SCA/14135/2007 1/49 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 14135 of 2007 With SPECIAL CIVIL APPLICATION No. 16150 of 2007 With SPECIAL CIVIL APPLICATION No. 21969 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE ANANT S. DAVE ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= MARUTI MINERALS & METALS - Petitioner(s) Versus THE GOVT. OF INDIA & 4 - Respondent(s) ========================================================= Appearance : MR SN THAKKAR for Petitioner(s) : 1, MR DC SEJPAL for Respondent(s) : 1, MR MIHIR JOSHI AAG with MR SATYAM CHHAYA AGP for Respondent : 2-4 MR DIPEN C SHAH for Respondent(s) : 5, ========================================================= CORAM : HONOURABLE MR.JUSTICE ANANT S. DAVE SCA/14135/2007 2/49 JUDGMENT Date : 16/06/2008 COMMON CAV ORDER 1) Rule. Mr.D.C.Sejpal, learned Central Government Counsel, Mr.Satyam Chhaya, learned AGP and learned counsel Mr.Dipen C. Shah, waive service of notice of Rule for respective respondents. 2) All these writ petitions involve similar issues for determination of this Court, in exercise of power under Article 226 of the Constitution of India therefore, with the consent of learned counsel for the parties, all these three writ petitions are taken up for hearing and disposed of by this common judgment. 3) Mr.Satyen Thakkar, learned counsel appearing for all the petitioners, submits that arguments and submissions advanced on the question of law are also common except certain facts, as stated in the Special Civil Application No.14135 of 2007. The petitioner is a proprietary concern and uses Manganese Ore for its captive consumption also. In Special Civil Application No.14135 of 2007, following prayers are made by the petitioner:- “(A) Your Lordships be pleased to issue writ of mandamus or a writ in the nature of mandamus, a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction quashing and setting aside the impugned notification dated 21.4.2005 and order dated 21.3.2007 at Annexures J & Q hereto respectively. (B) Your Lordship may be pleased to issue a writ of mandamus or a writ in the nature of mandamus, SCA/14135/2007 3/49 JUDGMENT a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction quashing and setting aside the impugned order dated 31.8.2006 at Annexure-T hereto. (B(i) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus, a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction quashing and setting aside the impugned notification dated 1.6.2007 at Annexure-U hereto. (C) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus, or any appropriate writ, order or direction directing the respondent No.2 to complete the formality of execution of mining lease in favour of the petitioner pursuant to the orders dated 8.3.2002 and 18.2.2004 of the respondent No.1 & 2 respectively. (D) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to:- (i) Stay the operation and implementation of the impugned notification dated 21.4.2005 and order dated 21.3.2007 at Annexures J & Q respectively; (ii) Stay the operation and implementation of the impugned order dated 31.8.2006 at Annexure-T hereto. (D)(iii) Stay the operation and implementation of the impugned notification dated 1.6.2007 at Annexure-U hereto”. 4) Brief facts of Special Civil Application No.14135 of 2007 are as under. 5) According to the petitioner, who is in the mineral business since many years, and dealing in Manganese Ore, which is a major mineral governed by the SCA/14135/2007 4/49 JUDGMENT provisions of the Mines and Minerals (Development and Regulations) Act, 1957 and Mineral Concessions Rules, 1960 (for short “the Act” and “the Rules” respectively). 6) Initially, as early as in the year 1954, a decision was taken by the then Government of Bombay for grant of an area of 800 acres and 22 gunthas of land for mining lease to M/s.Shivrajpur Syndicate Ltd. for a period of 20 years and lease was executed on 7.4.1954, which came to be surrendered to the State Government i.e. the respondent No.2 herein, later on. Thereafter, a declaration under Rule 59 of the Rules, by way of notification was issued on 16.10.1971 for re-grant of the said land to other interested bidders / lessees. Later on, the petitioner made an application for grant of mining lease on 19.6.1993 for removal of waste dumps of Manganese Ore from the area of Pani mines area, Taluka : Jetpur-pani, District Baroda and permits were granted to the petitioner for removal of waste dumps of Manganese Ore from the said area for a period of 5 years. It is the case of the petitioner that such temporary permits were granted by the officers of respondent Nos.2 and 4 for removal of Manganese Ore from 1994 to 2004. 