vil Appeal Nos
4843 44 of 1990
From the Judgment and Order dated 28101988 of the Rajasthan High Court in DB Civil WP
No 966of 1986 and 121 of 1985
Dr LM Singhvi P Agarwal SK Jain Sahid Rizvi and DK Singh for the Appellant
NS Hegde Additional Solicitor General JD Jain R Mohan RA Perumal Hemant Sharma Ms A Subhashini and Ms Sushma Suri for the Respondents
The Judgment of the Court was delivered by AHMADI J
Special leave granted in all the cases
Pursuant to the resolution passed by certain State Legislatures including that of Rajasthan under clause 1 of Article 252 of the Constitution Parliament enacted The Water Prevention  Control of Pollution Act1974 Act VI of 1974 hereinafter called the 1974 Act  to provide for the prevention and control of water pollution the maintaining or restoring of wholesomeness of water the establishment 123 of Boards for the prevention and control of water pollution the conferring on and assigning to such Boards powers and functions relating thereto and for matters connected there with Pollution  as defined in section 2e means such contamination of water or such alteration of physical chemical or biological properties of water or such discharge of any sewage or trade effluent or of any other liquid gaseous or solid substance into water as may or is likely to create a nuisance or render such water harmful or inju rious to public health or safety or to domestic commer cial industrial agricultural or other legitimate uses or to the life and health of animals or plants or of acquatic organisms
Sewage effluent according to section 2g means effluent from any sewerage system or sewage disposal works and includes sullage from open drains
Trade efflu ent according to Section 2k includes any liquid gaseous or solid substance which is discharged from any premises used for carrying on any trade or industry other than domestic sewage
Section 3 4 and 13 provide for the con stitution of a Central Board a State Board and a Joint Board respectively
Section 16 enumerates the functions of the Central Board constitution for promoting cleanliness of streams and wells in different areas of the State
Section 17 sets out the functions of the State Board which amongst others include preparing a comprehensive programme for the prevention control or abatement of pollution of streams and wells in the State and for securing its execution inspec tion of sewage or trade effluents works and plants for the treatment of sewage and trade effluents evolving methods for treatment of sewage and trade effluents and for the disposal thereof and laying down standards of treatment of sewage and trade effluents to be discharged into any partic ular stream
Sections 21 and 22 confer power on the State Board or any officer empowered by it to take for the purpose of analysis samples of water from any stream or well or samples of any sewage or trade effluent which is passing from any plant or vessel or from any other place into any stream or well and to send the samples for analysis to the Laboratory established or recognised for that purpose by the concerned Board
Section 24 prohibits the use of any stream or well for the disposal of polluting matters
Section 25 imposes restrictions on new outlets and new discharges
Section 251 reads as under Subject to the provisions of this section no person shall without the previous consent of the State Board bring into use any new or altered outlet for the discharge of sewage or trade effluent into a stream or well or begin to make any new discharge of sewage or trade effluent into a stream or well
 124 Under these provisions the application for consent has to be made to the State Board in the prescribed form containing the particulars relating to the proposed construction installation or operation of any treatment or disposal system or of any extension or addition thereto
Sub section 7 which is relevant for our purpose reads as under The consent referred to in sub section 1 shall unless given or refused earlier be deemed to have been given unconditionally on the expiry of a period of four months of the making of an application in this behalf complete in all respects to the State Board
 Section 26 provides that persons discharging sewage or trade effluent into a stream or well before the commencement of the Act shall apply for consent within a period of three months of the constitution of the State Board
If the State Board refuses to grant consent or withdraws consent already granted an appeal is provided to the appellate authority
Section 29 confers revisional powers on the State Government to call for the records of any case where an order has been made by the State Board under Sections 25 26 and 27 for the purpose of satisfying itself as to the legality or propriety of any such order
Failure to comply with the requirements of the statute is punishable under Chapter VII
Thus this law aims at prevention and control of water pollution
On 7th December
1977 the President gave his assent to the Water Prevention and Control of Pollution Cess act1977Act No XXXVI of 1977 hereinafter referred to as the 1977 Act 
This Act was enacted to provide for the levy and collection of a cess on water consumed by persons carrying on certain industries with a view to augment the resources of the statutory Boards for the prevention and control of water pollution
Section 2c defines specified industry to mean any industry specified in Schedule I
Power Thermal  Diesel Generating Industry is included at item No 14 in Schedule I to the Act
Section 3 which is the charging section inter alia provides that there shall be levied and collected a cess for the purposes of the 1974 Act and utilisation thereunder
The Cess under sub section 1 is made payable by every person carrying on any specified industry to be calculated on the basis of water actually consumed for any of the purposes specified in column 1 of Schedule II at such rate not exceeding the rate specified in the corresponding entry in column 2 thereof
