State Of Gujarat & Ors vs Nirmalaben S. Mehta & Anr. Etc

Brief facts of the case are stated hereunder to appreciate the rival legal contentions urged on behalf of both the parties:

The respondent no.1 again applied to the appellant-State by letter dated 18.02.2008 for sale of 1,12,900 metric tonnes of NPG bauxite. The same was rejected by the appellant-State vide order dated 19.06.2008 holding that the respondent no.1 has failed to establish captive plant within a period of two years in accordance with prevailing policy. The relevant portion of the aforementioned order reads thus:

Answer to Point No.2 The factual matrix of the instant case further reveals an important undisputed fact that the respondents’ mines were located in the Jamnagar district, which area along with Junagadh district area was declared a reserved area for exploitation of bauxite in public interest vide notification dated 26.02.1964 issued by the appellant-State. However, the said notification did not affect the mine belonging to the respondents as the said notification was made to operate prospectively. The facts of the instant case further reveals that on 02.08.1978 the appellant-State issued a notification whereby the bauxite areas of Jamnagar and Junagadh districts were de-reserved, which were earlier reserved and on the same day addressed a letter to the Central Government seeking permission for the same along with permission for imposition of certain conditions on the leaseholders of the above area with a view to protect the interest of the State Government and at the same time extending help to the industries which require bauxite for its bona fide captive use. The Central Government vide letter dated 16.01.1980 granted permission in favour of the State Government for both i.e., it allowed de-reservation of the bauxite areas of Jamnagar and Junagadh districts, which were earlier reserved, and also allowed the appellant-State to read clauses referred by it in its letter dated 02.08.1978 under Rule 27(3) of the Mineral Concession Rules, 1960 for the de-reserved area.

Thus, from the factual matrix, the relevant legal provisions and the case law referred supra upon which strong reliance is placed by the learned senior counsel on behalf of the appellant-State, it is clear that in the instant case the appellant-State after 16.01.1980 had the power to impose condition interalia, for setting up of a captive plant for bauxite by the respondents at the time of renewal of their lease. Therefore, the impugned order passed by both the Revisional Authority and High Court are vitiated in law and therefore, the same are liable to be set aside. Thus, point no.1 is answered accordingly.

Answer to Point No.3 Therefore, for the aforesaid reasons, we accept the legal submissions made by the learned senior counsel on behalf of the appellant-State as the same are well founded and based on law laid down by this Court in the case referred to supra. The civil appeals are allowed by setting aside the order of the High Court dated 13.12.2011 and the order of the Revisional Authority dated 27.08.2009. The State Government is at liberty to impose such terms and conditions in the renewal of lease of the mining area in question granted in favour of the respondents. A cost of Rs.5 lakhs is awarded to the appellant-State Government in respect of these proceedings.

[2] (1997) 1 SCC 650