7) That in the meanwhile, in the year 1995, the petitioner purchased a closed unit of Baroda Ferro Alloys for manufacture of ferro alloy where principal raw material was Manganese Ore. The said plant had 15000 M.T. per annum capacity and huge investment was also made for installation of the SCA/14135/2007 5/49 JUDGMENT plant nearby the Manganese Ore. The petitioner has installed the plant, machinery, sheds and buildings in the tribal area of State of Gujarat and the company can provide employment to 300 persons per day and the unit also paid royalty, sales tax, excise duty etc. and other cesses. Thus, it has become necessary for the petitioner to have a mining lease and not a working permit, therefore, applications were made to the respondent No.2-State of Gujarat. Accordingly, proposals / recommendations were sent by State Government vide letters dated 29.5.2000, 4.10.2001 and 27.12.2001 to the Central Government for grant of mining lease to the petitioner. The said proposals were initially for 100 acres, which subsequently came to be modified to 60 acres. While forwarding the above proposals, the State Government had taken into consideration the requirement of the petitioner unit and other facts about unit operating its plant in backward area of the State of Gujarat and providing employment to the people in the surrounding area and paying taxes etc. 8) That pursuant to the proposal, the Central Government-respondent No.1 in exercise of powers conferred under Section 5(1) of the Act, vide its order dated 8.3.2002, approved the same and conveyed it to the State Government for grant of mining lease of Manganese Ore for 60 hectares of area earmarked in the proposal for a period of 30 years. In the above order, a condition was stipulated that before allowing the grant of mining lease, the State Government may ensure the compliance of amended SCA/14135/2007 6/49 JUDGMENT provisions of the Act, Rules and other applicable Acts and rules, including Forest Conservation Act, 1980. However, the respondent No.2 did take considerable time for issuing order dated 18.12.2004 by which a decision was conveyed to the petitioner for granting mining lease to the petitioner for a period of 30 years in term of its proposal dated 27.12.2001 approved by the Government of India vide order dated 8.3.2002 subject to certain conditions. In the above order dated 18.12.2004 also, 5 conditions were enumerated to be complied with by the petitioner, which includes furnishing of approved mining plans by IBM within six months from the date of the order, clearance of the Department of Forest and Environment to establish a plant based on Manganese Ore within 2 years from the sanction and approval of lease and other such incidental requirements. Pursuant to that the petitioner complied all the conditions save and except the condition No.2 about due certification of pollution clearance by the Gujarat Pollution Control Board (for short “GPCB”). The above clearance could not be obtained due to various objections raised by respondents Nos.2 to 5 in view of the Gujarat State Mineral Policy of 2003 and decision taken in the meeting dated 18.6.2004 headed by the Hon’ble Chief Minister of the State of Gujarat for clarification and removal of objections with regard to implementation of Mining Policy of the State, as declared in 2003, and subsequent order issued by respondent No.2 dated 21.4.2005 for reservation of mining and Manganese Ore by Gujarat Mineral Development Corporation (for short “GMDC”), the SCA/14135/2007 7/49 JUDGMENT respondent No.5 herein. However, such objections were not required to be taken into consideration by the GPCB in view of the approval dated 8.3.2002 by the respondent No.1 and subsequent decision dated 18.12.2004 of respondent No.2 based on the above approval of granting mining lease to the petitioner for a period of 30 years, since according to the petitioner, the decision to reserve the Manganese Ore for mining purpose exclusively for GMDC was taken subsequently and qua the petitioner was not effective at all. 9) However, subsequently, the respondents Nos.2, 3 and 4 even refused to issue work permits and process of executing lease deed between the petitioner and the authority was not actuated in view of the notification dated 21.4.2005 issued by respondent No.2, as stated above. Subsequently an approval from the Central Government was sought for by letter dated 22.11.2005 by the State Government to exercise power under Section 17-A(2) of the said Act for reserving the areas in question for carrying out mining operation of Manganese Ore through GMDC, which came to be granted by the Central Government by an order dated 31.8.2006 and later on even a notification dated 1.6.2007 was also issued by the respondent No.2 pursuant to the above approval, which is also subject matter of challenge of this petition. 