Schedule II enumerates in column 1 the purposes for which water is consumed and sets out the maximum rate of cess therefore in column 2
The rare of cess for industrial cooling is three fourths of a paisa per 125 kilolitre while it is one paisa per kilolitre for domestic purpose
Where water gets polluted and the pollutants are easily bio degradable the rate is 2 paise per kilolitre but where the pollutants are not easily bio degradable and are toxic the rate is two and a half paise per kilolitre
It is obvious that the rate of cess depends on the degree of pollution
It may also be noticed at this stage that the cess is to be calculated on the basis of the water con sumed  for any of the purposes specified in column 1 of Schedule II at the rate set out in the notification issued by the Central Government not exceeding the rates specified in column 2 of the said schedule
Section 4 provides for affixing of meters for the purposes of measuring and record ing the quantity of water consumed
Section 5 requires every person carrying on any specified industry and every local authority liable to pay the cess under section 3 to fur nish returns in such forms and at such intervals containing such particulars as may be prescribed to the officer or authority appointed therefore
The officer or authority to whom the return has been furnished under section 5 is charged with the duty to make an inquiry as to the particu lars stated in the return and then pass an assessment order stating the amount of cess payable by the concerned person or local authority as the case may be
Section 14 pre scribes a penalty for failure to file a return and section 11 provides a penalty for failure to pay the cess within the specified time
Any person or local authority aggrieved by an order of assessment made under section 6 or by an order imposing penalty under section 11 may file an appeal under section 13 within the prescribed time
Section 7 provides for a rebate if the cess is payable
It reads as under Where any person or local authority liable to pay the cess under this Act instals any plant for the treatment of sewage or trade effluent such person or local authority shall from such date as may be prescribed be entitled to rebate of seventy per cent of the cess payable by such person or as the case may be local authority
 The expressions sewage  and trade effluents  having not been defined would have the same meanings respectively assigned to them under the 1974 Act
Section 17 empowers the Central Government to make rules for carrying out the pur poses of the Act
Under that section the Central Government made the Water Prevention  Control of Pollution Cess Rules 1978 hereinafter called the Rules 
Rule 6 there of deals with rebate
Under that rule where a consumer instals any plant for the treatment of sewage or trade effluent such consumer becomes entitled to the rebate under section 7 on or from the expiry of 15 days from the 126 date on which such plant is successfully commissioned and so long as it functions successfully
The appellant the Rajasthan State Electricity Board constituted  in 1957 under section 5 of the  established a Thermal Power Station on the bank of River Chambal in Kota for generating energy
It admittedly consumes water from the river for Condensor Cooling
The water drawn from the river is filtered and thereafter passes through an enclosed pipeline over the condensor unit for cooling the condensor After the water is used for cooling it is treated as a trade effluent in the neutralisation plant installed by the appellant at consider able expense with a view to preserving the wholesomeness of water before it is discharged into the river
After conden sor cooling the water passes through an enclosed under ground steel pipeline of the length of about 478 meters upto the seal pit
On reaching the seal pit the water is pumped to a height of about 22 feet from where it is made to fall into an open channel and is then carried in that channel to a distance of about 150 feet before it plunges into the river
In this manner the water at the seal pit comes in contact with air
Its temperature is reduced firstly by the 22 feet fall into the open channel and thereafter by cover ing a distance of about 150 feet before getting merged in the river or stream
The temperature is thus brought down to below 40 deg
C the standard prescribed under the Minimum National Acceptable Standards published by the State Board
The appellant had also installed a 04 MGD plant for treat ment of sewage
Both these plants contends the appellant are working satisfactorily
The appellant submitted monthly returns of the water consumed from river Chambal for its Thermal Station units 1 and 2 for the period from July 1983 to January 1984 and February 1984 to June 1984
The Assessing Authority re spondent No 2 assessed the cess at Rs 13 13710 for the first period and Rs942013 for the subsequent period
No rebate was allowed under section 7 of the 1977 Act on the ground that the so called neutralisation plant was not a plant for the treatment of sewage or trade effluents within the meaning of the said provision
Nothing was said about the plant for the treatment of sewage
The appellant filed an appeal under section 13 in respect of the cess claimed for the period from July 1983 to January 1984
The appel late authority dismissed the appeal holding that the cess was correctly assessed and the appellant was not entitled to rebate
In respect of the assessment for the period from February 1984 to June 1984 the appellant submitted a review petition which was rejected by respondent No 2
The appellant then preferred an appeal but the 127 same was dismissed as barred by limitation
The appellant preferred separate Writ Petitions Nos
12 185 and 96686 in the High Court challenging the two assessment orders
