Delhi High Court
Union Of India & Ors vs M/S Rvg Metals & Alloys Pvt Ltd on 25 April, 2019
Equivalent citations: AIRONLINE 2019 DEL 626
Author: Anup Jairam Bhambhani
Bench: Chief Justice, Anup Jairam Bhambhani
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 16.04.2019
Pronounced on: 25.04.2019
+ LPA 184/2019 & CM APPL. No. 12369/2019
UNION OF INDIA & ORS .... Appellants
Through: Mr. Tushar Mehta, SG with
Ms. Maninder Acharya, ASG,
Mr.Ripu Daman Singh Bhardwaj,
CGSC with Ms. Hina Bhargava,
Mr.N.K. Singh (Joint Secretary) &
Ms. Veena Kumari, Director for
Ministry of Mines.
versus
M/S RVG METALS & ALLOYS PVT LTD ..... Respondent
Through: Mr. Dhruv Mehta, Sr. Adv. with
Mr.Aman Vachher, Mr. Yashraj,
Mr.Saket Sikri, Mr. Ashutosh Dubey,
Mr. Abhishek Chauhan, Mr. Shyam
Agarwal & Mr. Arun Nagar, Advs.
+ LPA 185/2019 & CM APPL. Nos. 12384/2019 & 18118/2019
UNION OF INDIA & ORS ..... Appellants
Through: Mr. Tushar Mehta, SG with
Ms.Maninder Acharya, ASG,
Mr.Ripu Daman Singh Bhardwaj,
CGSC with Ms. Hina Bhargava,
Mr.N.K. Singh (Joint Secretary) &
Ms. Veena Kumari, Director for
Ministry of Mines.
versus
M/S STANDARD METALLOYS PVT LTD ..... Respondent
Through: Mr. Dhruv Mehta, Sr. Adv. with
Mr.Aman Vachher, Mr. Yashraj,
LPA 184/2019 & conn. matters Page 1 of 78
Mr.Saket Sikri, Mr. Ashutosh Dubey,
Mr. Abhishek Chauhan, Mr. Shyam
Agarwal & Mr. Arun Nagar, Advs.
+ LPA 200/2019 & CM APPL. No. 13106/2019
UNION OF INDIA & ORS ..... Appellants
Through: Mr. Tushar Mehta, SG with
Ms.Maninder Acharya, ASG,
Mr.Ripu Daman Singh Bhardwaj,
CGSC with Ms. Hina Bhargava,
Mr.N.K. Singh (Joint Secretary) &
Ms. Veena Kumari, Director for
Ministry of Mines.
versus
M/S RVG MINERALS & METALS PVT LTD ..... Respondent
Through: Mr. Dhruv Mehta, Sr. Adv. with
Mr.Aman Vachher, Mr. Yashraj,
Mr.Saket Sikri, Mr. Ashutosh Dubey,
Mr. Abhishek Chauhan, Mr. Shyam
Agarwal & Mr. Arun Nagar, Advs.
+ LPA 202/2019 & CM APPL. No. 13147/2019
UNION OF INDIA & ORS ..... Appellants
Through: Mr. Tushar Mehta, SG with
Ms.Maninder Acharya, ASG,
Mr.Ripu Daman Singh Bhardwaj,
CGSC with Ms. Hina Bhargava,
Mr.N.K. Singh (Joint Secretary) &
Ms. Veena Kumari, Director for
Ministry of Mines.
versus
M/S APEX METALLOYS PVT LTD ..... Respondent
Through: Mr. Dhruv Mehta, Sr. Adv. with
Mr.Aman Vachher, Mr. Yashraj,
Mr.Saket Sikri, Mr. Ashutosh Dubey,
Mr. Abhishek Chauhan, Mr. Shyam
Agarwal & Mr. Arun Nagar, Advs.
LPA 184/2019 & conn. matters Page 2 of 78
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI
RAJENDRA MENON, CHIEF JUSTICE
1. Taking exception to a common judgment passed on 06.02.2019 by the
writ court (Single Bench) in W.P.(C) 7537/2018 titled M/s Standard
Metalloys Pvt. Ltd. vs. Union of India and Ors., W.P.(C) 7553/2018 titled
M/s RVG Minerals and Metals Pvt. Ltd. vs. Union of India and Ors.,
W.P.(C) 7555/2018 titled M/s RVG Metals and Alloys Pvt. Ltd. vs. Union of
India and Ors. and W.P.(C) 7591/2018 titled M/s Apex Metalloys Pvt. Ltd.
vs. Union of India and Ors., these appeals have been filed under Clause 10
of the Letters Patent. As facts and questions of law are common and
identical in nature, therefore all the four appeals are being disposed of by
this common judgment.
2. The original writ petitioners challenged an order dated 30.06.2016
passed by Controller General, Indian Bureau of Mines (IBM)/appellant No.2
in his capacity as the Administering Authority exercising statutory
jurisdiction under the Offshore Areas Mining (Development and Regulation)
Act, 2002 (hereinafter referred to as the "OAMDR Act"). All the facts
relevant with regard to the issue have been dealt with in-extenso by the
learned Single Judge from paras 4 to 8 of the impugned judgment and it is
not necessary to dwell into them in detail.
3. Before considering the matter on merits, it is necessary to decide
CM No.18118/2019, which is an application for impleadment filed in LPA
No.185/2019 by M/s Trimax Sand Pvt. Ltd. The appeals were filed on
05.03.2019. They came-up for hearing before us on 18.03.2019 and on the
LPA 184/2019 & conn. matters Page 3 of 78
request made by the counsel representing the appellants we adjourned the
matters to 25.03.2019. On 25.03.2019, as the Bench could not assemble, the
cases were adjourned to 29.03.2019. On 29.03.2019 notices were issued;
interim order passed, parties were directed to file submissions or affidavit, if
advised, and the matters were listed on 08.04.2019. The matters were partly
heard on 08.04.2019 and thereafter further arguments were to be heard on
16.04.2019. When the matters were taken up on 16.04.2019, it is seen that
the aforesaid impleadment application had been filed, a day before i.e. on
15.04.2019. This impleadment application indicates that it has been filed by
way of abundant caution and the applicant seeks impleadment on the ground
that certain orders passed on 09.11.2017 in W.P.(C) No.5734/2016 at the
instance of the appellants are pending consideration in an SLP pending
before the Hon‟ble Supreme Court, being SLP No.2348/2018. Arguments in
the same have been heard and on 08.04.2019 the matter has been reserved
for orders. However, the fact remains that on 09.11.2017, W.P.(C)
No.5734/2016 was disposed of by the Bench on the basis of certain
statement made by the counsel representing the Union of India before the
Bench. Thereafter, a review application was filed and the review application
is pending before the Single Judge. Be that as it may, the learned writ court,
in the impugned order passed on 06.02.2019 in these appeals, had taken note
of the order dated 09.11.2017 passed in W.P.(C) No.5734/2016 and has
observed that the said writ petition was not decided on merits, was disposed
of based on certain statements made by the learned ASG for the Department
and as a review application (R.P. 103/2018) is pending, and now, the present
writ petitions are being decided on merits. Once the writ petitions have been
decided on merits, in our considered view, even Review Pet. No.103/2018
LPA 184/2019 & conn. matters Page 4 of 78
may have been rendered infructuous. However, we do not wish to make any
comment on the same as we are informed that Review Pet. No.103/2018 is
pending before the Division Bench and once the issue is being decided on
merits, we need not take note of these factors. That apart, the other grounds
raised in the application for impleadment are nothing but the grounds on
merits with regard to the impugned order, which are also the grounds raised
by the Union of India in the present appeal and the applicant/Intervener, who
was not even a party before the writ court and who did not even bother to
challenge the order of the writ court after it was rendered on 06.02.2019,
cannot, now be permitted to participate in the proceedings when the matter
is being heard.
4. It may also be taken note of that the applicant/Trimax never took part
in the process of selection in pursuance to the notification dated 07.06.2010.
That being so, they cannot have any grievance with regard to the said
selection process, however, in the grounds raised it is stated by them that
they were licensees of Beach-Sand Mining. They were granted the licence
in the year 2001 and also lease for granite in Shirakkulam deposit, Andhra
Pradesh. They claim to have invested a huge amount in this project and it is
their contention that if the project in question is revived, it would adversely
affect their project and therefore they be impleaded as party. Apart from the
fact that this cannot be a ground for impleadment, from the written
submission brought on record by the respondents, we find that even the lease
granted to Trimax/the applicant has been cancelled by the State of Andhra
Pradesh on 28.11.2018 and the issue is sub-judice in the High Court of
Andhra Pradesh. Taking note of all these circumstances and the fact that the
grounds on merit raised in the application have already been canvassed
LPA 184/2019 & conn. matters Page 5 of 78
before us by the appellant Department, we see no reason to allow the
application. In our considered view, the application has been filed only to
delay the proceedings. Accordingly, CM No.18118/2019 is dismissed.
5. After enforcement of the OAMDR Act and in terms of the mandate of
Section 10(1) of the said Act, the Administering Authority, namely, the
Controller General, IBM (as he was known at the relevant time) issued a
notification on 07.06.2010 inviting applications for grant of exploration
licence for 62 blocks, out of which 26 were in the Bay of Bengal and 37 in
the Arabian Sea. The said blocks were identified by latitudes and
longitudes. Wide publicity was given by the statutory authority, both in the
print and the electronic media, with regard to the aforesaid notification
inviting applications. Consequent thereto, 53 parties applied for allotment
of various blocks for grant of exploration licence for one or more of the
notified blocks. The respondents in the present appeal had also applied for
grant of exploration licence over certain blocks. The administrative
authority, with an intent to make the process fair and transparent, constituted
a Screening Committee consisting of a technical expert from the Indian
Institute of Oceanography, Goa, one technical expert from Geological
Survey of India, Kolkata and another technical expert from Indian Bureau of
Mines, Nagpur. Based on the criteria provided under Section 12 of the
OAMDR Act, the said Screening Committee scrutinized the applications
and gave its recommendation with regard to allotment to the Administering
Authority, who in turn, pursuant thereto published the list of selected
applicants on 22.03.2011; and consequently vide letter dated 05.04.2011
communicated the grant of exploration licence to each of the successful
applicants.
LPA 184/2019 & conn. matters Page 6 of 78
6. The said process of selection and the action taken for grant of
exploration licence was subjected to challenge in W.P.(C) No.1502/2011
before the High Court of Bombay, Nagpur Bench. Similarly, petitions were
also filed before various other High Courts challenging the selection process
and the grant made. In the backdrop of the aforesaid proceedings initiated
before various High Courts and certain orders passed therein, exploration
licence were not granted by the Administering Authority as he was awaiting
outcome of these proceedings.
7. The writ petition filed before the Nagpur Bench of the Bombay High
Court came to be dismissed on 17.09.2013 by a detailed judgment running
into more than 50 pages. The High Court upheld the entire selection
process, including the criteria adopted for selection. In fact, in the petition
before the Nagpur Bench of the Bombay High Court, the selection process
and the criteria adopted were subject matter of challenge by the petitioners.
The Central Government, the department concerned and the statutory
authority opposed the challenge and categorically came-out with a case that
the selection process was transparent, in accordance with law and the criteria
laid down were also in accordance to the requirements of the statute. In fact,
all authorities defended the selection process successfully. The High Court
accepted their contention and holding the selection to be in accordance to
the requirement of law, dismissed the writ petition. Challenge to the order
passed by the Hon‟ble High Court before the Supreme Court in SLP(C)
No.5530/2013 was dismissed on 31.03.2014.
8. In view of the aforesaid, the IBM initiated the process for executing
the exploration licence in furtherance to the grant already made on
05.04.2011. However, the then Secretary, Ministry of Mines in a meeting
LPA 184/2019 & conn. matters Page 7 of 78
held on 14.07.2015 directed the IBM to seek legal advice on re-allocating
the exploration blocks already granted through a process of auction. It may
be noted that the Secretary, Ministry of Mines referred to the amendments in
the Mines and Minerals (Development and Regulation) Act, 1957
(hereinafter referred to as "the MMDR Act"); and the suggestion given by
him for grant of exploration licence through auction was only because of the
amendment in the MMDR Act whereas in the OAMDR Act there was no
such statutory provision incorporated by any amendment. Another meeting
was held on 18.11.2015; and the Ministry of Mines indicated the reasons to
IBM based on which the allocation could be awaited and directed IBM to
take a decision on priority basis. Due to delay in execution of the
exploration licence, certain allottees approached this Court as also the High
Court of Bombay at Nagpur seeking enforcement of their grants and
execution of exploration deeds sometime in June, 2016. Pursuant to notice
being issued in these petitions, the IBM issued an order on 30.06.2016
thereby reiterating their reasons as communicated by the Ministry in the
meeting held on 18.11.2015 and sought to annul the notification dated
07.06.2010. As a consequence thereof, grant of all 62 exploration licences
stood rescinded. Aggrieved by this action, writ petitions were filed, which
have been allowed by the learned Single Judge by the impugned order.
Hence these appeals.
9. Challenging the order passed by the learned Single Judge in the writ
petitions, the grounds raised for the challenge can be summarized in the
following manner:
LPA 184/2019 & conn. matters Page 8 of 78
(i) The communication dated 05.04.2011 was not an order of
grant. It was only a letter of intent and therefore did not vest any right
in the respondents.
(ii) The allocation was contrary to the provisions of the OAMDR
Act and the blocks identified were overlapping with on-shore areas.
(iii) There was no intent to auction or re-grant of the said blocks and
the order dated 30.06.2016 did not amount to colourable exercise of
power.
(iv) The alleged decision of the Government was taken in public
interest to avoid granting of exploration licence for atomic minerals to
private parties, and
(v) Certain issues are also raised pertaining to mining of atomic
minerals in offshore areas.
10. Even though the aforesaid five grounds have been raised in these
appeals, a perusal of the order dated 30.06.2016 impugned in the writ
petition would show that most of the reasons as now cited in these appeals
were not given in the said order. In fact, the only reasons indicated in the
order was that a petition was pending in the High Court of Andhra Pradesh;
that the exploration areas are overlapping with some on-shore areas to which
OAMDR Act does not apply; and that since there was a blanket ban on
mining in offshore areas, therefore if exploration work is done and any
mineral is found, no production permit would be granted for mining of the
minerals. In fact, these were the only reasons which were indicated in the
order seeking to annul the grant of exploration licences.
11. In the original writ petitions filed by the respondents, the challenge
was made on the following grounds:
LPA 184/2019 & conn. matters Page 9 of 78
(i) The impugned order dated 30.06.2016 stands vitiated on
account of violation of the principles of natural justice.
