Andhra Pradesh High Court - Amravati
M/S Transworld Garnet India Private ... vs Union Of India, on 10 August, 2022
Author: U.Durga Prasad Rao
Bench: U.Durga Prasad Rao
HON'BLE SRI JUSTICE U.DURGA PRASAD RAO
Writ Petition Nos.10705 and 10773 of 2021
COMMON ORDER:
Parties and facts, except the prayers, are similar in both these writ petitions and hence they are disposed of by this Common Order.
2. The petitioner's case succinctly is thus:
(a) The petitioner is a Private Limited Company dealing in Beach Sand Minerals(BSM) mining and Garnet production. BSM deposits in our country contain seven important minerals viz., Ilmenite, Rutile, Leucoxene (Titanium minerals), Monazite (Thorium mineral), Zircon (Zirconium mineral), Garnet and Silimanite (Industrial minerals) co-
existing together. Of these, only monazite is radio-active & Prescribed Substance. All these minerals are listed as Atomic Minerals under Part- B, First Schedule of MMDR Amended Act, 2016 (Act 25 of 2016).
(b) The petitioner company applied for mining lease for BSM in the State of Andhra Pradesh. The 2nd respondent issued its recommendation dated 06.09.2000 for prior approval of the 1st respondent under Section 5(1) of MMDR Act and Rule 27(3) of Mineral Concession Rules, 1960 (for short "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:
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(i)If, while mining garnet, the lessee comes across the deposits of any prescribed substances / atomic minerals, the same shall be disposed of any after obtaining license from DAE.
(ii)The tailings containing 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 beach sand minerals, 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 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 AMD/Government of India.
With 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 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".
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(c) While so, after securing all the necessary permits and making intimation under rules 66A(1) of MC Rules, 1960, the petitioner started extraction of garnet and obtaining permits since 2004. So far, the petitioner company dispatched 2,56,287 MTs of Garnet mineral and 3,23,666 of MTs of tailings after payment of advance royalty and other dues to the State Government. The petitioner subsequently requested the 2nd respondent to include the other heavy non Garnet minerals in the existing mining lease and the same is pending.
(d) While the matter thus pending, the 1st respondent, all of a sudden issued three memos dated 02.11.2018 suspending the mining operations of the petitioner on the allegation of providing incorrect / incomplete information in the annual returns for the year 2016-17. Aggrieved, the petitioner challenged the proceedings in Memo No.13302/M.III(2)/2010-1, dated 02.11.2018 in Writ Petition No.41257/2018 and the Common High Court of Andhra Pradesh vide its order dated 27.11.2018 stayed the impugned proceedings until further orders. The petitioner submitted reply dated 12.11.2018 to the 2nd respondent.
(e) While so, following the directions in F.No.1/1/2019-M.VI, dated 01.03.2019 of the GoI directing the GoAP to prematurely terminate all the existing mineral concessions of BSM held by private persons / companies, the mining operation of the petitioner is stopped. As things thus stand, the 3rd respondent issued impugned show cause notice vide Memo No.4337687/D1-1/2021, dated 08.03.2021 asking the petitioner 4 company to show cause why the mineral confiscated on 21.11.2018 cannot be shifted to the custody of the 5th respondent for further disposal. The petitioner submitted reply dated 28.03.2021 requesting the 3rd respondent for the documents which were relied in the show cause notice including the communication / correspondence of inspection, recorded statement and confiscation order dated 21.11.2018. It is submitted that no confiscation was made on 21.11.2018 as mentioned in the show cause notice. So to cover the said mistake, the 4th respondent officials addressed mail dated 10.05.2021 seeking inspection of petitioner company on the very next day i.e., on 11.05.2021. On that day the 4th respondent seized the stock and handed over to the 5th respondent:
(f) The petitioner specifically requested the 3rd respondent that it cannot effectively give a reply without knowing what material was relied upon by the 3rd respondent in its show cause notice dated 28.03.2021.
However, so far, no documents were furnished. Further, the stock was illegally confiscated on 11.05.2021 and placed in the custody of the 5th respondent. The action of the 3rd respondent is arbitrary and illegal, besides violative of principles of natural justice.