In the former writ petition the High Court granted interim stay against the recovery of the disputed cess amount to the extent of seventy percent till the disposal of the writ petition
In the second writ petition since the appellant had already paid the amount of cess the application for stay did not survive but for future assessment orders it directed the appellant to pay thirty percent regularly and the remaining seventy percent with interest at 15 per annum in the event the challenge failed
Both the aforesaid writ petitions were finally disposed of by a Division Bench on 28th October
1988 which dismissed them holding that the cess was correctly assessed and the appellant was not enti tled to rebate
In taking this view the Division Bench came to the conclusion that there was no material on record to show that the appellant had applied for consent of the State Board to instal a plant either under section 25 or section 26 of the 1974 Act nor was there evidence to show that such consent was given
It therefore opined that the authori ties below had rightly concluded that the benefit of rebate under section 7 was not admissible to the appellant
While dismissing the writ petitions the Division Bench however observed as under Anyhow if the consent after the period of assessment in dispute has either been obtained for discharge of effluent etc or can be deemed to have been obtained and if the treatment plants are working satisfactorily the petitioner shall be entitled to rebate according to the provisions of rules for that period
 It follows therefrom that the Division Bench refused to grant rebate to the extent of seventy per cent for want of consent under section 25 or 26 of the 1974 Act
Feeling aggrieved by the Judgment and order passed by the Division Bench of the High Court the appellant pre ferred special leave petitions Civil Nos 1429 and 2157 of 1989 challenging the dismissal of the said two writ peti tions
During the pendency of these proceedings several assessment orders came to be made for the subsequent periods upto may 1989 for the water consumed at the appellant s Thermal Units
The Assessing Authority also refused to grant rebate The appellant preferred appeals against the assess ment orders passed from time to time but to no avail
In stead of approaching the High Court the appellant has filed Special Leave Petitions Nos 3223 3262 128 3272 4599 and 4600 of 1990 in this Court against the said assessment orders as well as the refusal to grant rebate on the ground that similar questions were involved in the earlier two special leave petitions which were pending in this Court
We have granted special leave in all cases under Article 136 of the Constitution and we now proceed to dis pose them of by this common Judgment
Dr Singhvi the learned counsel for the appellant con tended that the 1977 Act was an independent piece of legis lation and was not what he called the pari materia or parasite legislation  to the 1974 Act and hence once it is shown that the appellant had installed a plant for the treatment of a trade effluent within the meaning of section 7 of the 1977 Act read with rule 6 of the Rules the appel lant was entitled to rebate regardless of whether or not the appellant had secured the consent of the State Board under section 251 of the 1974 Act
He contended that the State Board s consent became necessary only if an outlet new or altered was sought to be used for the discharge of sewage or trade effluent in the stream and not otherwise
In the present case contended Dr Singhvi the appellant had put up an independent sewage plant for the treatment of sewage and an independent neutralisation plant for the treatment of water discharged from the condensor cooling plant of the Thermal Station
So far as the former is concerned the consumption of water is negligible the bulk consumption takes place at the condensor cooling plant from where water is discharged after use at a temperature far above the standard of 40 C which if discharged into the stream with out treatment would be harmful and injurious to acquatic organisms in the stream
That is why the neutralisation plant was necessary to bring down the temperature of water to 40C or below before its actual discharge in the stream
At the point where this water merges into the stream its temperature is below 40 C and therefore it ceases to be a contaminated trade effluent
Since the outlet is used for the discharge of this water which is no more polluted it cannot be said that it is used for the discharge of a trade effluent within the meaning of section 251 of the 1974 Act
According to Dr Singhvi the enactment being essential ly for the prevention control and abatement of pollution of streams and wells
the duty to ensure the purity of streams and wells is cast on the State Board and for the effective performance of the same section 25 1  provides for previ ous consent if any new or altered outlet is intended to be brought use for the discharge of sewage or trade effluent
But no such previous consent would be necessary if uncontam inated water is sought to be discharged into the stream
In other words according to Dr Singhvi the expression trade effluent  in section 2k must be read 129 in the context of the purpose and object of the law and the mischief it seeks to curb
Yet by way of abundant caution the appellant applied for the grant of consent under section 2526 of the 1974 Act by the letter dated 9th April 1984 for the neutralisation plant and by the letter dated I2th April 1984 for the sewage plant meant for the colony of workmen situate within the power Station
Under sub section 7 section 25 since the State Board neither granted nor refused consent within the period of four months from the receipt of the applications it must be deemed to have been granted unconditionally on the expiry of the said period