(ii) The order dated 30.06.2016 was without jurisdiction and ultra
vires the statute as there was no power of review of an order of grant
made under the OAMDR Act.
(iii) The two reasons provided in the impugned order dated
30.06.2016 for annulling the notification dated 07.06.2010, namely,
(a) that the blocks are allegedly overlapping with the on-shore areas
and (b) that the alleged complete prohibition on mining in offshore
areas were both baseless and contrary.
12. The aforesaid submissions were meticulously scrutinized by the
learned writ court and after detailed argument and consideration made, the
Single Judge has elaborately dealt with the issues in-extenso.
Learned counsel appearing for the appellants took us through the provisions
of the OAMDR Act and canvassed the same contentions as were advanced
before the learned writ court. It was argued that the OAMDR Act was
enacted in the year 2002 with a view to develop, regulate and exploit the
mining resources available in the territorial waters, continental shelf and
other maritime zones of India so as to augment the national wealth.
In exercise of the powers under the OAMDR Act, the Offshore Areas
Mineral Concession Rules, 2006 were framed to regulate the procedure for
grant of operating rights in respect of such areas. It was emphasized before
us that vide notification dated 07.06.2010, Controller General, IBM was
appointed as Administering Authority i.e. the statutory authority under
OAMDR Act to carry out various functions prescribed under the provisions
of the aforesaid Act. The said authority in exercise of the powers under
LPA 184/2019 & conn. matters Page 10 of 78
Section 10 of the OAMDR Act had notified 62 offshore blocks having size of 5
mins latitude x 5 mins longitude for grant of exploration licences vide
notification dated 07.06.2010 in offshore areas. The notification for grant of
minerals were those specified in First Schedule of OAMDR Act and the same
is dealt with by the learned writ court in para 7 of the impugned order. The
learned writ court considered the statutory provisions, and in the detailed
judgment, dealt with all the issues raised including the question of overlapping
and after detailed analysis in the backdrop of the statutory requirement, the
affidavits and the pleadings filed, has rejected the contention of the appellants
herein. However before us, apart from canvassing various submissions made
before the learned Single Judge, additional submissions have been made for
contending that the grant made has been rightly cancelled. It was the case of
the learned Solicitor General and the ASG before us that the annulment order
has been passed mainly on two grounds, namely, overlapping of onshore and
off-shore blocks and the restrictions imposed by the Coastal Regulation Zone
(CRZ) notification. They also argued that the grant dated 05.04.2011 did not
create any vested right in favour of the petitioners; and that it is only an
allotment and no right accrues on its issuance. It was also said that the
notifications have been withdrawn in public interest. Detailed written
submissions have also been brought on record, by the appellants on 23rd April,
2019 and by the respondent on 22nd April, 2019. It was also emphasized before
us that the Central Bureau of Investigation had also investigated the matter and
in a detailed enquiry submitted has found that the selection process stood
vitiated. We would deal with various issues canvassed before us in detail
hereinunder. For the sake of brevity, we would deal with all the issues
canvassed before us but do not intend to elaborate the submissions made as in
LPA 184/2019 & conn. matters Page 11 of 78
our considered view it may not be necessary for the present as we would be
dealing with the submissions as and when occasion arises in this judgment.
13. Learned counsel for the respondents has vehemently argued by
placing reliance on the judgment of Mohinder Singh Gill vs. Chief Election
Commissioner, (1978) 1 SCC 405 and para 5 thereof to say that when a
statutory functionary makes an order based on certain grounds, its validity
must be judged by the reasons so mentioned and cannot be supplemented by
fresh reasons canvassed in the shape of affidavits or otherwise. It was
argued that an order that is bad in the beginning cannot get supported when
challenged in a court by adding additional grounds cited later on.
The learned counsel argued that even though these grounds need not be
looked into but as the appellants have also tried to justify their action on
these grounds, they have tried to demonstrate before us that even these
grounds are not tenable or justified. That being the position, we deem it
appropriate to consider all the grounds raised in this appeal and proceed to
decide the appeal based on all the grounds canvassed before us and as
indicated in the memorandum of appeal.
14. The first ground on which the impugned action was challenged before
the writ court was that the impugned action was vitiated on account of the
violation of principles of natural justice. Even though, the learned Solicitor
General and the learned ASG did not argue anything on the question of
violation of the principles of natural justice and the finding recorded in this
regard by the learned writ court, we deem it appropriate to first proceed to
consider this aspect of the matter and analyse the reasons given by the
learned Single Judge on this issue and consider as to whether it can be
upheld or warrants reconsideration. It is the case of the petitioners /
LPA 184/2019 & conn. matters Page 12 of 78
respondents herein that before the impugned action was taken and the grant
made on 05.04.2011 was set aside, no notice was issued, no opportunity of
hearing was afforded and therefore the entire action stands vitiated.
This was rebutted by the appellants primarily on the ground that the grant
does not create any vested right.
15. Admittedly, in the present case, no notice or opportunity of hearing
was provided to the writ petitioners before passing the impugned order on
30.06.2016. The consequence of recalling the notification dated 07.06.2010
was to set at naught the order of grant dated 05.04.2011. A perusal of the
provisions of the OAMDR Act and the Offshore Areas Mineral
(Concession) Rules, 2006 (hereinafter referred to as the "OAMC Rules")
clearly shows that the legislative intent was to preserve the principles of
natural justice and various provisions of the Rules and the Act do indicate
that legislative intent. In fact, a perusal of Section 7(1) of the Act which
confers powers on the Central Government to prematurely terminate
operating rights for reasons mentioned therein preserves the principles of
natural justice and contemplates that no such order can be passed without
providing an opportunity of hearing in terms of sub-clause (2) of Section 7.
Similarly, Rule 69(1) and (2) of the OAMC Rules also require granting
opportunity of hearing before taking any action which would prejudicially
affect the rights of a person in whose favour a grant has been made. If we
analyse the facts of the present case in the backdrop of the aforesaid
statutory provisions, particularly Rule 69(1) and (2), it is clear that the grant
was made on 05.04.2011 in favour of the respondents and while annulling
this grant no opportunity of hearing has been granted. The legislative intent
of providing an opportunity of hearing is evident, since, if an application
LPA 184/2019 & conn. matters Page 13 of 78
seeking grant of licence is to be rejected, Rule 16(2) requires an opportunity
of hearing to be granted. If even an application praying for a grant can only
be rejected after an opportunity of hearing is granted, then the legislative
intent is very clear, namely, once a grant is made and is sought to be
cancelled or withdrawn, the principles of natural justice would have to be
followed. The appellants have stated that giving an opportunity of hearing
was not required as the initial grant itself was contrary to law. In our
considered view, in the case of Baraka Overseas Traders vs. Director
General of Foreign Trade, (2006) 8 SCC 103, similar contentions have
been rejected by the Hon‟ble Supreme Court and in paras 15, 16 and 17 the
contentions as advanced before us stood rejected. It has been held that grant
of a licence certainly creates rights in favour of a licensee; and if the
licensing authority was of the opinion that the licence was granted by
misrepresentation then a show-cause notice and opportunity of hearing is
required. In this case, the learned writ court has taken note of the statutory
provisions and has recorded a finding that the provisions for affording a
hearing is evident from the statutory rules and when we go through the
statutory rules providing for scrutinizing an application and making a grant,
it is clear that a vested right is created once a grant is made; and the
contention that until and unless the exploration licence is granted no vested
right is created cannot be accepted for the simple reason that the execution
of exploratory licence after the grant is only a ministerial act which does not
require any further decision making action to be taken. In fact, once the
grant is made, it creates a vested right and merely because the exploratory
licence has not been executed, in our considered view, it cannot be said that
a vested right has not been created. Grant itself creates a right and therefore
LPA 184/2019 & conn. matters Page 14 of 78
the principles of natural justice ought to have been followed, particularly
when even for rejecting an application for grant of licence the statutory rule
as indicated hereinabove i.e. Rule 16(2) requires opportunity of hearing to
be given. We may also, at this stage, take note of the law laid down by the
Hon‟ble Supreme Court in the case of State of Orissa vs. Binapani Dei, AIR
1967 SC 1269 wherein it has been clearly held that any act which causes
prejudice to any person has to be taken only after grant of opportunity of
hearing. The grant made to the petitioners on 05.04.2011 has been
prejudiced by the order dated 30.06.2016 without giving an opportunity of
hearing; and that is the reason why the learned Single Judge has held that the
principles of natural justice have been violated. That apart, we may take
note of the fact that the learned Single Judge has also found in the order
impugned that the action stands vitiated as the objective of cancelling the
grant was a pre-determined act as is evident from the minutes of meeting
dated 14.07.2015 held between the Secretary, Ministry of Mines and the
IBM, wherein the Secretary had indicated and directed to try and cancel the
grant so that the exploration licence would be available for re-grant through
auction. In our considered view, this is a case where the principles of
natural justice were required to be followed in annulling the grant; and this
is one of the grounds on which the entire action stands vitiated.
16. The second ground canvassed before us and considered by the learned
writ court was to the effect that the impugned action was taken without
jurisdiction and is ultra vires the statute as there is no power to review or
recall an order of grant under the OAMDR Act. The learned Single Judge in
para 100 of the impugned order has dealt with the issue in detail and we are
not reproducing the same here. It was the case of the respondents before the
LPA 184/2019 & conn. matters Page 15 of 78
learned Single Judge that the Administering Authority has in fact reviewed
his order dated 05.04.2011 despite the fact that no such power is available to
him under the statute. The appellants, on the other hand, have tried to
contend that in terms of Section 21 of the General Clauses Act, the
Administering Authority who had the power to issue the notification under
the OAMDR Act would also have the power to withdraw the same. There
may be no dispute in accepting this proposition in terms of Section 21 of the
General Clauses Act. However, that does not mean that this power is
unfettered or unchecked or is such a general power that it can be resorted to
without referring to the context in which the notification was issued in the
first place. In this regard, we may take note of the law laid down by the
Hon‟ble Supreme Court in the case of Industrial Infrastructure
Development Corporation vs. Commissioner of Income Tax, MP, (2018) 4
SCC 494 wherein in paras 21 and 22 the Hon‟ble Supreme Court has dealt
with the legal issue in the following manner:
"21. The general power, under Section 21 of the General
Clauses Act, to rescind a notification or order has to be
understood in the light of the subject-matter, context and the
effect of the relevant provisions of the statute under which the
notification or order is issued and the power is not available
after an enforceable right has accrued under the notification or
order. Moreover, Section 21 has no application to vary or
amend or review a quasi-judicial order. A quasi-judicial order
can be generally varied or reviewed when obtained by fraud or
when such power is conferred by the Act or Rules under which
it is made. (See Interpretation of Statutes, Ninth Edn., by G.P.
Singh, p. 893.)
22. Relying upon the aforementioned rule of interpretation, this
Court has held that the Government has no power to cancel or
supersede a reference once made under Section 10(1) of the
LPA 184/2019 & conn. matters Page 16 of 78
Industrial Disputes Act, 1947. (See State of Bihar v. D.N.
Ganguly [State of Bihar v. D.N. Ganguly, AIR 1958 SC 1018] .)
Similarly, on the same principle it is held that the application of
Section 21 of the General Clauses Act has no application to
amend or rescind or vary a notification issued under Section 3
of the Commissions of Enquiry Act for reconstituting the
commission by replacement or substitution of its sole member
except applicable for a limited purpose for extending the time
for completing the enquiry. (See State of M.P. v. Ajay
Singh [State of M.P. v. Ajay Singh, (1993) 1 SCC 302 : AIR
1993 SC 825] .) It is also held while construing the provisions
of the Citizenship Act that the certificate of registration of
citizenship issued under Section 5(1)(c) of the Citizenship Act
cannot be cancelled by the authority granting the registration
by recourse to Section 21 of the General Clauses Act.
(See Ghaurul Hasan v. State of Rajasthan [Ghaurul
Hasan v. State of Rajasthan, AIR 1967 SC 107] and Hari
Shanker Jain v. Sonia Gandhi [Hari Shanker Jain v. Sonia
Gandhi, (2001) 8 SCC 233 : AIR 2001 SC 3689] .) And lastly,
while construing the provisions of the Representation of the
People Act, it is held that the Election Commission cannot, by
recourse to Section 21 of the General Clauses Act, deregister or
cancel the registration of a political party under Section 29-A
of the Act for the decision of the Commission to register a
political party under Section 29-A(7) of the Act is quasi-judicial
in nature. [See Indian National Congress (I) [Indian National
Congress (I) v. Institute of Social Welfare, (2002) 5 SCC
685].]"
17. In the present case, in pursuance to issuance of the notification dated
07.06.2010, a detailed process of selection in terms of Section 12 of the
OAMDR Act has been undertaken and the grant was made to the
respondents after following these provisions. In view of the exposition of
law by the Hon‟ble Supreme Court as detailed hereinabove, once there is a
statutory provision for making the grant the appellant cannot resort to the
LPA 184/2019 & conn. matters Page 17 of 78
general power under the General Clauses Act to defeat the right of the
respondents. On the contrary, the Administering Authority while
considering the application for grant acts as a quasi-judicial authority as per
the test laid down by the Hon‟ble Supreme Court in the case of Indian
National Congress vs. Institute of Social Welfare, (2002) 5 SCC 685 which
reads as under:
"24. The legal principles laying down when an act of a
statutory authority would be a quasi-judicial act, which emerge
from the aforestated decisions are these:
Where (a) a statutory authority empowered under a
statute to do any act (b) which would prejudicially affect the
subject (c) although there is no lis or two contending parties
and the contest is between the authority and the subject and (d)
the statutory authority is required to act judicially under the
statute, the decision of the said authority is quasi-judicial.
27. What distinguishes an administrative act from a quasi-
judicial act is, in the case of quasi-judicial functions under the
relevant law the statutory authority is required to act judicially.
In other words, where law requires that an authority before
arriving at a decision must make an enquiry, such a
requirement of law makes the authority a quasi-judicial
authority."
18. The said test makes it evident that under the OAMDR Act the
Administering Authority while considering the application for grant of
licence when required to act at that stage has to make an enquiry so that
requirement of Section 12 is satisfied, coupled with the fact that in terms of
Rule 16(2) of the OAMC Rules he is required to provide an opportunity of
hearing before taking any adverse decision on the application seeking
exploration licence. These facts clearly show that the Administering
Authority is acting as a quasi-judicial authority and therefore in the light of
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the legal principles discussed hereinabove, particularly, the law laid down in
the case of Industrial Infrastructure Development Corporation (supra),
Section 21 of the General Clauses Act cannot be resorted to.
