Case: Tata Iron &amp; Steel Co. Ltd. etc.  Vs.  UOI and others and Industrial Development Corporation Orissa Ltd.

3. The appellants in these appeals are the Tata Iron and Steel Company Limited (hereinafter called TISCO) and the Industrial Development Corporation of Orissa Limited (hereinafter called `IDCOL). The principal respondents are the Union of India, the State of Orissa, M/s Indian Charge Chrome Limited (hereinafter called `ICCL), Indian Metal & Ferro Alloys Limited (hereinafter called `IMFA), M/s Jindal Strips Limited (hereinafter called `JSL), Ferro Alloys Corporation Limited (hereinafter called `FACOR) and Ispat Alloys Limited4. The factual matrix of the case is as follows5. The appellant, TISCO, is a limited company, one of whose primary objects has been to carry on business as a mining industry. It claims that it was the first to discover chrome ore in the Sukinda Valley, Orissa, in the year 1949. It applied to the Raja of Sukinda for a prospecting licence and was granted the same in 1952. On6. TISCO claims that over the years, it has spent more than Rs 180 crores for the development of the mine, including Rs 27 crores spent in setting up a beneficiation plant. It utilises the chrome ore mined by it for the manufacture of charge chrome/ferro chrome refractories. It also supplies ore to forty chromed industries situated in different parts of the country7. In the year 1957, Parliament enacted the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter called the Act). Section 8 of the Act deals with the renewal of mining leases which are to be granted by the Central Government. Applications under this section are to be made through the State Government which is to furnish all relevant information and material to the Central Government. On, the Central Government issued a circular which laid down guidelines in this behalf. Under the provisions of the Mineral Conservation and Development Rules, 1988, framed under Section 18 of the Act, the Indian Bureau of Mines is also required to furnish relevant information to the Central Government8. Since the lease was to expire on, TISCO sought its renewal which was duly granted under Section 8(2) in respect of 1261.476 hectares for a period of 20 years i.e. till, subject to the condition that it would set up a beneficiation plant, more than a year prior to the date of expiry of the lease, TISCO applied for a second renewal under Section 8(3) of the Act for a further period of 20 years. On, the State Government, acting on the basis of a favourable report dated2 submitted by the Director of Mines and Geology, Orissa, recommended to the Central Government that the entire lease of TISCO be renewed for a period of 10 years under Section 8(3) of the Act. On, the Indian Bureau of Mines, after analysing the mining plan submitted by TISCO, recommended to the Central Government that TISCOs lease be renewed in its entirety, the Central Government authorised the renewal of the lease over the entire area of 1261 .476 hectares. However, before the formal lease could be executed, the Union Minister of State for Steel and Mines, acting on a complaint filed by Shri G. C. Munda, Member of Parliament, directed that the matter be kept in abeyance. On1993, the said Union Minister wrote a letter to the Chief Minister of Orissa stating that the lease area of TISCO should be reduced by half and the balance should be distributed in an equitable manner taking into consideration the need of genuine consumers for captive consumption, the Central Government superseded its earlier approval dated, and renewed TISCOs lease over a reduced area of 651 hectares, On, TISCO filed a writ petition in the High Court, being OJC No. 7729 of 1993, under Article 226 of the Constitution challenging the order dated, inter alia on the ground that the scheme of equitable distribution of mining leases on the basis of need of an industry is extraneous to the concept of mineral development, which alone is relevant under Section 8(3) of the Act. Meanwhile, FACOR, Ispat Alloys, JSL and Jindal Ferro Alloys Ltd. applied for mining leases of the area held by TISCO, but the State Government refused to entertain them as being premature under Rules 59 and 60 of the Mineral Concession Rules franied under the Act (hereinafter called the Rules)12. While TISCOs writ petition was pending, ICCL and JSL filed writ petitions, being OJC No. 5422 of 1994 and OJC No. 7054 of 1994, challenging the renewal of TISCOs lease by the Central Government; both the orders dated3 (which had authorised the renewal of the entire lease area of 1261 hectares) and the order dated3 (which subsequently reduced the authorisation to 651 hectares) were challenged13. By its impugned order dated5 the High Court of Orissa struck down the renewal of TISCOs lease granted by the Central Government through its decisions dated. Thereafter, it directed the Central Government to reconsider TISCOs application for renewal of the lease in accordance with law; the Central Government was also directed to give a personal hearing to, and consider the applications of, the other parties before the Court14. The High Court of Orissa after hearing lengthy arguments of counsel appearing for different interests including the Central and the State Governments concluded in para 57 of its judgment that two courses were open to it, namely, (i) to accept the submission of the counsel for the State Government that all the writ petitions should be dismissed and the parties may be asked to exhaust the alternative remedy of permitting the Sate Government to take a decision as authorised by the Central Government and if any party is aggrieved it may move the Central Government under the Act and the Rules, or (ii) the Court may dispose of the writ petitions giving certain specific directions in the shape of guidelines to the Governments as well as other authorities