Surana Industries Limited vs The Secretary To The Government Of India on 8 July, 2009

[Cites 7, Cited by 0]

Karnataka High Court

Surana Industries Limited vs The Secretary To The Government Of India on 8 July, 2009

Equivalent citations: 2009 (6) AIR KANT HCR 206, 2010 A I H C 55, (2010) 2 KANT LJ 522, 2009 (4) KCCR SN 220 (KAR), 2009 (6) AIR KAR R 206

Bench: P.D. Dinakaran

IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE S:§£"DAv OF JULY, 2009
PRESENT _ V
THE HON'BLE MR. P.D. DINAKARAN, cHIEFIuST_IGER..VV '  E.
THE HON'BLE MR.3USTIcE_v.G. §A_BEFiAzl-IIT .

WRIT PETITIONS No.9261--63/2009 &'I3I'2f64I--66/V20.09 {..C:5i:'\'_l~iVV*"VI*!Sv/iu/ES') 

BETWEEN:

SURANA INDUSTRIES LIMITED V .
No.303, 2"" FLOOR, RITUAL PARK' 
ARUMUGAM CIRCLE, *   ..
BASAVANAGUDI  _  _. _

BANGALORE 560 00:4,     _   
REP.BY ITS DIRECTOR, 'K.P.;i.SHNA IIIDLIPA,'  
S/O PARAMESHMJARA UTDURA. , _ 
AGED 56 YEARS,  ' '1.

L  PETITIONER
("By Srfi \iINEET:rI:'I'vAIIA4LHOTRA, ADVOCATE)

AND :
1;_ THE SECRETAR~Y_

 TO THE G,OvER._NMENT OF INDIA

' MIMSTIRYV'QF"MINEiS
DEPARTMENT--oFT;;MINES

A a c WING, S.HASfE'RE BHAVAN,

. CONN'AUC5HT'PLACE, NEW DELHI I10 001

 _THE, SECRETARY
_ ».TO THE GOVERNMENT OF INDIA
' _ MINISTRY OF STEELS, DEPARTMENT OF STEELS
  St-IASTRI BHAVAN, CONNAUGHT PLACE
  _'NE'w DELHI 110 001

" M g 5

 



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on Bombay and Chennai Stock Exchanges. The petitionecihas

invested an integrated steel complex at Raichur wiizifan. 

capacity of one million MT per annum. _The_ said steaiu a

complex also consist of a sponge iron':.'ur:'i_t*~i¥vit'h~.g 

1,as,ooo MTPA and a steei me:e§eng,_%sh¢p :i.vithlV»3"A"¢;a';iac;~':ty or-i

1,28,000 MTPA, a rolling fnaill to....Rnnanufactare«special steel
structural with capacity of   power generating
unit of 35 MW capacity, preseiitiy  MW. The
plant has been  attjotaai R5300 crore and
also commenceo  to attain maximum
production lirnit._iivithi--r-V period. The second phase, a
fully automatelciiiiriit,len'irieaee:s~.:an.:investment of Rs.4,000 crore,
which inclydas Vtoflvibewneﬁciation plant for utilizing low
 irovn jviﬁnccordinloll to the writ petitioner the integrated

steelﬁlaichur require about 2 MT of iron ore per

it frainnum for ite.__'consomption in order to achieve the total capacity

' W " 'o"i'i"o:ri"e .miliion'tonne.

  it H'i"i1e fourth rwpondent, by notiﬁcation dated 15"'

zoos under Rule 59(1) of the ivic Rum, in the ofﬁcial

'lgaaette notiﬁed speciﬁc areas which are avaiiabie for grant of

mining iease and also invited applications for arant of lease with

 



5
respect to the said areas. Pursuant to the said notiﬁcation dated

15*' March, 2003 issued under Ruie 59(1) of the MC R;i.i§sii:icit is

submitted, that the petitioner submitted more:""'th'a~a:__ji. £5'

applications to the seventh respondent fotgrant"of~  lease"~ 

for different areas which were notifiedgas :ax{a'ilahleA..fo-rt¢ifa.ntw:ai"

mining lease.

4. Even though Rule 26   for'

giving an opportunity of being hear'd;'ve.Iftirnl5hlng' reasons to be
recorded in writing and comrnunicatinlar'Vth.e_:saine'_'to the applicant

before refusing to gra:ntpj'thelA_:nig1'i.nig ease  the whole or part

of the areaZappiied:tor;'fithe1"petitien'er'*comp|ains that it was not
given any oppoitunitii' the grant of mining lease;
nor the responders!  any reasons in writing and
 the Vsa"r'ne...i:.av the applicant for the refusal of the

grant of tninin~afl.eJase. Hence, the petitioner made repeated

 e.__Jrepresentatlonsta  seventh rapondent requesting the status

_ _:7._Afo:'igrantiof  lease on the appiicattens applied for. Finally

see;h¢'ur;isee;;n respondent, by their communication dated 6"'

 informed that the petitioner's applications could not

 ' ».i.VAbe::processed due to the pendency of the batch of writ appeals

 



6

against the order of the teamed single Judge.f"d_ated

7"' August,2008 in writ petition No..21608 of 2005.