19. Once in terms of Section 12 of the OAMDR Act the grant is issued by
the statutory authority, the Administering Authority is only empowered to
enforce the conditions of grant in terms of Section 12(2) read with Rule 69
and cannot review or recall the order but can cancel the grant for failure to
comply with the provisions as contemplated under sub-section (2) of
Section 12. In the present case, admittedly there is no failure on the part of
the respondents to comply with conditions to enable the appellant - statutory
authority to exercise powers under Section 12(2) or Rule 69.
20. It is a settled principle of law that the power to review or revise a
decision has to be specifically conferred by the statute and the same being
absent in the OAMDR Act, the Administering Authority has no power to do
so. In this regard, the law laid down by the Hon‟ble Supreme Court in
Kalabharti Advertising vs. Hemant Vimalnath Narichania, (2010) 9 SCC
437 can be considered wherein the principle has been discussed in paras 12,
13 and 14 in the following manner:
"Legal Issues
Review in absence of statutory provisions
12. It is settled legal proposition that unless the statute/rules so
permit, the review application is not maintainable in case of
judicial/quasi-judicial orders. In the absence of any provision
in the Act granting an express power of review, it is manifest
that a review could not be made and the order in review, if
passed, is ultra vires, illegal and without jurisdiction.
(Vide Patel Chunibhai Dajibha v. Narayanrao Khanderao
LPA 184/2019 & conn. matters Page 19 of 78
Jambekar [AIR 1965 SC 1457] and Harbhajan Singh v. Karam
Singh[AIR 1966 SC 641].)
13. In Patel Narshi Thakershi v. Pradyuman Singhji
Arjunsinghji [(1971) 3 SCC 844 : AIR 1970 SC 1273] , Major
Chandra Bhan Singh v. Latafat Ullah Khan [(1979) 1 SCC
321], Kuntesh Gupta (Dr.) v. Hindu Kanya
Mahavidyalaya [(1987) 4 SCC 525 : 1987 SCC (L&S) 491 :
AIR 1987 SC 2186] , State of Orissa v. Commr. of Land
Records and Settlement [(1998) 7 SCC 162] and Sunita
Jain v. Pawan Kumar Jain [(2008) 2 SCC 705 : (2008) 1 SCC
(Cri) 537] this Court held that the power to review is not an
inherent power. It must be conferred by law either
expressly/specifically or by necessary implication and in the
absence of any provision in the Act/Rules, review of an earlier
order is impermissible as review is a creation of statute.
Jurisdiction of review can be derived only from the statute and
thus, any order of review in the absence of any statutory
provision for the same is a nullity, being without jurisdiction.
14. Therefore, in view of the above, the law on the point can be
summarised to the effect that in the absence of any statutory
provision providing for review, entertaining an application for
review or under the garb of clarification / modification /
correction is not permissible."
21. Under the OAMDR Act, the statute only provides for a power of
appeal to the Central Government in terms of Section 34, that also to the
Central Government. That being so, in the absence of the power of review
the Administering Authority, in our considered view, became functus officio
insofar as issue of grant was concerned and once the power of review was
not available, the order impugned could not have been passed; and in
holding so the learned writ court has not committed any error.
22. Now we may consider the arguments advanced by the appellants that
the learned Single Judge has committed an error in deciding the question
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with regard only to the reasons contained in the impugned order. As already
indicated hereinabove, the reasons mentioned in the impugned order dated
30.06.2016 for annulling the notification dated 07.06.2010 and the
subsequent action thereto including the order of grant dated 05.04.2011 are:
(a) overlap of the exploration block as identified with certain onshore areas;
and, (b) the alleged prohibition of all mining activities within the CRZ area
in terms of CRZ Notification dated 06.01.2011. This point was elaborately
argued before us by the learned Solicitor General while referring to the
statutory provisions and various CRZs in question, it was argued that the
issue of overlap has been completely misconstrued by the learned Single
Judge and contrary to the statutory provisions, the requirement of
maintaining the blocks in the size of 5 mins latitude x 5 mins longitude has
been diluted by permitting the overlap.
23. The issue of overlap has been considered by the learned Single Judge
in paras 75, 76 and 78 of the impugned order in the following manner:
"75. The issue of overlapping of some blocks is nothing but an
afterthought and the reasons have been manufactured to
somehow cancel the grants so that the same can be
re-allocated/re-granted. The same is evident from the following
facts:
i. The notification inviting applications was issued on
07.06.2010 with prior approval and consent of
Controller General and various competent authorities
and departments of Government of India. The issue of
overlapping was never raised by any such authority.
ii. In fact, a committee of experts had been constituted for
the purpose of selection of successful applicants and such
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committee had members from IBM, GSI and NIO who
also recommended the granting of such blocks without
finding any fault therein including of the alleged
overlapping.
iii. The order of grant was issued on 05.04.2011 and the
said authorities defended the action of grant before
various High Courts viz. Chennai, Andhra Pradesh
(Counter of UOI and IBM page 285-293) and Bombay
(Nagpur Bench) (counter of IBM page 435-452) and
rather vehemently defended the issue of overlapping
raised by the writ petitioners before the Andhra Pradesh
High Court. They never found any such illegality for a
period of over 5 years since the issue of notification
dated 07.06.2010.
iv. The fact that the said reason is manufactured one is
also evident from the minutes dated 14.07.2015 at pages
167-168 wherein though IBM itself was asking for
proceeding with execution of the exploration licenses
without finding any fault, however, the then Secretary,
Ministry of Mines directed that IBM should consider
some process by which the present grants could be
cancelled and the blocks put up for re-grant.
In pursuant to such directions, reasons were
manufactured. In fact, writ petitions had been filed
before this Court in W.P.(C) No. 5734/2016 as well as
before the High Court of Bombay in W.P.(C) No.
3282//2016 and W.P.(C) No. 3625/2016. Notice by this
Court was issued in the month of June 2016 and the
Bombay High Court issued notice on 15.06.2016 wherein
petitioners were seeking a mandamus/direction to IBM to
execute the exploration licenses pursuant to grant. After
waiving notice by IBM and Union of India on
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15.06.2016, the impugned order dated 30.06.2016 was
issued in a hurried manner with a predetermined
approach.
76. The very fact that issue of overlap is an afterthought and a
malafide, reason is also evident from the counter affidavit filed
by IBM before the High Court of Andhra Pradesh in W.P.(C)
No. 12835/2011 wherein while defending the issue of overlap
as alleged in the writ petitions mentioned above, IBM in its
counter affidavit specifically stated that under Rule 43(3) of the
OAMC Rules, 2006, no mining activity in any way is
permissible within one nautical mile of the shoreline and
therefore, even if there was an overlap, no rights would be
vested and thereby the allocation of blocks, with some overlap
cannot be held to be beyond the jurisdiction of the
Administering Authority or in violation of the provisions of the
OAMDR Act.
78. Thus, the case of the respondents is absolutely false and
said issue is without affidavit with an attempt to mislead this
Court."
24. If we analyze the aforesaid reasons in the backdrop of the material
available before us and considered by the learned Single Judge, we see no
reason to interfere into the same. In fact, it was sought to be contended by
the learned SG that the Screening Committee had pointed out that some of
the blocks as notified did overlap with the onshore areas. In spite thereof,
the Administering Authority proceeded in issuing the grant on 05.04.2011.
In our considered view, this contention of the appellants is not correct
inasmuch as in the proceedings before the High Court of Bombay, Nagpur
Bench, the appellants themselves have filed affidavit defending the grant
and the entire selection procedure itself when the same was under challenge
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before the said court. The appellants herein on 13.08.2013 defended this
action of theirs before the High Court of Bombay, Nagpur Bench and in the
judgment rendered by the learned High Court on 17.09.2013, it was never
the contention of the appellants that the notification dated 07.06.2010 was
void on any issue including the issue of overlap. On the contrary, the stand
of the appellants before the High Court of Bombay was contrary to what is
being now stated before us and this is the reason why the learned Single
Judge has come to a conclusion that the justification now given for
withdrawing the grant is nothing but an afterthought as is made out from the
record. Even before the other High Courts where the selection process was
challenged, the appellants defended the grant throughout the period from
2011 till 2015 and it is difficult for us to accept that the appellants for five
years would not have taken any action as being contended now before us
with regard to the notification dated 07.06.2010 overlapping and therefore
vitiated.
25. It was also contended before us by the learned SG that the blocks can
be granted only in the size of 5 mins latitude x 5 mins longitude and the
direction issued by the learned Single Judge whereby the onshore areas
would be excluded from working would, in fact, amount to granting a block
of a smaller size than what is required under the statute. It was tried to be
emphasized that contrary to the size indicated in the statutory provision, no
block of a smaller size can be granted. In our considered view, this
contention is wholly misconceived and cannot be accepted. In our opinion,
the size of the block under law is not to be reduced from 5 mins latitude x
5 mins longitude. In fact, the learned Single Judge has reconciled the
position and held that the blocks of the statutory size would be granted but
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the licence holder shall only get permission to undertake exploration and/or
mining operation over the extent of area covered under the OAMDR Act.
That being so, even if the licence deed is executed for the entire block
covering an area 5 mins latitude x 5 mins longitude under law, the
permission available to the licence holder is to operate only over offshore
areas covered under OAMDR Act and not beyond that, i.e. onshore area.
26. In our considered view, the allegation pertaining to overlap cannot be
accepted for the following reasons also:
(i) The blocks are to be identified as 5 mins latitude x 5 mins
longitude under the OAMDR Act since no physical boundaries can be
provided over sea/offshore waters; and therefore, the provision is only
for ease of reference.
(ii) Admittedly, as the shore line does not run parallel to the
longitude in view of the physical features of the area, there is bound to
be certain degree of overlap regarding those blocks which are next to
the shore. This however does not mean that the licensee has any right
over the onshore area. In fact, even IBM was aware of the said fact
and in the report dated 11.12.2017 available on record, the Controller
General admitted that the reason in this regard contained in the order
dated 30.06.2016 was absolutely erroneous.
(iii) That apart, under Rule 18(2) of the OAMC Rules the
Administering Authority has power to impose additional conditions
while executing the exploration licence and in the exploration licence
executed with one M/s UA Minerals Pvt. Ltd. in pursuance to orders
passed in proceedings initiated by them, a condition was imposed by
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the Administering Authority that no right would accrue to the allottees
over any onshore area covered under the exploration licence. In fact,
a perusal of condition No. 3 of the Deed of Exploration Licence dated
30.11.2017 issued in favour of this licensee clearly shows that the
area granted under reference in Schedule A of the exploration licence
deed shall exclude all areas lying onshore to which the OAMDR Act
does not apply. This fact further clears any ambiguity over this issue
as the law empowers the Administering Authority to impose specific
condition and to restrict areas which are granted under the exploration
licence and prevent the issue of overlapping.
(iv) The parties while submitting the application were conscious of
the fact that they would only derive rights for exploration/mining in
the offshore areas; and no successful person would ever be able to
claim rights over the onshore area, which owing to the manner in
which the blocks are to be identified would necessarily overlap where
the block is close to the coastline.
27. That apart, we are of the considered view that the issue of overlap is
an afterthought as is evident from the counter affidavit filed by IBM before
the High Court of Judicature of Andhra Pradesh at Hyderabad in W.P.(C)
No.12835/2011 wherein, while defending the issue of overlap, as alleged in
the said writ petition in para 8, IBM in their counter affidavit specifically
stated that under Rule 43(3) of the OAMC Rules, 2006, no mining activity
in any way is permissible within one nautical mile of the shore line; and
therefore even if there was an overlap, no right would vest in the
respondents and thereby the allocation of block with some overlap cannot be
LPA 184/2019 & conn. matters Page 26 of 78
held to be beyond the jurisdiction of the Administering Authority or in
violation of the OAMDR Act. In fact, during the course of hearing before
us, learned counsel for the respondents had taken us through the affidavits
filed by the appellants in various proceedings to show the contradictory
stand taken by them. In our considered view, the learned Single Judge in
para 79 of the impugned order has dealt with the aforesaid issue in the
following manner:
"79. During the arguments, learned ASG contended that due to
the overlap, the grants allegedly stand vitiated as under section
10(3) read with section 5(4) of the OAMDR Act, blocks of only
5 x 5 minutes can be granted and as such if area of overlap is
excluded, the block will not be of 5 x 5 minutes. Learned
counsel for the petitioner submitted that the said contention is
absolutely erroneous and absurd. Section 10(3) merely fixes the
size of the blocks. Merely being granted a block does not mean
that the licencee can work all the areas in the said block. For
example, under section 9, the Central Government has power to
close any area in part or whole from being worked. Similarly,
under Rule 43(3) of the OAMC Rules, when undertaking mining
a distance of one nautical mile has to be maintained from the
sea shore, though the block may be abutting the sea shore.
Therefore, if for the reasons stated in section 9, the Central
Government closes only a portion of one block, or obligation
under section 43(3) of OAMC Rules is complied with, it would
not mean that the size of the block is affected in any manner or
that the block is no longer 5 x 5 minutes. Any such
interpretation as is being sought by the respondents would
make the entire act unworkable as every time power under
section 9 or a condition under Rule 18 or 43(3) is enforced, the
same would then make the grant invalid, if the argument of the
learned ASG is to be accepted. Such a construction would
LPA 184/2019 & conn. matters Page 27 of 78
result in absurdity. Learned counsel for the petitioner submitted
that the OAMDR Act, under section 10 introduces standard
block sizes and measurements as there are no physical
boundaries on the sea surface and as such area can only be
identified by longitudes and latitudes. It is settled law that an
Act should be interpreted as a whole and interpretation which
leads to absurdity is to be avoided at all costs."
28. As noticed, a fact which cannot be disputed is that the appellants have
sought to change their stand at every stage. Being faced with the findings as
recorded by the learned Single Judge, a new ground is now raised in these
appeals to say that strict demarcation is required so as to avoid illegal
mining and such overlap may lead to encroachment on the land to which the
OAMDR Act does not apply. In our considered view, this contention has to
be outrightly rejected. If the terms and conditions of the licence or the
provisions of the OAMDR Act are violated, the Administering Authority has
statutory powers to take action against such illegal mining or encroachment
on land, which if done, would amount to breach of the conditions of the
grant, and therefore on these grounds this contention of overlap has to be
and is accordingly rejected.
