Case: M/s. Indian Charge Chrome Ltd. &amp; Another Vs. Union Of India &amp; Others

directions of this Court issued ultimately in Ferro Alloys Corporation Ltd. & Anr. Vs. Union of India & Ors. (supra). The State Government had to proceed on the basis of the directions contained therein and make allotments as recommended by the Dash Committee or the successor Chahar Committee. Of course, the State Government might have been in a position to forward the application of Nava Bharat also to the said Committee for consideration and recommendation and might have thereafter acted on the basis of recommendations of the Chahar Committee. But that was not done and the decision to lease to Nava Bharat was straight away taken. We see some force in the submission on behalf of I.C.C.L and GMR that no proper reasons are given for overriding the preferences of others especially in the light of the directions of this Court while deciding to grant a lease in favour of Nava Bharat. Notwithstanding the valiant effort in that behalf made by learned Senior Counsel for Nava Bharat to salvage the grant made to it, we are of the view that on the facts and in the circumstances of the case, the decision to grant a lease to Nava Bharat out of turn was not justified, legal or proper. 30. When the State Government made the recommendation for grant of a lease to Nava Bharat, the infirmities in that recommendation were pointed out by the Central Government, in its letter dated 27.6.2001. The violation of Rule 59 was also pointed out. Instead of placing the letter before the Chief Minister or the Cabinet and obtaining directions thereon, the Steel and Mines Department on its own chose to send a letter dated 30.6.2001 purporting to conform to the requirements. When the matter reached the Chief Minister and the Cabinet, the decision taken was to withdraw the earlier request for grant of approval of lease to Nava Bharat. On the materials, it is clear that the letter dated 30.6.2001 sent by the Secretary of the Steel and Mines Department was not one consistent with the Rules of Business framed under Article 166 of the Constitution of India. The letter also lost its efficacy in view of the decision taken by the Cabinet to withdraw the recommendation itself. The position that emerges is that there was no valid recommendation by the State Government for the grant of a lease to Nava Bharat and there was hence no valid approval of the Central Government. Non-compliance with Rule 59 of the Rules also vitiated the proposal to lease to Nava Bharat 31. In view of our conclusion that the State Government was entitled to seek the approval of the Central Government in respect of the balance extent of 436.295 hectares, in which was included the proposed Nava Bharat grant, for exploitation by OMC and since, we are satisfied that the grant to Nava Bharat cannot be sustained, the proposed grant or grant to it has to be set aside. We do so. If it is a question of reconsideration of the applications of various entities for grant of leases in respect of 436.295 hectares, it would be a case where the claim of Nava Bharat would also have to be considered along with the claim of others in the light of the directions earlier issued by this Court. This contingency may arise only if the Central Government does not grant approval to the request of the State Government under Section 17A(2) of the Act. To that extent, we allow the appeals of I.C.C.L. 32. Taking note of the circumstances, it is for the State Government to make a fresh request to the Central Government in terms of Section 17A(2) of the Act setting out all the relevant details for consideration of the Central Government. Thereupon the Central Government will have to take a decision in terms of Section 17A(2) of the Act and in the context of Section 17A of the Act and all relevant attendant circumstances. We make it clear that the prior directions of this Court or that of the High Court cannot and do not stand in the way of the Central Government in applying its mind to the request made by the State Government under Section 17A(2) of the Act and in taking an independent decision thereon. All that is necessary at the moment is to hold that the recommendation of the State Government cannot be rejected by the Central Government on the ground that it has no freedom or right to take a decision on the request, in view of the prior orders of this Court or on the ground that adequate details are not forthcoming. In the latter contingency, it is for the Central Government to seek such further details from the State Government as it deems fit and thereafter to come to a decision. 33. The decisions of the High Court of Orissa are thus set aside. The appeals are allowed in the manner indicated above. The State Government is directed to make a proper request in terms of Section 17A(2) of the Act and the Central Government is directed to take a decision thereon bearing in mind all the aspects as indicated hereinbefore. What is to happen thereafter will depend upon the decision the Central Government takes and the consequences that flow therefrom. Those are aspects that will have to be tackled at the appropriate time, if the need or occasion for it arises. 34. Since, this matter has been pending for years and what is involved is exploitation of a precious mineral, we direct the State Government and the Central Government to comply with the directions we have made expeditiously. The State Government should send its request within a period of four months from today with all relevant details and the Central Government should take its decision on the recommendation within a period of four months from the date of receipt of the recommendation, if necessary, after calling for any further detail that it may consider relevant.