Lastly he pointed out that during the pendency of the two writ petitions in the High Court the Secretary of the State Board granted the required consent and conveyed it by his letter No F 5B I4RSEBTech8611472 dated 24th March 1988
Therefore when the Division Bench of the High Court disposed of both the writ petitions the consent of the State Board under section 251 was already granted and hence the High Court was not right in making the observations it made in paragraphs 7 and 9 of the impugned judgment
We may clarify that in the present appeals we are not concerned with the legality and validity of the levy of cess
Dr Singhvi however stated that the appellant re served the right to challenge the validity of the 1977 Act if the interpretation placed by the authorities below on the true scope and meaning of section 7 read with rule 6 is found to be correct
We may state that since we are not required to go into the question of Parliament s competence to enact the 1977 Act we do not propose to delve into this aspect of the matter
Now on a plain reading of sub section 1 of section 25 it becomes clear that the previous consent of the State Board is necessary where any new or altered outlet is pro posed to be used for the discharge of sewage or trade efflu ent into a stream or well
If what is discharged in the stream or well is not a pollutted trade effluent  section 2k or a sewage effluent  section 2g can there be any question of seeking the previous consent of the State Board The appellant has a separate sewage plant
Since the bulk of the water is consumed at the condensor cooling plant and the same is recycled into the stream the question is whether what is discharged in the stream can be said to be a trade effluent Dr Singhvi emphasised that the consent of the State Board would not be necessary under section 251 for the discharge of that recycled water unless it is shown that what the appellant discharged in the stream or river was polluted water According to Dr Singhvi the use of water at the condensor cooling plant merely raises the temperature of water above the tolerance limit 130 of 400 C if the water is discharged in the river or stream before its temperature is reduced to 400 C or below it may well be contended that within the broad meaning of the expression pollution  in section 2e it was imperative for the appellant to obtain the previous consent of the State Board for making use of that outlet
But if on the other hand it is shown that the temperature of water is brought down to the prescribed standard and the water is no more harmful or injurious to acquatic organisms in the river or stream ie is not polluted the discharge of such water cannot be equated with discharge of a trade effluent
This raises a mixed question of law and fact viz whether the recycled water returned to the stream in the same condition in which it was drawn with the temperature reduced to less than 400 C can still be said to be a trade effluent  requiring consent under Section 25 1 It may in this context be mentioned that samples of the trade effluent were collected by the State Board for analysis on 24th May 1984
By letter dated 3rd December 1984 the appellant requested the Assistant Engineer State Board to supply a copy of the analysis report which was refused by the letter dated 26th December 1984
The appellant was informed that the monitor ing results conducted by the Board were not supplied to the concerned industries
He added that the appellant could get the sample tested if so desired at the Board s Laboratory on payment basis
We think that if the Board was in posses sion of this vital information it should have in all fair ness brought it on record rather than withhold it
If that information was available on record Dr Singhvi s contention could have been met
We are however not inclined to raise any adverse inference as was suggested
We now come to the second limb of Dr Singhvi s submis sion
According to him section 7 of the 1977 Act is not dependent on the Board s consent under section 251 of the 1974 Act
In fact neither section 7 nor rule 6 speak about the same
All that section 7 says is that any person or local authority which is liable to pay cess can claim rebate of 70 of the cess payable by him or it if he or it has installed a plant for the treatment of sewage or trade effluent as the case may be
A plant has undoubtedly been installed for the treatment of sewage and no dispute in that behalf was raised before us
However as the bulk consump tion of water from the river is used at the condensor cool ing plant the question is whether the appellant can be said to have installed a plant for the treatment of a trade effluent
The Appellate Authority took the view that a 150 ft long channel meant for carrying the trade effluent cannot be described as a treatment plant
The appellant contended that the treatment plant installed by it comprises of an 131 arrangement to lift the water to a height of 22 ft and then drop it from that height into an open channel so that it cools down on coming in contact with the atmosphere and then flows towards and into the river
It would appear that this arrangement was not specifically brought to the notice of the authorities below including the High Court and it seems the authorities decided the question of the existence of the treatment plant on the premise that it consisted of merely a single 150 ft long channel
However this aspect has to be looked into
The High Court has however taken the view that in the absence of consent under Section 25 1  the appellant is not entitled to rebate
We find it difficult to agree with this view
Section 7 as well as Rule 6 do not envisage the Board s consent under Section 251 of the 1974 Act as a sine qua non
Under section 7 the consumer has only to show that he has installed a plant for the treatment of sewage or trade effluent and that it functioned successfully during the relevant period to earn rebate