29. Next issue raised was the prohibition with regard to mining in the
CRZ area. In this regard, the learned Single Judge has dealt with the issue
of CRZ notifications and mining in such areas in detail from paras 80 to 81
and thereafter again from paras 84 to 86 in the impugned order; and it is
categorically recorded that the CRZ notification does not impose a complete
ban on the mining activities. Nothing has been demonstrated or shown to us
which warrants reconsideration of the issue as decided by the learned Single
Judge. In fact, the impugned annulment order dated 30.06.2016 seeks to
LPA 184/2019 & conn. matters Page 28 of 78
allege that there is complete prohibition on all mining activities in the CRZ
areas, and therefore, no purpose would be served in granting exploration
licence as subsequently no production lease can be granted. In our
considered view, the issue of prohibition on mining does not arise at the
present stage as the respondents would, at this stage, on their own cost
would only be exploring for the kind of minerals that are available and
which can be commercially exploited. Thereafter, it would submit a report
to the Government of its findings. Exploration operations are entirely
different from mining activities. The issue of mining and permission to
mine would arise only after exploration is completed and when the
concerned licensee applies for production lease. The appellants on this
ground cannot be allowed to pass orders pre-empting what may or may not
transpire in future.
30. We may further take note of the fact that the appellants not only in
their submissions before the learned Single Judge but also in the affidavits
filed stated that they would re-grant the blocks again, preferably through
auction. Even though when confronted with these facts, it was submitted
that there is no intention for re-auction, but the fact remains that in the
notings on file, so also in the affidavits, there are admissions with regard to
re-grant by way of auction. This itself amounts to an admission that there is
no prohibition in law on the issue of mining within the CRZ.
31. We may take note of the fact that the CRZ notification dated
06.01.2011 specifically carves out an exception permitting mining of rare
minerals not found elsewhere outside the CRZ areas. In fact, Clause 4(ii)(g)
which provides for permissible activities within the CRZ reflects that mining
of rare minerals is allowed. We may also take note of the fact that the
LPA 184/2019 & conn. matters Page 29 of 78
applications for grant of exploration licence were made for seeking
permission to explore the availability of, amongst others, of minerals as are
mentioned in the First Schedule of OAMDR Act including atomic minerals.
That being so, the entire basis of the impugned order dated 30.06.2016,
namely the alleged mining within CRZ area not being permissible is
erroneous. In fact, the learned Single Judge in para 81 of the impugned
order holds that the order dated 30.06.2016 amounts to putting the cart
before the horse inasmuch as unless and until exploration is undertaken and
the reports disclose that there were no rare minerals/atomic minerals within
the blocks granted, the alleged reasoning pertaining to prohibition on mining
could not have been arrived at. In fact in these appeals, there is no challenge
to the finding of the learned Single Judge regarding the issue of complete
prohibition of mining in CRZ areas under the notification dated 06.01.2011.
As far as the subsequent notification dated 06.10.2017 is concerned, this
amendment, in our considered view, brings out further clarity on the rare
minerals which can be mined under the CRZ. The amendment provides that
atomic mineral as notified under Part-B of the First Schedule of the MMDR
Act are permitted to be mined within the CRZ. The minerals mentioned,
namely, ilmenite, rutile, zircon, etc. are identified as atomic minerals in Part
B of the First Schedule to the MMDR Act. That being so, if the aforesaid
minerals are found during exploration, there will be no impediment in
granting the production lease for the said minerals as mining of the said
minerals is expressly provided now by the CRZ notification. These facts
were communicated by the then Controller General, IBM and the
Administering Authority in his report vide e-mail dated 24.01.2017 to the
Ministry of Mines by contending that in light of the CRZ notification dated
LPA 184/2019 & conn. matters Page 30 of 78
06.10.2017 now exploration licence can be granted even for atomic
minerals. That apart, the clarification available on record dated 09.02.2018
issued by the Ministry of Environment, Forest and Climate Change also
clarifies that mining of rare minerals was a permitted activity under the CRZ
notification dated 06.01.2011 and specified in Part B of the First Schedule to
MMDR Act.
32. We may take note of the fact that the primary reason mentioned in the
order impugned dated 30.06.2016 was the alleged prohibition of mining
within CRZ. The CRZ notification dated 06.01.2011 is the only notification
which is required to be considered to test the correctness of the impugned
action and this notification does not provide for absolute prohibition on
mining. On the contrary, mining of rare minerals is very much permitted by
this notification as is evident from paras 3(x), 4(ii)(g), 8(III)(iii)(c) and
8(IV)(b).
33. That being the factual position, as discussed by the learned Single
Judge, with reference to the specific reasons mentioned in the impugned
order and, in our considered view, the same being in accordance to the
statutory requirement, we find no error in the order passed by the learned
Single Judge.
34. Having considered the main grounds that were canvassed before the
learned writ court, we may now proceed to consider the grounds that have
been raised before us namely the grounds that were not reflected in the
impugned annulment order dated 30.06.2016 but are the grounds which have
been subsequently reflected in the counter affidavit to justify the impugned
action.
LPA 184/2019 & conn. matters Page 31 of 78
35. One of the moot question that was canvassed before us was that the
letter of intent/grant/allotment dated 05.04.2011 does not create any vested
right or grant any legally enforceable right to the respondents. It is the case
of the appellants that no right can be derived by the respondents as the same
was only a conditional order which is nothing but in the nature of an in-
principle approval which is subject to finalization on issuance of the
exploration licence which has to be executed. It is said that until and unless
the exploration licence is executed, no right accrues to the respondents. It is,
therefore, the case of the appellants that as no right accrues to the
respondents by virtue of the grant or approval of 05.04.2011 it could be
withdrawn at any stage. However, it was argued before us by the
respondents/petitioners that the nature of grant made, which is based on
compliance with certain statutory procedural requirement, creates a vested
right in their favour and the accrued right which they have derived by virtue
of the statutory provisions could not be curtailed or taken away in the
manner done. It is their case that once, in accordance to the provisions of
the OAMDR Act and the Rules framed thereunder, the grant was made on
05.04.2011, the only subsequent action required was the ministerial act of
executing the exploration licence and nothing more.
36. The grant of exploration licence and the process for doing so are
governed by the OAMDR Act which came into force w.e.f. 15.01.2010. By
notification dated 11.02.2010 and subsequently in pursuance to the statutory
requirement in accordance to the provisions of Section 4A of the OAMDR
Act, the Controller General, IBM was appointed; and on 11.02.2010 the
Administering Authority in terms of Section 10(1) of the Act was required
to notify the blocks within six months of commencement of the Act i.e.
LPA 184/2019 & conn. matters Page 32 of 78
within six months of 15.01.2010, and he accordingly, notified the same on
07.06.2010 identifying blocks and notifying applications for exploration
licence within the statutory prescribed period. The making of an application
for exploration licence and the receipt thereof are governed by Rule 13 and
14 of the OAMC Rules and the grant of licence is governed by Section 12 of
the OAMDR Act. Section 12 of the OAMDR Act reads as under:
"12. (1) The administering authority may grant an exploration
licence to any person who-
(a) is eligible under section 6 for grant of operating
right;
(b) produces, to the satisfaction of the administering
authority, evidence that such person possesses the requisite
technical ability and financial resources to undertake
exploration operation based on such scientific parameters, as
may be prescribed;
(c) submits a work programme for the area applied for,
prepared in such manner and supported by such data as may be
prescribed, setting forth the activities proposed to be carried
out during the period of the exploration licence including the
intended exploration schedule and methods to be used, an
estimated schedule of expenditure, measures to prevent
pollution and protect the environment and to monitor the
effectiveness of environmental safeguards subject to the
modifications which the administering authority may make in
such work programme;
(d) undertakes not to deviate from the work programme
for exploration licence approved by the administering
authority; and
(e) has fulfilled, to the satisfaction of administering
authority, all his statutory obligations under any operating
right previously-
(i) granted; or
LPA 184/2019 & conn. matters Page 33 of 78
(ii) transferred in the prescribed manner,
to him.
(2) The administering authority may, if there is any reasonable
cause to believe that any person, to whom an exploration
licence has been granted, has violated any undertaking given
under clause (d) of sub- section (1), terminate the exploration
licence.
(3) All applications for the grant of exploration licence received
within the prescribed time and which satisfy the conditions
specified in sub-section (1) shall be considered together and
while making a selection for the grant of exploration licence,
the administering authority shall follow the procedure given
below, namely:-
(a) where only one application is received in
respect of an area, the administering authority may grant
the exploration licence to the applicant;
(b) where two or more applications are received in
respect of the same area or substantially the same area,
the order of preference shall be as follows, namely:-
(I) preference shall be given to an applicant
who requires the mineral for use in an industry
either already owned by the applicant or who has
taken sufficient steps to set- up such industry:
Provided that where there are more than
one application of such category, the
administering authority may grant licence based
on a comparative evaluation of the-
(i) nature, quality and experience of
the technical personnel employed by the
applicant;
(ii) financial resources of the
applicant;
LPA 184/2019 & conn. matters Page 34 of 78
(iii) nature and quantum of the
exploration work proposed by the applicant;
and
(iv) nature, quality and quantum of
data submitted along with the programme of
exploration;
(II) in case of other applicants, not covered
under sub- clause (I), the administering authority
may grant licence based on a comparative
evaluation of matters stated in items (i) to (iv) of
the proviso to sub- clause (I).
(4) The period for which an exploration licence may be granted
shall not exceed three years.
(5) An exploration licence granted under sub- section (1) may
be renewed for a period not exceeding two years if, after a
review, the administering authority is satisfied that the licensee
has been conducting the exploration operation in accordance
with the work programme approved by the administering
authority regarding such licence and longer period of renewal
of the licence is considered necessary to enable the licensee to
complete exploration.
(6) The area that may be granted under exploration licence
shall not exceed a block of thirty minutes latitude by thirty
minutes longitude:
Provided that if the administering authority is of the
opinion that in the interest of the development of any mineral, it
is necessary so to do, it may, for reasons to be recorded in
writing, permit any person to acquire an area in excess of the
area specified in this sub- section."
37. A perusal of the aforesaid provision would show that the power and
discretion to grant exploration licence vest solely with the Administering
Authority. The provision provides the conditions that are required to be
satisfied for the Administering Authority to exercise its discretion in favour
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of an applicant and also for instances to deal with cases where there are
more than one applicant for a given area. The manner in which preference is
to be given and the applications are to be scrutinized for providing the grant
is stipulated in the statute. The language of the statutory provision makes it
abundantly clear that the Administering Authority has to apply his mind and
only on arriving at a satisfaction to the effect that the conditions are fulfilled,
a decision can be taken by him for grant of licence. The question, therefore,
would be as to when the decision to make the grant is taken after following
all the statutory formalities; and whether communication dated 05.04.2011
can be called only a letter of intent or the grant itself?
38. At this stage, it would be appropriate to take note of Rule 16 of the
OAMC Rules. The same reads as under:
"16. Refusal of application for an exploration licence.-
(1) If the administrating authority is satisfied that the
application is in order, he may issue an order for grant of an
exploration licence in Form J Subject to such terms and
conditions as are specified in rule 18 and the additional terms
and conditions as may be stipulated therein.
(2) The administering authority may, after giving an
opportunity of being heard and for reasons to be recorded in
writing and communicated to the applicant, refuse to grant or
renew an exploration licence over the whole or part of the
offshore area applied for.
(3) An application for the grant or renewal of an exploration
licence made under rule 13 shall not be refused by the
administering authority only on the ground that Form G or
Form H, as the case may be, is not complete in all material
particulars, or is not accompanied by the documents referred to
in clauses (a), (b) and (c) of sub-rule (2) of that rule.
(4) Where it appears that the application is not complete in
all material particulars or is not accompanied by the required
LPA 184/2019 & conn. matters Page 36 of 78
documents, the administering authority shall, by notice, require
the applicant to supply the omission or, as the case may be,
furnish the documents without delay and in any case not later
than thirty days from the date of receipt of the said notice by the
applicant."
39. The aforesaid Rule under sub-clause (1) provides for issuance of the
order for grant and sub-clause (2) provides for cases where the
Administering Authority wishes to refuse grant of exploration licence. In
the present case, the Administering Authority acted under Section 12 read
with Rule 16(1) and issued the order for grant of licence in terms of the
order dated 05.04.2011 and the relevant extract of the grant reads as under:
"In view of above by virtue of powers vested in me under
Rule 16(1) of the Offshore Areas Mineral Concession Rules,
2006, I hereby order grant of Exploration Licence subject to
such terms and conditions as are specified in Rule 18 and the
additional terms and conditions as may be stipulated therein to
you over the block considered and qualified as above for the
offshore area minerals.
You are advised to execute the Exploration Licence deed
in Form K as required under sub-rule (1) & (2) of Rule 19 of
the Offshore Areas Mineral Concession Rules, 2006 within 90
(Ninety) days from the date of issue of this order.
This order is being issued without prejudice to any other
Act, Rules, Notifications, Honourable Court Orders / directions
applicable in this regard.
(C.S. Gundewar)
Controller General & Administering Authority"
40. Further, Rule 18 of the OAMC Rules makes it evident that the said
Rule provides for conditions which will be part of the exploration licence.
The Rule does not provide for satisfying certain conditions prior to
LPA 184/2019 & conn. matters Page 37 of 78
execution of the exploration licence but only putting the grantee to notice of
the grant and of the conditions on which the grant is made. A perusal of
sub-rule (4) of Rule 18 makes it clear that the licence stands granted or else
there would have been no occasion to provide for cancellation of licence as
contained in the rule referred to in communication dated 05.04.2011.
For the sake of brevity, Rule 18(1) and Rule 18(4) of the OAMC Rules is
reproduced hereinunder which would explain the position:
"18. Conditions of an exploration licence.- (1) Every
exploration licence granted under these rules, shall, in addition
to any other conditions that may be specified therein, be subject
to the following conditions, namely:-
(i) the licensee shall pay exploration charges at the
rate of five thousand rupees as a consideration for every
standard block of five minutes latitude by five minutes
longitude covered by the exploration licence for each
year or part of a year of the period for which licence is
granted or renewed;
(ii) for every standard block as specified in clause(i),
the licensee may, win and carry for purposes other than
commercial purposes-
(a) any quantity of such minerals within the
limits specified in column (3) of the Schedule
without any payment;
(b) any quantity of such minerals not exceeding
the limits specified in column (4) of the Schedule
on payment of royalty for the time being specified
in the First Schedule to the Act in respect to those
minerals:
Provided that if any quantity in excess of the quantities
referred to in sub-clause (b) is won and carried away, the
administering authority shall recover the cost of the excess
quantity of minerals won and carried away.