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

Explanation:
1[ds]19. We also do not find any substance in the contention that the decision to grant a lease of the remaining extent to OMC is irrational in the context of the performance of OMC and the other attendant circumstances of the case and in the context of the National Mining Policy. The argument that on principle the necessity of industries established in Orissa for captive mining had also been approved and the said aspect could not be lost sight of while taking such a decision cannot be the controlling factor. What we find is that the area available for chromite ore mining has already been divided among TISCO, the four companies and AIKITH and what is left is the extent of 436.295 hectares. It is clear that a number of companies have applied for leases of varying extents from that remaining extent and if the State Government took a decision that further fragmentation of the area would not be in the interests of scientific mining and to ensure even distribution among the consumers in the country, it is necessary to leave the mining to a corporation controlled by the Government, it is difficult to say that the decision is irrational. In a sense, it is a policy decision and though in a given case this Court could interfere with a policy decision of the Government, we cannot say that the present case is one where the decision is so irrational, unreasonable or patently illegal as to justify interference by this Court. All industries outside the State of Orissa also require the precious ore and it is the duty of the Government to ensure a just distribution at a fair price. In the circumstances, it is difficult to say that the decision taken to retain the area in a compact bloc for mining by a Government controlled Corporation is irrational. We therefore reject this contentiont is seen that the Central Government took the stand that as the matter was pending in this Court, it would not be appropriate for it to take a decision. The application or request of the State Government is seen to have been returned. Of course, the Central Government is also entitled to seek further clarifications or additional facts so as to make up its mind on the question of approval. As matters stand at this stage, the Central Government has refused to take a decision one way or the other on the request of the State Government. It is therefore not possible to proceed on the basis that the Central Government has already rejected the request of the State Government for reserving the area for exploitation by OMC26. In our view, the High Court was not right in holding that what had transpired thus far, or the directions of this Court earlier made, precluded the State Government from exercising the power and seeking approval in terms of Section 17A(2) of the Act. As we have held, the State Government could exercise that power until a grant is actually made since it is an overriding power. The taking up of a particular stand earlier, cannot also preclude the exercise of that power. Whether it has laid itself open to claims for damages by its prior actions is a different question and that cannot control the exercise of the power under Section 17A of the Act27. Now, we come to the lease proposed to be granted to Nava Bharat. In view of our upholding the decision of the State Government subject to approval by the Central Government, the lease proposed has to be found to be still born; or that the decision no more survives. But it is necessary to consider the contentions put forward, since the question would become relevant if for any reason, the Central Government chooses not to approve the request or decision of the State Government to lease the balance extent of 436.295 hectares to OMC28. As regards the allotment to Nava Bharat, we see considerable force in the submission on behalf of the I.C.C.L. that the decision to grant lease to Nava Bharat in preference to the other applicants who were before the Government was incorrect and calls for interference. On the materials, it is not established that the State Government exercised its power undern (5) of Section 11 of the Act. Nava Bharat was a subsequent entrant into the fray and had claimed the grant even while the claims of various applicants were being considered by Dash Committee. Even without sending the request of Nava Bharat to Dash Committee for consideration and recommendation, the State Government proceeded to recommend the grant of a lease to Nava Bharat from out of the extent available with it. This was a case to which the rule of preference under Section 11 of the Act as modified by the earlier orders of this Court applied and there was a preference available to those who had applied for leases earlier. Of course, the position had been explained in the first decision in Indian Metals & Ferro Alloys Ltd. Vs. Union of India & Ors. (supra). What is the reason that led to overriding the claims of others is not disclosed. On the materials, it cannot be said that the conditions ofn (5) of Section 11 are fulfilled in this case. No special reasons are recorded justifying such an out of turn grant29. If it was a case of consideration of the claims under Section 11 of the Act, we feel that the State Government was bound by the directions of this Court issued ultimately in Ferro Alloys Corporation Ltd. & Anr. Vs. Union of India & Ors. (supra). The State Government had to proceed on the basis of the directions contained therein and make allotments as recommended by the Dash Committee or the successor Chahar Committee. Of course, the State Government might have been in a position to forward the application of Nava Bharat also to the said Committee