under the Act to consider in the light thereof if there is any necessity to renew the lease for the whole or part of the area covered under the lease. The High Court took the second course, in that, it accepted the submission of the counsel for the State Government that the Central Government should hear the matter de novo on TISCOs application for renewal of the lease after hearing all parties including ICCL and JSL. It set aside the orders dated, inter alia on the ground that the Central Government had not kept in view the recommendation made by the Rao Committee which was accepted by this Court in the case of Indian Metals & Ferro Alloys Ltd. v. Union of India and directed the Central Government to hear the application for renewal of the lease, keeping in view the report submitted by the Rao Committee and the decision of this Court in the aforesaid case15. After the judgment of the High Court was delivered on, a Committee was constituted by the Ministry of Mines, Government of India, under the Chairmanship of one Shri S. D. Sharma for rehearing and reconsidering the issue in regard to the renewal of mining lease to TISCO. The Committee submitted a report dated, recommending renewal of the lease for a reduced area to TISCO. Acting on that report, on the very next day,, the Central Government authorised the renewal of TISCOs lease over the reduced area of 406 hectares which, according to the Central Government, would meet TISCOs captive requirements and requested the State Government to issue orders for the same. At the same time, in exercise of powers conferred by Rule 59(2) of the Rules, the Central Government relaxed the provisions of) with the objective of expediting the process of granting chromite are and requested the State Government to grant mining leases to four other parties, namely, ICCL, JSL, IMFA and FACOR for the balance area of 855.476 hectares16. SLPs Nos. 10838, 11391 and 11392 of 1995 seek to challenge the order dated5 of the Orissa High Court and SLPs Nos. 22710, 23131 and 23132 of 1995 seek to challenge the Central Governments decision dated, made pursuant to the High Courts order dated. While the first four special leave petitions have been filed by TISCO, the last two have been filed by IDCOL

Court's reasoning:
30. We have studied the orders of the Central Government dated3 is a statement which declares the grant of a second renewal to TISCO. It does not profess to give any reasons for such a decision and, for that reason, falls foul of the requirement of Section 8(3), as has rightly been pointed out by the High Court. The order dated3 is more generous in terms of the reasons it offers; however, the High Court was of the view that, since it did not take into account the findings of the Rao Report, the decision of this Court in the Indian Metals case and the National Mineral Policy, it could not have justified its decision as having been made after a proper analysis of the interest of mineral development. This brings us to the consideration of the second issue before us2. Relevance of the Rao Report and the decision of this Court in the Indian Metals case to the renewal of TISCO s lease31. The submissions made before us by the learned counsel for TISCO on this issue are a replication of those put forth before the Committee, and need not be repeated. We may, therefore, proceed to analyse the decision in the Indian Metals case. In that case, this Court was faced with a situation where, through a series of writ petitions, the grant of rights for the mining of chromite ore in the State of Orissa was challenged. The central issue that arose for adjudication was whether, and to what extent, the parties before the Court were entitled to obtain leases for the mining of chromite ore in the State of Orissa. Though the learned counsel for TISCO sought to indicate that that case is distinguishable from the one on hand on account of the fact that, while the former dealt with the grant of fresh licences, the present deals with renewal of lease, which involves a fundamentally different assessment, we must, however, point out that, in essence, both cases deal with the larger issue of mining of chromite ore in the State of Orissa and, in view of this relation, it becomes necessary for us to consider the views expressed therein33. It is clear from a study of the Indian Metals case that in the opinion of this Court, the Rao Report had made such a comprehensive study of the issue that it merited treatment as a decision of the Central Government. In our view, once this has been clearly stated by this Court, the Central Government, though not bound to follow the recommendations of the Rao Report, was at the very least under an obligation to record reasons why it sought to depart from the recommendations of the Report; especially in matters such as these where leases of considerable commercial value are granted for long periods of time34. We are, therefore, of the view that the High Court and the Committee were justified in taking note of the findings of the Rao Report as well as the observations of this Court in the Indian Metals case in considering the issue of renewal of TISCO s lease35. Since the order dated3 did not make any reference to the Rao Report or the decision of this Court, we feel that the High Court was justified in striking it down for not having taken into account all the factors relating to a proper appreciation of the concept of mineral development3. Locus standi of prospective applicants in proceedings considering the renewal of TISCO S lease42. We are of the view that the High Court had taken the correct step in allowing the prospective applicants to put forth their points of view with regard to the renewal of TISCOs lease. As we have already pointed out, these issues involve considerably high stakes, both in terms of commercial value and the effect that such a