LPA 184/2019 & conn. matters Page 38 of 78
(iii) with the written approval of the administering
authority, the licensee may carry away quantities of
minerals in excess of the limits specified in the Schedule,
on payment of royalty for the time being specified in the
First Schedule to the Act, for chemical, metallurgical,
ore-dressing and other test purposes;
(iv)(a) the licensee shall report to the administering
authority the discovery of any mineral not specified in the
licence within a period of sixty days from the date of such
discovery. Consequent upon such reporting, the newly
discovered mineral shall be deemed to have been
included in the exploration licence except the mineral
oils namely oil, gas, gas hydrate, oil sands or any other
hydrocarbon compound.
(b) the licencee shall, if encountered during
exploration operations, report indications of any form
of mineral oil, namely, oil, gas, gas hydrate, oil sands
or any other hydrocarbon compound, to the
administering authority within a period of sixty days
from the date of such encounter, who in turn shall pass
on the information to the Secretary to the Government
of India in the Ministry of Petroleum and Natural Gas:
Provided that no atomic mineral shall be included in the
exploration licence without approval of the Department of
Atomic Energy.
(v)(a) the licensee shall not, except with the previous
sanction of the administering authority, transfer his
licence to any person:
Provided that no exploration licence shall be transferred
to any person who has not filed an affidavit stating that he has
filed an up-to-date income-tax return and paid the income tax
assessed on him and paid the income tax on the basis of self
assessment as provided in the Income-tax Act, 1961 (43 of
1961):
LPA 184/2019 & conn. matters Page 39 of 78
Provided further that the administering authority shall
not grant its sanction for the transfer of exploration licence
unless the transferee has accepted all the conditions and
liabilities, which the transferor has in respect of such
exploration licence.
(b) where on an application for grant of sanction to
transfer the exploration licence under sub-clause (a),
the administering authority has granted sanction for
transfer of such licence, a transfer deed in Form J, or a
form as near thereto as possible shall be executed
within three months of the date of consent, or within
such further period as the administering authority may
allow in this behalf.
(c) the administering authority may, by order in writing
and after providing the licensee the opportunity of being
heard, cancel such exploration licence at any time if the
licensee has, in the opinion of the administering
authority, committed a breach of this clause;
(vi) the licensee shall not pay any wage less than the
minimum wages prescribed by the appropriate
Government from time to time, under the Minimum
Wages Act, 1948 (11 of 1948);
(vii) the licensee shall make available all data or
information collected by him and submit reports as per
the provisions of clauses (a), (b), (c) and (d) of sub-
section (2) of section 5;
(viii) the licensee shall maintain accurate and true
account of all the expenses incurred by him on the
exploration operations and also the quantity and other
particulars of all minerals obtained during such
operations and their dispatch;
(ix) the licensee shall allow every officer authorized by
the Central Government or the administering authority in
this behalf to examine at any time accounts maintained
and furnish the Central Government or the administering
LPA 184/2019 & conn. matters Page 40 of 78
authority or any other officer authorized by it in that
behalf such information and returns as they may desire;
(x) the licensee shall allow any officer authorized by the
Central Government or the administering authority in
this behalf to inspect any exploration operations carried
on by him;
(xi) the licensee shall give at least two months advance
notice before commencement of the exploration work to
the Ministry of Defence to ensure that the exploration
work does not interfere with any Naval exercise in the
area;
(xii) to undertake the exploration operations only Indian
contracted companies should preferably be deployed. In
case foreign contracted companies are to be deployed,
prior approval of the Ministry of Defence shall be
obtained and data shall be collected under supervision of
Indian representatives of the licensee who shall ensure
appropriate security safeguards;
(xiii) the exploration data should be processed in India
and such processed and unprocessed data may be
imparted to any foreign contractor only with prior
approval of the Central Government;
(xiv) all vessels deployed for exploratory work by the
licensee himself or contracted companies shall undergo
Naval security inspection of the Indian Navy under the
aegis of the Flag Officer Commanding-in-Chief of the
concerned Naval Command, Flag Officer, Offshore
Defence Advisory Group prior to their deployment.
A clear one month's notice is to be given to facilitate
clearance or inspection.
(xv) all vessels deployed for exploratory work by the
licensee shall obtain prior clearance from the
Directorate General of Shipping in terms of the relevant
provisions of the Merchand and Shipping Act, 1958 (44
of 1958) and the rules made thereunder;
LPA 184/2019 & conn. matters Page 41 of 78
(xvi) intimation regarding awards of contracts to other
contracted companies along with details of the contracts
shall be forwarded to the Naval Headquarters
(Directorate of Naval Intelligence), Ministry of Defence
suitably in advance of the operations by the licensee
providing six monthly long case on vessels deployment,
by operating companies;
(xvii) appropriate visa shall have to be obtained from the
competent authority for all foreign personnel on board
the vessel and for this purpose, the contracted company
shall provide a list of such foreign nationals to competent
authority for prior visa authorization;
(xviii) the licensee shall take all precautionary measures
for safety and security of all vessels or equipments
deployed for exploration activities;
(xix) for issuing the marine safety warnings, the licensee
shall immediately inform the Flag Officer, Offshore
Defence Advisory Group and the administering authority
the location indicating all vessels and equipments or
machinery deployed at particular location and thereafter
its new location as and when it is shifted.
(4) In the case of breach of any condition imposed on any
holder of exploration licence by or under this rule, the
administering authority may, by order in writing, cancel the
licence or forfeit, in whole or part, the amount deposited by the
licensee under rule 21 or do both.
Provided that no such order shall be made without giving
the licensee a reasonable opportunity of being heard of stating
his case."
41. It is, therefore, evident from the aforesaid statutory provision that
once the grant is made as is evident from order dated 05.04.2011, all that
remained to be done was execution of the exploration licence as provided
LPA 184/2019 & conn. matters Page 42 of 78
for under Rule 19 of the OAMC Rules. Rule 19 of the OAMC Rules reads
as under:
"19. Licence to be executed within three months - (1) Where on
an application for an exploration licence, an order has been
made for grant of such licence...................., and if no such
deed is executed within the said period due to any default on
the part of the applicant, the administering authority may
revoke the order granting the licence and in that event the
exploration charges paid ............." (emphasis supplied)
42. In fact, in the present case the original writ petitioners, who are
respondents herein, had approached the Administering Authority to execute
the exploration licence under the requisite forms in terms of Rule 19 of the
OAMC Rules. However, due to pendency of matters before the Court, the
Administering Authority did not proceed further. From a complete reading
of the statutory provisions and the Rules framed thereunder, it is abundantly
clear that it is after following certain statutory procedure and processes that
the grant is made and the subsequent act of execution of licence is nothing
but a ministerial act. Once the pre-requisites contemplated under Section 12
stood satisfied and the Administering Authority arrived at a decision in
accordance to the provisions of Section 12, a right stood determined and
vested in the respondents and then only the ministerial act of execution
under Rule 19 was required to be followed. A perusal of the provisions of
Rule 19, as is reproduced hereinabove, itself would indicate that before the
stay of execution of the licence came under Rule 19, the grant was already
made otherwise there was no question of providing a power to revoke the
order granting the licence. If the applicant defaults in executing the licence,
it is provided under Rule 19(1) that the Administering Authority may revoke
the grant made. Similarly, the provisions of Section 12 which provides that
LPA 184/2019 & conn. matters Page 43 of 78
the Administering Authority may grant a licence to any person clearly
indicates that once the statutory process contemplated for selection was
followed, the order for grant is issued and once a grant is issued after
following all these elaborate statutory provisions, it can, by no stretch of
imagination, be considered as a letter of intent or a mere in-principle
approval as canvassed by the appellant.
43. That apart, this issue can also be considered from a different
perspective. Section 12 contemplates that there may be multiple applicants.
In such a situation, the statute contemplates for rejection of an application by
recording reasons and the unsuccessful applicant or any other person who
may be aggrieved by such rejection is entitled to challenge the order. The
very fact that the right accrued to a person to challenge the rejection of the
application itself indicates that the grant is final and a right accrues for
challenging the same by unsuccessful applicant; otherwise the cause of
action would accrue to such a person only after execution of the licence deed
under Rule 19. There is nothing in the Act or the Rules framed thereunder
which suggest that an order under Section 12 rejecting an application is
premature and can be challenged only after execution of the licence deed
under Rule 19. The position of law clearly indicates that a party aggrieved
by rejection of his application has to challenge the order passed under
Section 12 read with Rule 16 and he has no right to challenge the execution
of the licence under Rule 19. This is because the rights of the applicants are
determined under Section 12 and what follows thereafter is only a
ministerial act. At this stage, it would be appropriate to take note of a
judgment of the Hon‟ble Supreme Court in the case of Edukanti Kistamma
(Dead) through LRs. & Ors. vs. S.Venkatareddy (Dead) through LRs &
LPA 184/2019 & conn. matters Page 44 of 78
Ors., (2010) 1 SCC 756 and in paras 23, 24 and 25 of the aforesaid
judgment the Hon‟ble Supreme Court has laid down the following principle:
"23. Undisputedly, the grant of a right or a permit/licence
under any statutory provision requires determination of rights
and entitlement of the parties. Once such a right is determined,
the issuance of the order on the basis of such determination
remains a ministerial act.
24. In Kundur Rudrappa v. Mysore Revenue Appellate
Tribunal [(1975) 2 SCC 411 : AIR 1975 SC 1805] this Court
examined the provisions of the Motor Vehicles Act, 1939
wherein Section 64 provided for an appeal against the grant or
refusal of the grant of a permit on a route. In the said case, the
appeal was filed only against the order of issuance. This Court
held that such an appeal was not maintainable for the reason
that issuance of permit was only a ministerial act, necessarily
following the grant of the said permit and as no appeal was
maintainable against the order of issuance. The order of the
Tribunal was a nullity for want of competence. The Court
further held that in such an eventuality, the permit granted to
the other party could not have been cancelled and directed for
issuance of the permit. Same view has been reiterated by this
Court in Sharif Ahmad v. RTA [(1978) 1 SCC 1 : AIR 1978 SC
209].
25. In A.P. SRTC v. STAT [(1998) 7 SCC 353 : AIR 1998 SC
2621] this Court observed that actual issue of permit cannot be
equated to the grant thereof, as both are separate things and
issuance will be consequential to the grant of the permit. In
fact, it is the grant and not issuance of the permit, which
requires to be challenged."
44. Similarly, in the case of M/s Gujarat Pottery Works Pvt. Ltd. vs. B.P.
Sood and Ors., AIR 1967 SC 964 in para 7 the Hon‟ble Supreme Court has
held that grant of a lease is different from the formal execution of a lease.
It has been held by the Hon‟ble Supreme Court that it is sanctioning of the
lease which amounts to grant of the lease and execution of a formal lease
LPA 184/2019 & conn. matters Page 45 of 78
deed thereafter is only compliance with the legal requirement to make the
grant legally enforceable. That being the legal position, in this case the
grant made by way of communication dated 05.04.2011 itself creates a right
in favour of the respondents.
45. Further, in the case of Bhushan Power and Steel Ltd. vs. SL Seal,
Addl Secretary (Steel and Mines) State of Odhisa and Ors., (2017) 2 SCC
125 the Hon‟ble Supreme Court while considering a question with regard to
issue of grant of lease under the MMDR Act in para 22.3 has observed as
under:
"22.3. Third category is that category of applicants where the
Central Government had already communicated previous
approval under Section 5(1) of the Act for grant of mining lease
or the State Government had issued letter of intent to grant a
mining lease before coming into force of the Amendment Act,
2015. Here again, the raison detre is that certain right had
accrued to these applicants inasmuch as all the necessary
procedures and formalities were complied with under the
unamended provisions and only formal lease deed remained to
be executed."
46. From the aforesaid principle laid down and on analysis of the facts in
the case of Bhushan Power and Steel Ltd. (supra), it is clear that in that
case the lease had not been executed and only the recommendation for grant
of lease was issued. However, the High Court accepted that rights had
accrued on such grant being made. If we analyse the facts in the case of
Bhushan Power and Steel Ltd. (supra), it would be seen that the Hon‟ble
Supreme Court has taken note of the procedures and formalities
contemplated for grant of lease, namely, making of the application and
acceptance of the same and held those to be the procedure and formalities
LPA 184/2019 & conn. matters Page 46 of 78
for grant. In the case in hand also, the formalities contemplated under
Section 12 read with Rule 13, 14 and 16 have been complied with and only
execution of a formal licence under Rule 19 remains. In view of the above,
contention of the appellants that no vested right has accrued in favour of the
respondents is unsustainable.
47. During the course of hearing, the appellants in support of the
aforesaid contention had placed reliance on the judgments of the Hon‟ble
Supreme Court in the case of Rishi Kiran Logistics Pvt. Ltd. vs. Board of
Trustees of Kandla Port Trust and Ors., (2015) 13 SCC 233 and Dresser
Rand S.A. vs. BINDAL Agro Chem Ltd. and Ors., (2006) 1 SCC 751. In
the case of Rishi Kiran Logistics Pvt. Ltd. (supra), the Hon‟ble Supreme
Court too arrived at a conclusion that in the facts and circumstances of that
case, the letter of intent did not result in a concluded contract, relied on
certain observations made in Dresser Rand S.A. (supra) and in para 43
[in the case of Rishi Kiran Logistics Pvt. Ltd. (supra)] observed as under:
"43. At this juncture, while keeping the aforesaid pertinent
features of the case in mind, we would take note of "the Rules
and Procedure for Allotment of Plots" in question issued by
Kandla Port Trust. As per Clause 12 thereof the Port Trust had
reserved with itself right of acceptance or rejection of any bid
with specific stipulation that mere payment of EMD and
offering of premium will not confer any right or interest in
favour of the bidder for allotment of land. Such a right to reject
the bid could be exercised "at any time without assigning any
reasons thereto". Clause 13 relates to "approvals from
statutory authorities", with unequivocal assertion therein that
the allottees will have to obtain all approvals from different
authorities and these included approvals from CRZ as well. As
per Clause 16, the allotment was to be made subject to the
approval of Kandla Port Trust Board/competent authority. In
view of this material on record and factual position noted in
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earlier paragraphs we are of the opinion that observations
in Dresser Rand S.A. v. Bindal Agro Chem Ltd. [(2006) 1 SCC
751 : AIR 2006 SC 871] would be squarely available in the
present case, wherein the Court held that: (SCC p. 773, paras
39-40)
"39. ... a letter of intent merely indicates a party's
intention to enter into a contract with the other party in
future. A letter of intent is not intended to bind either
party ultimately to enter into any contract. ...
