IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.10324 of 2011 1. M/S BSC-C&C‟JV‟, A Company registered under the provisions of The Companies Act, 1956 On 16.7.1996 Having Its Registered Office At Plot No. 70, Sector 32, Gurgaon, Haryana Through Its General Manager, Sri Shailendra Kumar S/O Sri Hari Shankar Prasad, resident of Flat No.404, Dhukhan Ram Plaza, Nlock-B, P.S. Gandhi Maidan, Town & District- Patna Versus 1. The Commissioner Of Mines , Govt. Of Bihar, Patna. 2. Commissioner Of Mines & Geology, Govt. Of Bihar, New Secretariat, Patna. 3. The Director Of Mines New Secretariat, Bihar, Patna. 4. The State Of Bihar Its Collector Kaimur At Bhabhua. 5. The Assistant Mining Officer, Kaimur At Bhabhua. 6. The Sub Divisional Officer, Bhabhua. 7. The Superintendent Of Police, Kaimur At Bhabhua. For the Petitioner : Mr. Chittaranjan Sinha, Sr. Advocate Mr. Siddharatha Prasad, Advocate For the State : Mr. D.K. Sinha, A.A.G. 2 For the Mines : Mr. V.M.K. Sinha, Advocate 4 20-09-2011 The petitioner prays for quashing of the order dated 18.6.2011 contained in memo no.1263 passed by the District Magistrate, Kaimur at Bhabua whereby the Assistant Mining Officer, Kaimur at Bhabua has been directed to ensure that illegal mining carried out at Madurana hills be stopped with immediate effect. The petitioner further prays for quashing the subsequent letter dated 19.6.2011 issued by the Assistant Mining Officer, Kaimur at Bhabua wherein the activity of crushing and mining carried out by the petitioner at Madurana hills has been stopped with immediate effect. 2. The petitioner has challenged the impugned order on the ground that the same has been passed on the dictates of the Hon‟ble Minister, Mines & Geology, Government of Bihar without any application of his mind. 2 3. The facts necessary for disposal of the case are being stated hereinbelow in short. The petitioner company is duly registered under the Companies Act having its registered office at Gurgaon at Haryana. The Ministry of Railways, Government of India planned to construct a Dedicated Freight Corridor across the length and breadth of the country for free movement of goods trains. The petitioner company is engaged in design and construction of formations including blanketing, major bridges, Minor bridges, R.U.Bs, R.O.Bs, supply and spreading of Ballast and other related infrastructure works. The petitioner has been awarded mega work of construction of Embankment and bridges for the Dedicated Freight Corridor from Karwandiya to New Ganj Khawaja measuring about 105 Kms on Mugalsarai-Sone Nagar section of Eastern Corridor in the State of Bihar and Uttar Pradesh. The execution of works also required large quantity of Granular soil. In course of survey it was found that the mountain soil available in Madurana hills outskirts is suitable for „blanket layer‟ and in past, the Mining department has been issuing permits for such mountain soil to private individuals. The Chief Project Officer of Dedicated Freight Corridor Corporation of India requested the District Magistrate, Rohtas vide his letter dated 7.7.2009 to consider allotment of Mines to the petitioner as per government policy and rates. The petitioner company had also applied to the government on 2.6.2009. In pursuance of the request made by the Company and Dedicated Freight Corridor Corporation of India 20.75 acres of land was leased in favour of the petitioner company for a period of 5 years after due approval of the District 3 Magistrate as per terms and conditions mentioned therein. A copy of letter no.203 dated 1.9.2009 issued by the Assistant Mining Officer communicating approval of lease to the petitioner company has been annexed at Annexure-4, whereas copy of lease deed dated 1.9.2009 containing the terms and conditions has been annexed at Annexure- 21 to the supplementary affidavit filed on behalf of the petitioner. 4. The petitioner submits that the area allotted and settled with it is located substantially over foot hills portion of Madurana Pahari which contains soil and stone in the ratio of 80:20. The aforesaid ratio of mountain soil would also be evident from the enquiry report dated 22.7.2009 carried out and prepared by the authorities of the Mining Department, which is contained in Annexure-6. The petitioner states that the companies applied with specific object to mine mountain soil and anything else if extracted except soil, the same is to be handed over to the Mining Department. The Mines and Mineral Department, Government of Bihar subsequently issued notification dated 15.10.2009 enhancing per cubic meter rate for extracting clay from Rs.15 to Rs.38 on account of some presence of small stones which was accepted by the petitioner. The petitioner submits that since the start of the mining operation by the petitioner, the local and influential people started lobbying against it and a P.I.L. bearing C.W.J.C. No.15536 of 2010 was also filed for cancellation of Mining lease which was rejected by a Division Bench of this court which found the mining lease does not affect any religious sentiments or monuments. The petitioner states that some of the lobbyists raised objections against mining operation in the meeting of the “20 Sutri” 4 Programme convened on 16.6.2011 under the Chairmanship of Hon‟ble Minister, Mines and Minerals Department. The Minister along with others carried out inspection of Madurana hills on 17.6.2011 along with officials of the District Administration and came to the conclusion that the Mining operation is going on in Madurana hills. A copy of the inspection report dated 17.7.2011 has been annexed as Annexure-D to the counter affidavit filed on behalf of respondent nos.1 to 4 and 7. On 18.6.2011 the Hon‟ble Minister, Mines wrote to the District Magistrate to stop illegal mining in Madurana hills as in course of inspection he found enough materials, which pointed towards such mining. In view of the letter dated 18.6.2011, the Collector, Kaimur issued direction to the Assistant Mining Officer with a copy to the District Administration to stop illegal mining on Madurana hills forthwith. Pursuant to the direction of the District Magistrate contained in his letter dated 18.6.2011, the Assistant Mining Officer directed the petitioner company to stop mining operation forthwith on Madurana hills. 