Kerala High Court
M/S. Kerala Rare Earths & Minerals ... vs State Of Kerala on 21 February, 2013
Author: V. Chitambaresh
Bench: V.Chitambaresh
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE V.CHITAMBARESH
THURSDAY, THE 21ST DAY OF FEBRUARY 2013/2ND PHALGUNA 1934
WP(C).No. 34345 of 2010 (P)
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PETITIONER(S):
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M/S. KERALA RARE EARTHS & MINERALS LIMITED,
POST BOX NO.79, VIII/224, MARKET ROAD,
ALUVA-683 101, REPRESENTED BY ITS AUTHORIZED
SIGNATORY - ASHTAMOORTHI P.M.
BY SRI.M.PATHROSE MATTHAI,SENIOR ADVOCATE
BY ADVS.SRI.E.K.NANDAKUMAR
SRI.A.K.JAYASANKAR NAMBIAR
SRI.K.JOHN MATHAI
SRI.P.BENNY THOMAS
SRI.P.GOPINATH
RESPONDENT(S):
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1. STATE OF KERALA,REPRESENTED BY THE
CHIEF SECRETARY TO GOVERNMENT, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695 001.
2. THE SECRETARY TO GOVERNMENT,
INDUSTRIES DEPARTMENT,
GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.
3. THE DIRECTOR,
DIRECTORATE OF MINING & GEOLOGY, KESAVADASAPURAM,
PATTOM PALACE PO, THIRUVANANTHAPURAM-695 004.
*ADDL.R4 & R5 IMPLEADED:
R4. B.BABU PRASAD, MLA, S/O.BALAKRISHNA KURUP,
AGED 50 YEARS, MANI BHAVANAM, MUTHUKULAM NORTH,
MUTHUKULAM PO, ALAPPUZHA DISTRICT.
R5. JOHN THOMAS, AGED 45 YEARS,
S/O.THOMAS, KOCHUKOICKAL, MUTTOM PO, HARIPAD.
(*ADDL.R4 & R5 ARE IMPLEADED AS PER ORDER DTD. 21/02/2013 IN
I.A.NO.17839/2010)
R1 TO R3 BY SPL.GOVERNMENT PLEADER SRI.C.S.MANILAL
R4 & R5 BY ADV. SRI. K.HARILAL
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARAD
ON 21-02-2013 ALONG WITH WPC. NO.34346/2010 AND
WPC NO.5420/2011, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
Kss
WPC.NO.34345/2010 P
APPENDIX
PETITIONER'S EXHIBITS:
P1: COPY OF THE POLICY RESOLUTION ON EXPLOITATION OF BEACH
SAND MINERALS ISSUED BY THE DEPARTMENT ATOMIC ENERGY ON
6/10/1998.
P2: COPY OF THE REPLY GIVEN BY THE HON'BLE MINISTER FOR EXTERNAL
AFFAIRS IN THE RAJYA SABHA ON 10/12/1998.
P3: COPY OF THE REPLY GIVEN BY THE MINISTER OF STATE IN THE
DEPARTMENT OF ATOMIC ENERGY AND SPACE IN THE RAJYA SABHA
ON 16/05/2002.
P4: COPY OF THE G.O.(MS) NO.101/02-ID DTD. 22/10/2012.
P5: COPY OF G.O.(MS) NO.129/02/ID DTD. 30/11/2002.
P6: COPY OF GOVERNMENT ORDER G.O.(MS) NO.50/03-ID DTD. 5/05/2003.
P7: COPY OF G.O.(MS) NO.9/2003/ID DTD. 13/01/2003.
P8; COPY OF THE EXPERT COMMITTEE REPORT SUBMITTED IN
FEBRUARY 2003.
P9: COPY OF G.O.(MS) NO.7/2004/ID DGD. 4/02/2004.
P10: COPY OF THE REPORT DTD. 30/03/2004 SUBMITTED BY THE COMMITTEE.
P11: COPY OF THE LETTER NO.4/111/2003-MIV DTD. 30/06/2004 OF THE
GOVERNMENT OF INDIA IN THE MINISTRY OF COAL & MINES CONVEYING
ITS APPROVAL IN RESPECT OF SOME AMONG THE APPLICATIONS FOR
MINING LEASE SUBMITTED BY THE PETITIONER.
P12: COPY OF G.O.(MS) NO.105/04-ID DTD. 15/09/2004.
