TATA IRON AND STEEL CO. LTD. ETC.

UNION OF INDIA AND ANR.

JULY 23, 1996

!A.M. AHMADI, CJ.AND B.L. HANSARIA, J.]

Mines and Minerals (Regulation & Development) Act, 1957-Secrion 8-Penads for ivhiciz niining leases n1ay be granted or renelred-Renewal of C lease in interest of niineral developn1ent-Order nzust rc.:ord

reason.s-Relevance of c1iterion of captive requircn1e11t of n1i11ing industries and principle of equitable distribution of 111ining lease-Pro.q1cctivc a11plicants-Held, proper pwties.

The appellant, TISCO, a limited company claiming that it was the D first to discover Chrome Ore in Orissa, in the year 1949, applied for a prospecting licence and \\as granted a inining lease over an area of 1813 hectares for chromite for a period of 20 years w.e.f. 12.1.1953. Since the lease was to expire on 12.1.1973, TISCO sought its renewal which was duly granted u/S 8(2) of the Mines and Minerals (Regulation & Development) Act, 1957, for a further period of 20 years, till 11-1 1993. In 1991, a year E prior to the date of expiry of the lease, TISCO applied for a second renewal u/s 8(3) of the Act for a further period of 20 years. The Central Government rene'\\'ed TISCO's lease over a reduced urea of 651 hectares and it was decided to distribute the balance area in an equitable manner taking into consideration the need of genuine consumers for captive ronsu1nption.

F TISCO filed a \\Tit petition in the High Court challenging the order 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 u/s 8(3) of the Act. The High Court struck down the renewal of TISCO's lease granted by the Central Government inter alia on the ground that the Central Government had not kept G in view the recommendations made by the Rao committee and thereafter directed the Central Government to reconsider TISCO's application for renewal of the lease in accordance with Jaw. In 1995, the Ministry of Mines, Government of India constituted a co1nmittee for rehearing and recon~ sidering the issue in regard to the rene'\\'al of nlining lease to TISCO. The H Co1nn1ittce sulJmittcd a report recornmending renewal of the lease for a

I AT,, !RON /\N ll STEEL CO. LTD.'' lJ.O.l. 809

reduced areido TISCO. stating that Articles 39(h) & 14 orthe Constitution A n1ust be taktn into consideration for deciding the issue of equitabJc distribution of resources and that rlSCO "'01Jld not claiin to have any legal right over tht rene\ral of its lease for the second tirne and, if the Central (; ovcrnn1cnt "'as to rcnC\\' it, it nould havr to record reasons \rhy such a 1neasure \\'Ould he in the interest of n1ineral devcloprucnt. Tht Cou11nittee \.ras of the opinion that it \\ould be necessary in the interest of n1ineral devclop1ncnt to authorise the rtne\ral of chron1ite lease to TISC()

11/s 8(3) of the Act >trictly in terms of TISC!)'s requirement and keeping in vie\V the require111ents of needy 111a1111facturing industries. The Com1nittcc approved the principle of allotting leases to different industries by taking into consideration tht:ir re£1uire1nents for captive mining holding C an opinion that tht• best \\-'ay of benefitting an established chro1ne based industry with a large ore consu1nption \\'as tn provide a n1inc owner status to the different industrial units and that TISCO should make efforts to initiate underground 1nining on a large scale "'hich would allo"' it to better exploit the ore within its lease hold area. In its view, the appropriate area D catering to TISCO's requirement would total 461 hectares. The Committee also formed an estimate of requirements of the other parties appearing before it.

In these appeals liled against the judgn1ent of the High Court, the issues raised for consideration were :

(i) Whether the High Court of Orissa was justiticd in striking down the decisions of the Central Government dated 3.6.1993 and 5.10.1993 on

the ground that the requirement of Section 8(3) of the Act had not been met; (ii) Whether the reJJOrt of the Rao Committee and the decision of this F Court in Indian Afetals case are relevant for the consideration of renewal of leases under Section 8(3) of the Act; (iii) Whether the High Court and the Comn1ittee \\'ere justified in hearing prospective applicants while con~ sidering the issue of renewal ofTISCO's lease; (iv) whether the Committee \Vas justified in interpreting the concept of "mineral development 11 under Section 8(3) of the Act as re£1uiring the assessn1ent of the captive mining G requirement of different industries and the application of the principle of equitable distribution of mining leases; (v) Whether the Central Govern ment in its order dated August 17, 1995, had correctly analysed the needs and ret111irements of TISCO in recommending that its lease be renewed o\'er land measuring 406.00 hectares; H