(g) In similar circumstances when the respondent issued Memo No.13302/M.III(2)/2010-3, dated 02.11.2018 without supplying the documents, the petitioner filed W.P.No.84/2019 which was allowed by this Court on 03.01.2019 with a direction to the respondents to furnish the documents to enable the petitioner to give reply to the show cause notice.
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Hence, the Writ Petition No.10705 of 2021 to declare the show cause notice vide Memo No.4337687/D1-1/2021, dated 08.03.2021, and consequential confiscation of minerals on 11.05.2021 as illegal, arbitrary and consequently to set aside the same.
3. Writ Petition No.10773 of 2021 is concerned, the petitioner's plea is that pursuant to the confiscation of the mineral on 11.05.2021, the 5th respondent / APMDC issued e-Tender No.APMDC/GEO/BSM-1/2021, dated 19.05.2021 in respect of the minerals (1) Garnet - 15000 MTs (2) Ilmenite rich tailings - 38,000 MTs and (3) Silimanite 2,400 MTs belonging to the petitioner which is illegal, inasmuch as, no opportunity was given to the petitioner to submit its reply to the show cause notice dated 08.03.2021. In the e-Tender it was stated that the 5th respondent was appointed as custodian by the GoI vide letter dated 20.08.2018 issued by the Ministry of Mines, GoI to confiscate the minerals. In fact the said letter dated 20.08.2018 has been challenged by the petitioner in W.P.No.658/2019 and the same is pending before this High Court. Though the matter is subjudice, the 5th respondent issued present e- Tender to sell the minerals on 21.05.2021 illegally. Hence Writ Petition No.10773 of 2021 with a prayer to declare the action of the 5th respondent in issuing e-Tender No.APMDC/GEO/BSM-1/2021, dated 19.05.2021 for the aforesaid minerals as illegal, arbitrary and violative of principles of natural justice and to set aside the same.
4. Respondent Nos.2 to 6 filed counter opposing the writ petitions as follows:
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(a) The writ petition is not maintainable and liable to be dismissed in limini for the facts
(i) The petitioner has not approached the Court with clean hands; as the High Court of Madras, Madurai Bench appointed Receiver (Mrs. Justice Dr. S.Vimala, Retd. Judge of the High Court of Madras) for the petitioner company vide judgment dated 08.04.2021 in the partition proceedings between the family members who owns the petitioner company and hence, the petitioner cannot file writ petitions.
(ii) The signatory of the present writ petition was appointed as General Manger by one of the Directors who was not delegated such powers by the Board of Directors, as Board Resolution is not filed.
(iii) The petitioner concealed material facts pertinent to the judgments in Writ Petition No.658/2019, dated 16.08.2019 and Writ Appeal No.285/2019, dated 27.09.2019. Hence the petitioner company has no right to file the writ petition.
(b) It is true that vide G.O.Ms.No.7 the petitioner was granted mining lease for Garnet mineral by GoAP over an extent of 95.085 Ha.
from the confluence of Nagavali River to south of Sy.No.1042 in Srikurmam Village of Gara Mandal in Srikakulam District with certain terms and conditions. It is categorically denied that the mining lease gave a right to the petitioner to dispose of the tailings in accordance with the conditions stipulated in the lease. The prior approval accorded by the MoM under Section 5(1) of the MMDR Act, specified the condition to dispose tailings only to another licensing entity to process/separate the prescribed substances because the tailings contain not only Garnet but other important minerals including Monazite which have significant 7 commercial value. Therefore, the petitioner as per the terms of the lease has obligation to deal with the tailings as specified thereunder, but has no right to dispose of the tailings. The petitioner company is not the owner of the tailings containing other atomic minerals. As per Section 5(1) of the MMDR Act, 2016, the petitioner company is required to obtain prior approval to include all the minerals in the existing mining lease from the MoM, GoI. Till then petitioner is permitted to mine only Garnet mineral, for which mining lease has been granted. Regarding the occurrence of other atomic minerals, the petitioner shall report to the GoAP and AMD whenever it discovered atomic minerals under Rule 12(2) of the MCR, 2016 and Rule 7 of the AMCR, 2016. The petitioner company failed to comply with these Rules as per the observation of the MoM, GoI in its letter dated 20.08.2018. The petitioner's request for inclusion of other minerals in its existing mining lease was rejected by the MoM, GOI vide its letter No.F.No.4/17/2011-MIV dated 20.08.2018 after careful consideration with a direction to the 2nd respondent to suspend mining operations of the petitioner company for its failure to comply Rule 12(2) of the MCR, 2016. Pursuant to the said direction of 1st respondent, the 2nd respondent issued Memo dated 02.11.2018 to petitioner company.
