Kerala High Court
V.S.Bashir vs The Director Of Mining And Geology on 24 October, 2018
Author: Shaji P.Chaly
Bench: Shaji P.Chaly
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
WEDNESDAY,THE 24TH DAY OF OCTOBER 2018 / 2ND KARTHIKA, 1940
WP(C).No. 23755 of 2018
PETITIONER/S:
V.S.BASHIR,
AGED 73 YEARS,
"MANJU", OLAYIL, PALACE WARD,
THEVALLY P.O., KOLLAM- 691 009.
BY ADV. SRI.GEORGE POONTHOTTAM
RESPONDENT/S:
1 THE DIRECTOR OF MINING AND GEOLOGY,
DIRECTORATE OF MINING AND GEOLOGY,
KESAVADASAPURAM,
PATTOM PALACE P.O.,
THIRUVANANTHAPURAM- 695 004.
2 THE GEOLOGIST,
DISTRICT OFFICE,
DEPARTMENT OF MINING & GEOLOGY,
CIVIL STATION, E-BLOCK, KANNUR.
BY ADVS.
BY SRI.S.KANNAN, GOVERNMENT PLEADER
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
09.10.2018, THE COURT ON 24.10.2018 DELIVERED THE FOLLOWING:
W.P.(C) No.23755 of 2018 2
JUDGMENT
This writ petition is filed by the petitioner seeking a declaration that petitioner is entitled for issuance of quarrying lease in respect of areas indicated in Ext.P7 Letter of Intent, and further to direct the 1 st respondent to issue quarrying lease enabling him to mine Laterite in respect of 4.8564 hectares of land in Re- survey No.1/1 of Panappuzha Village, Kannur Taluk, Kannur District. Material facts for the disposal of the writ petition are as follows:
2. Petitioner applied for quarrying lease to mine laterite for industrial purpose by submitting Ext.P4 application. Laterite has been notified as minor mineral by the Central Government as per Ext.P1 notification.
Petitioner was then issued with Ext.P7 letter of intent by the 1st respondent Director, assuring that lease would be granted subject to the petitioner producing Environmental Clearance (EC) and approved mining plan. Accordingly, petitioner obtained EC from the District Impact Assessment Authority, Kannur, evident from Ext.P8, and the approved mining plan from the 2nd respondent Geologist vide Ext.P9. Exts.P8 and P9 along with other relevant records were submitted to the office of the 1 st W.P.(C) No.23755 of 2018 3 respondent during March, 2018. It is the case of the petitioner that, in terms of Rule 33(2) of the Kerala Minor Mineral Concession Rules, 2015 [hereinafter called, 'the Rules, 2015'], on receipt of approved mining plan and EC and on production of all other statutory clearances from other authorities, the competent authority i.e., the 1st respondent is duty bound to grant quarrying lease within 30 days. However, no action has been taken till date by the 1 st respondent. It is thus seeking the reliefs specified above, this writ petition is filed.
2. A detailed counter affidavit is filed by the 1st respondent, refuting the allegations and claims and demands raised by the petitioner. Among other contentions, it is stated that, the delay if any occurred, is due to want of clarification from the Indian Bureau of Mines under the Ministry of Mines, Government of India, regarding the course of action to be followed in respect of application submitted by the petitioner. The Ministry of Mines is the authority to categorise minerals into major and minor. Major minerals and minor minerals have separate and distinct procedures to be followed while leasing out. The 1 st respondent has sent repeated communications to the Ministry of Mines to sort W.P.(C) No.23755 of 2018 4 out the issue by differentiating major mineral bauxite from minor mineral laterite. Nevertheless, no specific information was communicated from the end of the Ministry to the office of the 1st respondent till date. Circumstances being so, the 1st respondent has addressed the Government enumerating the subject issue and a decision in this respect is awaited, evident from Ext.R1(a).