P13: COPY OF THE INTERIM ORDER DTD. 23/08/2004 IN WPC.NO.15688/2003.
P14: COPY OF G.O.(MS) NO.112/2004-ID DTD. 25/09/2004.
Kss ..2/-
..2....
WPC.NO.34345/2010 P
P15: COPY OF THE NOTICE DTD. 1/03/2005 CIRCULATED BY THE COMMITTEE.
P16: COPY OF THE REPORT OF THE COMMITTEE DTD. 20/05/2005.
P17: COPY OF THE LETTER NO.4/82/2003-MIV DTD. 21/06/2005.
P18: COPIES OF ORDER NO.4/25/2005/MIV DTD. 3/11/2005.
P18(A): COPY OF ORDER NO.4/26/2005/MIV DTD. 3/11/2005.
P18(B): COPY OF ORDER NO.4/27/2005/MIV DTD. 3/11/2005.
P18(C): COPY OF ORDER NO.4/28/2005/MIV DTD. 3/11/2005.
P18(D): COPY OF ORDER NO.4/29/2005/MIV DTD. 3/11/2005.
P18(E): COPY OF ORDER NO.4/30/2005/MIV DTD. 3/11/2005.
P19: COPY OF THE LETTER DTD. 28/12/2005 SUBMITTED BY THE PETITIONER
TO THE 2ND RESPONDENT.
P20: COPY OF ONE SUCH LETTER FROM THE ADDL.CHIF SECRETARY TO
GOVERNMENT TO THE GOVERNMENT OF INDIA, DTD. 4/01/2006.
P21: COPY OF G.O.(P) NO.78/2007 DTD. 18/06/2007 ALONG WITH THE
RELEVANT PAGES OF THE INDUSTRIAL POLICY (PARAGRAPHS 12.1 &
12.2 THEREOF) APPENDED TO IT.
P22: COPY OF ORDER NO.29798/A3/04/ID PASSED BY THE 2ND RESPONDENT
DTD. 12/10/2006 REJECTING THE APPLICATION OF THE PETITIONER.
P22(A):COPY OF ORDER NO.34340/A3/02/ID PASSED BY THE 2ND RESPONDENT
DTD. 16/10/2006 REJECTING THE APPLICATION OF THE PETITIONER.
P22(B):COPY OF ORDER NO.36557/A3/03/ID PASSED BY THE 2ND RESPONDENT
DTD. 16/10/2006 REJECTING THE APPLICATION OF THE PETITIONER.
P22(C): COPY OF ORDER NO.5977/A3/05/ID PASSED BY THE 2ND RESPONDENT
DTD. 09/11/2006 REJECTING THE APPLICATION OF THE PETITIONER.
Kss ..3/-
..3....
WPC.NO.34345/2010 P
P22(D): COPY OF ORDER NO.5146/A3/05/ID PASSED BY THE 2ND RESPONDENT
DTD. 09/11/2006 REJECTING THE APPLICATION OF THE PETITIONER.
P22(E): COPY OF ORDER NO.2478/A3/04/ID PASSED BY THE 2ND RESPONDENT
DTD. 09/11/2006 REJECTING THE APPLICATION OF THE PETITIONER.
P22(F): COPY OF ORDER NO.14840/A3/05/ID PASSED BY THE 2ND RESPONDENT
DTD. 09/11/2006 REJECTING THE APPLICATION OF THE PETITIONER.
P22)G): COPY OF ORDER NO.36662/A3/05/ID PASSED BY THE 2ND RESPONDENT
DTD. 09/11/2006 REJECTING THE APPLICATION OF THE PETITIONER.
P22(H): COPY OF ORDER NO.37632/A3/03/ID PASSED BY THE 2ND RESPONDENT
DTD. 09/11/2006 REJECTING THE APPLICATION OF THE PETITIONER.
P23: COPY OF THE AUDITED BALANCE SHEET OF THE PETITIONER COMPANY
FOR THE YEAR 2007 - 2008.
P24: COPY OF THE FINAL ORDER PASSED BY THE CENTRAL GOVERNMENT
BEARING NO.149/2009 DTD. 30/11/2009.
RESPONDENT'S EXHIBITS:
R1(A): COPY OF THE RESOLUTION DTD. 14/02/2005 (DECISION NO.15) OF THE
ARATTUPUZHA GRAMA PANCHAYAT.