Section 251 operates in a different field and has nothing to do with a plant installed for the treatment of a trade effluent although the grant of consent to a new outlet can be conditional on the existence of a plaint for the satisfactory treatment of effluents to safeguard against pollution of the water in the stream
The High Court refused the claim for rebate as it erroneously thought that the prior consent of the State Board was a must
That is why in the concluding part of the Judgment it observed that if the consent is subsequently obtained or deemed to be obtained and the plant is working successfully the appellant will be entitled to rebate
Since we are of the view that the Board s consent under Section 251 was not imperative we think that that part of the High Court s order cannot be sustained
So far as the 1977 Act is concerned it would be neces sary to consider the true scope and meaning of section 7 and rule 6
On a plain reading of the said provisions it would be necessary to decide i whether water discharged from the condensor cooling plant can be said to be a trade effluent  by reason only of the fact of its temperature being above the prescribed standard ii whether but for the treatment given to it as described by the appellant and set out above such water would have been discharged in the stream or river at a temperature above 40 deg
C and iii whether the ar rangement made by the appellant as set out above can there fore be described as a plant for the treatment of a trade effluent
These and the related questions must be answered to effectively deal with the appellant s claim for rebate
The authorities below including the High Court have not applied their minds to these essential for deciding the question of grant or refusal of 132 rebate
If it is found that the plant in question is one for the treatment of a trade effluent the appellant would be entitled to rebate notwithstanding the absence of consent under section 251 of the 1974 Act
We feel that the par ties did not focus their attention on these vital aspects and therefore failed to place on record the material essential for deciding the application for grant of rebate
In the circumstances we are left with no alternative but to remit the matter to the Assessing Authority with a direction to permit the appellant as well as the State Board to place on record such material as is considered relevant and there after give the parties an opportunity of being heard before deciding the matter
The Assessing Authority should do so without being influenced by the previous orders of the authorities as well as the High Court
In the meantime ie till the Assessing Authority decides the matter afresh the appellant will continue to pay 30 of the cess amount and will file an undertaking in this Court within eight weeks from today to the effect that in the event the appellant is finally found liable to pay the balance of 70 the appellant will pay the same with interest at 15 per annum within six months from the final determination
The appeals are allowed accordingly
Having regard to the facts and circumstances of these cases we make no order as to costs
Y Lal Appeals allowed


Summary:
In these matters the petitioners viz four companies in the private sector two public sector corporations owned substantially by a State Government and a private individu al sought clarifications and directions in relation to the orders passed by this Hon ble Court on 30487 and 61087 on the Writ Petition
All these petitions arose out of applications for grant of right for the mining of chrome ore or chromite in the State of Orissa
Since chrome ore is one of the minerals specified in the first and second schedules to and not a minor mineral  within the meaning of Section 3f of the Mines and Minerals Development and Regulation Act 1957 the right to grant the mining right in respect of this mineral is vested in the State Government subject to the control by Union of India and as such they are respond ents in these matters
While disposing of the matters this Court referred the entire controversy to the Secretary to Government of India in the Ministry of Mines viz Mr Rao for a detailed consideration of the claims made by the parties
Before Mr Rao the two public sector undertakings also put forward their claims that the public sector units in the State were entitled to the grant of mining rights in the State to the exclusion of all private parties in as much as there was a reservation in their favour by an appropriate notification issued by the State Government
The other parties raised objection on the ground that the claims were made at a belated stage of the proceedings
On applications made by the Public Sector Undertakings this Court directed that their claims would also be examined by Rao 28 In his report dated 121988 Rao accepted the claim of reservation made by the two Public Sector Undertakings viz Orissa Mining Corporation OMC and Industrial Devel opment Corporation of Orissa Ltd IDCOL
He also partially accepted the claims of the three private parties
viz Indian Metals and Ferro Alloys Limited IMFA Ferro Alloys Corporation Limited FACOR and Aikath and rejected the claims of the other two private parties viz Orissa Cements Ltd OCL and Orissa Industries Ltd ORIND
Though he accepted the claim of the two public sector undertakings he recommended for them leases in respect of only the balance of the lands left after fulfilling the claim of the others which he had accepted
The present petitions biter alia sought directions on the report of Rao
It was contended that Rao was nothing more than a Commissioner appointed by this Court to examine the various parties and hence this Court should pass appro priate orders on his report
Various contentions were ad vanced by the petitioners as well as respondents as regards the legal character of the Rao Report and of giving effect to it either in toto or with modifications in certain re spects