5. our attention was also Invltw, on~~----t>uéha:lf«~:::ofAV 

petitioner, that by the said order dated?' ALtigiut.=;t_,. 12098" ;_!n

Writ Petition No.21608 of 2005, whegrethat1l'eamed'u"5§:n:qte iilagaiﬁ'.

has quashed the very notiﬁcation  15"'  2f5;';.)3 issued
by the fourth respondent     Rules,
notifying the areas that areAA,a\(a§!ai§!_n  mining lease
and also Issued  both the Central

Government and $ta_ttt_G6v&rti:i§entva's hereunder:

(a) ;f_he..si::c}u!d always make a dear
distinction _fc::1§est-t ama and nomforeﬂ araa
whit? ' granting 'mining.tVfeases;

(b) ;'7?1_e State " Government should always show
~  awatrenw existing ﬂares: whenber declared
as forest or otherwise and if were is an
* --. _ 5-,xis£ing"'»fprest in any area, the first and the
' ttfqn-3_r:::»s£_e_5€3'ort should be to conserve the forest;

(:3 ' If the area has aiteady been declared as reserved
 fcsrestarea, it should normaily be retained without
being dismrmed and cmly if the state Govemment S

.. T fufav satiwied that there is inevitable needjustiij/ing
»  de-Iaervation and to pemit a non-fattest activity,
  that should be examined keeping in vkw the
nature of non-ibnest activity proposed to be carried

out in tire fbrest area, the impact and consequence

of such non-ﬂames: activity in the forest area, the
extent of actual forest being damaged or
destroyed, as to me duratﬁon over which such
tbmst has developed in the area, wheﬁzer the

 

 



(0')

(e)

(0

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forest is in a unique and endangered biosplua-re,,___

whether there is an imminent need to conserve
such formt, if it is a unique type of ibrmt or 

endangered type of biosphere.

Mining activity being,

forest areas.

Conserving forest can arise  the  "of 
conserving the miners.' _embedded in the «.ee.r.tb 

beneath the finest gmWti5"«.aiid it rsnot though
the mineral is lost and '-tizerefore' «-the Store
Government to bestow attention to this asperrt of
conserving minerel_.=iiso.*_  V. "~--  
The State, Governmﬁnt ' sirouldr make a very
scientiﬁc .--.;.~nd ﬁoonscious "~..esralutition of the
conseqoences of losing forest as to
whetirerit  very imrninent and inevitable for
exploiting} Line " mineral 'ﬁar treing used in the
prntitrction o--;'~';f,_tii_e --.O11'!}_ei'3i torj,country's purpose and
Zdevetopnz-ent and  related aspects should
aiweys , " exanrined and only if it is found that the
beneﬁts of i«e.x;¢;:onmg. mineral far outweigh the
losses due to the destrtrction of forest and there is
imminent  '~.for*~.--the minerai, then alone, the

s ' state Governrnent shouid think of notifying even 3

~  forest  by the state Government as one

ayeiiénle for lease to carry out' mining operations in

,- ..  tne.are3.v 

iiining eopéiatron being undeputedry copabie of
cagtsingiiimmense pollution, eoologicai imbalance

 and -eiren environmentally dsastrous, the state

(f?)

' ~.Got3'ernn7ent should always undertake a scientific

study of ways and means to avoid arch

v  '  possibilities. The mineral ifcan be crowned by non
=  mining activity or can be obtained by any other

means tnat should be expiored and not to resort to
mining operation in forest areas.

As there is an imminent need to conserve existing
forest, stem Government $ directed to put on hold
on all' mining activities in {area areas, undertake a

 

deleterious activity for prmerving and conserving  
forest, mining actirity sabouldi-be' totally avoided in 



 ltie oiouoht to our notice that unias the notiﬁcation
V  AAV1S"3_Merch, 2003 Issued by the fourth respondent under
.A""'.'j~lii_ole  of the MC Rules and the action taken pursuant to the

na::acam dated 15"' March, 2.003 by the respondents herein

9

mining leases of the areas lbr commercial_
production and from line business angle and the 
prospects of existing lﬁem incurring losses'  
losing proﬁt cannot come in the way of_....stote'e-  " V.
Government pursuing rightful action for pro.£ectin_:;f   '
the forest wealth, for conserving and rotainji.«':gi'

l endangered species of flora and fauna _ono'v-oSren"~to  
retain a biosphere of uniquev~nat'ure oeveioped in' 
nature developed in nature dyer Zmilifons of 'yeaio 
which once interfered or dwtroyed will be lost to  
mankind forever.    A. 

(I) The State Government IE"-hereby directed' not to
embark on granting any__oiinin--_q leases in {onset
areas as a matterof roleono onlyas an exception,
forest areas mayutie _nc1tifisn:! l'oiv.gront of mining
leases, after lizlly esta'bIi-sliing __tlref'»iniminent and
inevitable need for' exploiting the minerai"and if it is
found such exploitation i5_in.ftl_ze "notional interest
for melting; available " " mineral ' " vwlrich otherwise
cannot  oiatajinedj foi --.the..'naftion building activities
including ':lefe'n-rse, i&oroh  or other scientiﬁc
aCtiVitl*?$."' =:.:;;.. _  " ._ " " . 