R1(B): COPY OF THE RESOLUTION DTD. 2/08/2010 REGARDING REMOVAL OF
MINERAL BEARING SAND FROM THE KAYAMKULAM SHIPPING HARBOUR
AREA (DECISION NO.1) OF THE ARATTUPUZHA GRAMA PANCHAYAT.
R1(C): COPY OF THE RESOLUTION DTD. 13/09/2010 REGARDING REMOVAL
OF MINERAL BEARING SAND FROM THE KAYAMKULAM POZHI AREA
(DECISION NO.1) OF THE ARATTUPUZHA GRAMA PANCHAYAT.
/TRUE COPY/
P.A.TO JUDGE
Kss
V. CHITAMBARESH, J
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WP(C) NOs. 34345 OF 2010,
34346 OF 2010 & 5420 OF 2011
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Dated this the 21st day of February, 2013
JUDGMENT
All these writ petitions are connected. I shall refer to the parties and exhibits in WP(C) No. 5420/2011 for the sake of convenience. I heard Mr. A.K. Jayasankar Nambiar, Senior Advocate on behalf of the petitioner and Mr. C.S. Manilal, Senior Government Pleader on behalf of the State of Kerala.
2. The petitioner is a Joint Sector Company promoted by M/s. Cochin Minerals and Rutiles Limited (Pvt.), Indian Rare Earths Ltd. (Government of India) and Kerala State Industrial Development Corporation (Government of Kerala). The Government of Kerala by Ext.P6 order allowed the applications put in by the petitioner for grant of mining lease to establish a Joint Sector Project subject to prior clearance by Government of India in the Ministries of Atomic Energy and Environment. The Government of India by Exts.P11, P17 and P18 series communications conveyed their approval to the grant of mining leases under Section 5 (1) of the Mines and Minerals (Development and Regulation) Act, 1957. The 2 WP(C) Nos. 34345/2010, 34346/2010 & 5420/2011 approval was so granted in respect of Ilmenite, Rutile, Leucoxene, Zircon and Silimanite (non-scheduled mineral) over four areas in Arattupuzha village of Alappuzha district for a period of twenty years. The Government of Kerala thereafter by Ext.P12 order granted mining leases to the petitioner in respect of areas covered by four applications out of the total number of thirteen applications processed. The Government of Kerala however by Ext.P22 series communications refused to grant mining lease to the petitioner in respect of areas covered by nine applications notwithstanding the approval granted by the Government of India.
3. Ext.P22 series communications were challenged by the petitioners in revision to the Government of India as provided under Section 30 of the Mines and Minerals (Development and Regulation) Act, 1957 read with Rule 54 of the Mineral Concession Rules, 1960. The Government of India by Ext.P24 order allowed the revision petitions and remitted the matter to the Government of Kerala for passing consequential 3 WP(C) Nos. 34345/2010, 34346/2010 & 5420/2011 orders with the following observations:
"9. After hearing both the sides, we find that the State Government had recommended the mining lease applications of the applicant for seeking prior approval of the Central Government in line with the policy resolution dated 22.10.2002. In 7 cases, the Central Government had also accorded its prior approval u/s 5(1) of the MMDR Act, 1957 to the proposals of the State Government for grant of mining lease for mineral sand in favour of the revision applicant. The impugned orders have been passed by the State Government after obtaining the prior approval of the Central Government in 7 cases, the State Government is required to pass order under Section 10 (3) of the MMDR Act. In all the 9 cases, including those in which prior approval of Central Government has been conveyed, the impugned orders passed by the State Government are against competitive edge of the mining industry. The policy decision of the State Government appears to be not in consonance with the MMDR Act, 1957 and also against the National Mineral Policy, 2008. (emphasis supplied).
10. The impugned orders in all the 9 revision applications mentioned above are set aside with a direction to the State Government to reconsider all 9 cases in the light of the discussions made in para 9 above and pass appropriate orders accordingly."
(emphasis supplied).
4 WP(C) Nos. 34345/2010, 34346/2010 & 5420/2011
4. Section 10 (3) of The Mines and Minerals (Development and Regulation) Act, 1957 referred to above is extracted hereunder:
"On receipt of an application under this section, the State Government may, having regard to the provisions of this act and any rules made thereunder, grant or refuse to grant the permit, licence or lease". (Emphasis supplied).
The procedure for the grant or refusal of a mining lease is governed by Rule 63 A of the Mineral Concession Rules, 1960 which is extracted hereunder:
"63A. The State Government shall dispose of the application for grant of reconnaissance permit, prospecting license or mining lease in the following period:-
(a) Reconnaissance Permit -- within six months from the date of receipt of the application for reconnaissance permit under rule 4 A.
