AJN 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1416 OF 2009 M/s. Ispat Industries Limited, a Company incorporated under the Companies Act, 1956, having its registered Office at Park Plaza 71, Park Street, Kolkatta – 700 016 and factory at Village Dolvi, Taluka Pen, District Raigad, Maharashtra. ) ) ) ) ) ) ) ... Petitioner Versus 1. The State of Maharashtra, through the Principal Secretary, Department of Industry, Energy and Labour, Government of Maharashtra, Mantralaya, Mumbai – 400 032. ) ) ) ) ) ) 2. Hon. Chief Minister, State of Maharashtra, Mantralaya, Mumbai – 400 032. ) ) ) 3. Union of India, through its Secretary, Ministry of Mines, Shastri Bhavan, New Delhi – 110 001. ) ) ) ) 4. M/s. Shree Virangana Steels Ltd., through its Managing Director, Nagpur, Maharashtra. ) ) ) ... Respondents Mr. V.A. Thorat, senior counsel with Mr. Vaibhav Sugdare, Mr. Y.H. Shah and Ms. Priyanka Desai i/b M/s. K. Ashar & Co. for the petitioner. AJN 2 Mr. D.A. Nalawade, Government Pleader with Mr. P.K. Jadhav, A.G.P. for the State. Ms. S.V. Bharucha for respondent 3 – Union of India. CORAM : SMT. RANJANA DESAI & SMT. MRIDULA BHATKAR, JJ. DATE ON WHICH THE JUDGMENT IS RESERVED : 13TH NOVEMBER, 2009. DATE ON WHICH THE JUDGMENT IS PRONOUNCED : 23RD NOVEMBER,2009. JUDGMENT :- (Smt. Ranjana Desai, J.) 1. Rule. Respondents waive service. By consent of the parties, taken up for final hearing forthwith. 2. The petitioner claims to be the largest manufacturer of steel within Maharashtra and one of the largest industrial houses in the country, having all the technical expertise, financial strength and an established track record for committed social responsibility. According to the petitioner, it provides direct and indirect employment to 5000 to 6000 persons on daily basis. The petitioner claims that it contributes an average of Rs.1000 crores as revenue per year to the State and the Central exchequer. AJN 3 According to the petitioner, it has the capacity to produce 3 Million Tonnes per year and is likely to enhance the capacity of production by 56 Million Tonnes. The petitioner has signed a Memorandum of Understanding (for short, “the MOU”) with the Government of Maharashtra for Power Plant also. The plant of the petitioner is spread over 1500 acres (approximately) of land near Pen, Alibaug, adjoining the National Highway 17. 3. Respondent 1 is the State of Maharashtra represented through Principal Secretary, Department of Industry, Commerce & Labour. It is an appropriate authority under the Mines and Minerals (Regulation & Development) Act, 1957 (for short, “the Mines Act”) to grant Prospecting Licence (for convenience, “the PL”). Respondent 2 is the Chief Minister of State of Maharashtra, who is the authority under the Mines Act at the relevant time, when the impugned order dated 24/2/2009 was passed. He was the head of the AJN 4 Department of Industry, Commerce and Labour. Respondent 3 is the Union of India and is the authority who grants approval under the Mines Act for grant of the PL. Respondent 4 is a company, who under the impugned order has been recommended for grant of the PL under Section 11(2) by respondent 2. 4. The case of the petitioner as stated in the petition needs to be shortly stated. The petitioner has integrated steel plant at Dolvi about 80 Kms. from Mumbai in Raigad District, Maharashtra. The integrated steel complex has a sponge iron plant of 1.6 MTPA steel melting shop to produce 3.6 MTPA HR coil, Blast Furnace to produce 2.0 MTPA Hot Metal and other Ancillary units like Oxygen Plant Jetty to handle more than 6.0 Million Tonnes of material etc. The petitioner has recently commissioned a 2.24 MTPA Sinter Plant for manufacturing sinter using the iron ore fines. 5. The iron ore deposits situated at Mauze Karampalli, Nagupadi, Taluka Ettapalli, District Gadchiroli have been AJN 5 notified for grant of PL over an area of 631.552 H/R under Section 11(2) of the Mines Act by the Director, Geology Mining Nagpur and applications were invited for grant of PL vide Notification dated 7/1/2008. The petitioner filed application on 15/2/2008. The application was addressed to the Secretary of respondent 1. The petitioner furnished all the necessary details sought under the prescribed form. The petitioner also deposited the necessary fees. The necessary affidavit stating that no mining dues are outstanding against the petitioner was also filed. The petitioner also gave details of list of applied mining lease, PL applications made by the petitioner in the State of Maharashtra thereby detailing area in various villages which the petitioner had applied. 