40. It is no doubt true that a letter of intent may be
construed as a letter of acceptance if such intention is
evident from its terms. It is not uncommon in contracts
involving detailed procedure, in order to save time, to
issue a letter of intent communicating the acceptance of
the offer and asking the contractor to start the work with
a stipulation that the detailed contract would be drawn
up later. If such a letter is issued to the contractor,
though it may be termed as a letter of intent, it may
amount to acceptance of the offer resulting in a
concluded contract between the parties. But the question
whether the letter of intent is merely an expression of an
intention to place an order in future or whether it is a
final acceptance of the offer thereby leading to a
contract, is a matter that has to be decided with reference
to the terms of the letter."
When the LoI is itself hedged with the condition that the final
allotment would be made later after obtaining CRZ and other
clearances, it may depict an intention to enter into contract at a
later stage. Thus, we find that on the facts of this case it
appears that a letter with intention to enter into a contract
which could take place after all other formalities are
completed. However, when the completion of these formalities
had taken undue long time and the prices of land, in the
interregnum, shot up sharply, the respondent had a right to
cancel the process which had not resulted in a concluded
contract."
LPA 184/2019 & conn. matters Page 48 of 78
48. From the aforesaid, it is clear that in the facts of that case the letter of
intent itself was held to be expression of an intention as it was hedged with
conditions and it was stipulated that the final allotment would be made later
on after obtaining certain clearances and completing certain formalities.
It was held that in the facts of that case it was only a letter expressing an
intention to enter into a contract. In the present case, the scenario is entirely
different. In this case, the grant itself is made and it is not expression of an
intention to make any grant. In fact, the judgments relied upon and the ratio
in the cases of Rishi Kiran Logistics Pvt. Ltd. (supra) & Dresser Rand S.A.
(supra) will not apply in the present case. In the cases relied upon by the
appellants in this regard are all clearly distinguishable in view of the fact
that in all those cases what was conveyed was an intention to make a grant
and there were various pre-conditions which were to be fulfilled before the
grant could be finalized or made. In the present case, all the pre-conditions
were held satisfied before the grant was made and what remained was only
the ministerial act of execution of the exploration licence.
49. We may also take note of the fact that the appellants did rely upon a
judgment in the case of Savita Rawat and Ors. Vs. State of M.P. and Ors.,
(2016) SCC Online MP 542. This judgment was also rendered in the
backdrop of Section 10A of the MMDR Act; however, the said judgment
stands impliedly overruled in view of the law laid down in the case of
Bhushan Power and Steel Ltd. (supra). In fact, the distinction between
grant of lease and licence has to be understood differently and should not be
confused with execution of a lease or licence deed. In the facts of the
present case, the grant was already made and the execution was what
remained to be done. Accordingly, we are of the considered view that in the
LPA 184/2019 & conn. matters Page 49 of 78
facts and circumstances of the present case the contention of the respondents
that the letter of intent did not create any right is not correct. Even though in
this regard various other judgments were cited before us to indicate that the
grant did not create any right but all the judgments relied upon are
distinguishable on facts. They were all cases where on certain conditions to
be fulfilled, the grant was made or the letter of intent was issued and the
conditions still remained to be fulfilled, whereas in the present case all the
conditions required to be fulfilled by the appellant were stipulated in Section
12 and the Rules framed thereunder like Rules 13, 14 and 16; and it is only
after these conditions were fulfilled that the grants were made and what
remained after making of the grant was only the formal act of execution of
the licence deed.
50. It may also be relevant to take note of the fact that in the instant case
the selection process was undertaken by the Administering Authority with
the help of experts from the Indian Bureau of Mines, Geological Survey of
India and the National Institute of Oceanography and the said process of
selection and grant had attained finality as far as the writ petitioners,
namely, respondents herein are concerned in view of the fact that certain
findings in this regard recorded by the Division Bench of Bombay High
Court at Nagpur on 17.09.2013 in W.P.(C) 1502/2011 titled M/s. Rare (H)
Minerals Pvt. Ltd. vs. Union of India dismissed the challenge to the
selection process which was ultimately upheld by the Hon‟ble Supreme
Court while dismissing the SLP on 31.03.2004. This is a case where the
procedure adopted for evaluating the applications and the process done for
selecting the eligible applicants for the grant of exploration licence had
LPA 184/2019 & conn. matters Page 50 of 78
attained finality and judicial acceptance after the SLP was dismissed by the
Hon‟ble Supreme Court.
51. That apart, the appellants are now seeking to make a submission and
take a ground which is contrary to their own understanding and submissions
made in the previous litigations. In terms of the internal discussions held by
the departmental authorities, namely, in the minutes of the meeting brought
on record under the Right to Information Act, it is evident that the
departmental authorities understood that the blocks already stood granted
and only execution of the licence remained. In fact, in the minutes of the
meeting held on 14.07.2015 between IBM and the Secretary of Mines, the
position is crystal clear if the discussion between the various officials with
regard to Issue No.6 is analyzed. A perusal of the minutes of this meeting
dated 14.07.2015 makes it abundantly clear that the departmental authorities
understood that the blocks have already been granted and only execution of
the licence remained. It is therefore clear from a complete reading of the
statutory provisions and the manner in which the departmental officers
understood the issue, that all were under the bona fide belief that the grant
had been made and what remained was only the ministerial act of execution
of the licence. Accordingly, we have no hesitation in holding that a right
was created in favour of the writ petitioners/the respondents herein and it
could not be annulled or taken away in the manner in which it was done.
The contention of the appellants that what was granted or issued was only a
letter of intent or an intention to make the grant is not correct. What was
done is finalizing the grant itself, after scrutiny of claim made by various
applicants, after following the statutory provisions contemplated under
Section 12 read with Rules 13, 14 and 16; and after following such elaborate
LPA 184/2019 & conn. matters Page 51 of 78
statutory provisions once a grant is made, it can, by no stretch of
imagination be construed to be only an expression of intention or an offer.
The arguments in this regard have to be and are accordingly rejected.
52. The next point that was canvassed, even though it was not part of the
reason indicated in the impugned order, was with regard to the public
interest involved in the manner; and a more important question as to whether
the annulment order was passed with an intention to re-auction the block.
Whatever be the decision, even if it be a noble decision or a decision taken
on paramount considerations of public interest but when a decision is
challenged on the ground of it being taken in violation of the statutory rule,
it is a well settled principle of law that any decision taken de hors the
statutory provision is unsustainable. Mere public interest cannot be a
ground for taking a decision in breach of statutory provisions. If such a
process is permitted, the principle of rule of law would stand violated and
any statutory provision would become dead letter if permitted to be ignored
only on the ground of public interest. Such course of action would sound
the death knell for the rule of law. In the case of Dipak Babaria and Anr.
vs. State of Gujarat, (2014) 3 SCC 502 it has been held by the Hon‟ble
Supreme Court by referring to certain commentaries by Lord Bingham in his
work titled "Rule of Law" that a public office, at whatever level it is
functioning, must exercise power conferred on them in good faith, fairly and
in conformity with the statutory provisions and the powers conferred
thereto; and it cannot be done in derogation to the statutory provision.
The power can be validly used in the manner as provided by the statute and
not otherwise.
LPA 184/2019 & conn. matters Page 52 of 78
53. It is a well settled principle of law that when a statute provides a
particular thing to be done in a particular manner then it is mandatory to do
the same in the manner provided and not otherwise. This proposition of law
has been laid down in the famous case of Taylor vs. Taylor, (1875) LR1 Ch
D 426 and has been adopted by this Court in various cases right from Nazir
Ahmad vs. King Emperor, AIR 1936 Privy Council 253 and followed
consistently in various cases. It is the cardinal principle of law based on the
rule adopted in Taylor vs. Taylor (supra) that if a statute has conferred a
power to do an act and has laid down the method in which the power is to be
exercised, the statute necessarily prohibits doing so in any manner other than
the one prescribed.
54. In the present case, a perusal of the minutes of the meeting dated
14.07.2015 shows that the Secretary of the Department was seeking to place
reliance on the amendment to the provisions of the MMDR Act incorporated
in the year 2015 to suggest that exploration licence granted under the
OAMDR Act should be cancelled and re-granted through auction. The said
direction on the face of it stands vitiated as under the provisions of the
OAMDR Act there is no procedure laid down providing for grant of licences
by auction and no amendment as carried out in the MMDR Act has been
undertaken in the OAMDR Act. It has to be assumed that Parliament was
aware of the provisions of the OAMDR Act when it decided to amend the
provisions of MMDR Act in the year 2015 by introducing the concept of
auction of mining leases. However, no such amendment was carried out in
the OAMDR Act. When the legislature itself has not thought it appropriate
to amend the OAMDR Act, no executive authority, like the Secretary, can
seek to frustrate the legislative intent by placing reliance on a provision of
LPA 184/2019 & conn. matters Page 53 of 78
another Act i.e. MMDR Act for implementing the statutory requirement
under the OAMDR Act. The Hon‟ble Supreme Court in the case of
In Re.: Natural Resources Allocation, (2012) 10 SCC 1 has explained that
auction is not the mandate of the Constitution and the Government can
always take a decision to allocate resources without auction. The Hon‟ble
Supreme Court in the said case was taking note of the provisions of the
unamended MMDR Act which provided for allocation of resources without
auction and the legislative principle of allocation without auction was
approved. Accordingly, the provisions of the OAMDR Act which does not
prescribe for auction in the matter of grant of exploration licence cannot be
ignored by following a procedure under the MMDR Act. In fact, in the
present case, the statutory requirement under the OAMDR Act was
complied with before the grant was made. That apart, even if the contention
of the applicant to the effect that they propose to grant offshore blocks by
auctioning in the future is accepted, the same can be permitted only if the
OAMDR Act is amended and provides a procedure as has been provided
under the MMDR Act. Even by amending the MMDR Act vide Section
10A, the provision for auctioning was made prospective and all grants
granted prior to the amendment were treated to have created vested right and
protected obviously for the simple reason that the legislature did not wish to
affect vested or accrued right prior to amendment in the MMDR Act.
55. As far as the question of re-allocating exploration blocks through
auction is concerned, even though during the course of hearing, it was
indicated to us that there was no intention to auction blocks and only the
Government itself planned to explore and mine in the area but from the
affidavit filed by the respondent No.1/Union of India on 26.09.2017 in
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W.P.(C) No.5734/2016 as also in the admission made by the learned counsel
at the time of argument before the learned Single Judge, a categorical
finding has been recorded by the learned Single Judge in para 80 of the
impugned order which clearly shows that the impugned action was taken for
starting the fresh process for grant through auction. In fact, this was one of
the reasons why it was held that the appellants have been consistently trying
to justify the annulment by highlighting the importance of auction route; and
the learned Single Judge in para 96 notes the fact that the contention of the
respondents are contradicted on their own admission that blocks will be
re-granted through auction. In this regard, reference can also be made to the
minutes of the meeting dated 14.07.2015 available on record which meeting
was chaired by the Secretary (Mines) in which also there is a clear direction
to re-grant the blocks through auction. In fact, the purpose for which the
power was exercised by the authorities was to achieve an object not
provided for in the OAMDR Act; and therefore, amounts to colourable
exercise of power.
56. At this stage, we are constrained to express our opinion that the
appellants have been consistently changing their stand before the Courts
time and again, in total disregard to the statutory provisions. In this regard,
the grounds raised in the present appeals vide ground (p) can be taken note
of wherein again it is said that the impugned judgment rendered by the
learned Single Judge proceeds on the erroneous premise that the notified
block would be re-granted through auction. It was argued before us that the
intention of re-grant indicated by the learned writ court is without basis.
On the contrary, the ground now canvassed before us is that the OAMDR
Act does not prescribe auction methodology; and that the auction theory is
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an imagination which is not supported by records; and now a stand is taken
that exploration licence and mining of atomic mineral cannot be allowed to
be done by non-Government entities. The above stand taken now in these
appeals clearly shows that the appellants have taken a U-turn on the issue.
Initially, as is evident from the record, the reason was re-auction.
Now, when the learned writ court has decided the issue based on evidence
and material on record, it is said that it is the imagination of the Single Judge
without any basis; and now a new stand with regard to mining of atomic
mineral only by the Government is taken. This is nothing but an
afterthought and we see no reason to accept the same as this was never the
ground or reason indicated when the impugned action was taken on
05.04.2011. That apart, one more ground taken before us in the appeals is
that it is a policy decision not to go ahead with the grant of exploration
licence and to annul the notification dated 07.06.2010. However, no policy
decision in this regard has been brought on record. How, when, where and
in what manner such a policy decision was taken is not indicated and it is
surprising that when the OAMDR Act clearly provides for grant of
exploration licence, till the Act is amended pursuant to any such policy
decision, any action in this regard would be contrary to law.
57. In view of all these factors, we have to record an inevitable
conclusion that the contention of public interest now being canvassed by the
appellants is nothing but an afterthought, which is also not reflected in the
annulment order dated 30.06.2016. Had it been so, such a fact would have
been available on record as one of the reasons for annulment of the
notification. Accordingly, we have no hesitation in holding that no public
interest was involved in cancelling the already granted exploration licence in
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accordance with the requirement of law; and accordingly a detailed finding
recorded by the learned writ court in para 100 of the impugned order which
goes to hold that the impugned action was taken only with the intention of
re-allocating the offshore blocks is correct; and the reasons given for its
cancellation were nothing but an afterthought and manufactured reasons and
the respondents have acted in violation to the statutory provision only to
justify their illegal actions.
58. The learned writ court has also held the impugned action to be vitiated
on account of it being pre-determined as well as on the ground of malice.
In this regard, detailed findings have been recorded in paras 73 and 100 by
the learned writ court. However, it is the case of the appellants that the
findings recorded in this regard are without taking note of the minutes of the
meeting dated 14.07.2015 and 30.06.2016. This contention of the appellants
cannot be accepted. The learned writ court has meticulously analyzed each
and every aspect of the matter and has recorded proper findings. In order to
examine the correctness of the findings arrived at by the learned Single
Judge, at this stage, certain facts with relevant dates which are available on
record may be taken note of. On 05.04.2011, the order was issued and the
appellants were informed about the grant made to them. However, in spite
of the grant made, the licence deed could not be executed as the selection
process was sub-judice in the High Court of Bombay, Nagpur Bench
wherein all actions taken were made subject to the decision and were kept in
abeyance. On 17.09.2013, the challenge to the selection process was
dismissed; and thereafter on 31.03.2014 SLP was also dismissed by the
Hon‟ble Supreme Court, and therefore, in the minutes of meeting dated
14.07.2015 the IBM and the Secretary, Ministry of Mines were to consider
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the execution of exploration licence and they had recorded the said decision.