decision will have on the concept of mineral development and the consequent national interest. To that extent, those likely to be affected and indeed, those who can legitimately have a stake in the proper formulation of such a vital policy, can be heard. No exception can be taken to the High Court treating them as proper parties and directing the Committee to hear them43. We, therefore, hold that both the High Court and the Committee were justified in hearing the prospective applicants while considering the issue of renewal of TISCO s lease54. Thereupon, the Committee analysed the provisions of Article 14 and Article 39(b) of the Constitution which, in its view, were relevant for the purpose of appreciating the issue under Section 8(3) of the Act. It then came to the conclusion that, to grant the renewal of mining lease over an area as large as that held by TISCO, in favour of a single applicant whose own needs are limited, while several needy manufacturers were deprived of adequate sources of raw material, would be to promote monopolistic tendencies which cannot be allowed55. For the foregoing reasons, the Committee was of the view that the concept of mineral development under Section 8(3) of the Act requires the assessment of the captive mining requirement of different industries as also the application of the principle of equitable distribution of mining leasesWe find it difficult to accept the contention that the Rao Committee had not endorsed the concept of captive mining because, as we have already mentioned, it does in fact do so. Having studied the decision in the Indian Metals case we find that on the issue of the requirement of captive mining, this Court had expressly refrained from giving an opinion on the issue as it did not arise for its consideration; however, it did recommend that chromite ore be supplied to needy applicants in an equitable manner. It must be pointed out that nowhere in the Rao Report nor in the report of the Committee, has the requirement of captive mining been interpreted to mean that every industry within the State would, by reason of its existence, be entitled to a mining lease. The captive requirement of an industry is a factor that has to be kept in mind while granting leases but, it is to be done on a comparative scale. While the Central Government exercises its discretion in granting or renewing a lease, it is clear that the capacity of an industry to effectively exploit the ore, will be a predominant consideration. The submission of the learned counsel that none of the other parties before this Court required the mineral ore for captive consumption cannot be accepted. This aspect has been specifically examined by the Committee at pages3 of its report. In order to properly appreciate the issue of captive consumption, the Committee examined the needs of the other parties before it. It stated that each of these parties had manufacturing industries which produced products and earn considerable foreign exchange for the country, and it was therefore of the view that an analysis of their total requirement was necessary in the interests of mineral development as also that of the nation. Based on the information supplied to it, the Committee thereafter made an assessment, for a total period of 50 years, of the captive and net requirements of ICCL, IMFA, FACOR and JSL. At page 349 of its report, the Committee has also taken note of the projected captive and net requirements of Ispat Alloys. This being a finding of fact that has been recorded by the/Committee, we have to accept that the argument of captive consumption does have a basis in the facts of the present case. On the issue of the application of the principle of equitable distribution, we are of the view that the Committee had, after having taken note of the prevailing situation and the problems faced by needy manufacturers, taken the correct view in recommending its implementation58. We are, therefore, of the view that the Committee had correctly interpreted the relevant material available for appreciating the concept of mineral development and adopting the stance that it encompassed the concept of captive mining as well as the principle of equitable distribution5. Validity of the Central Governments order dated62. At this juncture, we think it fit to make a few observations about our general approach to the entire case. This is a case of the type where legal issues are intertwined with those involving determination of policy and a plethora of technical issues. In such a situation, courts of law have to be very wary and must exercise their jurisdiction with circumspection for they must not transgress into the realm of, unless the policy is inconsistent with the Constitution and the laws. In the present matter, in its impugned judgment, the High Court had directed the Central Government to set up a Committee to analyse the entire gamut of issues thrown up by the present controversy. The Central Government had consequently constituted a Committee comprisingl functionaries drawn from various governmental/institutional agencies who were equipped to deal with the entire range of technical andm considerations involved. This Committee, in reaching its decision, consulted a number of policy documents and approached the issue from a holistic perspective. We have sought to give our opinion on the legal issues that arise for our consideration. From the scheme of the Act it is clear that the Central Government is vested with discretion to determine the policy regarding the grant or renewal of leases. On matters affecting policy and those that require technical expertise, we have shown deference to, and followed the recommendations of, the Committee which is more qualified to address these issues64. For the foregoing reasons, we are of the view that the High Court and the Committee were justified in the view they took.