6. Pursuant to the Notification dated 7/1/2008, 109 applicants applied for grant of PL. On 29/1/2009, respondent 2 i.e. the Chief Minister of Maharashtra gave personal hearing and considered the submissions made on behalf of the representatives of the respective AJN 6 applicants, who had filed the applications. Out of 130 applicants, many of the representatives of the applicants were absent at the time of hearing. According to the petitioner, in the hearing before respondent 2, the petitioner made detailed submissions stating inter alia, that it is one of the largest steel plants in the State of Maharashtra; that it has sound financial condition and technical expertise at all levels; that it intends to make huge investments to enhance the capacity for which it has drawn up a comprehensive plan; that the existing PL granted to it would not be sufficient to meet growing demand of the petitioner and, therefore, it had approached the State of Maharashtra for grant of PL to enable it to explore the reserve in the areas which would also be beneficial to the State of Maharashtra. 7. According to the petitioner, no representative of respondent 4 was present on 29/1/2009 at the time of hearing. The petitioner's representative Mr. Shastri was present. Respondent 2 passed the impugned order dated AJN 7 24/2/2009 by which he recommended grant of PL to respondent 4 under Section 11(2) of the Mines Act for iron ore over an area of 631.552 Hectares. The petitioner is aggrieved by the said recommendation. 8. We have heard Mr. Thorat, learned senior counsel appearing for the petitioner at some length. Mr. Thorat submitted that the impugned order dated 24/2/2009 is contrary to the relevant provisions of the Mines Act and the Mineral Concession Rules, 1960 (for short, “the said Rules”). He submitted that the impugned order reveals total non application of mind. Learned counsel pointed out to us that in the impugned order, respondent 2 has recorded that respondent 4 had brought to his notice that the expansion of existing unit is in progress with an investment of Rs.11,090 crores and this will create additional employment for 1000 personnel. Learned counsel pointed out that respondent 2 has noted the submissions of respondent 4. However, admittedly, no representative of respondent 4 was present. Learned AJN 8 counsel submitted that there cannot be a greater example of non-application of mind. Learned counsel further pointed out that respondent 4 has been recommended for grant of PL because respondent 4 is allegedly an emerging entrepreneur and needs to be encouraged as per the State Mineral Policy. Learned counsel submitted that this is a totally irrelevant consideration. Learned counsel submitted that this reason is totally untenable, unjust and arbitrary. He submitted that comparative merits of various applicants have not been properly considered. He submitted that respondent 2 has not given any cogent reasons why he has recommended respondent 4's case. Learned counsel submitted that the impugned order rests on conjectures and surmises and as such deserves to be set aside and direction needs to be given to the State Government to pass a fresh order after hearing parties. 9. Mr. Nalawde, learned Government Pleader on the other hand raised a preliminary objection. He submitted AJN 9 that an alternative remedy of revision is open to the petitioner and, hence, this petition ought not to be entertained. He drew our attention to the affidavit of Mr. Vasant Shankar Kulkarni, Under Secretary, Department of Industry, Energy & Labour, Mantralaya, in support of his submissions. Mr. Nalawde submitted that even on merits, the petitioner has no case. The impugned order is passed taking into consideration the relevant factors. Though respondent 4 was not present, written submissions filed by respondent 4 were very much before respondent 2. Hence, there is no non-application of mind. Mr. Nalawade submitted that Section 6 of the Mines Act stipulates that no person shall normally be granted one or more PLs covering a total area of more than 359 sq. Kms. in a State. He pointed out that the petitioner has been granted PL over an area of 2486 a i.e. 24.86 sq. mtrs. in Maharashtra. Thus, it is evident that the petitioner has been considered for mineral concessions for maximum area normally allowed under the Mines Act. Mr. Nalawade submitted that therefore there is no substance in the AJN 10 contention of the petitioner that respondent 2 has displayed any arbitrariness and, hence, the petition deserves to be dismissed. 