(c) It is further submitted that a direction in File No.1-1- 2019/M.IV dated 01.03.2019 was issued for premature termination of the lease of the petitioner.
(d) It is stated that several policy decisions were taken by the Central Government for regulation of atomic minerals including BSM. They are:
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(i) MMDR Act, 1957 was suitably amended in the year 2015 and new rules relating to the regulation and development of atomic minerals were framed. In view of Section 11B of the MMDR amended Act, 2015, the Central Government framed the Atomic Mineral Concession Rules, 2016 (for short, the AMC Rules, 2016').
(ii) The Threshold Value (THV) i.e., the weight of a particular atomic substance in BSM is specified in the above rules so as to regulate the mineral concessions in respect of BSM resources and to give complete control over atomic minerals to the Department of Atomic Energy (DAE). As per Rule 5(1) of the AMC Rules, 2016, where the THV of atomic minerals is equal to or above the THV, the mining lease will be granted only to Government companies in the place of private parties.
(e) In the light of above amendments, the MoM, in exercise of the powers under Section 4A(1) of the MMDR Act and in consultation with the State Governments, proposed to prematurely terminate the existing mineral concessions of BSM held by private persons / companies and accordingly, the State Governments were requested to take necessary action in that regard. The GoAP has already issued show cause notice to the petitioner company vide Memo dated 12.05.2021. The atomic minerals in BSM have important strategic elements and their pilferage at the stage of mineral processing / handling will affect the National Security. The role of State Government is minimal which has to implement the decisions taken by the Union of India in the interest of nation. Therefore, the State Government confiscated the minerals and 9 mineral concentrates stored within the premises of the petitioner company under its control on 21.11.2018.
5. It is further contended that BSM deposits in the country contain seven minerals viz., (i) Garnet (ii) Silimanite (iii) Rutile (iv) Zircon (v) Leucoxene (vi) Ilmenite and (vii) Monazite. All these minerals are classified as atomic minerals under Part B of the First Schedule to the MMDR Amended Act, 2016. At the time of initial grant of mining lease, the Garnet and other minerals were not atomic minerals and remaining minerals were administered as Prescribed Substances under the Atomic Energy Act, 1962 and were under the administrative control of DAE. It is true that subsequently vide Gazette notification dated 18.01.2006, these Prescribed Substances were delisted from the list of Prescribed Substances w.e.f. 02.01.2007. Since at the time of lease the petitioner company was a foreign company and as it was not eligible to mine the prescribed substances / atomic minerals, it obtained mining lease only for Garnet. So far as the other associated minerals were concerned, the GoI and the DAE found suitable mechanism, keeping in view the mineral conservation and development and National Security, to dispose the minerals other than Garnet to meet the needs of the industry. Thus, the mining lease for the petitioner company is only for Garnet and not for other minerals. As on the date of confiscation the petitioner company has no right on the other minerals. In the past, the petitioner was permitted to dispose of the non-Garnet mineral mixture called as "Tailings" to another company which has a valid license from the DAE/Atomic Energy 10 Regulatory Board. However, that is not the case now. The proposal for inclusion of non-Garnet minerals in the existing mining lease of the petitioner company was rejected for the above reasons. Against non- inclusion of other minerals in the mining lease, the petitioner filed W.P.No.658/2019. In the said writ petition, an interim order was sought for and the same was dismissed. The petitioner filed W.A.No.285/2019 and the same was also dismissed on 27.09.2019. The petitioner company has no ownership over Tailing minerals and in the light of the relevant statutes and regulations, the confiscation of those minerals by the respondents is valid. Hence, the writ petitions may be dismissed.