for consideration and recommendation and might have thereafter acted on the basis of recommendations of the Chahar Committee. But that was not done and the decision to lease to Nava Bharat was straight away taken. We see some force in the submission on behalf of I.C.C.L and GMR that no proper reasons are given for overriding the preferences of others especially in the light of the directions of this Court while deciding to grant a lease in favour of Nava Bharat. Notwithstanding the valiant effort in that behalf made by learned Senior Counsel for Nava Bharat to salvage the grant made to it, we are of the view that on the facts and in the circumstances of the case, the decision to grant a lease to Nava Bharat out of turn was not justified, legal or proper30. When the State Government made the recommendation for grant of a lease to Nava Bharat, the infirmities in that recommendation were pointed out by the Central Government, in its letter dated 27.6.2001. The violation of Rule 59 was also pointed out. Instead of placing the letter before the Chief Minister or the Cabinet and obtaining directions thereon, the Steel and Mines Department on its own chose to send a letter dated 30.6.2001 purporting to conform to the requirements. When the matter reached the Chief Minister and the Cabinet, the decision taken was to withdraw the earlier request for grant of approval of lease to Nava Bharat. On the materials, it is clear that the letter dated 30.6.2001 sent by the Secretary of the Steel and Mines Department was not one consistent with the Rules of Business framed under Article 166 of the Constitution of India. The letter also lost its efficacy in view of the decision taken by the Cabinet to withdraw the recommendation itself. The position that emerges is that there was no valid recommendation by the State Government for the grant of a lease to Nava Bharat and there was hence no valid approval of the Central Government.e with Rule 59 of the Rules also vitiated the proposal to lease to Nava Bharat31. In view of our conclusion that the State Government was entitled to seek the approval of the Central Government in respect of the balance extent of 436.295 hectares, in which was included the proposed Nava Bharat grant, for exploitation by OMC and since, we are satisfied that the grant to Nava Bharat cannot be sustained, the proposed grant or grant to it has to be set aside. We do so. If it is a question of reconsideration of the applications of various entities for grant of leases in respect of 436.295 hectares, it would be a case where the claim of Nava Bharat would also have to be considered along with the claim of others in the light of the directions earlier issued by this Court. This contingency may arise only if the Central Government does not grant approval to the request of the State Government under Section 17A(2) of the Act. To that extent, we allow the appeals of I.C.C.L32. Taking note of the circumstances, it is for the State Government to make a fresh request to the Central Government in terms of Section 17A(2) of the Act setting out all the relevant details for consideration of the Central Government. Thereupon the Central Government will have to take a decision in terms of Section 17A(2) of the Act and in the context of Section 17A of the Act and all relevant attendant circumstances. We make it clear that the prior directions of this Court or that of the High Court cannot and do not stand in the way of the Central Government in applying its mind to the request made by the State Government under Section 17A(2) of the Act and in taking an independent decision thereon. All that is necessary at the moment is to hold that the recommendation of the State Government cannot be rejected by the Central Government on the ground that it has no freedom or right to take a decision on the request, in view of the prior orders of this Court or on the ground that adequate details are not forthcoming. In the latter contingency, it is for the Central Government to seek such further details from the State Government as it deems fit and thereafter to come to a decision33. The decisions of the High Court of Orissa are thus set aside. The appeals are allowed in the manner indicated above. The State Government is directed to make a proper request in terms of Section 17A(2) of the Act and the Central Government is directed to take a decision thereon bearing in mind all the aspects as indicated hereinbefore. What is to happen thereafter will depend upon the decision the Central Government takes and the consequences that flow therefrom. Those are aspects that will have to be tackled at the appropriate time, if the need or occasion for it arises34. Since, this matter has been pending for years and what is involved is exploitation of a precious mineral, we direct the State Government and the Central Government to comply with the directions we have made expeditiously. The State Government should send its request within a period of four months from today with all relevant details and the Central Government should take its decision on the recommendation within a period of four months from the date of receipt of the recommendation, if necessary, after calling for any further detail that it may consider relevant19. We also do not find any substance in the contention that the decision to grant a lease of the remaining extent to OMC is irrational in the context of the performance of OMC and the other attendant circumstances of the case and in the context of the National Mining Policy. The argument that on principle the necessity of industries established in Orissa for captive mining had also been approved and the said aspect could not be lost sight of while taking