10. In response to the preliminary objection, Mr. Thorat, learned senior counsel for the petitioner submitted that it is true that under Section 30 of the Mines Act, the Central Government can revise the order passed by the State Government. He submitted that this remedy, however, is not efficacious alternative remedy. Learned counsel submitted that in any case, existence of an alternative remedy does not preclude this court in exercise of its powers under Article 226 of the Constitution of India from interfering with an order if it finds that it is patently illegal or arbitrary. In support of his submissions, Mr. Thorat relied on the judgments of the Supreme Court in Everest Apartments Co-operative Housing Society Limited, Bombay v. State of Maharashtra & Ors. AIR 1966 SC 1449 and Whirlpool Corporation v. Registrar of Trade Marks, Mumbai & Ors. (1998) 8 SCC 1. Mr. AJN 11 Thorat also relied on the judgment of the Single Judge of this court in Balasaheb Kondiram Pawar & Ors. v. State of Maharashtra & Ors. 1999 (3) Mh. L.J. 982. 11. For the purpose of dealing with the preliminary objection raised by Mr. Nalawde, learned Government Pleader, it is necessary to have a look at the relevant provisions of the Mines Act. “Prospecting Licence” is defined under Section 3(g) of the Mines Act. Section 3(g) reads as under : “3. Definitions. - In this Act, unless the context otherwise requires, - (a) xxx xxx xxx (b) xxx xxx xxx (c) xxx xxx xxx (d) xxx xxx xxx (e) xxx xxx xxx (f) xxx xxx xxx (g) “prospecting licence” means a licence granted for the purpose of undertaking prospecting operations.” AJN 12 12. Section 10 provides for applications for PL or mining lease. It states that an application for a reconnaissance permit, PL or mining lease in respect of any land in which the minerals vest in the Government shall be made to the concerned State Government in the prescribed form and on receipt of an application, the State Government may, having regard to the provisions of the Mines Act and rules made thereunder, grant or refuse to grant the permit, licence or lease. 13. Section 11 is important. Section 11 provides for preferential right of certain persons. Sub-section 1 of Section 11 states that where a reconnaissance permit or prospecting licence has been granted in respect of any land, the permit holder or the licensee shall have a preferential right for obtaining a prospecting licence or mining lease, as the case may be, in respect of that land over any other person. Proviso thereto details the conditions which the permit holder must fulfill so as to AJN 13 satisfy the State Government about his preferential right. 14. Sub-section 2 of Section 11 contemplates a situation where the State Government has not notified the area. The first proviso to sub-section 2 of Section 11 states that where an area is available for grant of reconnaissance permit, PL or mining lease as the case may be, and the Government has invited applications for the same, all the applications received during the relevant period and all applications received prior thereto, which are not disposed of shall be deemed to have been received on the same day for the purpose of assigning priority. The second proviso to sub-section (2) states that where any such applications are received on the same day, the State Government after taking into consideration the matter specified in sub-section (3) may grant reconnaissance permit, mining licence or PL. Sub-section (3) details the matters referred to in sub-section (2). Sub-section (4) pertains to grant of PL. Sub-section (5) empowers the State Government for any special reasons to be recorded, AJN 14 to grant a reconnaissance permit, mining lease or a PL to an applicant whose application was received later in preference to an applicant whose application was received earlier. Proviso to this sub-section is important. It states that in respect of minerals, specified in the First Schedule prior approval of the Central Government shall be obtained before passing any order under this sub- section. Iron ore is mentioned at Serial No.6 in Part C of the First Schedule. Thus, prior sanction of Central Government is necessary before issuing PL in respect of iron ore. 15. Therefore, order passed by the State Government under sub-section (5) is only recommendatory in nature and is subject to approval of the Central Government. This is not and cannot be disputed by the petitioner. In fact, it is averred in the petition that the impugned order recommends the grant of PL in favour of respondent 4. In this connection, it is necessary to quote the operative part of the impugned order. It reads thus: AJN 15 “U/s. 11(2) of the Mines and Minerals (Development and Regulation) Act, 1957, I recommend to grant the Prospecting Licence to M/s. Shree Virangana Steels Ltd., Nagpur over an area of 631.552 H/R situated at Mauze Karampalli & Nagupadi, Taluka Etapalli, Dist. Gadchiroli (i.e. Compartment No.229 to 232, 257 to 259) as indicated in MAP (Annexure `B') appended herewith. All NOC's from the Central Government, State Government and Local Authorities be obtained by the applicant. Sd/- (Ashok Chavan) Chief Minister of Maharashtra Place : Mumbai Date : 24/02/2009.” 