(in) 'The. state«".3od'~t'neliVoen£':al Governments may also
oonsider _tr:e poe;ioiliifies of nationalization of
mimfng,ino'o_stiy' so'--that the private proﬁt motive
does-.._not come viii the way of protecting

. * environment," conserving formts and to avoid

~  eoo!ogical"disasteis, so that the Government once

'£ia.ez:oi:<!.e$ aware that the mining operations are

= .. _ oielete-(ions to this cause, it can without any lramie,
" T. straightaway stop mining activitim. "'

6. i "As theajaoove batch of writ appeals are pending before

   



(d)

(9)

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revoked under sub-:uIe(.1) of rule 7A car sub-

rule(1)
of rule 15 or sub---mﬁe(1) or rule 31, as are case

may be; or

in (aspect of which a nodﬁmion has ._
  .

issued under sub-section (2) or (4) afsaction 17,- or which has been « .

uaderasacit:a'n ':73 jg:

Government or Act, shall' be available for grant _

(i) an entry ta. we 3 available for g:"éu't_Tés Iaadef in: {egister referred um Zﬂﬁor sub~ruIe (2) of rule 21035 A and (ii;

2-1113 40, as the case may be;

tnea.gam:::.y the aura for grant is notiﬁed '#3:; the Voﬁﬁciai Gazette and specifying a date (being . aj?a'£s:_-f_ not eadier than thirty days from the date of T. :::"«r{§e4'Vr2sj£§§,ir:atioa of such notification in the Official V<3ai;;sgs,-tit) from which such area grail be avaiiable ..__vfo.-grant.' n that nothing in am ruﬁe shallapply to the "' _ ofa law in favour of the original E or 53 tags: helm notwithstanding we act that the lease .. has alneady expimd:

Provided further mat when an area rwervnd under rule 58 or under section 17A of the Act is proposed s"ist%"""vx ii"

.a¢i---v""

to be granted to a Government company. notiﬁcation under csauseaz) shalt! be required tocltk#%<wT % issued: ' 1 Provided also that when an reconnaissance permit or a case may be, is granted in "of ("of section 11, no notiﬁatjon claose. '(}i)v.§':a§} be required to be issued.

(2) The Centra;3««§ove}_w::g:lér§:it .fof:Vjroasons to be mcorded of sub-rule V ' ' so polled) 8.9% " Trhe counsel for the petitioner further Vlcootleitzclo thlsélltolljlle considering the applications, which had been rec:éwécl__o&:'§o.o_n§ﬁ:o the publication of notiﬁcation dated 15"' lviarch, 'notifying the areas available for grant of mining stljo Vrnﬁatters speciﬁed under Section 11(3) of the MMDR V§a:l*'e"i3o be taken into consideration for statutory compliance.

1 *:fl1e"rﬁatters to be taken into consideration while granting the 3 'Raining lease as per Section 11(3) of the MMDR Act are:

(a) any special knowledge of, or experience In, reconnaissance operations, pnospecting, L operations er mining operations, as the __"' may be, possessed by the appiicant;

(b) the ﬁnancial resources of the V '

(c) the nature and quality of employed or to be employed.__by the epplicantge. . A "

(d) the invmtment which the'V'VL'ag_ip!i¢ant"ﬂ!'6 3 make in the mines 33:1 Inefire the minerals; and we "

(e) such 3.3. <;i§1:?"atten1tI$i%gv"waé§_a§se'invited to Ruie 35 of the MC Rules, whieh. "dents. " Preferential Rights of certain persons" and the same ma 5 as hereunder:

, Aniss; '~«£?:'efeneniia! rights of certain persons.- af more have applied for a " ;ecmaz,e:sa:g.ee permit or a prospecting ﬁance or a rnining' ieése in respect of the same land, the State AA Goieajnnrent shall, for the purpose of sutreection (2) of :7 _ 's"er:§'on 11, consider besides the matters mentioned In':c!auses (a) to an of sub-secnon (3) of section F 11, the end use of the mineral by the appiicant."

{emphasis suppiied) ,/"'i"?:

'%C?"';.«'£"

Ag .»».--.4-...,.»4 .. hr» , . . . .

5:»-m4),..-»..~_..m..»«..»:»,....~.»..» 14 8.4. The learned counse also invited our attention to Section 11(2) of the MMDR Act, as per which, subja:£'toL:'.§he provisions of sub-section (1) of section 11, Government has not notified in the:Ofﬁci.a£« ' for grant of reconnaissance permit mining lease, as the case may begfand " V %' have applied for a licence or a mining land in such area, the applieeftg " received earlier, she}! right to be permit, over the was received later.

»A _':rne--,lvea,rned counsei for the petitioner Invited our a::enu¢a.;,:oaa;t;§n4(1) of the MMDR Act, as per which no tiiidertake any reconnaissance, prospecting or .e._opafations in any area, except under and in with the terms and eoI:dit:otIs' of a reeerineissence permit or of a prospecting Siouaee or, as 17 the inn» one mfnetak by eﬂablishafngi steel plants. -

and also fully qualiﬁes Rule 35 of the MC Rulm by est_ebil'ehi*ng steel industries for the end---use of the minerals himself and hence is entitled for the pfeference--'_es'_Veﬁelnetsethefuif persons.