Reservation in favour of Public Sector Undertakings was challenged by the private parties
Plea of Promissory Estoppel was also raised on behalf of some of the petition ers
Disposing of the matters this Court HELD 1
The statute must lay down clearer guidelines and procedure
Having regard to the new avenues for vast industrial development in the country a more workable procedure would be for the State Government to call for applications in respect of specified blocks by a particular date and deal with them together other later entrants not being permitted in the field
Otherwise only confusion will result as here
There was a time when the State Government looked to private enterprises for mineral development in its territory
Of late however competition has crept in
The State Government has its own public sector corporations and various enterpreneurs are interested in having mining leases for their purposes
It is therefore vital that there should be a better and detailed analysis district wise and area wise and that a schedule for consideration of applica tions in respect of define areas should be drawn up with a strict time frame so that the State is no longer constrained to deal with sporadic applications or make a routine grant of leases in order of priority of applications
These are aspects which call for careful consideration and appropriate amendments to the Mines and Minerals Development and Regu lation Act 1957 and the Rules made thereunder
72D G 29 2
Chromite ore is an important major mineral and the importance of its conservation and proper utilisation for our country s development cannot be gainsaid
The State Government rightly decided upon a policy of reservation in 1967 and this was kept up till 1974
In February 1974 the State Government was in favour of free issue of mining leases but gave up this policy in pursuance of the Central Government s letter of 15574
Reservation was therefore clamped in 1977 again
Applications could still be consid ered to see how far a relaxation was permissible having regard to the nature of the applicant s needs the purpose for which the lease was asked for the nature of the ore sought to be exploited the relative needs of the State the availability of a public undertaking to carry out the mining more efficiently and other relevant considerations
There is no material on record to substantiate the plea that the State Government has been acting arbitrarily or mala fide in its policy formulations in this regard
82C E Venkataraman vs Union   referred to
Rao s decision that the leases that have been grant ed already in favour of IMFA FACOR be confirmed should be upheld
These should be treated as leases legitimately granted to them in exercise of the powers of relaxation under rule 592
It is true that the orders granting the leases do not elaborately record the reasons but they were passed in the context of this litigation and have to be considered in the light of the affidavits and counter affi davits filed herein
Rao s decision regarding the grant of a lease to AIKATH not yet implemented should also be upheld
In these three cases the records disclose sufficiently the reasons on the basis of which the leases have been decided upon and are adequate to justify the mining leases actually granted 89B D 4
The claims of OCL and ORIND have been rejected sum marily by Rao without an advertence to the various consider ation urged by them
This part of Rao s decision has to be set aside as being too cryptic and unsustainable
Pursuant to this conclusion it is directed that these claims be considered afresh by the Central Government
It would be more expedient if the claims of OCL and ORIND are restored for detailed consideration in all their several aspects before the State Government as the State Government has had no opportunity to consider the various aspects pointed out and as this course will also provide an opportunity to the claimants to approach the Central Government again if dissatisfied with the State Government s decision to consid er whether despite the reservation some relaxation can be made also in 30 Favour of these two companies The State Government has to take into account various factors and aspects before grant ing a mining lease to an individual concern carving out an exception to its reservation policy
It has done this in respect of IMFA and FACOR for certain special reasons re corded by it
Whether it would do so also in favour of OCL and ORIND is for the State to consider
It would be noticed that the applications of these two companies have not been considered in this light earlier The applications of OCL and ORIND are restored for the consideration of the State Government
94B G 5
The State Government has rejected ORIND s applica tion inter alia on the ground that in view of the penden cy of the Writ Petition before this Court it could not at that stage pass any order on the application
It would therefore be open to ORIND to ask the State Government to reconsider the application in the light of the present order
There is no necessity for insisting on such a formal request and therefore the State Government is directed to consider ORIND s application afresh in the light of this judgment
95A B 6
So far as OMC and IDCOL are concerned Rao has recomamended that the areas left after the grants to IMFA and FACOR be given on lease to OMC
There were huge areas of mineral bearing lands which have been reserved for the public sector
Its interests do not clash or come into conflict with those of private applicants which can only claim a right to the extent the State Government is willing to relax the rule of reservation
This Court does not think OMC or IDCOL have any voice in requiring that the State Government should keep certain extent of land reserved and should not grant any mining lease at all in favour of any private party
