Case: M/S. Pallava Granite Industries(I)P.Ltd Vs. Union Of India

above, G.O.No.1290 was a decision to grant a mining lease in favour of the appellants. Even assuming for the sake of the argument that G.O.No.1290 constituted a grant by itself still, as held in the above decisions, such a grant cannot fetter or hamper future executive action/decision to revoke the grant in public interest. In the present case, the State Government detected an important source of revenue in the form of granite reserves. It is true that at one point of time the State Government decided to exploit the granite through private parties. However, later on with globalization, the State Government decided to go for global tender. This course of action was open to the State Government. The State Government decided to exploit the granite through its agency, namely, APMDC. The object was to earn commercial profits and revenue. APMDC was given liberty either to excavate the granite on its own or through joint ventures. The land belongs to the State Government. The granite belongs to the State Government. Therefore, a mere decision in G.O.No.1290 to grant mining leases to the appellants cannot hamper or fetter the power of the Government to exploit the resources through its own agency. In the circumstances, we do not find any mala fides in the decision of the Government reserving the area admeasuring Acs.61.50 for exploitation by APMDC, either on its own or through its joint ventures/partners. 40. It has been vehemently urged before us on behalf of the appellants that the approval dated 29.10.99 contained in G.O.No.72 is invalid since Section 17A(2) of the 1957 Act does not contemplate conditional approval. In this connection, the following facts are required to be noted. The Central Government granted approval for reservation of an area admeasuring Acs.61.50 subject to two caveats, namely, that the reservation shall not be applicable in case of areas already held under any mining lease or quarry lease and that the approval was subject to the outcome of pending cases. It was submitted on behalf of the appellants that such conditional approval did not permit mining operations to be carried out by the State Government Corporation till the pending cases were decided and, therefore, if APMDC is allowed to exploit during the pendency of the cases then the conditional approval would have the effect of defeating the claims for mining leases in respect of the very area pending adjudication. We do not find any merit in these arguments. As stated above APMDC was entitled to enter into joint venture agreements with private partners. The alleged condition attached to the approval dated 29.10.99 was not to annul the transaction but only to render it subservient to the rights of the parties to the litigation. If the appellants were to succeed in the pending litigation they had the monetary claim against the joint venture. Therefore, in order to put the third parties to notice the above condition was incorporated. Such a condition did not make the approval a conditional approval and, therefore, it is not hit by Section 17A(2) of the 1957 Act. 41. We also do not find any merit in the contention of the appellant that the approval dated 29.10.99 granted by the Central Government stood vitiated on account of non-application of mind. In the approval granted by the Central Government dated 29.10.99 the subject-matter referred to four communications, namely, letter dated 24.10.97, letter dated 13.2.98, letter dated 5.11.98 and letter dated 23.12.98. These letters were addressed by the State Government. The initial proposal of the State Government was to reserve an area admeasuring Acs.61.50 only in Survey no.55/5 for exploitation by APMDC. However, later on in the last letter dated 23.12.98 the State Government proposed reservation for a larger area covering the entire granite bearing area to be exploited by the APMDC. It is equally true that while granting approval dated 29.10.99 the Central Government did not refer to the last proposal dated 23.12.98 and as a result gave its approval for reserving Acs.61.50 only. On that basis it is urged on behalf of the appellants that the Central Government had never applied its mind to the later proposal of the State Government and consequently even the approval granted for reserving a limited area of Acs.61.50 stood vitiated on account of non-application of mind. As stated above, the property belongs to the State Government. The mineral vests in the State Government. The State has decided to earn more revenue by inviting global tenders. The State has obtained the prior approval of the Central Government. The Central Government has restricted its approval to an area admeasuring Acs.61.50. In the circumstances, we do not find any illegality in the State Governments order of reserving the area admeasuring Acs.61.50 for mining operations through APMDC or through private/public sector enterprises. We reiterate that the rights, if any, under G.O.No.1290 were inchoate rights. These rights never stood crystallized. No mining lease was ever granted by the State Government to the appellants. In the circumstances, there was no bar in reserving an area admeasuring Acs.61.50 for exploitation of galaxy granite through State public sector undertaking. 42. Before concluding one aspect needs to be mentioned. During the pendency of these civil appeals, the State Government permitted exchange of areas between APMDC and M/s. Victorian Granite Pvt. Ltd. vide Memo dated 14.3.2006. This event took place during the pendency of the special leave petition. The question as to whether such an exchange required approval of the Central Government and whether such exchange was in the interest of the State exchequer, cannot be decided by us in the present proceedings. It is a distinct and separate cause of action. We do not wish to express any opinion on the validity of the said exchange as well as on the merits of the said exchange. It is for the Central Government to examine the validity of the said exchange. In any event, it is a subsequent cause of action. Hence, we express no opinion on the validity of the said exchange.