State, of course, does not eerioA;;.siV§f»v.._ciispute' eeintentions made on behalf of the peti'tie"n.er*..tt§.rt:stih§.:'onthe preferential right for those who satisfy"'»th'e jiﬁifnescribed under Section 11(3)lori.§lia nié:%;>ef'A;t ameuie 35 of the MC Rules, as the same cehndt_ be 9.2. Thes.._leaVrn'e-d"AAdv§cate General submits that the ;;':o.\(ernrne.nt is only"weitiflg:for the decision this Court ln the writ e'p;;ee}is.. and 6086 of 2009 preferred against the ord'e}-xnswni' t§IetltiVeh"..No.216O8 of 2905 dated 7"' August, 2003 and conees feiftvafd to process the applications received pursuant izqtmcaiion dated 15"' March, 29:23; immediately after the of this Court in the aforesaid writ appeals.

gﬂmyagx '"""1L; "K 9.1. The iearned Advecate._v:'G.enefa! appeerih_g«~v...fo% the."

10. We have given our careful consideration"to',the submissions made on behalf of the parties.

11.1. Even though thefact thatthegagtitione-ii§a;§:'ii

(a) We: knowledge of, iii-'t"+X'\3fE!'l'6;,""'f§'A"Ai'~°~"'.», in; reconnaissance opezatkineg---.pmspecjting_ or mining operaﬁons, cése may "Jae, poedbytfie 3;2pIican't;' = V]: _

(b) the ﬁnancial of ,

(e) the applicant proposes to Zinéke .,-,fnd in 'industry based on the ':nineia!s."~.f~-..,_4" ' ' are not seriou§iy divsouted'._ Government, suffice it direct vtnat it __the GoVe.*nfnent to procws, scrutinize and consider the aopiicationsfeceivod pursuant to the notiﬁcation dated 15"' vMaro.h--,,x'..2O0v§'«Vé.'i:.d'A'i:=t$.i<ing note of an the material facts white cc*nVsiderifng "tne"eppiications of the petitioner for the impugned oer Section 11(3) of the MMDR Act and Ruie 35 of :_ the Roses.

11.2. Even though the learned single Judge in his order dated 7"' August, 2008 quashed the very notiﬁcation notifying Y """ j:>*' ":~ 20 the areas available for grant of mining lease and issued consequential directions (a) to (m) referred to in paragrai:n°s1_50 of the said judgment, this Court, by order dated in writ appeal No. 5026/2008 set asidetlie V August, 2008 made in writ petition of that the notiﬁcation dated 15"' zonal notiﬁeiﬁglltheliarealtl available for lease and inviting' theA..a;3a.i§¢a'tio_ns felt' i;he-same are valid and consequently the issued by the learned singie Judgeinthe 2008 made in W.F.No.21608/290.3_«.retei;:;fec;i§_j;:gt§ wete also set aside. In the said judament,5v'l.'vifi:$le :'nttetpteting.»»§ection :£1(3)(e) of the MMDR Actlland "MC Rules, it was held as hereunder: V l é _ "z3%.4.% "med employed by the Parliament under ._ ,ASex;tton_vi1,I(3)(e) viz, 'such other mattem as may be the matters prescribed under Rule 35 am: speciﬁcally refers to Section 11(3) of the V MMSR " It is, therefore, mandatory for the State ._ Vﬁovernmént tn consider the endwttse of minerals by the

5.' "::p§1Eiit:an5 white evaluating their relative merits. In the

- . tnttatt case, the appellants herein (respondents 4 and 5 in 'd ..._t!:3e writ petition) who have already established :'n>n-o:e '4 based indwtry viz., iron and steal plant, weighed the State Government to prefer the appellants herein (mspondents =2" it 21 4 and 5 in the writ petition) as against the first respondent herein (writ petitioner). when the appeiiants herein (respondents 4 and 5 in the writ petition) proposed to the iron-are mined as captive consumption for the exé3'tin§;_i"..V_ industry which in tum generate more span anciliary industries, the consIdera' tion and eveiuavtion A of relative merits of the appeaants herein (re:a;m.2@-as-4 « _ and 5 in the writ petition) and the ﬁi$t ' X (writ petitioner) in terms of Rule 35"'of waﬂld certainiy fall within me matters-'speciﬁed 11(3) ofMMDR Act."

12. of course, there. 'is.V_A'no tﬁheV"pe'titioner is entitied for an opportunity beio.re§ranting tease as per Rule 26 of me_p1o tpu:esi,iout theiojonteiitions made in this regard on behaifioi"tfee"pet£tIo:n'er;"«!n:'jot3'r_considered opinion does not weigh nguch" rn'ed"'£xd§rocate Genera! has fairly come forwaifdp 'that is prepared to process, scrutinize end Vixcicnsider applicaﬁons received pursuant to nvotéﬁoatioir. qeV:todA 1o""»v--».--srch, 2003 and to take appropriate deVt:is_§o.r¥ in the:_'i:7§pta:o«t;ed matters, as they could not proceed due ,___to the writ appeals before this court against the __m..o_;o'eVr dated. 'August, 2608 made in W.P.No.21608/2005 by *i._"t!v1:e:lI1ieaAArnedA Singie Judge.

