Orissa High Court
Sarada Mines Private Limited And vs State Of Odisha And Another .... ... on 26 April, 2021
Author: B. P. Routray
Bench: B. P. Routray
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.15157 of 2021
Sarada Mines Private Limited and .... Petitioners
another
Mr. Rajiv Nayar, Senior Advocate
Mr. Gopal Jain, Senior Advocate
Mr. S.S. Mohanty, Advocate
Mr. Naveen Kumar, Advocate
-versus-
State of Odisha and another .... Opposite Parties
Mr. A. Parija, Advocate General
Mr. P.K. Muduli, A.G.A.
CORAM:
THE CHIEF JUSTICE
JUSTICE B. P. ROUTRAY
ORDER
26.04.2021 Order No.
02. 1. This matter is taken up by video conferencing mode.
2. Issue notice.
3. Mr. P.K. Muduli, learned Additional Government Advocate accepts notice on behalf of Opposite Party Nos.1 & 2. Required number of extra copies be served on him within three days.
4. Reply be filed within eight weeks. Rejoinder, if any, be filed before the next date.
5. List on 26th July, 2021.
I.A. No.6642 of 20211. The challenge in the writ petition is to an order issued on 18th April, 2021 by the Joint Director of Mines, Joda, District- Keonjhar calling upon Petitioner No.1. Sarada Mines Private Page 1 of 6 Limited (SMPL), to pay within seven days from the date of receipt of the notice, the following amounts:
"1. Differential Royalty Rs.316,66,32,876/-
2. DMF Rs.299,73,91,147/-
3. NMET Rs. 19,98,26,076/-"
2. The impugned notice states that in the years 2012-13, 2013-14 when the transaction of SMPL with Jindal Steel and Power Limited (JSPL) was concluded, royalty was paid to the State of Odisha by SMPL at the highest rate after obtaining exemption from stacking and sampling under the relevant provisions of the Mines and Minerals (Development and Regulation) Act, 1957 ('MMDR Act') read with the OMPTS Rules, 2007. According to the impugned notice, a quantity of 135,04,519.157 MT of 'royalty paid iron ore', was lying undisposed as on 31st March, 2014 within the leasehold area. It notes that the minerals were removed from the mines in February, 2020 without payment of the above amounts and seeks their recovery as a consequence thereof.
3. The principal ground of challenge to the impugned notice is that it is violative of the principles of natural justice since it is not preceded by any show-cause notice (SCN) or opportunity of hearing to the Petitioner No.1 i.e. SMPL.
4. Mr. Rajiv Nayar and Mr. Gopal Jain, learned Senior Advocates and Mr. S.S. Mohanty, learned Advocate appearing for the Petitioners pointed out that way back on 5th April, 2004 itself the Deputy Director, Mines, Joda, District-Keonjhar had conveyed to SMPL the approval of Director of Mines for supply of ROM (Iron ore) to JSPL within the lease hold area at the approved rate Page 2 of 6 of royalty. That royalty amount was duly paid. Reference is also made to the judgment of Division Bench of this Court dated 8th April, 2016 in M/s.Jindal Steel & Power Ltd. v. State of Odisha 2016 SCC OnLine Ori.179 where while quashing the decision of the Government of Odisha refusing permission for transportation of the iron ore from the leasehold area, this Court noted that SMPL had "effected delivery of ROM (Iron ore) to the Petitioners (JSPL) and the Petitioners have thereafter processed the ore into sized iron ore and fine and is seeking permission for transportation thereof." It is accordingly contended that it is not open to the Government of Odisha to now insist either on the differential royalty or on payment to the District Mineral Foundation (DMF) or to the National Mineral Exploration Trust (NMET) by invoking Rule 40 (1) of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concessions Rules, 2016 (2016 Rules). It is submitted that the transportation of iron ore was held up since 2014 on account of the directions issued by the Supreme Court and only after the judgment dated 30 th January, 2020 of the Supreme Court in Civil Appeal No.850 of 2020 (State of Odisha v. M/s.Jindal Steel and Power Ltd.) that the processed iron ore could be removed from the leasehold area under valid permit issued on 2nd February, 2020 by the Deputy Director of Mines, Joda. Accordingly, it is submitted that there should be an unconditional stay of the impugned demand notice till the writ petition is finally decided.