3. "Laterite" is a minor mineral enlisted in Schedule I of the Rules, 2015. Since the 1st respondent found that the application and connected documents are in order, Ext.P7 letter of intent was issued to the petitioner, enabling him to obtain all other statutory licences. However, Ext.P7 letter of intent was granted to the petitioner subject to an undertaking dated 17.10.2017, submitted by the petitioner that, he has no objection in withdrawing the intent, if the results of samples collected from the proposed lease area and analysed in the Department Lab is unfavourable for granting a quarrying lease, evident from Ext.R1(b). Therefore, the sum and substance of the contention advanced by the 1st respondent is that, the letter of intent granted to the petitioner is conditional in nature, and he has expressed no objection, insofar as W.P.(C) No.23755 of 2018 5 withdrawing Ext.P7, in case the results of the Lab Report are adverse.
4. Accordingly, when the samples collected from the proposed lease area was analysed in the Department, the content of Al2O3, Fe2O3 and SiO2, the primary oxides that determine whether laterite can be grouped as aluminous laterite or bauxite, manifested results, showing its susceptibility for classification as 'bauxite', which is a major mineral. The bauxite and laterite (aluminous) have distinct rule provisions for leasing. Bauxite is grouped in the Fourth Schedule of Mines and Minerals (Development & Regulation) Act, 1957 [for short, 'the MMDR Act'], and it can only be leased out through public auction as insisted upon in Sec.10B of the MMDR Act. Before 10.02.2015, the laterite used for any purpose other than as building stone was considered as major mineral and mining lease was granted by the Government. However, by S.O.423 (E) dated 10.02.2015 issued by the Ministry of Mines, 31 minerals, including laterite were declared as minor mineral. Thereupon, the State Government amended the Rules, 2015 and included 'laterite' used for industrial purposes in Schedule-I of the Rules, 2015, as per the amendment dated 22.06.2017. W.P.(C) No.23755 of 2018 6
5. The percentage of Al2O3, and SiO2 in the mineral is taken into account to differentiate laterite and bauxite. The Indian Bureau of Mines has fixed threshold values of Al2O3 and SiO2 vide their notification dated 16.10.2009, as per which, minerals with values higher than threshold could be treated as ore. The Department on 09.10.2017 has sought clarification from Indian Bureau of Mines regarding the minimum percentage of Al2O3 and SiO2 required to classify a laterite as bauxite. The Bureau of Mines clarified that the State Government has to take a decision based on the end use of the mineral.
6. As seen from the application of the petitioner, he intends to utilize the mineral for cement industry, as per the documents produced. Then the question arose, as to whether laterite used in cement industry shall be treated as major or minor. Again on 06.04.2018, Ext.R1(c) communication was issued by the 1st respondent, requesting the Bureau for further clarification to specify the exact guideline for granting the lease based on chemical composition and end use declared. However, despite many reminders issued, no response was received from the Bureau. Thereupon, on 02.06.2018, an email was sent to the Director, Ministry of Mines, however, no reply is received.
W.P.(C) No.23755 of 2018 7
7. In the interregnum, it was found that the State of Maharashtra has auctioned a mineral block as major mineral bauxite with cut off percentage of Al 2O3 as 30%. In this case, the samples collected from the area under lease application, the percentage of Al2O3 is 32.634. On 25.04.2018, the Ministry of Mines superseding the notification dated 16.10.2009, issued notification No.C- 284/3/CM9/2017 mentioning the threshold value of major minerals and in the said notification, aluminous laterite is classified under the major mineral 'Bauxite', evident from Ext.R1(d). Therefore, according to the 1 st respondent, no quarrying lease can be granted to the petitioner overlooking all the aforesaid factual aspects and law regarding the same.
8. It is the duty of the 1st respondent to make sure that a high value mineral with higher royalty rate shall not be treated as low value mineral. It is also the duty of the 1st respondent to adhere to the procedure for granting of mineral concession based on the type of mineral, and the notifications issued by the Ministry of Mines. Even though the 1st respondent has made its best efforts, so far a clarification is issued by the Ministry of Mines or the Indian Bureau of Mines. It is also pointed out that, as per Ext.R1(e) letter dated W.P.(C) No.23755 of 2018 8 17.07.2018, petitioner was informed the reasons for delay, and therefore, the attempt of the petitioner to attribute cause of delay on the 1 st respondent cannot be sustained factually and legally.
