material. However, in the (Downloaded on 22/07/2024 at 08:35:45 PM) [2024:RJ-JD:27903-DB] (7 of 14) [SAW-685/2024] present case, the excavated material i.e. limestone duly excavated by the petitioner is being utilized by the petitioner for the purpose of cement manufacturing and thus it cannot be said to be not useful material for the petitioner. The respondents thus were justified in imposing penalty of Rs.2,77,05,522/- upon the petitioner for excess production beyond the prescribed limit under the EC done by it and the revisional authority has not committed no error in passing the order impugned dated 03.04.2024 (Annex.30).
34. In view of above discussion, the demand notice demand notice dated 26.12.2022 (Annex.15) issued by the Mining Engineer, Chittorgarh and the order impugned dated dated 03.04.2024 (Annex.30) passed by the revisional authority do not require any interference by this Court in the instant writ petition.
35. Accordingly, the writ petition as also stay petition are dismissed. No costs."
5. The main plank of the appellant-company is that the EC granted to it permits production of 2.8 MT of limestone mineral. Mr. Vikas Balia, the learned Senior Counsel for the appellant- company contended that for several years the Annual Returns filed by the appellant-company showing production of limestone were accepted by the statutory authority and no objection was ever raised and, as a result whereof, the appellant-company was under a bonafide impression that it can lawfully do extraction of minerals to the extent of 2.8 MT. The learned Senior Counsel would further submit that there is a fundamental distinction between mineral and mineral rejects and it is the production of mineral limestone and not limestone rejects that has to be considered for calculating total production by the appellant- company.
6. To begin with the EC, we observe that the order dated 29th July 2004 passed by the Ministry of Environment and Forests for expansion project (2.4 MTPA) of M/s Birla Cement Works had put a specific condition under clause A(i) that the production shall be (Downloaded on 22/07/2024 at 08:35:45 PM) [2024:RJ-JD:27903-DB] (8 of 14) [SAW-685/2024] maintained at the rated capacity of 2.4 MTPA from the entire leasehold area including 27.13 hectares of forest land for which forestry clearance under the Forest Conservation Act, 1980 was obtained. Besides that, one of the general conditions was that no change can be allowed in the calendar plan including excavation, quantum of limestone, waste/OB dumps etc. The EC granted to the appellant-company on 17th September 2007 by the Ministry of Environment and Forest for the expansion of Jai-Surjana Limestone Mining Project also put a specific condition under clause A(iv) that the project proponent shall not exceed annual limestone production from the mine beyond 2.8 MT per annum. It was provided that in case of a proposed enhancement beyond 2.8 MT prior approval from the Ministry of Environment and Forest shall be obtained as per the procedure prescribed. The EC further provided under the heading 'General Conditions' that no change in the calendar plan including the production of limestone and waste materials should be made. In "Common Cause Vs. Union of India & Ors." (2017) 9 SCC 499, the Hon'ble Supreme Court held that the mining operation in breach of the conditions under the mining plan or mining scheme or mining lease shall be illegal. The Hon'ble Supreme Court further observed that the mining laws ensure that the mining operations are carried out in a scientific manner with a high degree of responsibility in protecting and preserving the environment and flora of the area. The Hon'ble Supreme Court held that:
"illegal mining is not confined only to outside the mining lease area and in case where the holder of a mining lease did not adhere to the terms of the mining scheme, mining plan and the mining lease, (Downloaded on 22/07/2024 at 08:35:45 PM) [2024:RJ-JD:27903-DB] (9 of 14) [SAW-685/2024] then the mining operation shall be illegal or unlawful."
7. The Mining Engineer, Chittorgarh through communication dated 01st February 2022 informed the Superintending Engineer (Mines), Department of Mines and Geology, Bhilwara, Circle Bhilwara that the total annual production (ROM) for Jai Block was 28,50,288 tonnes whereas the annual limit prescribed under the EC was 28,00,000 tonnes; 50,288 tonnes was in excess of the permissible annual limit. Similarly, there was excess production for another three years in the past. This is a significant fact that the mining plan approved for the appellant-company provided that different sizes of limestone were to be used by the appellant- company. Interestingly, in the Annual Return filed for F.Y. 2018-19 at item No.4.2(b)(i) in part (V) the appellant-company itself included both limestone and the mineral rejects. Even in the modified mining plan for the period 2021-22 to 2024-25, the appellant-company has proposed the total extent of excavation and ROM extraction. In these facts, the issue which now falls for consideration is whether production of limestone by the appellant- company as approved under the EC shall include ROM or limestone mineral released after processing of ROM.