The interests of these corporations are safe in the hands of the State Government and the allocation of mining leases to these organisations is a matter of discre tion with the State Government strictly speaking therefore no question of any application by them for mining lease need arise at all
But when made their applications are consid ered by the State Government and on revision by the Central Government as a matter of form
To this extent they have a statutory remedy
95C El 7
When the State Government agreed to lease out the areas to MFA and FACOR it was pointed out that this could not be given effect to without the Central Government s approval
This Court thereupon directed that the State Government should seek such approval
The direction to the Central Government is only that its approval should be given within the particular time limit set out therein It cannot be 31 construed reasonably as a direction compelling the Central Government to grant approval whether it agreed with the State Government s decision or not
Thus the grant of mining leases to IMFA and FACOR are to be treated as having been made in exercise of the power of relaxation under Rule 592
Though there is no specific recording of reasons by the State Government or Central Government inasmuch as these leases came to be granted by way of compromise it is a fair inference that the compromise proposals were prompted by the at least partial acceptance of the claim put forward by these parties
Since the grant of leases to these parties can be attributed to the relaxation of the reservation rule in particular cases the finding of Rao that these leases may be confirmed deserves acceptance
90C F 81 AIKATH is admittedly an individual who discovered chromite ore in the State
He had secured a lease as early as in 1952 though that lease was annulled by the State when it took over
Again as against a lease of 640 acres which he had once obtained and started operating upon the State Government has finally approved of a lease in respect of only 140 acres
AIKATH had been actually working some mines from 1553
His original grant had been approved before the areas was reserved on 3762
If the State Government con siders these to be weighty considerations and entered into a compromise with him for a lease of 140 acres and this has also been recorded by the High Court these are no grounds to interfere with that decision of the State Government
89D F 82 Though the State Government and AIKATH had entered into a compromise as early as 4121984 no lease has yet been granted in his favour perhaps as the Central Government has had no occasion to consider the matter earlier
However no useful purpose would be served by remitting the matter and asking the State Government to seek the formal approval of the Central Government therefore
The decision of Rao itself can be taken as containing the approval of the Cen tral Government in this regard and is thus upheld
The State Government is  directed to execute at as early a date as possible a mining lease in Favour of AIKATH in respect of the 140 acres agreed to be leased to him under the compro mise dated 4121984
90G H 91A 9
Although Rao has approved the grants made in favour of IMFA and FACOR by the State Government which he re marks were perhaps based on the observations made by this Court he has clearly reached his conclusions on these independently
In fact he has set out a basis for justify ing the grants of IMFA and FACOR
It is also clear that 32 there were no Court orders that could have influenced his decisions on the claims of the other parties
87F G 101 In the context of the scheme of the Act and the importance of a lease being granted to one or more of the better qualified candidates where there are a number of them it would not be correct to say that as the State Government s order of 29101973 has been set aside ORIND s application should be restored for reconsideration on the basis of the situation that prevailed as on 29101973 and that therefore it has to be straightaway granted as there was no other application pending on that date before the State Government
In matters like this subsequent applica tions cannot be ignored and a rule of thumb applied
74C E 102 Though section 11 tries to enunciate a simple general principle of first come first served in practice prior ity of an application in point of time does not conclude the issue
In this case itself for instance during the period ORIND s application of 1971 has been under consideration before various authorities and in the writ petition filed in the High Court several other competitors have come into the picture
The statutory provision is not clear as to which of the applications in respect of any particular area are to be considered together
If ORIND s application of 1971 were to be considered only on the basis of the persons who had made applications at that time or a short time before or after one result would follow if on the other hand all the applications pending for disposal at the time ORIND s application is to be granted or rejected are to be consid ered the result would be totally different
Since the interest of the nation require that no lease for mining rights should be granted without all applicants therefore at any point of time being considered and the best among them chosen or the area distributed among such of them as are most efficient and capable the latter is the only reasona ble and practical procedure
That is why this Court in its order dated 30487 laid down that all applications pending for consideration as on 30487 should be considered by Rao
71G H 72A B Ferro Alloys Corporation of India vs Union ILR 1977 Delhi 189 and Mysore Cements Ltd vs Union AIR  distinguished
111 Previously rule 58 did not enable the State Gov ernment to reserve any area in the State for exploitation in the public sector