The appellant contended that the orders renewing TISCO's lease had complied with the requirements of Section 8 of the Act; that the Rao Couuuittee had provided incorrect i11for1nation about TISCO's 111ining lease and the concept of captive mining was not really part of the National Mineral Policy and, though propagated by the Rao Report, this concept did not find support from the National Mineral Policy; that the other petitioners did not have locus standi as none of the other parties could be. regarded as aggrieved parties having any interest in these proceedings since the State Government had neither made an entry in the concerned register that the area was available for grant, nor had it notified its availability in the oflicial Gazette; that none of the other parties who were C before this Court to stake their claim for mining leases, had any industry of their own wliere the chromite ore could be used for manufacturing purposes and, therefore, they \\'ere not in a position to use it for captive consumption and therefore the Committee had erred in applying the principle of equitable distribution of mining leases as the correct principle D is that of equitable distribution of minerals and not of mining leases.

The respondent submitted that any decision on the second renewal of TISCO's lease was bound to affect the rights of the other parties and that the State Government, which was duty bound to make the relevant entry in the register and notify the area as being available for grant, had E neglected to do so and that the applications of the petitioners would not have been deemed to be premature under Rule 60 of the Minerals Concession Rules.

Dismissing the appeals, this Court

HELD : 1.1. The language of Section 8(3) of the Mines & Minerals (Regulation & Development) Act, 1957 is quite clear in its import. Ordinarily, a lease is not to be granted beyond the time and the number of periods mentioned in clauses (1) and (2). If, however, the Central Government is of the view that to allow a lessee's lease to be renewed further would be in the interest of mineral development, then, it is empo\.\'ered to do so, provided there exist on record sound reasons for such an action and those reasons are recorded. Since such a measure has been incorporated in the legislative scheme as a safeguard against arbitrariness, the letter and spirit of the law must be adhered to in a strict manner. The order orthe Central Government H dated 3.6.1993 is a statement which declares the grant of a second renewal

TATA IRON AND STEEL CO. LTD. v. U.0.1. 811

to 'flSCO. It did not profess to give any reasons for such a decision and, for A that reason, falls foul of the re<Juirement of Section 8(3). The order dated 5-10-1993 is rriore generous in terrns of the re<:&sons it offers; however, the High Court was of the view that, since it did not take into account the

tinciings of the Rao Report, the decision of this Court ii! Indian Afetals case

and the National !'viineral Policy, it could not have justified its decision as having been made after a proper analysis of the interest of mineral developn1ent. The Rao Report had 1nade such a comprehensive study of the issue that it merited treatment as a decision of the central Government. The Central (iovern1nent, though not hound 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 C in matters such as these where leases of considerable com1nercial value are granted for long periods of time. Since the order dated 5·10·1993 did not make any reference to the Rao Report or the decision of this Court the High Court was justified in striking down for not having taken into account all the factors relating to a proper appreciation of the concept of mineral D development. The High Court had taken the correct step in allowing the prospective applicants to put forth their points of view "ith regard to the renewal of TISCO's lease. These issues involved 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 E 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 them. 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 con1parative scale. While the F Central Government exercises its discretion in granting or rene\ol'ing a lease, the capacity of an industry to effectively exploit the ore, will be a predominant consideration. 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 in dustries which produce value-added products and earn considerable G foreign exchange for the country, and it was therefore, of the view that an analysis of their total requirement was necessary in the interest 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 SO

;-\ iears, of the ca1ltive and net require1ncnts of ICCL, IMFA, FAC(JR and .ISL. The Committee has also taken note of the projected captive and net rel)uirements of lspat alloys. This being a finding of fact that has been recorded by the Cornn1ittec, the argument of captive consu1nption did have a basis in the facts of the present case. On the issue of the application of the

principlt! o!· et1uitable distribution, the Com1nittee had, after.having taken note of the prcrailing situation and the prohlen1s faced by needy n1anufac- . turers, taken the correct rie\v in rcconuucncing its implcrnentation. [825-F-

H; 826-A-B; 827-B-U; 830-A-B; 834-B-HJ

l.2. This is a case of the type where legal issues are intertwined with C those involving deter1nination of policy and a plethora of technical issues.