However, the direction of the Secretary ran contrary and by referring to the
recent amendment to the MMDR Act, he directed for seeking legal opinion
to re-allocate the exploration blocks through auction in-line with the
amendment made to the MMDR Act and also recommended for necessary
amendments in the relevant provisions of the OAMDR Act. Thereafter, on
18.11.2015, another meeting of the IBM chaired by the Secretary was held
wherein also the observation was to dispose of pending applications on 64
offshore blocks on priority basis keeping in view the notifications already
made. On 03.06.2016, the Secretary (Mines) gave a statement to the press
which is said to have been reported on findings expressed on 03.06.2016,
wherein suggestions were said to be sought from the Law Ministry with
regard to extending the auctioning process as provided in the MMDR Act
also for offshore minerals under the OAMDR Act. Thereafter, in June 2016,
one of the applicants, M/s U.A. Minerals filed a writ petition before this
Court seeking a mandamus for execution of the licence in-line with the order
already passed by the Nagpur Bench of the Bombay High Court wherein
notices were issued. It was thereafter that on 30.06.2016 that the impugned
action nullifying the impugned action was passed.
59. It is in the aforesaid factual background, as was available on record,
that the entire order was considered and the learned writ court has taken note
of the fact that the IBM and the Ministry of Mines were clearly of the view
that execution of exploration licence should be granted after dismissal of all
the writ petitions except the one pending before the Andhra Pradesh High
Court. However, for reasons which remained unexplained, opinion was
sought from the Ministry of Mines and thereafter the impugned action was
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taken. It was only after the intervention of the Secretary (Mines) that the
change took place. Till then the statutory authorities were all along for
implementing the notification dated 07.06.2010. In fact, the appellants‟ act
of successfully defending the selection process in the High Court of
Bombay, Nagpur Bench and other challenges before this Court is a clear
indication of their intention. Even in the writ petition pending before the
High Court of Andhra Pradesh, the IBM has filed the affidavit, which was
part of the record before the writ court and in which a similar stand has been
taken. Even in the press statement published on 03.06.2016 the intention of
the Ministry to allocate the blocks through auction is evident; and it was
after analyzing all these factors that a finding of legal malice was arrived at
by the learned writ court and we see no reason to take a different view. That
apart, the order dated 30.06.2016 cannot be sustained in law as it is the
Administering Authority, namely, Controller General, IBM who is the
statutory authority to whom power had been conferred by the Parliament
under the OAMDR Act to take action. The said authority is required to
independently take action, exercise discretion in terms of the provisions of
the Act and he cannot be dictated to by the whims and opinion of another
authority who under statute is not empowered to take any decision.
A perusal of the minutes of the meetings dated 14.07.2015 and 18.11.2015
and consideration of the impugned action in the backdrop of the aforesaid
clearly shows that the decision was not an independent decision of the
Administering Authority but it was thrust upon him by the Secretary of the
Ministry of Mines and therefore the order stands vitiated on this ground as
well.
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60. The Administering Authority is the statutory authority who has to take
action and if he has taken the action by the dictates of the Secretary, the
same stands vitiated as in view of the law laid down in the case of Dipak
Babaria & Anr. (supra) and the observations made in the aforesaid case in
paras 69 and 70. The said paras are reproduced hereinunder:
"69. Besides, the present case is clearly a case of dictation by
the State Government to the Collector. As observed by Wade
and Forsyth in the 10th Edn. of Administrative Law:
"If the Minister's intervention is in fact the effective
cause, and if the power to act belongs to a body which
ought to act independently, the action taken is invalid on
the ground of external dictation as well as on the obvious
grounds of bad faith or abuse of power."
The observations by the learned authors to the same effect in
the 7th Edn. were relied upon by a Bench of three Judges of this
Court in Anirudhsinhji Karansinhji Jadeja v. State of
Gujarat [(1995) 5 SCC 302 : 1995 SCC (Cri) 902] . In that
matter the appellant was produced before the Executive
Magistrate, Gondal, on the allegation that certain weapons
were recovered from him. The provisions of TADA had been
invoked. The appellant's application for bail was rejected.
A specific point was taken that the DSP had not given prior
approval and the invocation of TADA was non est. The DSP,
instead of granting prior approval, made a report to the
Additional Chief Secretary, and asked for permission to
proceed under TADA. The Court in paras 13, 14, 15 has held
this to be a clear case of "dictation", and has referred to Wade
and Forsyth on Surrender, Abdication and Dictation.
70. Respondent 5 had the courage to state that the notings of
the Secretaries were inconsequential. As a beneficiary of the
largesse of the Government, Respondent 5 could say that, but it
is not possible for us to accept the same. In Tarlochan Dev
Sharma v. State of Punjab [(2001) 6 SCC 260 : AIR 2001 SC
LPA 184/2019 & conn. matters Page 60 of 78
2524] what is observed by this Court is relevant for our
purpose: (SCC p. 273, para 16)
"16. In the system of Indian democratic governance as
contemplated by the Constitution, senior officers
occupying key positions such as Secretaries are not
supposed to mortgage their own discretion, volition and
decision-making authority and be prepared to give way
or being pushed back or pressed ahead at the behest of
politicians for carrying out commands having no sanctity
in law."
A higher civil servant normally has had a varied experience
and the Ministers ought not to treat his opinion with scant
respect. If the Ministers want to take a different view, there
must be compelling reasons, and the same must be reflected on
the record. In the present case, the Secretaries had given advice
in accordance with the statute and yet the Minister has given a
direction to act contrary thereto and permitted the sale which is
clearly in breach of the statute."
61. Even though initially in the present case the Administering Authority
wished to act in accordance with the statute and execute the licence,
however, on the dictates of the Secretary he failed to act in consonance with
the statutory provisions and committed a breach of the statutory provisions.
That being so, the impugned order and the action is a nullity as the
Administering Authority has acted beyond the power and the authority
vested in him under Section 12 of the OAMDR Act. A statutory authority is
required to act within the four corners of the statute and not otherwise.
[See DDA vs. Joint Action Committee, Allotment of SFS Flats, (2008) 2
SCC 672; paras 65, 75 and 79.] At this stage, we may also take note of the
legal position with regard to premature termination of an exploration
licence, which power is vested under Section 7 of the OAMDR Act and this
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power is available only with the Central Government and not with the
Administering Authority, who has, in fact, issued the impugned order dated
30.06.2016. The Administering Authority under Section 7 can exercise
powers only on the grounds mentioned therein, that also after providing an
opportunity of hearing. Admittedly, the said power has not been exercised
in the present case; and therefore, it has to be held that the action taken
being contrary to the requirement of law and not in the manner as provided
for under the law, stands vitiated. In terms of Section 12(2) read with Rule
69 of the OAMC Rules, the Administering Authority has power to terminate
the exploration licence only in cases of failure to comply with the terms of
the licence which is admittedly not the case in hand. That being so, the
finding of the learned writ court that the power exercised by the
Administering Authority is ultra vires the statute is clear and on this ground
also in view of the law laid down in the case of Kalabharti Advertising
(supra) and on account of legal malice, the entire action stands vitiated as
held by the learned writ court.
62. We may further take note of the fact that there is sufficient material
available on record, as held by the learned Single Judge, that the real
intention for taking the impugned action was to re-grant the blocks after
cancellation of the grant already made. The entire action was taken to
achieve the objective as is indicated in the minutes of the meeting dated
14.07.2015 and to achieve this object, various grounds and reasons have
been manufactured from time-to-time only to frustrate the claim of the
respondents.
63. Finally, a ground was raised before us to say that exploration licence
cannot be granted for atomic mineral in offshore areas. In fact, challenge is
LPA 184/2019 & conn. matters Page 62 of 78
made by contending that grant of exploration licence for atomic minerals to
private companies is not permissible in offshore areas. In this regard, it may
be noted that the OAMDR Act governs the grant of mining concession over
offshore areas which admittedly includes CRZ-IV i.e. the territorial waters
of the country (12 nautical miles). It is evident from Section 3 of the Act
which governs grant of all minerals including atomic minerals; and therefore
it is clear that there are no restrictions for grant of exploration licence even
for such minerals under the OAMDR Act. The learned writ court has
correctly held in the impugned order that the limited restriction is only at the
stage of production lease which stage has not been reached and under this
provision i.e. Section 6, only consultation is required with the Department of
Atomic Energy before granting the production lease. In the present case, the
issue pertains to exploration licence which is granted under Section 12
whereas a production lease is granted under Section 13 which stage has not
arrived in the present case; and therefore the finding of the learned writ court
in this regard is absolutely correct and reliance on Rule 18(1) is misplaced as
this rule pertains to inclusion of those atomic minerals which are not part of
the original exploration licence and therefore prior approval of the
Department of Atomic Energy would be required to include such mineral in
the licence deed. The contention of the learned Solicitor General that the
notification dated 07.06.2010 was never meant for atomic minerals cannot
be accepted for the following reasons:
(a) The Offshore Areas Mining (Development and Regulation)
Act, 2002 under Section 3(1) clearly states that the said Act
shall apply to all minerals in the offshore area including any
mineral prescribed in the notification issued under Clause (g) to
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sub-section (1) of Section 2 of the Atomic Energy Act, 1962
except mineral oils and hydrocarbons.
(b) The First Schedule of OAMDR Act specifies the royalties for
various minerals to be found in offshore areas and this includes
various minerals like ilmenite, rutile, zircon, etc. which form
part of the list of atomic minerals in Part-B of the First
Schedule to MMDR Act, 1957.
(c) It is evident that the OAMDR Act always envisaged mining and
exploration of rare minerals/atomic minerals such as ilmenite,
rutile, zircon, etc. by private companies and to this effect
specific provisions have been laid down in the Act and Rules
framed wherein it is contemplated that when atomic minerals
are found in the offshore area, what procedure has to be
followed; particularly, seeking opinion of the Department of
Atomic Energy and submitting six monthly report to the
Secretary of the Department of Atomic Energy in terms of
exploration lease deed „Form K‟. This clearly shows that
exploration of atomic minerals was always directed for in the
OAMDR Act.
64. The learned writ court in para 85 of the impugned order has held that
the appellants have adopted a pick-and-choose policy since on the one hand
they have directed mining of atomic minerals by private companies along
the onshore limits of CRZ during the alternate CRZ notifications dated
06.01.2011 and 06.10.2007 were operational and based on this it is held that
mining of atomic minerals is permissible with certain restrictions.
Surprisingly, the appellants in support of their contention in this regard tried
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to rely on the provisions of the Atomic Energy (Concession) Rules, 2016
which admittedly are not applicable to offshore area as these rules have been
framed under MMDR Act for onshore mining concession. Even otherwise,
the Atomic Mineral (Concession) Rules, 2016 do not provide for any
restriction as is being alleged and Rule 3 of the said Rules merely provides
the manner in which mining concession for atomic minerals can be granted.
65. During the course of hearing, the learned Solicitor General also tried
to substantiate that the Beach-Sand Mining Policy implemented by the
Government of India on 16.10.1998 has not been successful and therefore
the Government does not wish to grant mineral concession for atomic
minerals to private companies but the admitted fact is that the said policy of
the Government of India is still in existence and nothing has been brought to
our notice on the basis of which amendment to this policy of 1998 can be
inferred.
66. The learned Solicitor General also sought to argue with regard to lack
of provisions governing the handling of monazite found along with atomic
minerals such as ilmenite, rutile, zircon, etc.; however we are informed that
Rules in this regard are already in place, namely, the Working of Mines,
Minerals and Handling of Prescribed Substances Rules, 1984, formulated
under the Atomic Energy Act and in a case where private companies carry
out mining in offshore areas, the said Rule would be applicable and the
handling of a particular mineral has to be rooted or regulated by this Act.
Finally, we may take note of the fact, which has already been considered by
the learned writ court, that another CRZ notification has been issued on
18.01.2019 after the arguments were advanced before the writ court; and by
this notification the Government has allowed exploration and mining of
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atomic minerals notified under Part-B of the First Schedule of MMDR Act
occurring as such or in association with other minerals in the territorial
waters of the country i.e. upto 12 nautical miles as classified in CRZ-IVA.
It is therefore clear that exploration and mining of named minerals including
the atomic minerals is permissible. That being the factual position, there is
no iota of doubt in our mind with regard to permissibility of exploration and
mining of atomic minerals and associated minerals in the CRZ area by
private companies; and the learned writ court has dealt with this issue in the
right perspective.
67. At this stage, we would be failing in our duty if we do not refer to and
take note of certain objections raised by the Union of India during the course
of hearing in the form of an additional affidavit filed which was received by
us in the midst of the hearing on 16.04.2019. Even though the additional
affidavit pertains to most of the issues already dealt with by us in-extenso
hereinabove, we may take note of the affidavit and deal with it based on the
submissions made with regard to the said affidavit. The affidavit is sworn
by the Director, Ministry of Mines and certain facts with regard to issuance
of the grant in question and legal submissions are taken note of therein and it
is stated that the averments and the documents filed along with this affidavit
be considered as additional evidence; and this Court is requested to exercise
its analogous power as may be available under Order 41 Rule 27 CPC, and
to examine the reports and the documents filed before taking a decision.
The submissions made in the affidavit can be categorized as under:
(a) A Geological Survey of India‟s report indicating that the
mineral resources in the area include "Monazite", an atomic
mineral prescribed in the Schedule to the Atomic Energy Act,
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1962 and it is indicated in the affidavit that mining of atomic
minerals is prohibited. Certain observations made by the
learned Single Judge in para 85 of the impugned order with
regard to the appellant‟s practicing a pick-and-choose formula
in granting 50 mining leases for atomic minerals to companies
within CRZ area is indicated in the affidavit and it is said that
most of the mining activities have been stopped since 2013.
(b) Arguments with regard to grant of mineral concessions to
private parties for mining and exploring atomic minerals is said
to be in the process of being discontinued and only Government
or Government companies would now be allowed to mine
atomic minerals. Reference is made to Atomic Minerals
(Concession) Rules, 2016 in this regard; and in para 7 of the
additional affidavit it is indicated that the Central Government
in exercise of the powers conferred under Section 4A(1) of the
MMDR Act, in consultation with the State Governments, has
taken a decision to the effect that it is now expedient and in the
interest of regulation of mines and minerals development and
conservation of mineral resources to terminate all existing
mineral concessions of Beach Sand Minerals (Atomic Mineral)
and the State Governments have also been directed to take
action and a communication dated 01.03.2019 „Annexure A-2‟
has been filed along with the affidavit.
(c) However, so far as territorial waters in offshore areas under the
OAMDR Act are concerned, para 8 of the affidavit indicates
that the question of prohibiting any operating right for atomic
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minerals to private persons or companies is said to be under
serious consideration of the Central Government in the interest
of mineral development and conservation and in public interest
keeping in view the strategic significance of atomic minerals.