5. The petitioner submits that the order dated 18.6.2011 passed by the District Magistrate, Kaimur is unsustainable in law as the same has been passed without any application of mind at the behest of Hon‟ble Minister, Mines. The petitioner also contended that the Hon‟ble Minister has no locus to direct the District Magistrate to stop the mining operations. In support of his submission, the petitioner relied upon decisions reported in A.I.R.1952 SC 16 (Commissioner of Police Vs Gordhandas Bhanji and (1969)1 SCC 308 (the Purtabpore Co. Ltd. Vs Cane Commissioner of Bihar & Ors). 5 6. The petitioner next submits that stopping of mining operation would amount to cancellation of licence which cannot be done without affording an opportunity of hearing. The petitioner submits that in case if petitioner is indulging in any illegal activity the Collector can issue necessary instruction to rectify the mistake or can impose penalty. The petitioner refers to clauses 1, 2 and 3 of the General Provisions contained in Part IX which is quoted hereinbelow: “1. Breach of any condition- In case of breach of any of the conditions of the lease other than mentioned in clauses 2 and 3 of this Part the Collector may require the lessee/lessees or his/their its transferees or assignees to pay penalty not exceeding an amount equivalent to four times the amount of annual deed rent specified under clause 2, Part V. 2. Obstruction to inspection- In case the lessee/lessees or his/their/its transferees or assignees obstructs/obstruct or does/do not allow entry or inspection any of the conditions of the lease mentioned in clause of Part III and clauses 13, 14 and 2 of Parv VII, the Collector may cancel the lease and forfeit the whole or part of the security deposit. 3. Breach of any other condition- In case of lessee/lessees or his/their/its transferee or assignee commit any breach of any of the conditions specified in (clause 3 of Part III) and clauses 2,3,6,10, 23 of Part VII then an in any such case the Collector shall give notice in writing to the lessee/lessees or his/their/its transferees or assignees as the case may be asking him/them to remedy the breach within 30 days from the date to the notice and if the breach is not remedied within such period the Collector may determine the lease; provided that nothing herein contained shall debar the Collector from enforcing any other right or remedy that the collector may have against the lessee/lessees or his/their/its transferees or assignees under any other provisions herein contained”. 7. Mr. V.M.K. Sinha, learned counsel for the Mines submits that the inspecting team consisting of Hon‟ble Minister, Mines and officials of the District Administration, Mines Department as well as 6 the petitioner‟s representative inspected the mining operation on Madurana hills. In course of inspection, the inspecting team found a crusher machine, drilling machine and heaps of big stones. He submits that presence of all these instruments/ materials prove that the petitioner is indulging in illegal mining of stone, for which it did not have any sanction. He further submits that representative of petitioner‟s company was also present in course of inspection and he too signed as one of the members who participated in the proceeding. He submits that as large scale illegal mining was resorted to, the Hon‟ble Minister rightly wrote to the District Magistrate to stop such illegal mining. He submits that no show cause is necessary for ordering suspension of illegal mining which would be necessary if a lease deed is being cancelled. The respondents have also relied upon the order dated 24.4.2008 passed in L.P.A. No.174 of 2008 and the decision in the case of Sushila Chemicals, reported in (2010) 10 SCC 388. The Hon‟ble Minister in his inspection note favoured a detailed enquiry and inspection by the District Magistrate, and till then he sought stoppage of illegal mining operation. Learned counsel for the Mines submitted that a detailed inspection would be soon undertaken in the near future. 8. Mr. D.K. Sinha, learned A.A.G. II appearing for the State submits that any individual can make a complaint of an irregularity and illegality to the authorities. He submits that the Hon‟ble Minister, Mines being head of the Mines Department would be in his right to make a complain and seek immediate action as in course of inspection large scale of illegal mining came to his notice. He too submits that 7 accumulation of big stones, presence of a crusher machine and drilling machines in the petitioner‟s premises is a proof in itself that the petitioner indulged in Mining of stone though he had licence only for Mining of Granular soil and no licence for mining in stones. 9. In reply, the petitioner submits that in L.P.A. No.174 of 2008 would not be of help to respondent, as the Division Bench noticed that sufficient opportunity was given to the defaulting parties to make good the deficiencies. But in the instant case the petitioner was ordered to stop mining without a notice. The decision in the case of Sushila Chemicals Private Limited (supra) would also be not applicable as the order of suspension was passed as C.B.I. had registered a criminal case against the consumers of coal for illegally selling the same in open market and instead of utilizing them in plant. 