5. Mr. Asok Parija, learned Advocate General appearing for the Opposite Parties draws attention to the fact that the valid removal Page 3 of 6 of the iron ore from the leasehold area was not possible till the penalties that were liable to be paid for illegal mining of the iron ore was in fact paid in terms of the judgment dated 30th January, 2020 of the Supreme Court of India. Secondly, it is pointed out that Rule 40 (1) of the 2016 Rules the payment of not only the royalty but the DMF and NMET "at the time of removal or consumption of mineral from the mining lease area" by the lessee i.e. SMPL is mandatory. It is incumbent therefore on SMPL to pay the demanded amounts at the time of removal of the iron ore pursuant to the transit permit granted to it on 2nd February, 2020. He also draws attention to Section 9 (1) of the MMDR Act which again places the liability on the holder of the lease to make payment of the royalty at the time of removal of the mineral from the leased area.
6. It may be noted here that while Mr. Parija raised a preliminary objection that the impugned demand notice should be treated as an order which is revisable under Section 30 of the MMDR Act before the Central Government, the submission on behalf Mr. Nayar was that the Officer of the Central Government located in Odisha exercising the revisional power is not presently in position and therefore it is not possible for SMPL to file a revision petition in the first instance.
7. The above submissions have been considered. It appears to this Court, prima facie, that the observations of this Court in its decision dated 8th April, 2016 in M/s.Jindal Steel & Power Ltd. v. State of Odisha (supra) to the effect that delivery of the Page 4 of 6 processed iron ore took place in favour of JSPL in the leasehold area did not anticipate that the actual valid removal of iron ore from the lease hold area was not feasible till such time the penalties that would be determined by the Supreme Court of India, for violation of environmental norms, were in fact paid. What effect the orders of the Supreme Court have had in respect of the illegal mining of iron ore and whether it could be said that the delivery of quantities of iron ore within the leasehold area by SMPL to JSPL could be treated as valid 'removal' within the meaning of Rule 40 (1) of the 2016 Rules without the payment of such penalties are questions that require to be determined. The fact however remains that by the time SMPL was formally permitted to remove the mild quantities of iron ore under the transit permit issued in its favour on 2nd February, 2020, Rule 40 (1) of 2016 Rules had already come into force making it mandatory for payment of the contributions to the DMF and NMET. The question that further arises is whether the royalty that is payable at that stage was that which already stood determined win 2004 or that prevalent at the time of actual removal?
8. On a considered view of the matter, and acknowledging that this is only the interim stage, the Court is of the prima facie view that while the Petitioners may have made out a prima facie case for examining the validity of the demand for revised royalty, the balance of convenience lies in favour of the Opposite Parties in directing that at this stage the Petitioners should, as a condition for the grant of the interim relief, pay to the Opposite Parties the amount specified at (2) and (3) of the impugned notice i.e. Page 5 of 6 contribution to the DMF and NMET. It is accordingly directed that subject to Petitioner No.1 paying the sums towards DMF and NMET to the Opposite Parties as indicated in the impugned notice, without prejudice to the rights and contentions of the Petitioners, within a period of four weeks from today and in any event not later than 1st June, 2021 no further coercive steps shall be taken against the Petitioners pursuant to the impugned notice. Needless to state that if the Petitioner No.1 fails to make the payment within the time granted, the Opposite Parties will be free to proceed in accordance with law, but any recovery of the amounts so made shall be subject to the final outcome of the writ petition.
9. The application is disposed of in the above terms.
10. As the restrictions due to resurgence of COVID-19 situation are continuing, learned counsel for the parties may utilize a printout of the order available in the High Court's website, at par with certified copy, subject to attestation by the concerned advocate, in the manner prescribed vide Court's Notice No.4587, dated 25th March, 2020 as modified by Court's Notice No.4798, dated 15th April, 2021.
(Dr. S. Muralidhar) Chief Justice ( B.P. Routray) Judge Barik Page 6 of 6