(b) Prospecting License - within nine months from the date of receipt of the application for prospecting license under rule 10.
(c) Mining Lease - within twelve months from the date of receipt of the application for mining lease under rule 22:
Provided that the aforesaid periods shall be applicable only if the application for reconnaissance permit, prospecting license or mining lease, as the case may be, is complete in all respects:5
WP(C) Nos. 34345/2010, 34346/2010 & 5420/2011 Provided further that the disposal by the State Government in case of minerals listed in the First Schedule to the Act shall mean either recommendation to the Central Government for grant of the mineral concession, or refusal to grant the mineral concession by the State Government under rule 5 for reconnaissance permit, rule 12 for prospecting license and rule 26 for mining lease, and in all other cases, disposal shall mean either intimation regarding grant of precise area, or refusal to grant the mineral concession under rule 5 for reconnaissance permit, rule 12 for prospecting license and rule 26 for mining lease:
Provided also that in case the State Government is not able to dispose of the application for grant of reconnaissance permit, prospecting license or mining lease within the period as specified above, the reasons for the delay shall be given in writing."
The relevant part of the National Mineral Policy, 2008 referred to in Ext.P24 order is also extracted hereunder:
"4. ROLE OF THE STATE IN MINERAL DEVELOPMENT: The role to be played by the Central and State Governments in regard to mineral development has been extensively dealt in the Mines and Minerals (Development and Regulation) Act, 1957 and Rules made under the Act by the Central Government and the State Governments in their respective domains. The provisions of the Act and the Rules will be reviewed and harmonised with the basic features of the new National Mineral Policy. In future the core functions of the State in mining will be facilitation and 6 WP(C) Nos. 34345/2010, 34346/2010 & 5420/2011 regulation of exploration and mining activities of investors and entrepreneurs, provision of infrastructure and tax collection. In mining activities, there shall be arms length distance between State agencies (Public Sector Undertakings) that mine and those that regulate. There shall be transparency and fair play in the reservation of ore bodies to State agencies on such areas where private players are not holding or have not applied for exploration or mining, unless security considerations or specific public interests are involved."
5. The Government of Kerala by Ext.P25 order rejected the nine applications put in by the petitioner for the grant of mining lease inter alia observing as follows:
"8. In the present case, major portion of the land in which mining operation is proposed to be carried out by the Kerala Rare Earths & Minerals Limited is Kayal Puramboke and Sea Prumaboke land. They are Government lands and Government, being the owner of the land also is having the discretionary power to decide not to permit private parties and Joint sector Companies from mining in its lands in public interest. Policy decisions are taken by a Government in public interest. Here, the applications of Kerala Rare Earths & Minerals Limited is for granting Mining Lease for mining Titanium bearing minerals and ores i.e., Ilmenite, Rutile, Leucoxene, Zircon etc. These minerals are categorised as Atomic minerals as per Part B of the First Schedule to the Mines & Minerals (Development & 7 WP(C) Nos. 34345/2010, 34346/2010 & 5420/2011 Regulation) Act, 1957. As per Section 2 (a) of the Environment Protection Act, 1986 "environment" includes water, air and land and the inter-relationship which exists among and between water, air and land, and human beings, other living creatures, plants, micro organisms and property. Environmental protection is the statutory duty of the State. It is a constitutional mandate also. Kerala is a densely populated State. Arattupuzha, Purakkad, Alappadu Villages in the State are coastal areas some of which are lying in between Kayal and Sea. Hence in that accord also Government cannot be expected to take any decision, which may affect a larger section of people who are residing in those areas or which may affect the environment conditions of the area."
Ext.P25 order in so far as it rejects the applications of the petitioner is challenged in WP(C) No. 5420/2011. WP(C) No. 34345/2010 had been filed to give effect to Ext.P4 order passed in revision. WP(C) No. 34346/2010 was filed against Ext.P14 order whereby further action in respect of areas covered by four applications after the grant of mining lease was stopped.