6. The 5th respondent filed counter and opposed the writ petitions. The contention of the petitioner that the recorded statement and confiscation order dated 21.11.2018 were not furnished to the petitioner and hence, it could not submit its response to the show cause notice is false. On the other hand, on 21.11.2018, during confession, the statement of the petitioner was recorded and he was directed not to disturb the maintained stocks and the statement bears his signature. So it is not correct to claim that no confiscation was taken place. The request of the petitioner to include other BSM in his lease was rejected by 1st respondent and the said fact was concealed by the petitioner. The rejection was challenged in W.P.No.658/2019, wherein I.A.No.1/2019 was filed seeking a direction to the respondents to issue permit for dispatch of minerals. However, the said I.A. was dismissed and the W.A.No.285/2019 filed by the petitioner was also dismissed. All these 11 facts were suppressed by the petitioner. The writ petition is not maintainable for non-inclusion of the Atomic Mineral Directorate, which is the competent authority. The petitioner has no right over the minerals notified in the impugned tender notification. The writ petition is liable to be dismissed.
7. The 7th respondent filed counter contending thus:
(a) Vide G.O.Ms.NO.7 the petitioner was granted mining lease for recovery of only Garnet with a condition to dispose the tailings to another entity which holds valid license from DAE. The petitioner applied for inclusion of other heavy minerals in his lease, but the same was rejected vide letter dated 20.08.2018 by the Ministry of Mines and the Government of A.P. was directed to confiscate the minerals. In compliance thereof, the GoAP issued show cause notice dated
08.03.2021 to the petitioner for disposal of confiscated minerals stocked with the petitioner. The Mineral Concession Rules, 1960 were repealed and the MCR, 2016 were notified. As per Rule 12(2) of the MCR, 2016, the holder of a mining lease shall have no right over the discovered mineral and shall not dispose of such mineral. The State Government will have control in respect of such mineral.
(b) Further, the AMC Rules, 2016 were notified and with the amendment of THV of Monazite, all the mineral deposits of beach sand came under the purview of the AMCR, 2016 and the mining lease shall be granted to the Government companies / corporations in the changed scenario. The MOM vide its letter dated 01.03.2019 requested all the 12 State Governments to take action for premature termination of the mining leases of BSM held by the private firms and accordingly, the GoAP issued show cause notice dated 08.03.2021 to the petitioner and thus, its action is within the purview of mineral laws in force. The mineral laws in the country are amended from time to time basing on the strategy / industrial policy of the country. The holder of mineral concession has to comply with the provisions of mineral laws in force and hence, the petitioner cannot claim any right over the Tailing minerals. The action taken by the GoAP is in accordance with law. Finally it is stated that the Memo in 12719/M.III(2)/2010-1 dated 23.03.2018 was not issued by the DAE / AMD as claimed by the petitioner and the writ petition is sought to be dismissed.
8. The petitioner filed rejoinder denying the counter allegations.
9. Heard arguments of Sri Ravi Cheemalapati, learned counsel for petitioner, and learned Assistant Solicitor General of India representing the respondents 1 & 7, learned Government Pleader for Mines & Geology representing the respondents 2 to 4 and Sri V.R.N.Prashanth, learned counsel for 5th respondent.
10. The point for consideration is:
Whether the actions of the respondents, particularly the 3rd respondent in issuing show cause notice vide Memo No.4337687/D1- 1/2021, dated 08.03.2021 to the petitioner company and the action of the 5th respondent in making consequential confiscation of the minerals 13 on 11.05.2021 and issuing e-tender notification dated 19.05.2021 for auctioning the BSM seized from the petitioner as illegal, arbitrary and violative of principles of natural justice for non-furnishing of the documents sought for by the petitioner to submit an effective reply to the show cause notice dated 08.03.2021?