10)Prior to this, the petitioner herein along with other petitioners preferred Special Civil Application No.10003 of 2006 and allied matters SCA/14135/2007 8/49 JUDGMENT challenging the notification dated 21.4.2005 on various grounds, which came to be disposed of by an order dated 23.8.2006 of the learned Single Judge with certain directions to be decided by the respondents after affording an opportunity of hearing and the decision to be communicated to the petitioners. Accordingly, representation was made by the petitioners on 1.9.2006 in detail which came to be rejected by an order dated 21.3.2007 after hearing the petitioners and after careful consideration of the interest of the State, opportunities for generating employment in the State of Gujarat and also after taking into consideration the requirement of the petitioners with regard to raw material of Manganese Ore for its captive plant to be taken care by the GMDC. The above decision dated 21.3.2007 is also subject matter of challenge in these petitions on the ground of non-application of mind and de void of any reasons being a non- speaking order along with the grounds raised to challenge the notification dated 21.4.2005 issued by respondent No.2 and subsequent order dated 21.3.2007 and notification dated 1.6.2007 specifying local limits of certain reserved area for undertaking prospecting or mining operation of Manganese Ore for the GMDC-respondent No.5 for 30 years. 11)Mr.Satyen Thakkar, learned counsel for the petitioners, submits that the impugned order dated 21.3.2007 as well as the notification dated 21.4.2005 of respondent No.2 are patently illegal, arbitrary, unreasonable, irrational and deserve to be quashed and set aside inasmuch as while rejecting SCA/14135/2007 9/49 JUDGMENT the representation dated 21.3.2007, the respondent No.2, though directed by the learned Single Judge to consider the representation and decide the same after grant of opportunity of personal hearing, did not consider any of the contentions raised by the petitioners, therefore, the impugned order is not in conformity with the directions issued by this Court and deserves to be quashed and set aside. He further submits that the order dated 21.3.2007 is de void of reasons, therefore, the same is a non- speaking order and cannot be sustained as legal and valid and on this ground alone the same deserves to be quashed and set aside. 12)Learned counsel for the petitioner submits that rejection of the request for grant of mining lease to the petitioner excluding the area in question as sanctioned and approved by the Central Government vide order dated 8.3.2002 from the proposal sent under Section 17-A(2) of the Act is not germane to exercise of power conferred under Section 5 read with Section 11 of the Act. According to learned counsel for the petitioner, proviso to Section 5 of the Act mandates that in support of any mineral specified in the First Schedule, no reconnaissance permit, prospecting, licence or mining lease shall be granted except with the previous approval of the Central Government. In the present case, notification dated 16.10.1971 reveals that the mining lease area of the erstwhile lessee M/s.Shivrajpur Syndicate Limited was available for re-grant, therefore, the respondent No.2 would not be in a position to dispute its satisfaction under SCA/14135/2007 10/49 JUDGMENT sub-section (2) of Section 5 of the Act with regard to evidence to show that the area for which the lease is applied for has been prospected earlier or the existence of mineral contents therein has been established otherwise than by the means of prospecting such area and there is a mining plant duly approved by the Central Government or by the State Government in respect of such category of mines as specified. Therefore, when the mining plant of the petitioner was approved by IMB, there was no justification to reject the representation of the petitioner on the ground that the area was mining area of Manganese Ore and was exclusively reserved for respondent No.5. 13)It is further contended that when the order dated 18.12.2004 was passed for sanctioning the lease in favour of the petitioner after the approval was granted by the Central Government vide order dated 8.3.2002 in exercise of power under Section 5 of the Act, all rights have been crystallized in favour of the petitioner, more particularly, when the petitioner had complied with all the conditions laid down in the aforesaid orders, after approval, sanction and grant of lease by respondents Nos.1 and 2. According to learned counsel for the petitioner, the petitioner cannot be deprived of his legal rights accrued out of the above two orders passed by respondents Nos.1 and 2 on the ground of subsequent issuance of notification reserving mining area of Manganese Ore by GMDC-respondent No.5 and even subsequent approval of the proposal dated 22.11.2005 of respondent No.2 by respondent