16. It is now necessary to have a look at Section 30 of the Mines Act, which confers powers of revision on the Central Government. The Central Government can revise any order made by the State Government under the Mines Act with respect to any mineral other than a minor mineral. There is no dispute about the fact that iron ore is not minor mineral. Section 30 reads thus: AJN 16 30. Power of revision of Central Government.- The Central Government may, of its own motion or on application made within the prescribed time by an aggrieved party, revise any order made by a State Government or other authority in exercise of the powers conferred on it by or under this Act with respect to any mineral other than a minor mineral. 17. Section 13 of the Mines Act empowers the Central Government to make rules for regulating grant of reconnaissance permits,PL and minding leases in respect of minerals. Sub-section (2) sets out the matters in respect of which rules can be made. Under Section 13, the Central Government has made the said Rules. 18. Rule 54 thereof pertains to application for revision. It is necessary to quote it. “54.Application for revision. - (1) Any person aggrieved by any order made by the State Government or other authority in exercise of the powers conferred on it by the Act or these rules may, within three months of the date of communication of the order to him, apply to the Central Government in triplicate in Form N, for revision of the order. AJN 17 The application should be accompanied by a Bank Draft for five thousand rupees on a nationalized bank in the name of `Pay and Accounts Officer, Department of Mines' payable at New Delhi or through a treasury challan for five thousand rupees under the Head of Account 0853 – Non-ferrous Mining and Metallurgical Industries – 102 Mineral Concession Fees, Rents and Royalties. Provided that any such application may be entertained after the said period of three months if the applicant satisfied the Central Government that he had sufficient cause for not making the application within time. (2) In every application under sub-rule (1) against the order of a State Government refusing to grant a prospecting licence or a mining lease, any person to whom a prospecting licence or mining lease was granted in respect of the same area or for a part thereof, shall be impleaded as party. (3) Along with the application under sub- rule (1), the applicant shall submit as many copies thereof as there are parties impleaded under sub-rule (2). (4) On receipt of the application and the copies thereof, the Central Government shall send a copy of the application to each of the parties impleaded under sub-rule (2) specifying a date on or before which he may make his representations, if any, against the revision application.” AJN 18 A reading of this rule makes it clear that a revision can be preferred against the order made by the State Government within three months from the date of communication of the order. The proviso to Rule 54(1) gives power to the Central Government to condone the delay if sufficient cause is shown. Under sub-rule (2) of Rule 54, in every application made against the order of a State Government refusing to grant PL or a mining licence, any person to whom a PL is granted must be impleaded as party. On receipt of the application, the Central Government has to send copy of the application to each of the impleaded parties. 19. Rule 55 states the procedure which is to be followed till the order is passed on the revision application. Under sub-rule (1) on receipt of the revision application, copies thereof have to be sent to the State Government or any other authority and to all impleaded parties calling upon them to make such comments as they may like to make. The State Government or the other authority and the AJN 19 impleaded parties, while furnishing comments to the Central Government have to endorse a copy of the comments to other parties. Sub-rule (2) of Rule 55 requires that comments received from any party have to be sent to other parties for making further comments. Under sub-rule (4) after considering the record, the Central Government may confirm, modify or set aside the order or pass such other order in relation thereto as the Central Government may deem just and proper. Sub-rule (5) is important. It empowers the Central Government, if sufficient cause is shown to stay the execution of the order against which the revision application has been made pending the final disposal of the application. 