The existence and validity of such a power of reservation was upheld by this Court
Rule 58 has been amended in 1980 to confer such a power on the State Government
It is also not in dispute that a notification of reservation was made on 3877
The State Government OMC and IDCOL are 33 therefore right in contending that ex facie the areas in question are not available for grant to any person other than the State Government or a public sector corporation unless the availability for grant is renotified in accord ance with law rule 591e or the Central Government decides to relax the provisions of rule 591
79D F Amritlal Nathubhai Shah and Ors
vs Union of India and Anr
  relied on
Kotiah Naidu vs State of AP AIR 1959 AP 185 and Amritlal Nathubhai Shah vs Union AIR 1973 Gujarat 117 referred to 112 In the present matters except for two or three instances
where leases have been granted by the State Government on its own the State Government has generally and consistently adhered to its stand that the chromite bearing lands are reserved for exploitation in the public sector
The rules permit the Central Government to relax the rigid requirements of reservation in individual cases after recording special reasons
Such exceptional and isolated instances of lease are not sufficient to sustain the plea of the parties that the policy of reservation is merely being raised as a formal defence and has never been seriously implemented by the State Government
81G H 82A B 113 The conclusion that the areas in question before this Court were all duly reserved for public sector exploi tation does not however mean that private parties cannot be granted any lease at all in respect of these areas for as pointed out earlier it is open to the Central Government to relax the reservation for recorded reasons
Nor does this mean that the public sector undertakings should get the leases asked for by them
This is so for two reasons
In the first place the reservation is of a general nature and does not directly confer any rights on the Public Sector Under takings
This reservation is of two types
Under section 17A1 inserted in 1986 the Central Government may after consult ing the State Government just reserve any area not covered by a Private Lease or a Mining Lease with a view to conserv ing any mineral
Apparently the idea of such reservations is that the minerals in this area will not be exploited at all neither by private parties nor in the public sector
The second type of reservation was provided for in rule 58 and such reservation could have been made by the State Government without any necessity for approval by the Cen tral Government and was intended to reserve areas for exploitation broadly speaking in the public sector
The notification itself might specify the Government Corporation or Company that was to exploit the areas or may be just general on the 34 lines of the rule itself
Whether such areas are to be leased out to OMC or IDCOL or some other public sector corporation or a Government Company or are to be exploited by the government itself is for the Government to determine de hors the statute and the rules
There is nothing in either of them which gives a right to OMC or IDCOL to insist that the leases should be given only to them and to no one else in the public sector
There are no competitive applica tions from organisations in the public sector controlled either by the State Government or the Central Government but even if there were it would be open to the State Gov ernment to decide how far the lands or any portion of them should be exploited by each of such Corporations or by the Central Government or State Government
 Both the Corpora tions are admittedly instrumentalities of the State Govern ment and the decision of the State Government is binding on them
If the State Government decides not to grant a lease in respect of the reserved area to an instrumentality of the State Government that instrumentality has no right to insist that a Mining Lease should be granted to it
It is open to the State Government to exercise at any time a choice of the State or any one of the instrumentalities specified in the rule
It is true that if eventually the State Government decides to grant a lease to one or other of them in respect of such land the instrumentality whose application is rejected may be aggrieved by the choice of another for the lease
The question whether OMC or IDCOL can object to the grant to any of the private parties on the ground that a reservation has been made in favour of the public sector has to be answered in the negative in view of the statutory provisions
For the State Government could always denotify the reservation and make the areas available for grant to private parties
Or short of actually deserv ing a notified area persuade the Central government to relax the restrictions of rule 591 in any particular case
It is therefore open to the State Government to grant private leases even in respect of areas covered by a notifi cation of the State Government and this cannot be challenged by any instrumentality in the public sector
82F H 83A H 84A C 12
In these matters no grounds have been made out which could support a plea of promissory estoppel
The grant of a lease to ORIND had to be approved by the Central Gov ernment
The Central Government never approved of it
The mere fact that the State Government at one stage recom mended the grant cannot stand in the way of their disposing of the application of ORIND in the light of the Central Government s directives
78E F Kanai Lal Sur vs Paramnidhi Sadhukhan  Ms 35 Motilal Padampat Sugar Mills Co P Ltd vs State of Uttar Pradesh and Ors   Gujarat State Financial Corporation vs Ms Lotus Hotels Pvt Ltd  Surya Narain Yadav  Or5
vs Bihar State Electricity Board Godfrey Philips India Ltd 1985 Suppl
3 SCR 123 and Mahabir Auto Stores  Ors
vs Indian Oil Corporation Ors 1990 JT I SC 363 referred to