No.1 vide order SCA/14135/2007 11/49 JUDGMENT dated 31.8.2006 and subsequent notifications by the State Government and notification under Section 17- A(2) of the said Act do not affect in any manner the rights of the petitioner. Therefore, the lease deed must be executed in favour of the petitioner in exercise of power under Section 5(A) of the Act. 14)Mr.Satyen Thakkar, learned counsel for the petitioner submits that the Mining Policy is declared in 2003 by respondent No.2 and it cannot be said to be a policy decision. It is further submitted that the order dated 21.4.2005 and notification dated 1.6.2007 by respondent No.2 are unreasonable, arbitrary, irrational, malafide and defeating the rights of the petitioner under Articles 14 and 19(1)(g) of the Constitution of India, therefore, they are required to be quashed and set aside. The above arbitrary, unreasonable, malafide exercise of powers is reflected in view of the fact that the proposal dated 22.11.2005 sent by respondent No.2 to respondent No.1 under Section 17A(2) of the Act for seeking its approval does not contain any mention about a particular area for which approval was already granted on earlier occasion by respondents Nos.1 and 2 in exercise of powers under Section 5 of the said Act. The suppression of the above fact of earlier orders dated 8.3.2002 and 18.12.2004 passed by respondents Nos.1 and 2 in favour of the petitioner for grant of lease is a colourable exercise of power and deserves to be quashed and set aside. 15)It is further contended that while approving the SCA/14135/2007 12/49 JUDGMENT proposal dated 22.11.2005 of the respondent No.2 to respondent No.1, no opportunity is given to the petitioner in spite of the fact that as early as on 8.3.2002 approval was granted by the respondent No.1 for mining lease for the area earmarked therein and pursuant to that respondent No.2 had also issued order of granting lease on 18.12.2004 and, therefore, the petitioner was at least entitled for opportunity of hearing, and had there been any opportunity granted to the petitioner, the above fact could have been pointed out to respondent No.1 that the subsequent proposal of the State Government contained the very same area. Not only that but according to the learned counsel for the petitioner, approval means application of mind by the authority on relevant facts and taking into consideration various other factors the authority can exercise the power. In the present case, approval is granted in a mechanical manner and therefore, also, the approval dated 31.8.2006 by respondent No.1 is also unreasonable, arbitrary and violative of Article 14 of the Constitution of India and also violative of principles of natural justice. 16)It is next contended by learned counsel for the petitioner that the aspects about providing opportunity of employment and revenue can be taken care of by the petitioner also and that there was no public interest in preserving the area for mining exclusively in favour of respondent No.5-GMDC. 17)However, during the pendency of the petition, respondent No.2 has issued notification dated SCA/14135/2007 13/49 JUDGMENT 1.6.2007 and the same is challenged by way of draft amendment and it is respectfully submitted that the above notification is also illegal, arbitrary, unreasonable and colourable exercise of powers on the same grounds for which order of approval dated 31.8.2006 passed by respondent No.1 is challenged in this petition. Thus, according to learned counsel for the petitioner, the petitioner has purchased a closed unit of ferro alloy and developed the same on the basis of grant of lease to the petitioner in accordance with law by respondents Nos.1 and 2 after following procedure of law and subsequent issuance of notification dated 21.4.2005 by respondent No.2 declaring and specifying certain areas to be reserved for undertaking prospecting or mining operation of Manganese Ore exclusively for the GMDC- respondent No.5 herein for a period of 30 years deprives the petitioner of his basic legal right to carry on trading and industrial activity and, therefore, applicability of impugned notification dated 1.6.2007 with retrospective effect cannot be permitted by this Court and necessary directions can be issued to the respondents as prayed for in the petition. 18)It is further submitted that by exclusively reserving mining of Manganese Ore amounts to monopolizing mining activity in favour of respondent No.5 and would encourage profiteering which would not be in the public interest and directions contained in the order dated 21.3.2007 of rejecting representation to the petitioner to approach GMDC- respondent No.5 for necessary quota for captive SCA/14135/2007 14/49 JUDGMENT consumption of Manganese Ore is not just and proper since the petitioner will be left to the mercy of respondent No.5. 