T' ""'hereunde.r:

13. As to the matters that are required to be cons-idered under Section 11(3) of the Act and the preferentleif':ri§'ht"..of certain persons in the light of Rule 35 of MC Rules; upheld the decision of the Governmentgrentlnq ieese tout' those who intend to use the iron ore as'«lcag6_'tii}e the proposed steel industries takin§"'i.nto considere,tlon"'the":ends'it use of the minerals by theapplicaetA"end.._lts iraiue addition as provided under Section 11v(3).V:A'of Rule 35 of the MC Rules. Therefore.__ suffice' that the Government shat: in the similarly placed cases .lf.i.Ci_lJ'i:i,i::;"1'g1'V«:i;ij:|_a'3_l:

14. As righti§rvVpointed%V"'h»y_ the learned Advocate General, the contentions 'raised_.i'erj~.i;§§ﬁ§li""ol' the petitioner is similar to those raised. in (PIL) which was disposed by us we feel it aiwropriate to extract the' of the said judgment which reads as ii"1[$.1. Industrialization, which is Intended for pmductlon a' gooﬁ, changes the way of and use my rrmyre. While grobamauon 23 takes over, the local and traditional economy slowly-~ cﬂwppeasvs.

15.2. Iron ore oomprisw naturally .' ~ Iron bearing minerals which can be _ axtnacted for productlm: of -: I .

all the Iron and steel in thh i'7 derived initially from iron one «gxmivtiiig a ;

occurrences of meteorites from Space. Iron omjs a ,.:r..V°-.ji§:' imv méi'a;rla!'§for same: industry. In 21"'.t§enté::'y{,g ofiron and steel came from from recycled steal in "téi_:-:_§ from Iran ores over " V the backbone of modern Per wire mnsuinpfion sf direct Index of degree of developimgntvv A As per the avallabie the azpiw wee! comumpﬂan V' ._ 2,159 érmzaiin In India. Time has come to ' V.¢0mpafe'Ir2r1ia$ﬁs_per capita ﬂee! consumption with that of kgiﬁ countria, a wonfd average of 180 kg am) Chinesgajlcurrant consumption of 340 3:95. Our codrtgrja from a mate domestic per capita steel

-- A.c¢:{rsuh3;§tio.n of 35 kg in 2090, is projected to grow ta 150 kg 2020. This corrmponds {'0 the production targeted % consumption cf 200 million tons per annum, after ' " " "factoring in imports/exports. 60% of the production is expected to come thmugh wast fumace mute, 33% thmugh sponge iron -~ eiectric an: furnaces and 7% ,_,_.,_wmNN /"E \-, X' K r' 3 K3 ff?" ._ 5 __,M,,.........,,.M.,,......,,........

through other mums. ihis wauid require an avaiiability of 290 miliion Iona per annum of medium/high grade are, after discountmg scrap and ne~cycIing. _ ;"'B1a$~f.._._i » furnaces have the ﬂexibility in use medium (_6V2}¥"' 54% Fe) and ﬁnes (thmugh sinter and_p¢lIetS)'viwit;'2oiitV'_".VV ioss of pmdcrctmly and efficiency.

15.4. Iron constitutes 445% of '5 Vcrtisif, u not evenly distributed. Iron '*reserv'es__ Iahgeljr distributed in Australia, srazii, reas§,Russ:a and ukzaine. Indian Imn ore is richi?e"._an;f.'.i'ha5,h1aderate silica, aiumina and phosphorm. 'Irr_dié' tenns of iron one reservfaesrnd is; bad exporter of iron are éiitér AQstraiia;""Brazii and CIS countries émd .:;E6nirib:;té;<2?7Tta'.3-rérariiaf 47.6% of wnrid iron are b:a:....!:£ India are the best naturér:iiy' Qcc:)rr:ir;gz_;:iraaL=2$"ir1 the mm. with 297 miilion tones 5: iron' ore';}ar«2duc§k::§ in 2093, iron are tops the metallic mam: the country.

~ "£ir!..__ﬂ2t$!3ntirne, countries like Japan and _ {.'i§ina importing iron are from India and value 'égdingﬁagrréémﬁg it no high end-high priced saw! 'precincts é}:dVA"a-Isa exporting to all other muntries, to the iré'rseﬁt_j' or «~""their society. Generally, countries have .. adop£s_d'::o the idea of conserving raw mahenals and other .A "inputs for the purpose of domestic industry and only value added item have been exported, ensuring economic fgmwm right fmm grassroot level. All the economically V' " 'developed countriw have become deveioped by pursuing #275 route, excepting Australia who have very large 5 X' 25 minerai resoumas and retain very smaii popuiatioff.

China has adopted a dﬂferent strmegy now, of importing"-..4_' imn (+50% Fe) contributed to 60 MT per , additional steel inventory tfmre, which is mo5:a_." £*;.'?zaVrf "

India': annual production. This, in V impmves the competitiveness of 'T T } for eventual export possibly back t<i"[nt§i<f_3z anci _t.§:£s:..wiI! work against the overali of Indian growtzhin the Along term. " " V' 15.6. The Staei---._fi:d$«::}tr§{VI§~«..i.*aé'.¢:Igkae that ammmr ammances and gm back bone of Nation" and whet-efarm, ' I medal concern should! be é:.--ea_taj the Indigenous sum:

the l1Id¢&."1fy-in-aAA.pr::ferenﬁaI position Iris-5-Iris prp§;.f&renwent"ef_Ifbn ﬁne.

zzndoameany, the Steel industry Income to the sway axcheqnar far more enwoyment than the nstaaminuvmrry. u ragmy pomad out, the Steel .. cantﬂbmses around Rupees 200 crore animatty to the state and Central exchequer tar « AA':g.ei?e'Ary miiifan tonne oflron are canvertad into Sine], cmmam: to Rs.1.5 cum in the was afiron am expormd, besides providing permanent empioyment and iiveilhood to mllﬁom of citizens.