In such a situation, courts of latt' have to be vt!ry wary and n1ust exercise their jurisdiction \\'ith circumspection for they ntust not transgress into the realm of policy making, unless the 11olicy is inconsistent with the Constitution and the laws. In the present n1atter, in its in1pugned judgment, the High Court had directed the Central Government to set up a Comn1ittee to analyse the entire gan1ut of issues thrown up by the present contrnver; y. The Central Government had consequently constituted a Comn1ittee con1prising high level functionaries drawn from various Ciovernrnental/institutional ngencies \\'ho \\'ere etjuipped to deal with the entire range of technical and long-term considerations involved. This

Committee, in reaching its decision, consulted a number of policy docun1ents and approached the issue from a holistic perspective. From the scheme of the Act it is clear that the Central Government is vested with desecration to detern1ine the policy regarding the grant or renewal of leases. On matters ,11Tecting policy and those that require technical expertise, the recomn1endations of the Committee which is more tiualitied to address these issues is to lie followed. [835-F-H; 836-AB]

Indian Metals & FcmJ Alloys Ltd. v. Union of India, AIR (1991) SC 818, referred to.

CIVIL APPELLATE JURISDICTION Civil Appeal No. 9454 of

1996 Etc. Etc.

From the Judgment and Order dated 4.4.95 of the Orissa High Court

in 0 .. 1.C. No. 7729 of 1993.

H D.P. Gupta. Solicitor Ciencral, F.S. Nariman, Kapil Sihal, Gopal

TATA IRON AND STEELCO.J:m.v. U.0.1.[AHMADI.CJ.] 813

Subramaniam, Ms. Indira .laising, Shanti Bhushan, R.K. Anand, H.N. Salve, A AK. Ganguli, G.L. Sanghi, Y.S.N. Murty, Sr. Advs., Sunil Gupta, Ravinder Narain, Ashok Sagar, S. Kachwah, Ms. Punita Singh, Ashok Parija, Rajan Narain, Ms. Vijay Lakshmi Menon, Jayant Bhushan, Ms. Ritu Gupta, Y.P.

Mahajan, W.A Qadri, AK. Sharma, Gautam Mitra Rajiv La., Indira Sawhney, K.K. Lahiri, Ejaz Maqbool, B.K. Mishra, D.A. Dave, Praveen B Kumar, Virender Kaushal, R.K. Mehta, Indrajeet Roy, P.N. Misra, Ashok K. Gupta and Bharat Sangal for the appearing parties.

The Judgment of the Court was delivered by

AHMADI, CJ! Special Leave granted.

These appeals seek to challenge: (i) the common judgment and order of the Orissa High Court dated April 4, 1995, arising out of OJC No. 7729 of 1993 and allied matters and (2) the decision of the Central Government dated August 17, 1995 made pursuant to the said judgment of the High Court.

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 ''JCCL''), Indian Metal & Ferro Alloys Limited (hereinafter called ''!MFA"), M/s. Jindal Strips Limited, ( hereinafter called "JSL"), Ferro Alloys Corporation Limited (hereinafter called "FACOR") and !spat Alloys Limited .

• The factual matrix of the c3'6 is as follows :

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 cli, covcr Chrome ore in the Sukinda Valley, Orissa, in the year 1949. It applied to the Raja of Sukinda for a prospecting licence and G was granted th~ sac in 1952. On October 22, 1952, it was granted a mining lease over an area of 1813 hectares for chromite for a period of 20 years.

Subsequently, under the provisions of the Orissa Estates Abolition Act, 1952, on the rights of the Raja having vested in the State Government, the latter recognised the lease of TISCO for a period of 20 years with effect from January 12, 1953.

A TISCO claims that over the years, it has spent more than Rs. 180 crores for the developn1ent 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. lt also supplies ore to forty Chrome ore based industries situated in different parts B of the country.

In the year 1957, Parliament enacted the Mines &.Minerals (Regulation & Development) Act, 1957, (hereinafter called "the Act"). Section 8 of the Act deals with the renewal of mining leases which are lo be granted by the Central Government. Applications under this Section are to be C made through the State Government which is to furnish all relevant information and material to the Central Government. On October 10, 1980, the Central Government issued a circular which laid down guidelines in this behalf. Under the provisions of the Mineral) Conservation & Development Rules, 1988, framed under Section 18 of the Act, the Indian Bureau of Mines is also required lo furnish relevant information to the Central D Government.