8. The definition of 'production' as defined under Section 3(fa) of the MMDR Act includes any derivatives of the word 'production' and means the winning or raising of minerals within the leasehold area for the purpose of processing or dispatch. This is common knowledge that in the opencast method mining benches are prepared and blasted and this is the blasted materials which are called ROM. The blasted materials consist of large boulders, fragments, fines, etc. and when crushed in machines would (Downloaded on 22/07/2024 at 08:35:45 PM) [2024:RJ-JD:27903-DB] (10 of 14) [SAW-685/2024] produce lumps, fines and contaminants [refer, NMDC Ltd. Vs. State of M.P. (2004) 6 SCC 28]. We may also refer to the definition of 'run of mine' under the Mineral Concession Rules, 1960 which means the raw, unprocessed or uncrushed material in its natural state obtained after blasting, digging, cutting or scrapping from the mineralized zone of a lease area. Whereas, the definition under the Mineral Concession Rules of 2016 defines 'run of mine' by deleting the expressions 'cutting' and 'scrapping' and reads as under:
"the raw, unprocessed or uncrushed material in its natural state obtained after blasting or digging, from the mineralized zone of a lease area."
9. This is therefore clear on a mere glance at the definitions of 'production' and 'run of mine' that the raw, unprocessed or uncrushed material in its natural state obtained after blasting or digging from the leasehold area shall fall under the definition of 'production', and it is the volume of ROM that has to be counted for quantifying the total production of limestone. However, the appellant-company set up a defence that it was stacking mineral rejects separately within the leasehold area and the quantity of mineral rejects to the tune of 62,800 MT cannot be considered as part of limestone mineral. Quite contrary to this stand, in the Annual Return filed by the appellant-company for F.Y. 2018-19 the type of ore is mentioned as 'lump'. The chemical analysis provided by the appellant-company reflected that the size of lump varied from 12 to 25 MM with CaO as the principal constituent to the extent of 43% which was of grade 34.8% (at page 57 of the paper book). In the Revised Annual Return filed by the appellant- company (at page 77 of the paper book), similar details and (Downloaded on 22/07/2024 at 08:35:45 PM) [2024:RJ-JD:27903-DB] (11 of 14) [SAW-685/2024] descriptions have again been provided. In "Common Cause Vs. Union of India & Ors." (2019) 11 SCC 674, the expressions "Iron Ore" and "Iron Ore (Lump)" came to be interpreted by the Hon'ble Supreme Court. It has been held that the extraction of mineral iron ore is the extraction of iron ore run-of-mine or ROM whereas lumps of iron ore are by-products of ROM as are topsoil, mineral rejects, sub-grade ore and fines. In "Common Cause", the Hon'ble Supreme Court rejected the plea set up by the mining leaseholder SMPL that it was entitled to extract iron ore (lump) and its production cannot be determined based on total extraction of iron ore. The Hon'ble Supreme Court observed that: "If this submission is to be taken literally, then SMPL was entitled to extract only iron ore (lump) without extracting iron ore ROM. This would be much like the argument put forth by Portia enabling Shylock to extract his pound of flesh without spilling a drop of blood."
10. To recapitulate, the limestones smaller in size forming part of ROM are characterized by the appellant-company as mineral rejects which according to it shall not qualify as mineral limestone. However, the provisions under the MMDR Act and the schedule appended thereto provide a clear indication that lime kankar and limeshell also do fall under the category of minerals extracted from the earth. Under Schedule 2 of the MMDR Act, the rates of royalty of limestone, lime kankar and limeshell are provided at serial Nos.26 to 28. This is quite understandable that some distinction has been made between the mineral, ROM and by- products for the purpose of payment of royalty etc. but limestone smaller in size cannot be discarded as 'rejects'. In our opinion, (Downloaded on 22/07/2024 at 08:35:45 PM) [2024:RJ-JD:27903-DB] (12 of 14) [SAW-685/2024] that portion of ROM shall also qualify as mineral and cannot be discounted for calculating the total production of limestone.