11. Point: While it is the contention of the petitioner that the respondents 3 to 5 have illegally seized the tailings of BSM extracted and stored by the petitioner on a false ground that the petitioner has not complied with the provisions of the relevant laws, particularly Rule 12(2) of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 [M(OTAHBM) CR, 2016] and making hectic preparations to sell the seized tailings of BSM by issuing the e-auction notification dated 19.05.2021 without affording an opportunity to the petitioner by supplying relevant material to enable it to submit its reply to the show cause notice dated 08.03.2021, per contra, the respondents would contend that the petitioner was given lease to mine and dispose only the Garnet, one of the beach sand minerals, but not other tailings and that it shall dispose of other tailings to a licensed entity only after obtaining permission from the DAE, however, the petitioner grossly contravened the terms of the lease and also the provisions of relevant laws and therefore, on the directions of the MoM, GoI, the 2nd respondent issued instructions to the respondents 3 & 4 to seize the BSM tailings stored by the petitioner and hand over to 5th respondent and accordingly, they seized the minerals and confiscated to the State and the 5th 14 respondent issued e-auction notification dated 19.05.2021 and thus, the acts of the respondents are well within the law.
The above is the crux of the lengthy pleadings of either side. I gave my anxious consideration to the respective contentions.
12. Geographically, the Beach Sand Minerals (BSM) are a group of minerals which exist together and cannot be found in isolation. There are about 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 GoI 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 15 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.
13. Be that it may, the petitioner company which is primordially deals with BSM mining and Garnet production, applied for mining lease and after necessary formalities, the GoAP 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 in Srikakulam District for 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. 16 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.
14. While so, Ilmenite, Rutile, Leucoxene and Zircon were ceased to be Prescribed Substances w.e.f. 01.01.2007 vide Gazette Notification dated 18.01.2006 published in the Gazette of India, Extraordinary, Part II, Section III(ii). The petitioner appears to have filed several writ petitions when permission was not accorded for transporting the Garnet and tailing minerals with which we are not concerned. Be that it may, the GoI having regard to the prevailing conditions changed its policies in relation to atomic minerals. Section 11B 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 grant a reconnaissance permit, prospecting license or mining lease in respect of such mineral in accordance with such rules framed by the Central Government. 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, Zircom and Sillimanite. Therefore, the Central Government was vested with power to make rules 17 relating to the Atomic Minerals contained in Part B of First Schedule regulating the grant of mining leases in respect of those minerals.
15. 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.
16. 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, 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.
17. After introduction of the above policy decisions and also the statutory rules, the 3rd respondent issued the impugned notice dated 18 08.03.2021 to the petitioner company stating that the MoM, GoI vide F.No.4/17/2011.M.IV dated 20.08.2018 directed the GoAP to confiscate those minerals under Rule 12(2) of the M(OTAHEM) CR, 2016 for failure of the petitioner to comply with the requirement of Rule 12(2) of the AMCR, 2016. It is further stated that the petitioner's request for inclusion of other heavy minerals in its lease was rejected and therefore, it has no right on the tailing minerals. It is also stated in the show cause notice that the MoM, GoI vide letter in F.No.1/1/2019-M.VI dated 01.03.2019 directed the GoAP to prematurely terminate all existing mineral concessions of Beach Sand Minerals held by private persons / companies and accordingly, the 3rd respondent submitted proposals to the Government for premature termination. It is also stated in the show cause notice that the Ministry of Home Affairs, GoI vide File No.15012/09/2018-CSR.III dated 15.11.2018 instructed the State Government to confiscate the minerals stored within the lease premises and plants of lessee and accordingly, the minerals stored in the factory premises of the petitioner were confiscated on 21.11.2018. The particulars of the confiscated minerals are mentioned in the show cause notice.
18. Thus, the notice was issued to the petitioner to show cause as to why the minerals confiscated on 21.11.2018 cannot be shifted to the custody of APMDC/5th respondent for further disposal. To the above notice, the petitioner submitted a preliminary reply dated 28.04.2021 stating that it has received the show cause notice on 17.04.2021 but it has 19 not received any communication / correspondence nor the alleged confiscation order dated 21.11.2018 mentioned in the show cause notice. Therefore, in the said reply, the petitioner requested the 3rd respondent to forward copy of the communication / correspondence and confiscation order dated 21.11.2018 along with proof of service thereof so as to enable the petitioner to submit a detailed reply and to defend itself. However, it appears, without responding to the reply of the petitioner, the 3rd respondent handed over custody of the confiscated material to the 5th respondent vide Mediators report dated 11.05.2021. Hence, the petitioner challenged the show cause notice dated 08.03.2021 and the Mediators report dated 11.05.2021 by which the confiscated material was handed over to 5th respondent, in W.P.No.10705/2021.