Since the lease was to expire on January 12, 1973, TJSCO 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 .January 11., 1.993, Subject to the E condition that it would set up a beneliciation plant.

On October 3, 1991, more than a year prior to the date of expiry of the lease, TJSCO applied for a second renewal under Section 8(3) of the Act for a further period of 20 years. On NoYember 28, 1992, the Stale Government, acting on the basis of a favourable report dated March 31, F 1.992 submitted by the Director of Mines & Geology Orissa, recommended to the Central Government that the entire lease of TJSCO be renewed for a period of 10 years under Section 8(3) of the Act. On April 27, 1993, the Indian Bureau of Mines, after analysing the mining plan submitted by TISCO, recommended to the Central Government that TISCO's lease be G renewed in its entirety.

On June, 3, 1993, 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 & Mines, acting on a complaint filed by Shri G.C. Munda, Member of H Parliament, directed that the matter be kept in abeyance. On September •

TATA IRON AND STEEL CO. LTD. v. U.0.1. [AllMADI, CJ.] 815

27, 1993, the said Union Minister wrote a letter to the Chief Minister of A Orissa staling 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.

On October 5, 1993, the Central Government superseded its earlier approval dated June 3, 1993, and renewed TlSCO'; lease over a reduced area of 651 hectares. On October 19, 1993, TrSCO filed a writ petition in the High Court, being O.TC No. 7729/93, under Article 226 of the Constitution challenging the order dated October 5, 1993, inter alia on the ground that the scheme of equitable distribution of mining leases on the basis of need of an industry is c>-1raneous 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 TJSCO, but the State Government refused to entertain them as being premature under Rules 59 and 60 of the Mineral Concession Rules framed under the Act (hereinafter called "the Rules").

While TISCO's writ petition was pending, !CCL and .TSL filed writ Petitions, being OJC No. 5422/94 and OJC No. 7054/94, challenging the renewal of TISCO's lease by the Central Government; both the order dated June 3, 1993 (which had authorised the renewal of the entire lease area of 1261 hectares) and the order dated October 5, 1993 (which subsequently reduced the authorisation lo 651 hectares) were challenged.

By its impugned order dated April 4, 1995 the High Court of Orissa struck down the renewal of TISCO's lease granted by the Central Government through its decisions dated June 3, 1993 and October 5, 1993.

Thereafter, it directed the Central Government to reconsider TISCO's application for renc\val of the lease in accordance \Vith la\v; the Central Government was also directed to give a personal hearing to, and consiJer the applications of, the other parties before the Court.

The High Court of Orissa after hearing lengthy arguments of counsel G appearing for different interests including the central and the State Governments concluded in paragraph 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 State Government to take a decision as authorised by the Central Govern- H

A n1ent and if any party i~ aggrieved it n1ay n1ove t.he l'.entral GovcrnnHnL under the Act and the Rules, or (ii) the Court may dispose of the writ petitions giving certain specific directions in the shape of guideline~ to the Governments as well as other authorities under Act to consider in the light thereof if there is any necessity lo renew the lease for the whole or part of

B the area covered under the lease. The High C0urt took the second course,

in that, it accepted the submission of counsel for the State Government that the Central Government should hear the matter de nol'o nn TISCO's application for renewal of the lease after hearing all parties including !CCL and JSL. lt set aside the orders <lated June 3, 1993 and October 5, 1993, inter alia on the ground that the Central G0Yern1ncnt had not kepi. in vie\v C the recommendation made by the Rao Committee which was accepted by this Court in the case of Indian Matoia/s & Fc1ro Alloys Ltd. v. Union of India, AIR 1991SC818 = 11992] Supp. 1SCC91, 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 decisinn or this D Court in the aforesaid case.

After the judgment of the High Court was delivered on April 4, 1995, a Con1mittee \Vas constituted by the Ministry of Mines, (Jovcrnmcnt of India, under the Chairmanship of one Shri S.D. Shann<.1 for rehearing ;_ind reconsidering the issue in regard to the renewal or mining lease tu TJSCO.

E The Committee submitted a report <lated August 16, 1995, recommending renewal of the lease for a reduced area to TISCO. Acting on that report, on the very next <lay, August 17, 1995, the Central Government authorised the renewal of TISCO's lease over the reduced area of 406 hectares which, accortling to the Central Govern1ncnt, \Vould n1cct TlSC()'s captive rc- F quirement.s and requested the State Govcrn1nent 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 sub-rule (J) \Vith the objective of expediting the process uf granting chromiti.: ore and

requested the St.ate Ciovcrnn1ent to grant 1nining leases to four other parties. namely, !CCI, JSL, !MFA and FACOR for the balance area of G 855.476 hectares.