9. A reply affidavit is filed by the petitioner, reiterating the stand adopted in the writ petition. It is pointed out thereunder that, since the laterite comes under Schedule-I, the 1st respondent is entitled as of right to consider the application submitted by the petitioner and take appropriate decision irrespective of any clarification to be received by the 1st respondent.
10. I have heard learned counsel for the petitioner and the learned Special Government Pleader. Perused the documents on record and the pleadings put forth by the respective parties.
11. The subject issue revolves around a very narrow compass. It is true, 'laterite' is included in Schedule- I of the Rules, 2015, consequent to the amendment made in the year 2015. However, 'bauxite' is a mineral included in the Fourth Schedule of MMDR Act, 1957. The minerals specified in the Fourth Schedule are "notified minerals", defined under Sec.3(ea) of MMDR Act, 1957. "Minor minerals" is defined to mean as per Sec.3(e) of Act, 1957, building stones, gravel, ordinary clay, ordinary W.P.(C) No.23755 of 2018 9 sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by notification in the Official Gazette, declare to be a minor mineral.
12. According to learned counsel for the petitioner, since the laterite is included in the First Schedule of Rules, 2015, the 1st respondent is duty bound to consider the application taking into account the said aspect and since the petitioner has secured all clearances from the respective statutory authorities, it is the bounden duty to issue the clearance sought for by the petitioner. Learned Special Government Pleader, on the other hand, submitted that the State of Maharashtra, evident from Ext.R1(c), has auctioned a mineral block as major mineral 'bauxite' with cut off percentage of Al 2O3 as 30%. It is also pointed out that, as per the communication dated 05.04.2018 issued by the 1st respondent to the Indian Bureau of Mines reveals that the area, Village, Taluk and District in which the clearance sought for by the petitioner has an extent of 4.8564 hectares, and the chemical analysis result of percentage shows that Al2O3 is 32.643. Therefore, the content of the 'bauxite' is exceeding the cut off threshold of 30%. It is not under dispute that 'bauxite' is a mineral included in the W.P.(C) No.23755 of 2018 10 Fourth Schedule of MMDR Act, 1957 along with Iron ore, Limestone and Manganese ore. So much so, unless and until a clarification is issued by the Central Government, as sought for, standardizing and fixing the threshold value of bauxite in the laterite as an end use product, the State Government has no power, enabling it to enter into lease arrangements, especially due to the fact that, as per Ext.R1(d), threshold value for bauxite Al2O3 is fixed at 30% (Min.) and S1O2 (total) 7% (Max.). That apart, since bauxite is included in the Fourth Schedule, the mining lease is taken care of under Sec.10B of MMDR Act, 1957, which read thus:
"10B. Grant of mining lease in respect of notified minerals through auction.--(1) The provisions of this section shall not be applicable to cases covered by section 10A or section 17A or to minerals specified in Part A or Part B of the First Schedule or to land in respect of which the minerals do not vest in the Government.
(2) Where there is inadequate evidence to show the existence of mineral contents of any notified mineral in respect of any area, a State Government may, after obtaining the previous approval of the Central Government, grant a prospecting licence-cum-mining lease for the said notified mineral in such area in accordance with the procedure laid down in section 11.
(3) In areas where the existence of mineral contents of any notified mineral is established in the manner prescribed by the Central Government, the State Government shall W.P.(C) No.23755 of 2018 11 notify such areas for grant of mining leases for such notified mineral, the terms and conditions subject to which such mining leases shall be granted, and any other relevant conditions, in such manner as may be prescribed by the Central Government.