such a decision cannot be the controlling factor. What we find is that the area available for chromite ore mining has already been divided among TISCO, the four companies and AIKITH and what is left is the extent of 436.295 hectares. It is clear that a number of companies have applied for leases of varying extents from that remaining extent and if the State Government took a decision that further fragmentation of the area would not be in the interests of scientific mining and to ensure even distribution among the consumers in the country, it is necessary to leave the mining to a corporation controlled by the Government, it is difficult to say that the decision is irrational. In a sense, it is a policy decision and though in a given case this Court could interfere with a policy decision of the Government, we cannot say that the present case is one where the decision is so irrational, unreasonable or patently illegal as to justify interference by this Court. All industries outside the State of Orissa also require the precious ore and it is the duty of the Government to ensure a just distribution at a fair price. In the circumstances, it is difficult to say that the decision taken to retain the area in a compact bloc for mining by a Government controlled Corporation is irrational. We therefore reject this contention20. The contention on behalf of the Companies, that the Central Government must be taken to have rejected the approval sought by the State Government under Section 17A(2) of the Act, cannot be accepted.seen that the Central Government took the stand that as the matter was pending in this Court, it would not be appropriate for it to take a decision. The application or request of the State Government is seen to have been returned. Of course, the Central Government is also entitled to seek further clarifications or additional facts so as to make up its mind on the question of approval. As matters stand at this stage, the Central Government has refused to take a decision one way or the other on the request of the State Government. It is therefore not possible to proceed on the basis that the Central Government has already rejected the request of the State Government for reserving the area for exploitation by OMC25. We find some merit in the contention of learned counsel for the State and OMC that the fact that the ore is required by many industries in the country other than the applicants for leases for captive mining and if the whole area is divided and given for private exploitation, there may be difficulty in ensuring equitable distribution of the ore was a relevant consideration for the State Government in making the recommendation under Section 17A (2) of the Act. We cannot certainly say that this aspect is not a relevant circumstance. Anyway, as we have indicated, it is not for us to pronounce on it at this stage and that would also be one of the aspects to be considered by the Central Government when it considers the request of the State Government for approval under Section 17A(2) of the Act26. In our view, the High Court was not right in holding that what had transpired thus far, or the directions of this Court earlier made, precluded the State Government from exercising the power and seeking approval in terms of Section 17A(2) of the Act. As we have held, the State Government could exercise that power until a grant is actually made since it is an overriding power. The taking up of a particular stand earlier, cannot also preclude the exercise of that power. Whether it has laid itself open to claims for damages by its prior actions is a different question and that cannot control the exercise of the power under Section 17A of the Act27. Now, we come to the lease proposed to be granted to Nava Bharat. In view of our upholding the decision of the State Government subject to approval by the Central Government, the lease proposed has to be found to be still born; or that the decision no more survives. But it is necessary to consider the contentions put forward, since the question would become relevant if for any reason, the Central Government chooses not to approve the request or decision of the State Government to lease the balance extent of 436.295 hectares to OMC28. As regards the allotment to Nava Bharat, we see considerable force in the submission on behalf of the I.C.C.L. that the decision to grant lease to Nava Bharat in preference to the other applicants who were before the Government was incorrect and calls for interference. On the materials, it is not established that the State Government exercised its power undern (5) of Section 11 of the Act. Nava Bharat was a subsequent entrant into the fray and had claimed the grant even while the claims of various applicants were being considered by Dash Committee. Even without sending the request of Nava Bharat to Dash Committee for consideration and recommendation, the State Government proceeded to recommend the grant of a lease to Nava Bharat from out of the extent available with it. This was a case to which the rule of preference under Section 11 of the Act as modified by the earlier orders of this Court applied and there was a preference available to those who had applied for leases earlier. Of course, the position had been explained in the first decision in Indian Metals & Ferro Alloys Ltd. Vs. Union of India & Ors. (supra). What is the reason that led to overriding the claims of others is not disclosed. On the materials, it cannot be said that the conditions ofn (5) of Section 11 are fulfilled in this case. No special reasons are recorded justifying such an out of turn grant29. If it was a case of consideration of the claims under Section 11 of the Act, we feel