Even though the Government of Indh formulated a national mineral paucy with objective of granmg pmlbranial mining r sme: industries, as camcrem mm have been': imam: In that regard. withing concrete '-- _ the State of xamatataa to ' X money power of the mighty indestriw have not any 15.8.1. Kamataka.._.Iins tbta{.i}cn_'.<§re% resources of

9. 03 biilion ms» out of iota}A23.59:'bit!i¢nAA_'§9h$, which is 38.28% of total_:1'nd:'ani'irﬁ91' In spite of higher Asiaté, "£62af*~'fmn and steel making ca;i-acitf' .Sizi£eE.. {mIjr_a'.«dsmal 6.5 million tons, which is._6b3;s;._. tlserﬁitai Indian iron and state! .~.;:apécity..§f-India'.

back of very low steel iaa._tfaat--ali--thése producers who have set Iii do not have any iron are ._ . games,' of the ms-urance by the state I provisions of MHBR Act and Poilcy and the Karnataka State Mirie.ra»!_ These companies have already

-an imrestmem of over ns.25,aoa/- crane in and have rratad awed and lndlmct " to atleast zsooo people.

15.8.3. All other mineral-rich states w'z., Orissa, V - Jharkhand and Chattisgarh which signed maximum number of M005, have clear policy to give imn ore mining-

ieam onty to the existing iron and steel producers or the proposed steel plants, who make sumtantial investment in the state in iron and steel plant before we recommendation.

15.8.4, Although mineral wealth vests witl§"'State_'__:' "

Governments, yet the subject of reguiation of mines.andi' ' mineral oevelopment is covered by entry 54 ofithei List under Seventh Schedule of theizﬁonisatittstion "of 'Ino'ia;..o__" A it By virtue of this, the Parliament hae'Ve.{(c:lcishre.power«. make laws with respect to' regglation of mineral development. But goreawter State Governments is 15.9. While ratiljying,_V §raloe"eo'dition criteria adopted by oer-tein_ "Indian 1-Etates, utmost priority for of Vietiéli be given to those hwlio» up; steel plane; to the benefit, ofthe :-ioce ' ' '' 15'f1o_," -Prz'::len.t " 'oie-qualifxations followed by allooaition of .rnin_in§ leavses, within a reasonable time, to .. .. _ wage oompaniesi who have invested and operating, L' 'vt;e'itneA:"e,c2propriate route to trigger higher growth '' in «"steei.::'s'ector, thereby ensuring value addition, 'A so<;iet;§£"

employreenjt Aigeneration, infrastructure development -~ a pre~moeisite to become a developed and balanced 28

15. with regard to the preferential right based on the end- use of the minerals by the appticant, it was heid by t1;sVV_Vi»-rﬂatrit petition No.5022/2009 as hereunder:

"18. White mining as a standaaione' 'indtﬁtrgsr €i.'t3ii!iO{v'V "

be ignored, the contention of the 7}' policy decision of the Centrai and State.Govem:nent.:tnat preference sbouid be given tit:-aptive"' mining efhiie granting mining tease, also 'doe consioﬁzration.

The scheduie of time utidefilole' ~5_._3A of the MC Rules in abs required to adiie{ed'_'..to, as the State is bottntl. sucgfiwititne: soiiejt!qie7 in 'V'decio'ing the appIications4_for ofirnining it true that no 'innitation granting approval by the Centiai._Govein'inent, _:botti2at does not mean that the Central Go1(einn3ent.'oouidi"'g:=3i<e its own sweet time, which in oar eoneitiered opt.-mi would be unreasonable and oecauoe-~--any such delay would affect the » of tire State.

19,Iv'.1'i_Eiien though it is not proper for this Court to V preooiiiie any time scheduie, which is not provided under : the ototaite, we are of one considered opinion that the L.' Central Government shoutd themseivw come forward to Weiteitrioe their power for clearing the applications for the A approvai contemplated under Section 5 of the MMDR Act and Section 2 of the FC Act within a reasonable time limit, which sbouid not, in our considered opinion, be more than Q" N' \ 30 Every holder of a public office by virtue of which he ads on behalf of the State or pabllc body Is uitimately accountable the people in whom the sovereignty *~ 5 As such, all powers so vested in him are néeeniw, % to be exercised for public good and p;s:::£2£'§ng"~..VV .

the public interest. This is equa!.'ye tree ofaif actions even in the field of Contract "3'?I'u5,' «V every holder of a pubﬂc a trztsme A ~ whose hlgheﬁ duty by ta thepeople ofﬁtbe ' country and, ti:erefm*_e,"'~ act 6! holder of a public ot?1ce;4e.Iri1espect!ve'ea-3%' label classifying that act, "Is i:;_vdischa:_ge of public duty naeaant witimately-for pebiic good. with the dive'ISif.':_:ation 'ef'v.Sz:ete activity in a Welfare State; 'requi'rfng__ mate to discharge jts wick.» ranging 'ﬁ1nCE§o.'-ye even threughv ..-his sevfs-Ia! 'in$£ru:r:en1eIi£.is.=s, which requires' er:Se:ing intcé tc<§ntr3<:ts'--a:'s."9,.~-it would be unreal' encf~...eet'p§;a_g":22ats'c, -{apart tirom being unju.<;t1ﬁed'_,to exclude .con.t.ra<:'£;1é1'i matters from th-e.tsphere'ef$1ate ,a'<::i¢;ns' required to be non~ Varbitrezy'. and on The touchstone of 'A_rt§cIe14;1'f~.._V _