10. The petitioner has filed rejoinder to the counter affidavit to show that the cursher machine was established pursuant to grant of stockist license for stone minerals under Rule7(1) of the Bihar Mineral Prevention of Illegal Mining, Transportation and Storage (Rules), 2003 on a bid price of Rs.59 lacs. The petitioner as such installed the crusher machine having capacity of 50 MTPH after obtaining no objection certificate from the Bihar State Pollution Control Board. The petitioner further submits that subsequently the respondents have procured different reports to justify its action. The areas leased out contain 80% soil and 20% stones and as such the royalty was raised to Rs.38 per cubic meter from Rs.15 per cubic meter. The petitioner states that it purchased stones from one Madan Mohan Singh who had a mining lease for stones. 8 11. I have heard learned counsel for the petitioner and State. The petitioner got mining lease consequent to the approval granted by the District Collector. The general provisions contained in Part IX of lease document provides for cancellation of lease after giving notice in writing to the lessee/lessees or his/their assignees. In certain cases the Collector may even direct the lessee to rectify the defaults and the breach of conditions failing which the lease can be terminated. The power to cancel the lease would include in itself to issue direction in respect of suspending the work if the Collector has doubt that the appellant is resorting to illegal mining of minerals for which they are not authorized. In case of Sushila Chemicals Private Limited & anr Vs Bharat Coking Coal Limited & Others, reported in (2010) 10 SCC 388 the B.C.C.L. suspended the supply of coal to the firm as they were named in the F.I.R. by the C.B.I. with an allegation of selling the coal in black market though the same was allotted for being utilized in plant of consumers. The Apex Court upheld the suspension of supply coal observing that the authorities entertain serious doubts on the basis of F.I.R. lodged by the C.B.I. that supply of coal would be misutilised by the firm. The Apex Court thus held that neither Coal India Limited nor B.C.C.L. acted arbitrarily or unreasonably in stopping supplies of coal under FSA scheme to the appellant firm. It would be relevant to quote paragraph 23 of the judgment as under: “23. In our considered opinion, BCCL, will also have the right to suspend supplies of coal to the appellants where it has doubts that the appellants may misutilise the allotted coal and divert or sell the same in open market because, as would be clear from Clause 4.4 of the FSA and the new coal distribution policy dated 18-10-2007, the very object of FSA as well as policy decision of the Government 9 is to allot coal to the appellants for utilisationo in their plants and not for any other purpose. Therefore, if the FIR lodged by CBI, which is a premier investigation agency of the Central Government, created serious doubts that the allotted coal may be diverted or sold in the open market instead of being utilized in the plants of the appellants, BCCL would be within its rights to suspend the supplies of coal to the appellants till the doubts are cleared in appropriate proceedings”. 12. In the instant case it would appear from the impugned order dated 18.6.2011 passed by the Collector, Bhabua that he has passed the impugned order stopping illegal mining as he was so ordered by the Hon‟ble Minister pursuant to his inspection made on 17.6.2011. It appears from the impugned order that the Collector, Bhabua gave the aforesaid direction in view of the order of the Hon‟ble Minister without applying his mind either to the enquiry report of the Minister itself or other materials. The order of the Collector does not reflect that he himself entertained any doubt whether the petitioner is indulging in illegal mining. He has not even prima facie recorded his satisfaction that the petitioner has indulged in illegal mining. It would be always open to the authority to charge penalty for loss apart from suspending/cancelling the license in accordance with law. In such circumstances, the judgment delivered in the case of Purtabpore Co.Ltd (supra) and Commissioner of Police (supra) would apply with full force. In the aforesaid cases, the Apex Court observed that the order passed by the authorities who has been conferred with such jurisdiction must reflect due application of mind. 13. The order of the Collector, Bhabua would only show that he has merely communicated the direction given to him by the Hon‟ble 10 Minister. It is true that any one can make a complaint to an authority and if such complaint is made by the Hon‟ble Minister Incharge of the department, the same has to be construed with all its seriousness and sensitivity. If the competent authority on going through the inspection report of the Hon‟ble Minister and others had prima facie come to a view that there is some materials to indicate illegal mining, then the competent officer could stop the same pending enquiry. In absence of any such satisfaction of his own, the impugned order dated 18.6.2011 stopping the mining is unsustainable in law and is accordingly quashed. The matter is remitted to the Collector, Kaimur/competent authority to pass appropriate order after examining the relevant materials on record in accordance with law. The petitioner at the same time is restrained from using the crusher machine till it satisfies the authority with regard to procurement of stones from a lessee in its premises. 14. With the aforesaid observations and directions, this writ petition stands disposed of. 15. Let a copy of this order be handed over to Mr. V.M.K.Sinha, learned counsel appearing for the Mines for its onward communication. (Samarendra Pratap Singh, J.) Md.Jamaluddin Khan