SLP Nos. 10838/95, 11391/95 and 11392/95 seek to challenge the 01dcr dated April 4, 1995 of the Orissa High Court and SLP Nos. 22710/95, 23131/95 and 23132/95 seek to challenge the Central Government's H decision dated August 17, 1995, made pursuant to the High Court's order

TATA IRON AND STEEL CO. LTD. i. U.0.1. [AHMADI.CJ.] 817

dated April 4, 1995. While the lirst four special leave petitions have been filed by TISCO, the last two have been filed by IDCOL.

Before we proceed to deal with the arguments of counsd appearing for the different parties, \Ve must deal \vith the impugned judgn1cnt of the Orissa High Cnurt and the report of the Committee that was set up pursuant to its directions, in son1e detail.

In its impugned judgment, ihc High Court has taken the view that Section 8(3) of the Act is applicable lo the dispute in the present case; it further held that this provision mandatorily requires the Central Governinent to giYe reasons as to \vhy it \Vas in the interest of 1nincral development to renew T!SCO's lease. The High Court look nt>le of the decision of this Court in Indian A1etals case \Vhere, faced \Vi th a dispute involving the grant of rights for the mining of chron1ite ore in the State of Orissa, this Court had appointed a Commillee headed by the Secretary to the Government

of India in the Ministry of Mines, Mr. B.K. Rao (hereinafter called "The 0 Rao (on1rnittee") to consider the c\ain1s of the various parties. The Rao Committee submitted its report \Vhcrcin it studied the i.".suc of n1ining of chromite ore in the State of ()rissa at great length and gave its specific findings. This Court, in rendering its final decision in the Indian Afetals case, relied on the Rao Co111mittee report and also opined that the report was bound to be of use to the Central Government as well as the State E Govcrnn1cnt of Orissa in regard to their future policy in the matter of grant of chromite leases.

The High Court of ()rissa \Vas, therefore, of the vie\v that in deciding to rcne\v TISCCJ's lease, thl: Central Government should have considered F the Rao Committee report as well as the decision of this Court in Indian flletals case and for its failure to de .so, the High Court struck <lo\vn the orders of the Central Govcrnn1cnt rene\ving TISC()'s lease. The l-ligh Court directed the Committee that \Vas to be set up, to consider the issue keeping in mind the Rao Con1n1ittee report, this Court's decision in Indian G Afetals case, the National Mineral Policy and all other factors relevant under the Act. Before the High Court, the learned counsel for T!SCO put forth a preliminary objection; he argued that since the n1attcr concerned the issue of renc, val of TISC()'s lease, the other parties before the High Court had no locus stancU in vie\v of the express bar in Rules 59 and 60 of the Rules. After considering these subn1issionsi the High Court, while 1-I

A directing the constitution of a Committee lo look into the matter, made the following observations:

"As we arc of the view that the Central Government should consider afresh and as Mr. B.M. Patnaik has submitted that the Central Government has no objection to consider afresh, there is no bar and/or impediment if the Central Government considers the proposal of subsequent renewal of lease of TISCO by giving it opportunity of hearing which may be effected in presence of the other petitioners who have come to this Court. Nevertheless, it is submitted that the Central Government has no obligation to invite other intending parties besides the \VTit petitioners in the case at the time of disposal of the application for a subsequent renewal of the lease at the instance of TISCO, this Court finds that by the ultimate result other writ petitioners are consequently to be affected by renewal, part renewal or refusal of the lease in favour of TISCO. They may be heard by way of fair play and in compliance with the principles of natural justice, and to enable them to place on record such necessary facts for essential consideration by the Central Government. It is made very much clear that only in the event of availability of the area occupied by TISCO, State Government \Vill consider their prospectiv~ applications in accordance E with law."

The Committee which was appointed by the Central Government pursuant to the directions of the High Court of Orissa, consisted of senior officers from the Ministry of Mines, the Indian Bureau of Mines and the F Geological Survey of India. Tt.e Chairman of the Committee on Sukinda Valley Chromite Lease of Tata Iron & Steel Corporation Ltd. (hereinafter called

11The Comrnittec'') \Vas Shri S.D. Sharma, Joint Secretary, Ministry of mines. The Committee \Vas required to submit its report \Vithin two weeks. In view of the express directions of the High Court, the Committee gave a personal hearing to the advocates appearing for TISCO, FACOR, G !CCI, !MFA, JSL and !spat Alloys and thereafter, submitted its report which extends lo four hundred and fifty-one pages.