119..?;.ne--«..%% V Aigeings Apex count. in root:

cosiéeoenrroieor mom v. KAMADHENU CATTLE seed i'!9EQlI5TRIE$mfeported in [(1993): sec 71] has obeeNed:3$"herenunder:

. ."'i'.-in contractual sphere as in all other

-- State actions, the State and 3!! its ~~ins€mmen£alit1?e; have to conform to Article .. 1'4' of the Constitution of which new " arbitratfnm is a signiﬁcant Iecet. There is = no unfettered discretion in public law: A A pebiic authority pomﬁ powers only tousethemforpublicgood. This impe the duty to act thirty and to ' adopt a procedme which is 'railway in action'. Due observance of this obligation x a part of good adminktration raism a reasonable or "\ 23;

,{ .,,.. um Q) -'., ::

legitimate expectation in every citlzee to be treated fairly in bk lnteractlon with the State and its lnstmtnemalltles, V with this ebment fanning a necessary. component of the dedslon-making" L- precess in all state actions. To thk requirement of non-arbitrariness a State action, iris, tlrerefdgre, " , "

exert-he of the power aizaeeni' teen abuse or excess..,_ of ajmrt from anmung the bone "else decision in a given case. " made would be, exposed.,_te 'challel§ge'~~..'e:z~" the gmuncl .ozFar.£;it:a;riness; Rul'e..jc.!f lawzdces not compIejtely;e~e~'ell;n5nate"" disx:retion....- in the exetfcise 4.0?'-.. pewer, it--.."is.f umealistic, but prov:'clesﬁ_ _ﬁ;_r centmibf lt1~;:vexe;tci£ae by judicial _..rew?vew...l_ * V";}'ae'*mere'" reasonable or legitimate 'expect'atr'on~.bfVé vcltﬁzert, in such a situatien, may not by a distinct enforceable right,, but failure 'as consider and give due " weight to" ' it may render the decision ' :arizlt:'ary,"an:1__thls is how the requirement of "'duel'censlderation of a legitimate expectation

--~.f'bn1rs part of the principle of non»-

' ..a»r_bit:'ariness, a necessary concomitant of the ri:le--.of;law. EVEIY legitimate expectation is a relevant factor requiring clue consideration in ta fair decslommalcing process. Whether are " V expmtation of the claimant is reasonable or "legitimate in the context £9 a question of fact in each case. Whenever the question arlsw, it is to be determined not ascending to the claimente perception but in larger public interest wherein other more important considerations may outweigh what would otherwise have been the legitimate expectation of the claimant. A bena fide decision of the public authozlty reached in 32 this manner wouid satisfy the requirement of non--~arbitrariness and withstand 'ud:'ciaI scmtrlny. The doctrine of leg imate expectation gets assimilated in the may of law and operates in our toga! "

In this manner and to this extent." ' (emphasis supplied) ' A 19.6. In the case of mvamue reported m (2eea)1o--.scc 1,Ttm;

Court whiie dealing with "~~dectﬁhe_ of j e.=g'iz::r:aae expectation observed that.' V' "

"102. The conas.§pt'ef*"fdueeevp:rece.ss of law" has pIayed._ai--.maj.pr"mle..';!ri the develqpment e._>f admlnktretive, few. It ensurjm }:;= telrriaesis " _ public administrative authorities with the _ teskef [ls the parties or edji£;dia§ti:Ig'»ypon rights of the Individtreis 'eye-._d:t__ty-boutrd to conuig with the ':u!es.._¢;i'..netuml justice, wh aee' The absence of bias in the'*:1ecisian_--m3king' process and compliance ' ~ with aedi 'aiteram partem are two of these V facets. doctrine of legitimate 'iexﬁectation Is a nascent addition re the __ruie;e"~af natural justice. It goes beyond _ rights by gaming as another "e'eeice'ibr rendering jumdce. At the root of ~ the prindple of itlmate gexrpectation is the coast utional .. principle of rule of law, which requires = regularity, pnwicmbility and cerainty in Government's dealings with the pabilcw

1. R32, The Authority a Law [(19379) Chapter 11 J. The "Iegai certainty" :3 3130 a bask:

principie of Eumpeen cemmertity. European law :3 based upon the cencept of vertraeenmhetz (the honouring of a trust or conﬁdence). It as fior these masons that the 33 existence of a legitimate expectation may even in the absence of a right of private law jusrily its recognition in public iaw. v " * '

103. In HaIsbwy"s Laws of England__(r¥'tf2 Edn.), the doctrine of iegitimatet-xpe¢ta;ion'lt A' has been described in the following A "A Person gmai' 'Vﬁave . it A' legitimate expecta'£ion of being' treated in a certain 'way bynant .

administrative aqtnoritya even __ though he' has no legal right in ' private law?' _tCt_ teceive-l such treatment. T!':_e expectationfrnagr arise either...£ro_m a ._repre'9entatien or. ".made.['=..by autigoritpr, inititiding ._a'n' " vinaplied repieeentagjgg; or » ﬁ'om consistent pas: practice, ""

""" the doctrine or iegiti:na'to,ex,0éctation 'can be found in me ji££l9i??tent'iof "of Lords in Council of V Civil"'~ Seniioe unions v. Minister for Civil Service. "In. Vtiiatv case the Government tried fotibid trade unionism among civil service.