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]34. At the outset, we are of the view that G.O.No.1290 is not in the nature of the grant as alleged. In this connection we may recapitulate that the 1973 Act stood enacted to consolidate and amend the law relating to the fixation of ceiling on agricultural holdings and taking over the surplus lands. The land in question fell in the category of surplus lands. These surplus lands in Survey no.55/5 stood vested in the Government under the 1973 Act. These surplus lands were frozen under Prohibitory Order Book (POB). Subsequently it was detected that these lands contained galaxy granite. It was an important asset for the government. This aspect needed exploitation. Therefore, a proposal was made by the various authorities referred to above to release these lands from POB and to allow these lands to be exploited by private parties so that the State could earn revenue. Under the said 1973 Act these lands were meant for the benefit of the weaker sections. Therefore, they were kept under POB. However, in order to earn larger revenues the Government accepted the proposal to exploit thed granite. This is done through G.O.No.1290. This was the primary purpose of the said G.O. Conferment of rights on the appellants was not the main purpose of the said G.O. In fact, as stated above, the said G.O.No.1290 was issued on 27.8.91 and within one month it was withdrawn on 18.10.91. As stated above, when the said G.O. was issued on 27.8.91 a public interest litigation, Writ Petition No.2356 of 1991, was filed in the High Court. On receipt of notices from the High Court in the said PIL the said G.O. was withdrawn39. As stated above, G.O.No.1290 was a decision to grant a mining lease in favour of the appellants. Even assuming for the sake of the argument that G.O.No.1290 constituted a grant by itself still, as held in the above decisions, such a grant cannot fetter or hamper future executive action/decision to revoke the grant in public interest. In the present case, the State Government detected an important source of revenue in the form of granite reserves. It is true that at one point of time the State Government decided to exploit the granite through private parties. However, later on with globalization, the State Government decided to go for global tender. This course of action was open to the State Government. The State Government decided to exploit the granite through its agency, namely, APMDC. The object was to earn commercial profits and revenue. APMDC was given liberty either to excavate the granite on its own or through joint ventures. The land belongs to the State Government. The granite belongs to the State Government. Therefore, a mere decision in G.O.No.1290 to grant mining leases to the appellants cannot hamper or fetter the power of the Government to exploit the resources through its own agency. In the circumstances, we do not find any mala fides in the decision of the Government reserving the area admeasuring Acs.61.50 for exploitation by APMDC, either on its own or through its joint ventures/partners40. It has been vehemently urged before us on behalf of the appellants that the approval dated 29.10.99 contained in G.O.No.72 is invalid since Section 17A(2) of the 1957 Act does not contemplate conditional approval. In this connection, the following facts are required to be noted. The Central Government granted approval for reservation of an area admeasuring Acs.61.50 subject to two caveats, namely, that the reservation shall not be applicable in case of areas already held under any mining lease or quarry lease and that the approval was subject to the outcome of pending cases. It was submitted on behalf of the appellants that such conditional approval did not permit mining operations to be carried out by the State Government Corporation till the pending cases were decided and, therefore, if APMDC is allowed to exploit during the pendency of the cases then the conditional approval would have the effect of defeating the claims for mining leases in respect of the very area pending adjudication. We do not find any merit in these arguments. As stated above APMDC was entitled to enter into joint venture agreements with private partners. The alleged condition attached to the approval dated 29.10.99 was not to annul the transaction but only to render it subservient to the rights of the parties to the litigation. If the appellants were to succeed in the pending litigation they had the monetary claim against the joint venture. Therefore, in order to put the third parties to notice the above condition was incorporated. Such a condition did not make the approval a conditional approval and, therefore, it is not hit by Section 17A(2) of the 1957 Act41. We also do not find any merit in the contention of the appellant that the approval dated 29.10.99 granted by the Central Government stood vitiated on account ofn of mind. In the approval granted by the Central Government dated 29.10.99 ther referred to four communications, namely, letter dated 24.10.97, letter dated 13.2.98, letter dated 5.11.98 and letter dated 23.12.98. These letters were addressed by the State Government. The initial proposal of the State Government was to reserve an area admeasuring Acs.61.50 only in Survey no.55/5 for exploitation by APMDC. However, later on in the last letter dated 23.12.98 the State Government proposed reservation for a larger area covering the entire granite bearing area to be exploited by the APMDC. It is equally true that while granting approval dated 29.10.99 the Central Government did not refer to the last proposal dated 23.12.98 and as a result gave its approval for reserving Acs.61.50 only. On that basis it is urged on behalf of the appellants that the Central Government had never applied its mind to the later proposal of the State Government and consequently even the approval granted for reserving a limited area of Acs.61.50 stood vitiated on account ofn of mind. As stated above, the property belongs to the State Government. The mineral vests in the State Government. The State has decided to earn more revenue by inviting global tenders. The State has obtained the prior approval of the Central Government. The Central Government has restricted its approval to an area admeasuring Acs.61.50. In the circumstances, we do not find any illegality in the State Governments order of reserving the area admeasuring Acs.61.50 for mining operations through APMDC or through private/public sector enterprises. We reiterate that the rights, if any, under G.O.No.1290 were inchoate rights. These rights never stood crystallized. No mining lease was ever granted by the State Government to the appellants. In the circumstances, there was no bar in reserving an area admeasuring Acs.61.50 for exploitation of galaxy granite through State public sector undertaking42. Before concluding one aspect needs to be mentioned. During the pendency of these civil appeals, the State Government permitted exchange of areas between APMDC and M/s. Victorian Granite Pvt. Ltd. vide Memo dated 14.3.2006. This event took place during the pendency of the special leave petition. The question as to whether such an exchange required approval of the Central Government and whether such exchange was in the interest of the State exchequer, cannot be decided by us in the present proceedings. It is a distinct and separate cause of action. We do not wish to express any opinion on the validity of the said exchange as well as on the merits of the said exchange. It is for the Central Government to examine the validity of the said exchange. In any event, it is a subsequent cause of action. Hence, we express no opinion on the validity of the said exchange.