11. The respondents referred to the Mining Plan and Progressive Mine Closure Plan which also provide valuable information to resolve the controversy involved in the matter. At paragraph No.3.6 of the order dated 02.12.2019, it is mentioned that the limestone mined from the pits is mixed with clay which are screened within crusher house. Up to +12 mm is used for cement manufacture and (-)12 mm which is a mixture of limestone and clay are stacked separately for future use as it has economic value and contains around 75% recoverable limestone of around 42- 43% CaO. Pertinently, there is no dispute that in the Bench Scale Study by the IBM and CDE Asia and also in online testing by Derreck Corporation, USA it was found that the total recoverable mineral quantity is to the extent of 70%. There is also no answer by the appellant-company to the respondents' stand that it intended to use mining rejects in cement manufacturing and, it had itself proposed to install a washing plant to upgrade the mineral rejects obtained in the mining. This is therefore quite clear that the stocks kept separately by the appellant-company labeled as 'crusher screen reject' was for future use and it must be counted towards calculation of total production of limestone by the appellant-company. In our opinion, if the defence set up by the appellant-company is accepted it would have the effect of re- writing the EC and mining plan and the appellant-company shall then have unlimited rights of excavation/winning the minerals. Simply put, if the total quantity of extraction has to be the total quantity of limestone then it is really not known what would be (Downloaded on 22/07/2024 at 08:35:45 PM) [2024:RJ-JD:27903-DB] (13 of 14) [SAW-685/2024] the total quantity of extraction that shall produce 2.8 MT limestone.
12. The second alternative argument put forth on behalf of the appellant-company that power to impose penalty could not have been exercised after about two decades is equally fallacious and liable to be rejected. It was the inspection carried on 18 th October 2019 and 19th October 2019 that brought to the knowledge of the IBM the mining laws' violations by the appellant-company and then notice was issued to it. There was no delay on the part of the statutory authority to proceed further in the matter and the appellant-company was provided sufficient opportunity to defend itself. In "Madras Aluminium Company Limited vs. Tamil Nadu Electricity Board And Another" (2023) 8 SCC 240, the issue was what would be the reasonable time to consider an application for reduction in maximum demand fixed while providing electric connection. The fact-situations pleaded in "Madras Aluminium"
were entirely different from the present case and there is no similarity either on facts or in law in both cases. Quite true, even a little difference in facts may lead to a different conclusion.
13. In the backdrop of the foregoing discussions, after having considered the materials on record, we have arrived at a definite conclusion that no interference is required with the writ Court's decision. The writ Court in exercise of its powers under Article 226 of the Constitution of India shall not embark on an exercise to test legality of the order passed by a statutory authority under the MMDR Act, except where the order is challenged on the ground of lack of jurisdiction or patent illegality. Indeed, the findings of fact recorded by the revisional authority under the MMDR Act shall be (Downloaded on 22/07/2024 at 08:35:45 PM) [2024:RJ-JD:27903-DB] (14 of 14) [SAW-685/2024] binding on the parties except where such findings of fact are not based on legal evidence or are contrary to the records. The limitation on powers of the writ Court to issue a writ of certiorari is that the findings of fact recorded by the inferior Tribunal cannot be reopened or questioned in a writ proceeding. In "Syed Yakoob Vs. K.S. Radhakrishnan & Ors." 1964 AIR 477, the Hon'ble Supreme Court held that an error of law which is apparent on the face of the record can be corrected by the writ Court but not an error of fact howsoever grave it may appear to be, except where a finding of fact has been recorded by the inferior Tribunal by erroneously admitting inadmissible evidence or some admissible evidence has been improperly refused.
14. In the present case, there is no dispute on facts and the view taken by the writ Court is in tune with the object behind the mining laws. Therefore, finding no merits in this Special Appeal, D.B.Spl. Writ No. 685/2024 is dismissed.
(SHREE CHANDRASHEKHAR),J (MANINDRA MOHAN SHRIVASTAVA),CJ
-AjaySingh/-
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