A proposal to stop grant of operating rights to private persons is
said to be under active consideration and process of
consultation is going on.
(d) That apart, reference is made to the Central Bureau of
Investigation report, the preliminary enquiry conducted,
reporting of a Chief Vigilance Officer (Annexure A-3 dated
19.07.2011), the subsequent action taken and finally it is said
that now the Government of India by a communication dated
01.04.2019 has intimated to the Central Bureau of Investigation
(CBI) to re-investigate the matter; and the CBI vide
communication dated 08.04.2011 has intimated to the Ministry
of Mines that the CBI has re-opened the case.
(e) It is also stated that the decision taken to grant two licence
deeds to U.A. Minerals on 30.11.2017 after orders were passed
by this Court on 09.11.2017 in W.P.(C) No.5734/2016 is a
hasty decision; and therefore charge sheet has been issued to
the officers concerned.
(f) The learned Solicitor General invited our attention to the
constitutional mandate of Article 297 of the Constitution, the
law laid down by the Hon‟ble Supreme Court in the case of
Association of Natural Gas & Ors. vs. Union of India & Ors.,
(2004) 4 SCC 489, Reliance Natural Resources Ltd. vs.
LPA 184/2019 & conn. matters Page 68 of 78
Reliance India Ltd., (2010) 7 SCC 1 and Natural Resources
Allocation, In re., Special Ref. No.1/2012, (2012) 10 SCC 1 to
argue that when an issue involves grant of permission to mine
natural resources which is the property of the public at large,
interference into such matter should be made keeping in view
the right of the public at large as the people of the entire
country have a stake in the natural resources of the whole
country and they should be dealt with in a just, fair and
reasonable manner.
68. Accordingly, pointing out the importance of distribution of natural
resources and the fact that Government is now contemplating to bring about
drastic change in the procedure to lay down system of auctioning even under
the OAMDR Act, prayer made is that when large scale irregularities are
apparent from the face of the record and when the Vigilance Report and a
CBI enquiry is already in progress, this Court in exercise of its extraordinary
jurisdiction should not and cannot give a direction for specific performance
in the matter of execution and entering into an exploration licence.
The learned Solicitor General tried to indicate that looking to the manner in
which the companies were set-up and the auction process undertaken, the
entire selection process having been nullified by the Government,
interference into the matter should not be made.
69. Even in the written submission filed on 23.04.2019, the importance of
preventing illegal mining activities, the rampant corruption going on in the
field of mining, particularly, in the States of Orissa, Karnataka, Goa and
banning all mining activities by the Hon‟ble Supreme Court in these cases
have been highlighted and this Court is requested that looking to the high
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standard of transparency and fair play to be practiced while permitting
private parties to mine in a particular area, care should be taken by the Court
while interfering in such matter. Detailed assertions have been made in the
written submission on various aspects already dealt with by us hereinabove
and it is sought to be argued out that the entire selection process stands
rendered void-ab-initio in view of the findings recorded by the CBI on
19.10.2019 in its preliminary enquiry report. Reference is made to a
self-contained note dated 28.03.2013 wherein the CBI had made the
following remark:
"In view of the facts mentioned above, no misconduct was
found on the part of any public servant of Indian Bureau of
Mines in this case. However, it was found that no clear cut
guidelines were formulated for short listing of the applicants
and that the criteria for selection of the applicants for issuance
of exploration licences was fixed after receipt of the
applications, which is a serious procedural irregularity. It was
also found that the Administering Authority carried out the
entire process without doing adequate preparation before
issuance of notification calling applications for the exploration
licences. They also did not resort to get the DPR through an
international consultant. This exercise was being done for the
first time in India, and the above mentioned measures would
have resulted in more systematic and transparent process in the
selection of applicants for exploration licences.
Therefore, it is recommended that the Ministry of Mines
may take suitable remedial action to rectify the irregularities
that have come to fore in selection of applicants for offshore
exploration licences so that enough precautions are taken in
future to prevent occurrence of such irregularities."
70. If we go through the aforesaid remark, it would be seen that the report
exonerates all public servants of any kind of misconduct. It only speaks
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about certain procedural irregularities, that also, in view of the fact that
action is being taken for grant of offshore exploration licence for the first
time after coming into force of the OAMDR Act. In fact, the aforesaid
observation of the CBI in its preliminary enquiry report and the CVC in its
report dated 04.07.2011 is nothing but a recommendation for future
guidance. The contention of the appellants that this was indictment of the
officers and of the procedure followed, is clearly misconceived and
unacceptable, more so when this report was available even when the issue
was considered by the Bombay High Court when it dismissed the writ
petition on 17.09.2013 i.e. about 6 months after the aforesaid observations of
the investigating agency.
71. We may take note of the fact that we have already dealt with most of
the issues in the preceding paragraphs, particularly with regard to the CBI
enquiry, the prohibition for grant of exploration licence in CRZ area,
prohibition in granting rights for atomic minerals, etc. Now, in the affidavit
the ground raised is that after the appeals were filed and even after the
matter was heard on 29.03.2019 the Government has taken-up the matter
with the CBI and recently on 08.04.2019 the CBI has agreed to re-open the
matter. In our considered view, these factors are not at all relevant for
deciding the lis in question for the simple reason that the grant of
exploration licence is governed by the statutory provisions as contained in
the OAMDR Act, Section 12 and 13 thereof; and what was impugned before
us is the decision taken on 30.06.2016, the reasons for taking the said
decision as it existed on the said date have been dealt with by us and we
need not elaborate on them any further. Except for saying that, as held by
the learned writ court, the Government had been changing its stands from
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time-to-time and they now say that a communication has been received on
08.04.2019 whereby the CBI proposed to re-open the investigation.
These are materials which did not lead to taking of the impugned action; and
therefore at this stage these cannot be grounds for considerations in these
appeals. That apart, the Vigilance Report filed by the appellants as
„Annexure A-3‟ is nothing but a preliminary investigation report dated
19.07.2011 submitted by the CVO, Indian Bureau of Mines based on some
newspaper report reported on 04.07.2011 in the Economic Times; and after
considering the methodology adopted for the grant in question, the
background, the statutory provision, the proceedings of the Screening
Committee, the analysis is made with regard to considering the applications
submitted for exploration licence and it is only indicated that 5 companies
were registered after the notification, 16 companies have been allotted
exploration licence, addresses of most of the companies are similar and after
narrating the facts as has been submitted before us, to say that all the
companies are sham and illegally created only to get the grant in question,
the findings recorded by the CVC read as under:
The concept of grant of offshore exploration licence for
mineral bearing offshore blocks is new in the country.
Ministry of Mines approved notification of 63 mineral
bearing offshore blocks falling in Bay of Bengal &
Arabian Sea with a time period of 3 months vide their
letter No. 1/16/95-M.VI (Part III) dated 01.06.2010. The
Controller General, IBM accordingly notified on 7 th
June, 2010 that the mineral bearing offshore blocks as
contained in the schedule shall be available for grant of
EL. Persons desirous of obtaining EL may apply for
grant EL on or from 15th June, 2010 till 14th September,
2010. A time of 3 months was given which is quite a big
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time and which have led to registration of the companies,
to suite the notification.
Further notification has no provision that created basis
on which applications would have been scrutinized.
However, the evaluation criteria based on 4 parameters
as mentioned in the Section 12 of the OAM (D&R) Act,
2002 had been considered. This provided scope for
discretion, as the evaluation sheet finalized by the
Screening Committee is finalized in December 2010 and
this leaves scope for discretion but again this evaluation
sheet was placed on IBM website for two months before
finalizing the award of blocks by IBM authorities and
except one representation no other company had any
objection to it.
As per Section 6(a) of the OAM(D&R) Act, 2002, all the
companies as defined in Section 3 of the Companies Act,
1956 are eligible to apply and therefore the OAM(D&R)
Act, 2002 does not debar any such company to apply for
exploration licence. As the offshore legislation and
notification have no provision of Application fee and no
restriction on number of block applications, all the
applicant company have applied for any number of
offshore blocks. Hence it was not possible for IBM - the
administering authority to stop any person registering 5
companies.
But IBM should have made thorough scrutiny of
application by asking more details as per Rule 16(4) of
the OAMCR, 2006; as the document with applications
are very very preliminary in nature like for technical
collaboration, a very very preliminary e-mail has been
taken as evidence by the Screening Committee.
In the light of above backdrop, no further comments
can be given at this preliminary stage."
72. The aforesaid report leads to nothing. The report itself speaks about
the applicant companies having applied in accordance with the requirements
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of the statute and the statute permitting the same. In spite of this report
being available on record and even after the CBI enquiry as already
indicated by us, the appellants have throughout, right from the year 2011 till
the year 2016 i.e. for 5 years, been defending the selection process at various
stages.
73. We may also take note of the fact that the alleged CBI enquiry in the
past was taken note of by the learned Single Judge and even after filing of
this appeal now, it is stated that on 01.04.2019 i.e. after the judgment was
rendered by the learned Single Judge on 06.02.2019 and after this Court had
issued notice on 29.03.2019, the CBI, it is said, is proposing to re-investigate
the matter from the date of issuance of the notification dated 07.06.2010.
We cannot lose sight of the fact that the whole process of evaluation and
allotment has been subjected to strict judicial scrutiny not only by this Court
but also by various Courts as is indicated by us hereinabove upto the
Supreme Court and after a lapse of more than six years what is now being
done is nothing but an act to prejudice the Court and we find lack of bona
fides on the part of the appellants in dealing with the matter pertaining to
re-opening of the CBI enquiry. Once, the matter has been taken up on the
judicial side and after judicial scrutiny the entire selection process has been
upheld, the act of the appellants in trying to point out that there are serious
allegations against the officers and the proceedings conducted and therefore
the CBI enquiry is being conducted is, in fact, a method to somehow
indicate to this Court that all is not well and therefore an enquiry should be
conducted. However, for arriving at such a conclusion, no material has been
provided. We are even not aware as to whether the CBI has taken note of all
the relevant factors before proceeding to consider re-investigation into the
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matter. The bona fides of the appellants in filing the affidavit in this regard
on 15.04.2019 and the act of re-opening the enquiry on 01.04.2019 for
re-investigation into the matter may be a device to somehow get over all the
judicial pronouncements made by various Courts including this Court with
regard to the selection process and the issue in question. It prima facie
seems to be an act that is not at all bona fide but a device or method to
somehow deny benefit of Court‟s orders to the respondents.
74. Taking note of all these factors, we are not impressed by the grounds
now raised in the additional affidavit. That apart, the concept of grant of
natural resources, the mandate of Article 297 of the Constitution and the
public interest involved in the matter are also not sustainable for the simple
reason that they are based on proposals which are still to receive
consideration by the competent authority of the Union of India and
thereafter the Union of India may or may not amend the statutory provisions.
75. Learned Solicitor General had referred to the judgments of
Association of Natural Gas & Ors. vs. Union of India & Ors., (2004) 4
SCC 489 and Reliance Natural Resources Ltd. vs. Reliance India Ltd.,
(2010) 7 SCC 1 to contend that Central Government is owner of the minerals
and this Court while considering the issue should take note of the principles
laid down in the aforesaid judgment as it is the Union of India on behalf of
the public on whom the right to the mineral vests under Article 297 of the
Constitution. In our considered view, so far as the present case is
concerned, the OAMDR Act has been enacted by the Parliament for the first
time and the issue of legislative competence is not involved in the matter
and the provisions for distribution of natural resources pertaining to offshore
area is governed by the statutory provisions contained therein and therefore
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in the present case the issue of allocation will have to be considered in the
backdrop of the statutory principle and as the allotment is based on the
statutory provision, in our considered view, the judgments referred to may
not be applicable.
76. For the present, it is sufficient for us to hold that as per the statutory
provisions and the law existing, the selection process has been completed.
The selection process was upheld by the Nagpur Bench of the Bombay High
Court which was affirmed by the Hon‟ble Supreme Court; and thereafter in
two cases exploration licences have also been issued. Merely because some
preliminary enquiry is proposed to be taken or some officers are being dealt
with departmentally for their so-called mala fide actions, we see no reason to
make any indulgence into the matter; and as already held by the learned writ
court and approved by us, they are nothing but an afterthought or resonance
by way of justification now given for justifying the actions of the appellants.
The issue of mining of atomic minerals and the security concerns have been
addressed in detail but so long as the OAMDR Act and the Rules framed
thereunder permit grant of exploration licence or production licence on
certain conditions for these minerals, we see no reason as to why in
anticipation of some change in the statutory provision by the Government,
which is still only at the stage of consideration, interference should be made
by us. The question of pick-and-choose policy has also been considered by
the learned writ court in detail and has been rejected.
77. A very interesting feature of the additional affidavit which was
pointed out to us by Shri Tushar Mehta, learned Solicitor General at the time
of hearing warrants consideration. In the additional affidavit, by
highlighting safety reasons and public importance, it was sought to be
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indicated that on account of prohibition or importance of preventing mining
and exploration of atomic minerals, mining leases of majority of the lessees
have been cancelled or stopped since 2013. However, if we see para 6 of the
affidavit we find the respondents submit that the said 50 mining leases were
granted in offshore areas under the MMDR Act. However, they do not say
that they have been cancelled because mining of atomic minerals in area is
prohibited; on the contrary, in the affidavit it is stated "Furthermore, due to
mass scale illegalities the said mining activities in majority of the mines
have been stopped since the year 2013", meaning thereby that mining
activity has been stopped in majority of cases but still in many cases out of
50 mining leases mining activities are being carried out and the affidavit
does not say that the mining activities were stopped due to prohibition in
atomic minerals being mined or explored but on account of large scale
illegalities in the mining activities, meaning thereby that they have been
stopped because of breach in the terms and conditions of the mining lease
and nothing more.
78. In view of the aforesaid discussions and reasons, we are of the view
that the writ court has rightly set aside the impugned action and the
impugned order dated 30.06.2016; and we find no infirmity or illegality in
the impugned judgment dated 06.02.2019 warranting any interference. The
appeals are without any merit and accordingly dismissed without any order
as to costs.
79. We may add that on 06.02.2019 the learned writ court had directed
the appellants to execute the exploration licence of the respondents as per
the procedure within four weeks from the date of receipt of the order.
This order has not been given effect to till now. Accordingly, we direct the
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Administering Authority to execute the exploration licences as directed by
the learned writ court within a period of two weeks from today as the matter
is pending since long due to pendency of cases before various Courts.
CHIEF JUSTICE
ANUP JAIRAM BHAMBHANI, J.
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