19)Mr.Mihir Joshi, learned Additional Advocate General for the respondent No.2, has opposed grant of any relief to the petitioner on the ground that no right accrues in favour of the petitioner in view of non- execution of sale deed in favour of the petitioner by respondent No.2. 20)According to learned Additional Advocate General, there are two broad perceptions for considering the contentions of an aggrieved party as to whether the claim is based on equity or on relevant facts and law. However, in case of a challenge of any action of the authority actuated with malafide, the Court can consider the relevant aspect but otherwise an aggrieved person or a party is not entitled to be heard. It is submitted that neither claim of the petitioner is based on equity and relevant facts nor on the provisions of the statute and no specific pleadings of malafide are made much less supported by any material. Therefore, the petitioner has no locus to challenge the impugned orders and notifications passed and issued by the respondents Nos.1 and 2 as challenged in the prayer clause. 21)It is submitted that Section 17 empowers the Central Government to undertake prospecting or mining operation in certain areas and the above powers are special powers. However, Section 17A is pertaining to reservation of area for purposes of conservation. SCA/14135/2007 15/49 JUDGMENT The above Section 17-A is inserted by the Central Act 37 of 1986 and with a view to conserve any minerals, after consultation with the State Government the Central Government may reserve any area not already held under any prospecting licence or mining lease and by issuing proper notification in the Official Gazette, boundaries of which area can be specified and such area can be reserved. That Section 1-A came to be added in Section 17 by Central Act 25 of 1994 which empowers Central Government in consultation with State Government to reserve any area not already held under any prospecting licence or mining lease for mining operation through a Government company or Corporation owned or controlled by it and other procedure is the same as reflected in Section 17- A(1) of the Act. However, according to learned Additional Advocate General, the subject matter of this petition mainly revolves around exercising of power under sub-Section (2) of Section 17A by which the State Government may, with the approval of Central Government, reserve any area not already held under any prospecting licence or mining lease or undertaking prospecting or mining operations through a Government Company or Corporation owned or controlled by, and where it proposes to do so, the State Government by notification in the Official Gazette specify such boundary of such area and the mineral or minerals in respect of such areas will be reserved. Therefore, according to learned Additional Advocate General the above provisions of Section 17A(2) requires strict consideration and if so construed the implications are obvious and SCA/14135/2007 16/49 JUDGMENT apparent and when prior approval by the Central Government is granted for this purpose, no further interference is called for in exercise of power under Article 226 of the Constitution of India by this Court. 22)As a corollary, it is submitted that the petitioner is not a holder of mining lease and, therefore, on the basis of earlier orders dated 8.3.2002 of respondent No.1 and order dated 18.12.2004 passed by respondent No.2, no legal right accrues in favour of the petitioner and on the basis of some incohesive right, submissions made by the learned counsel for the petitioner cannot be accepted and deserve to be rejected. 23)It is further contended that declaration of Mining Policy in the year 2003 by the State Government as clarified in the meeting of the High Power Committee held under the Chairmanship of the Hon’ble Chief Minister on 18.6.2004 and by way of such policy reflected in the notification dated 21.4.2005 pertaining to development of certain minerals including the Manganese Ore by respondent No.5-GMDC certain areas are reserved and cannot be a subject matter of review by this Court and no power under Article 226 of the Constitution of India can be exercised. 24)Learned Additional Advocate General further submits that powers under Section 5 of the Act and Section 17-A(2) are in a different arena and particularly provisions of Section 17A(2) are of special nature SCA/14135/2007 17/49 JUDGMENT and any prior approval granted to the petitioner by order dated 8.3.2002 by respondent No.1 and subsequently by order dated 18.12.2004 of respondent No.2 cannot come in the way of policy decision of respondent No.2 and issuance of subsequent notification dated 21.4.2005 and approval by respondent No.1 on 31.8.2006 and final notification dated 1.6.2007 in exercise