(4) For the purpose of granting a mining lease in respect of any notified mineral in such notified area, the State Government shall select, through auction by a method of competitive bidding, including e-auction, an applicant who fulfils the eligibility conditions as specified in this Act.
(5) The Central Government shall prescribe the terms and conditions, and procedure, subject to which the auction shall be conducted, including the bidding parameters for the selection, which may include a share in the production of the mineral, or any payment linked to the royalty payable, or any other relevant parameter, or any combination or modification of them.
(6) Without prejudice to the generality of sub-section (5), the Central Government shall, if it is of the opinion that it is necessary and expedient to do so, prescribe terms and conditions, procedure and bidding parameters in respect of categories of minerals, size and area of mineral deposits and a State or States, subject to which the auction shall be conducted:
Provided that the terms and conditions may include the reservation of any particular mine or mines for a particular end-use and subject to such condition which allow only such eligible end users to participate in the auction.
(7) The State Government shall grant a mining lease to an applicant selected in accordance with the procedure laid down in this section in respect of such notified mineral in any notified area."W.P.(C) No.23755 of 2018 12
13. Therefore, on an appreciation of the provisions afore, it is clear that a different procedure is prescribed so far as grant of mining lease thereunder is concerned. Moreover, Rule 10 of the Rules, 2015 deals with conditions on which quarrying permit shall be granted and clause 'h' thereunder prohibits winning of any mineral other than the mineral specified in the permit which read thus:
"(h) The permit holder shall not win and dispose of any type of mineral other than the mineral specified in his permit".
Therefore, on a harmonious reading of the provisions discussed above, it is clear, unless and until a clarification/guidelines is issued by the Central Government/any competent authority, the State authority cannot be found fault with in not considering the request made for.
14. However, a contention is advanced by learned counsel for the petitioner that, it is evident from Ext.R1(c) that the Indian Bureau of Mines has clarified that, while granting any area under mining lease as 'bauxite' and 'laterite', the State Government may look into the likely end use of the mineral and accordingly grant lease. With respect to the said communication, it is pointed out by the 1st respondent that, the Ministry of W.P.(C) No.23755 of 2018 13 Mines was addressed to issue a guideline as to how the leases are to be granted in cases of content of bauxite exceeding the threshold value. However, no communication was received clarifying the said issue. It is also evident that, Ext.R1(e) was issued to the petitioner stating all these reasons, and therefore, there is no delay or laches on the part of the 1 st respondent in issuing necessary clearance. It is also evident from Ext.R1(d), the threshold value of minerals will have meaning as defined in Minerals (Evidence of Mineral Contents) Rules, 2015. "Cut off grade" thereunder is defined to mean; the minimum economic assay grade of the mineral for a deposit below which the mining operations become unviable in the present market dynamics or end use quality, and it may vary from deposit to deposit depending upon the market conditions. As per clause (8) thereunder, all the lessee's are directed to comply with the guidelines issued thereunder.
15. As per sub-clause (a) thereunder, all resources shall be assessed up to the threshold value and the resources between the threshold value and the cut-off grade shall be reported separately. There will however be no restrictions in estimating resources below the threshold value if there is a ready market of such W.P.(C) No.23755 of 2018 14 mineral/ore either directly or after beneficiation. Sub- clause (c) stipulates that, the inventory of mineral/ore stock above the limit prescribed in the threshold values of minerals and below cut off grade shall be maintained in a bound register indicating the quantity and quality of material stacked, and the month-wise inventory of such materials shall be updated.
16. Having evaluated the situation and appreciating the rival contentions advanced and the law involved in the subject, I am of the considered opinion that, there is force in the contention advanced by the 1st respondent, due to the fact that, in the area in which petitioner proposes to conduct quarrying operations, the threshold value of bauxite is exceeding 30%, and therefore, unless and until the Central Government issues appropriate clarifications, there is a clear prohibition created under Sec.10B of the MMDR Act, 1957. Even though laterite is included in the First Schedule of Rules, 2015, enabling the 1st respondent to issue appropriate clearances, in view of the notifications issued by the Ministry of Mines and the prohibition created under the MMDR Act, 1957, disables the 1st respondent to take a decision on the application submitted by the petitioner in the present fact scenario. In the writ petition, the W.P.(C) No.23755 of 2018 15 Ministry of Mines or any of the appropriate authorities are made parties. Therefore, I am of the view that there is no arbitrariness or illegality on the part of the 1 st respondent, justifying interference of this Court, exercising the discretionary power conferred under Article 226 of the Constitution of India.