6. There is no case for the Government of Kerala that the area covered by the nine applications pending have been notified in terms of Section 17 A (2) under the Mines and Minerals 8 WP(C) Nos. 34345/2010, 34346/2010 & 5420/2011 (Development and Regulation) Act, 1957. It cannot therefore be said that these areas have been reserved for being held by the State Government for the purpose of mining and operation to the exclusion of private entrepreneurs. {See: Monnet Ispat and Energy Ltd. Vs. Union of India and others [JT 2012 (7) SC 50]}. The specific direction in Ext.P24 order is to reconsider the nine applications in the light of the observations contained therein particularly paragraph 9 thereof. A reading of Section 10 (3) of the Mines and Minerals (Development and Regulation) Act, 1957 and Rule 63 A of the Mineral Concession Rules, 1960 throws light. The disposal of the application in terms of Rule 63 A of the Mineral Concession Rules, 1960 and facilitation to private entrepreneurs in the National Mineral Policy, 2008 have obviously been overlooked. The Government of Kerala has already exercised its discretion in terms of the mining policy then in vogue by recommending to the Government of India for the grant of approval for mining lease. A rejection of the applications allegedly on the basis of a changed policy at this 9 WP(C) Nos. 34345/2010, 34346/2010 & 5420/2011 distance of time after the Government of India has accorded sanction for the grant of mining lease may not be justified. I am afraid that the Government of Keala has not understood the purport and import of Ext.P24 order of the remand in the correct perspective.
7. The Government of Kerala has a contention based on Deepak Kumar and others Vs. State of Haryana and others [(2012) 4 SCC 629] that environmental clearance has not been obtained prior to the grant of mining lease from the Ministry of Environment and Forest. But I find from Ext.P11 communication of the Government of India and Ext.P12 order in relation to the four applications that environmental clearance should be obtained. The relevant clause therein is extracted here below.
"The applicant should obtain, before commencement of operations, all necessary clearances from Revenue Department, Ministry of Forest and Environment and Coastal Regulatory Zone (CRZ) authority and other relevant authorities."
The aforesaid orders is emphatic about the necessity to obtain clearance from the authorities mentioned therein and therefore 10 WP(C) Nos. 34345/2010, 34346/2010 & 5420/2011 the apprehension of the Government of Kerala in this regard is totally misplaced.
8. The petitioner Company has also a case that substantial amounts have been expended subsequent to Ext.P6 order of the Government of Kerala and Ext.P11 order of the Government of India in furtherance of the project. Reliance is placed on Ext.P23 audited accounts of the Company to show that about `18 crores have been spent by the petitioner to commence operations the moment consequential order is passed by the Government of Kerala. The Senior Government Pleader alertly points out that the principles of promissory estoppal cannot be imported when actual mining lease deeds had not been executed by the State of Kerala. The fact that the petitioner has spent substantial amounts as reflected in the audited accounts is a relevant aspect to be considered by the State of Kerala in passing orders pursuant to Ext.P24 order of remand.
9. The contention of the Government of Kerala that there has been change in the mining policy since the grant under 11 WP(C) Nos. 34345/2010, 34346/2010 & 5420/2011 Ext.P6 order has little relevance in view of the attendant circumstances. This is because the very same Government of Kerala has thought it fit to grant mining lease in respect of area covered by four applications as evident by Ext.P12 order. There cannot be a different policy in respect of different areas covered by different applications though put in by the same Company. I have no option except to quash Ext.P25 order and remit the matter to the Government of Kerala to pass fresh orders in the light of the observations above and in accordance with law. Necessarily Ext.P14 order of the Government of Kerala stopping further proceedings pursuant to the grant of mining lease in respect of areas covered by four applications is also quashed. It is pointed out that sixteen applications in addition to the thirteen applications already dealt with above are pending consideration with the Government of Kerala itself as evidenced by Ext.P6 communication. Needless to say that the remaining sixteen applications pending at various stages shall also be dealt with by the Government of Kerala in accordance with law. The needful 12 WP(C) Nos. 34345/2010, 34346/2010 & 5420/2011 shall be done within a period of six months from the date of receipt of a copy of this judgment and ofcourse with notice to the petitioner.
The Writ Petitions are disposed of. No costs.
V. CHITAMBARESH JUDGE ncd The sentence "W.P.(C) No. 34345/2010 had been filed to give effect to Ext.P4 order passed in revision" occurring in paragraph 5 at page 7 of the judgment dated 21.02.2013 in WP (C) Nos. 34345/2010, 34346/2010 and 5420/2011 is corrected and substituted as "WP(C) No. 34345/2010 had been filed to give effect to Ext.24 order passed in revision", as per order dated 21.03.2013 in I.A. No. 4230/2013.
Sd/-
Registrar (Judicial)