that the State Government was bound by the directions of this Court issued ultimately in Ferro Alloys Corporation Ltd. & Anr. Vs. Union of India & Ors. (supra). The State Government had to proceed on the basis of the directions contained therein and make allotments as recommended by the Dash Committee or the successor Chahar Committee. Of course, the State Government might have been in a position to forward the application of Nava Bharat also to the said Committee for consideration and recommendation and might have thereafter acted on the basis of recommendations of the Chahar Committee. But that was not done and the decision to lease to Nava Bharat was straight away taken. We see some force in the submission on behalf of I.C.C.L and GMR that no proper reasons are given for overriding the preferences of others especially in the light of the directions of this Court while deciding to grant a lease in favour of Nava Bharat. Notwithstanding the valiant effort in that behalf made by learned Senior Counsel for Nava Bharat to salvage the grant made to it, we are of the view that on the facts and in the circumstances of the case, the decision to grant a lease to Nava Bharat out of turn was not justified, legal or proper30. When the State Government made the recommendation for grant of a lease to Nava Bharat, the infirmities in that recommendation were pointed out by the Central Government, in its letter dated 27.6.2001. The violation of Rule 59 was also pointed out. Instead of placing the letter before the Chief Minister or the Cabinet and obtaining directions thereon, the Steel and Mines Department on its own chose to send a letter dated 30.6.2001 purporting to conform to the requirements. When the matter reached the Chief Minister and the Cabinet, the decision taken was to withdraw the earlier request for grant of approval of lease to Nava Bharat. On the materials, it is clear that the letter dated 30.6.2001 sent by the Secretary of the Steel and Mines Department was not one consistent with the Rules of Business framed under Article 166 of the Constitution of India. The letter also lost its efficacy in view of the decision taken by the Cabinet to withdraw the recommendation itself. The position that emerges is that there was no valid recommendation by the State Government for the grant of a lease to Nava Bharat and there was hence no valid approval of the Central Government.e with Rule 59 of the Rules also vitiated the proposal to lease to Nava Bharat31. In view of our conclusion that the State Government was entitled to seek the approval of the Central Government in respect of the balance extent of 436.295 hectares, in which was included the proposed Nava Bharat grant, for exploitation by OMC and since, we are satisfied that the grant to Nava Bharat cannot be sustained, the proposed grant or grant to it has to be set aside. We do so. If it is a question of reconsideration of the applications of various entities for grant of leases in respect of 436.295 hectares, it would be a case where the claim of Nava Bharat would also have to be considered along with the claim of others in the light of the directions earlier issued by this Court. This contingency may arise only if the Central Government does not grant approval to the request of the State Government under Section 17A(2) of the Act. To that extent, we allow the appeals of I.C.C.L32. Taking note of the circumstances, it is for the State Government to make a fresh request to the Central Government in terms of Section 17A(2) of the Act setting out all the relevant details for consideration of the Central Government. Thereupon the Central Government will have to take a decision in terms of Section 17A(2) of the Act and in the context of Section 17A of the Act and all relevant attendant circumstances. We make it clear that the prior directions of this Court or that of the High Court cannot and do not stand in the way of the Central Government in applying its mind to the request made by the State Government under Section 17A(2) of the Act and in taking an independent decision thereon. All that is necessary at the moment is to hold that the recommendation of the State Government cannot be rejected by the Central Government on the ground that it has no freedom or right to take a decision on the request, in view of the prior orders of this Court or on the ground that adequate details are not forthcoming. In the latter contingency, it is for the Central Government to seek such further details from the State Government as it deems fit and thereafter to come to a decision33. The decisions of the High Court of Orissa are thus set aside. The appeals are allowed in the manner indicated above. The State Government is directed to make a proper request in terms of Section 17A(2) of the Act and the Central Government is directed to take a decision thereon bearing in mind all the aspects as indicated hereinbefore. What is to happen thereafter will depend upon the decision the Central Government takes and the consequences that flow therefrom. Those are aspects that will have to be tackled at the appropriate time, if the need or occasion for it arises34. Since, this matter has been pending for years and what is involved is exploitation of a precious mineral, we direct the State Government and the Central Government to comply with the directions we have made expeditiously. The State Government should send its request within a period of four months from today with all relevant details and the Central Government should take its decision on the recommendation within a period of four months from the date of receipt of the recommendation, if necessary, after calling for any further detail that it may consider