19. Whereas, questioning the Auction Notification dated 19.05.2021 issued by the 5th respondent, the petitioner filed W.P.No.10773/2021. This Court passed interim order dated 03.06.2021 to the effect that the auction may go on pursuant to the proceedings dated 19.05.2021 but the respondents shall not finalize the same. The interim order admittedly is in force.
20. I have gone through the impugned show cause notice dated 08.03.2021 and the preliminary reply dated 28.04.2021 submitted by the petitioner. In the show cause notice the stand of the respondents is that in view of the change in the policy of the GoI and introduction of statutory rules, the lessee has no right over the tailing minerals and it has to inform about the discovery of tailing minerals other than the mineral for which 20 the lease was granted and since the petitioner has not submitted such particulars, the lease was proposed to be prematurely terminated on one hand and the stock existing with the petitioner was sought to be confiscated on the other. Needless to emphasize that when such drastic actions of termination of lease as well as confiscation of minerals for whatever valid reasons are contemplated, it is the duty of the respondent authorities to give an opportunity of filing reply by the petitioner and also to afford a personal hearing. No doubt, a show cause notice was issued to the petitioner asking to submit reply within 15 days. However, when the petitioner sent a letter dated 28.04.2021 stating that he has not received any communication / correspondence nor the alleged confiscation order dated 21.11.2018 referred in the show cause notice and requested the 3rd respondent to furnish copy of communication / correspondence and the alleged confiscation order dated 21.11.2018 so as to enable the petitioner to submit its full-fledged reply and to defend its case, the respondent authorities have not furnished the documents sought for by the petitioner nor gave any reply to the petitioner. In my considered view, this amounts to the violation of principles of natural justice.
21. Needless to emphasize that when there is gross violation of principles of natural justice, this Court can exercise its plenary jurisdiction under Article 226 of the Constitution of India in the interest of justice. This proposition of law has been reiterated by Hon'ble Apex 21 Court in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai1 and observed thus:
"14. The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of Habeas Corpus, Mandamus, prohibition, Qua Warranto and Certiorari for the enforcement of any of the Fundamental Rights contained in Part III of the Constitution but also for "any other purpose".
15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this court not to operate as a bar in at least three contingencies, namely, where the Writ Petition has been filed for the enforcement of any of the Fundamental rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case law on this point but to cut down this circle of forensic whirlpool we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field." It should be noted that in the instant case there is no efficacious and alternative remedy available to the petitioner to seek for. That is also one of the grounds which weigh with this Court to exercise the writ jurisdiction.
22. Accordingly, the Writ Petition Nos.10705 and 10773 of 2021 are disposed of with the following directions:
(a) The petitioner shall make a fresh application to the 3rd respondent within two weeks mentioning the relevant documents which are required by it to submit its detailed reply to the show cause notice dated 08.03.2021 and also the Mediators Report dated 11.05.2021. 11
AIR 1999 SC 22 = MANU/SC/0664/1998 22
(b) Within two (2) weeks from the date of receipt of such application, the 3rd respondent shall furnish the documents sought for by the petitioner.
(c) Thereupon, within two (2) weeks from the date of receipt of documents, the petitioner shall submit its detailed reply to the show cause notice dated 08.03.2021 and Mediators Report dated 11.05.2021 to the 3rd respondent.
(d) Upon receiving such reply, the 3rd respondent shall fix a date and conduct enquiry and after hearing the petitioner, the 5th respondent and other concerned, pass appropriate orders in accordance with governing law and rules after duly considering the reply and submissions of respective parties within four (4) weeks from the date of holding enquiry.
(e) Subject to the result of enquiry, the 3rd respondent and 5th respondent shall finalize the auction of the seized minerals. No costs.
As a sequel, interlocutory applications pending, if any, shall stand closed.
_________________________ U.DURGA PRASAD RAO, J 10 .08.2022 mva/krk 23 HON'BLE SRI JUSTICE U.DURGA PRASAD RAO Writ Petition Nos.10705 and 10773 of 2021 10th August, 2022 mva/krk