17. Upshot of the above discussion is, at this stage of the proceedings, petitioner is not entitled to succeed. However, I make it clear that, if the Central Government makes clarification in respect of the communication issued by the 1st respondent, issuing guidelines, the application submitted by the petitioner shall be considered in accordance with law, without much delay.
The writ petition is dismissed, subject to the above observation.
Sd/-
SHAJI P.CHALY JUDGE W.P.(C) No.23755 of 2018 16 APPENDIX PETITIONER'S/S EXHIBITS:
EXHIBITP1 TRUE COPY OF THE GAZETTE NOTIFICATION DATED 10-02-2015 ISSUED BY THE CENTRAL GOVERNMENT.
EXHIBITP2 TRUE COPY OF THE S.R.O NO.346/2017 DATED 22-06-2017 ISSUED BY THE GOVERNMENT.
EXHIBIT P3 TRUE COPY OF THE CONSENT DEED DATED 19-09-2017 EXECUTED BY SMT. MARYKUTTY MATHEW IN FAVOUR OF THE PETITIONER.
EXHIBIT P4 TRUE COPY OF THE APPLICATION FOR GRANT OF QUARRYING LEASE SUBMITTED BY THE PETITIONER TO THE 1ST RESPONDENT DATED 18-09-2017 WITH COVERING LETTER.
EXHIBIT P5 TRUE COPY OF THE RECEIPT EVIDENCING THE PAYMENT OF RS. 10,000/- BY THE PETITIONER.
EXHIBIT P6 TRUE COPY OF THE FORWARDING LETTER DATED 18-09-2017 ADDRESSED TO THE 1ST RESPONDENT BY THE 2ND RESPONDENT GEOLOGIST.
EXHIBIT P7 TRUE COPY THE LETTER OF INTENT NO.8868/M1/2017 DATED 19-10-2017 ISSUED BY THE 1ST RESPONDENT DIRECTOR IN FAVOUR OF THE PETITIONER.
EXHIBITP8 TRUE COPY OF THE COMMUNICATION NO.DOC/M-
185/18 DATED 15.01.2018 ISSUED BY THE GEOLOGIST, DISTRICT OFFICE, KANNUR ALONG WITH ITS RELEVANT ENCLOSURES.
EXHIBIT P9 TRUE COPY OF THE ENVIRONMENTAL CLARENCE NO.86/2018 DATED 24-03-2018 ISSUED BY THE DISTRICT ENVIRONMENTAL IMPACT ASSESSMENT AUTHORITY, KANNUR.
EXHIBIT P10 TRUE COPY OF THE CONSENT TO OPERATE ISSUED BY THE KERALA STATE POLLUTION CONTROL BOARD TO THE PETITIONER.
RESPONDENTS' EXHIBITS :
EXHIBIT R1(A) A COPY OF THE LETTER FORWARDED TO GOVERNMENT BY THE 1ST RESPONDENT.W.P.(C) No.23755 of 2018 17
EXHIBIT R1(B) A COPY OF THE UNDERTAKING SUBMITTED BY THE PETITIONER.
EXHIBIT R1(C) A TRUE COPY OF COMMUNICATION DATED 06.04.2018.
EXHIBIT R1(D) A TRUE COPY OF THE NOTIFICATION DATED 25.04.2018.
EXHIBIT R1(E) TRUE COPY OF THE LETTER DATED 17.07.2018.
//TRUE COPY// P.S. TO JUDGE St/-