20. Having perused Section 30 of the Mines Act read with Rules 54 and 55 of the said Rules, we are of the opinion that the remedy of revision application is an efficacious alternative remedy available to a person who is aggrieved by the State's order refusing to recommend his case for PL. These provisions require that all necessary parties AJN 20 must be impleaded. Each party has to be served with copy of the revision application. Comments filed by the parties have to be served on all parties. The Central Government has been given power to condone delay. The Central Government has to consider the record which consists of the revision application and comments of the parties. The Central Government has been empowered to confirm, modify or set aside the impugned order or it can pass such other order as it may deem fit. The Central Government has also the power to stay the execution of the order passed by the State Government. The Central Government has thus very wide powers. If it is satisfied, it can reverse the order, modify it or pass a fresh order. The Central Government is, therefore, the ultimate authority who has the final say in the matter. That is the scheme of the Mines Act and the said Rules. The State Government can only recommend issuance of PL. The Central Government has to grant approval for it. It is only thereafter that a person can get PL. AJN 21 21. In this case, by the impugned order, the Central Government has only recommended the petitioner's case. Approval of the Central Government is awaited. When efficacious alternative remedy is available, looking to the scheme of the Mines Act and the said Rules, in our opinion, the preliminary objection must be sustained. 22. Mr. Thorat submitted that the alternative remedy of revision is limited in its scope. It is not as wide as an appeal and, therefore, it is not an adequate and efficacious remedy. We are unable to agree with Mr. Thorat. In this connection, Mr. Thorat relied on the judgment of the Supreme Court in Everest Apartments's case and judgment of this court in Balasaheb Pawar's case. 23. In Everest Apartments' case, a person who was refused admission to membership of a Society filed an appeal under Section 23 of the Co- operative Societies Act, 1960. After the AJN 22 order in appeal was made, the Society moved the State Government under Section 154 of the Co-operative Societies Act. Under Section 154, the State Government and the Registrar can call for proceedings of subordinate officers and modify, annul or reverse any decision or proceeding so called. While considering the nature of power under Section 154, the Supreme Court observed that Section 154 is potential but not compulsive. The Supreme Court observed that power is reposed in Government to intervene to do justice when occasion demands it and of the occasion for its exercise, Government is made the sole judge. These observations are referred to by this Court in Balasaheb Pawar's case. In our opinion, the petitioner cannot draw any support from these judgments because Section 154 of the Co- operative Societies Act is not in pari materia with the relevant provisions with which we are concerned here. We have already discussed the amplitude of the revisional powers provided under the Mines Act and under the said Rules. When the relevant provisions of the Mines Act and AJN 23 the said Rules are so clear, it is not necessary to refer to any other provisions which are not comparable to them at all. The amplitude of the power of revision under the Mines Act cannot be questioned. This submission of Mr. Thorat is, therefore, rejected. 24. Mr. Thorat submitted that alternative remedy would not operate as an absolute bar and writ petition under Article 226 could still be entertained in exceptional circumstances. He referred to Whirlpool Corporation's case, where the Supreme Court has observed that where writ petition is filed for enforcement of any of the fundamental rights or where there has been a violation of principles of natural justice or where the order is wholly without jurisdiction or the vires of an Act is challenged, alternative remedy does not operate as a bar to issuance of prerogative writs under Article 226. There can be no debate over this proposition. But, in our opinion, none of the above contingencies are present in this case and no exceptional case is made out by the petitioner for this AJN 24 court to entertain this petition though efficacious remedy of revision is provided. 25. In this connection, it would be advantageous to refer to the judgment of the Supreme Court in State of Goa and Others v. M/s. A.H. Jaffar & Sons, AIR 1995 SC 333. In that case, the respondents had made an application for a lease for mining mineral boxite in Goa. That application was deemed to have been rejected under Rule