. for Cnrii Service Order in the 1932 Coiincii= "was issued. The Court of Appeal .dec!aied that the Minister had acted " tiiilawfllibl in abridging the fundamental right of a citizen to become a member of the trade union. 'lire House of Lords approved the judgment of the Court of Appeal and held that such a right could not be taken away without consulting the civil servant concerned. /E,t;.3.\ «% """" we .. .

42.5 1'£ Eé ,, sf F.» i""*-

decision of live House of Lords in Councii of Civil Service Unions V. Minister for Civil Sen/ice. It has been he-id in the said decision that an aggiievecl person was entitled to ;

judicial review if he could show that a,"

decision of the pubiic authority affected him of someizeneﬁt ' advantage which in the past ire. had-:' 2 . been permitted to enjoy and sgvkieia he ' legitimately expected to be.__per3nitted " -

to continue to enjoy-..eitherapntii he "

was given reasons forﬁaithdrawai and", ' ' the oppoimnity to comment on such"

reasons. .

1.5; It may' i:n:iinated:.nem that of "leg-itinwate exﬁectation' in essence a duty "on ',:subii§:vl_ aaitiioififf to act Tr.-may in; 'in:o_ consideration an Vifrelesfant ' ~ . faetnts' relating to each?' , --~..'legi£'inie..te . wqzectation'. Witisin of fair dealing ._in £:aseV._oi"=v'ie_:3itin2ace expectation: the reasonaole i._opnortunitiw to maize ' ~ _ reptwse-ntation by the parties likely to ' be by any change of : Consistent past policy, come in. We V _, not been shown any cmmpeillng reasons taken into " « "_eon.sideration by the Central _ . Ginvernnzent to make a departure from the existing policy of .. allotment with reﬁemnce to ' -- seniority in registmtion by introducing a new guideline. "

(emphasis supplied) 19.7. The Apex Court in TATA IRON AND STEEL CO. LYD. V. UNION OF IPIDIA reported in (1996)9 SCC 709, approving the View of the Committee appointed 37 employing advanced mining equipment and machineries with skilied and non-skilled manpower and ectixqeaig-(i._V encouraging vaiue addition which should go hand~in.-:izaVndt:'"'V;~ * with the growth of the mineral sector as a sta--nd--alone" A industrial activity and to give priority to the''& = _ who propose to establish industries on .:_.:V3itviiii' ' addition making it clear that mining 'la industry needs to be encouragei¢i..as it nrotrides employment; new mineral ..industries~.siiouid set up to match the availatzie. raw Am3te.rial"imourt$$;-existing and new industries shovlil .$€-£_tL epivto bring the available raw materials to rsipecifications by processes. fajliire :lber;eiic:a:ic;::o,i upeiietisation and sintering; _ and .wiil'Wﬁenerate more employment

22. In.die__direct:

(i) the State._Go,ve'rnment to strictly adhere ;' 'V _ to the time 'schedule prescribed under _ ' Rule 63A...Qf.the MC Ruies in disposing '* the appiications for grant of mining iron '«.to.re"'w_ithin the State of Kametaka;

._ " (ii)« '}to__ consider the matters specified under Q _.$'e_ction 11(3) of the MMDR Act read with Rule 35 of the MC Rules strictly in the matter of grant of mining iease of iron one in the State of itarnataka;

(iii) to give preference for the captive consumption of iron ore for their existing iron and steel industries, of course, without causing any harm to the existing mining as a stand~aione industry as it would go in line with the National Mineral Policy, 2008 and the Karnetaka Minetai Poiicy, 2008 to 38 generate more employment in the State and am pmvida ibr value addition and satisfy the endmuse of minerals by such appiicanls; and

(iv) direct the Central Govemment dispose of the appIications».A.Vfo; the approval of mining lease ' .. as -1' --. ' contemplatved under Sect:io:§~, 5 ' A MMDR Act and/or Section 2 or the FC " ~ Act, as the case may be, wit.'-:_i:1 mev reasonabfe time, net ..

months from the date of receipt 'of ' applications for such apprc-val. so that, there would not any f:}r2a"ncia.I_ sirain on the investmenis £2':a€_ﬁ~'ra=y made by the indzrstiialistaas welii as*ﬁna:1c*iaI aid that' may be ' 'extem.*eci tire state or st-szite-A9?-':°Iiec1"1._ ~.or_i we Nationaiiseq _£_$aizks_ in ._5'!£'>j4--:*.=i;§gatd, "

16. In ﬁne; H§tad*'§'7"" August, 2008 made in the consequentiai directions issued:'«.%theraift-gaffé set aside by this court by~crd_er Jah'e,».2.009 in Writ Appeal No.!-S026 of 2068..L'aﬁd" matters and that apart, appropriate agirectiofsa 'are angmsuea by this Court by order dated 11*"

zooé %ma%wn: Petition No.5022 of 2oo9(P1L), and f_pai_*t'E{r:uIaﬂy.,«wf§en the ieamed Advocate General has fairiy 'that the applications of peﬁtioner would be XfL'*--.pr6c}$aaed, scrutinized and considered; and appropriate 'iérders wii! be passed therein immedéatety aftw the

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