In its voluminous report, complete with elaborate anncxures, the Committee has dealt with many of the legal issues that have been canvassed H before us and also with other technical considerations involved in the

TATA IRON AND STEEL CO. LTD."· U.O.l. [AHMADI, CJ.] 819

mining of chrome ore in the Sukinda Valley. ll would, thercforc, be appropriate for us to cxan1ine the rcco1nmcndaLions of the Committee an<l their basis for putting them forth.

In its <.inctlysis of lhc sub1nissions of the variou.s parties before it, the Connnittec first dealt \Vith the issue of the relevance of the Rao Con1n1ittee and the decision of this Court in Indian Metals case lo the present dispute.

The learned counsel appearing for TISCO before the Committee attacked the Rao Report on several grounds. He pointed out that the High Court had required the Central Government only to consider the Rao Report and not necessarily to adopt its recommendations; he submitted C that it would be open to the Committee to examine the correctness of the legal and Factual premises of the Rao Report. He contended that since TlSCO was not a party before the Rao Committee, its report was not binding for the purposes of considering TJSCO's lease. He further urged that the Rao Report does not, in essence, uphold a principle of policy and was superseded in many respects by this Court in the Indian Metals case. D He contended that the Rao Committee did nol endorse the policy of distributing leases on the basis of the captive 1nining requirc1nent of industries and in the alternative argued that even if the Rao report \Vere to do so, such a policy was unsustainable under the scheme of the Act and the Rules and, at no point of time had the said principle been applied in E determining the question of rene\va1 of lease or in <lcc; iding on whom the right should be conferred.

The Commillce was of the firm opinion that the central Government was required to take note of the Rao Report as it contains in1portant

findings~ guidelines and directions regarding the grant of chron1ite leases and supply of chromite ore to needy applicants in an equitable n1anncr.

The Con1mittec took note of the fact that, in reaching its final decision, this Court, in the Indian /\feta/.\· case relied upon the findiQg~ of the Rao Report.

It also noted that Lhe High Court of Orissa had studied the Rao Report

and had required it to rely upon the findings therein. Finally, the Commit- G tee took note of the observations of this Court in para 42 of the judgn1ent of the Indian Metals case :

· ..... the (Rao) report and its annexures arc bound to be of immense help and value to the S.G. and C.G. in arriving at their decisions not only on the various applications but also in regard to their H

future policy in the matter of grant of chromite leases and of the supply of chromite to the needy applicants in an equitable manner."

The Committee rejected the cont en lion of TlSCO that the Rao Report had proviJed incorrect inforn1ation about TiSCO's 1nining lease. The Corn1nittee relied upon the report of the Gopalachari Committee. which was constituted subsequent to the Rao Report to look into the issue of mining leases in the entire country, to refute TISCO's contentions in this regard.

This being so, the Committee rejected the arguments put forth by TISCO to dilute the significance of the Rao Report for the consideration of the present dispute.

Thereafter, the Committee analysed the National Mineral Policy, 1993 and the Industrial Policy of Orissa, 1992 lo obtain an understanding of the concept of mineral development as envisaged by Section 8(3) of the Act. Learned counsel for TISCO submitted that the concept of captive mining was not really part of the National Mineral Policy and, though D propagated by the Rao Report, this concept docs not find support from the National Mineral Policy. The Con1111ittce ca1ne to the conclusion that the National Mineral Policy, having been tabled before both Houses of Parlian1ent, is a guiding factor in the decision making process of the Government and, both in the National Mineral. Policy as well as the E Industrial Policy of the State of Orissa, captive mining has been recognised as a fundamental guideline in determining the criteria for granting mining leases.

On the issue of equitable distribution of resources, in view of the fact that TISCO held 55% of the total chromite resource of the country, the F Committee was of the opinion that Article 39(b) and Article 14 of the Constitution 1nust be taken into consideration for deciding the issue under Section 8(3) of the Act.

Thereafter the Comn1ittec examined the requirements of Section 8(3) of the Act. The provision as it originally stood was amended in 1986 G and again in 1994. The application for renewal ofleasc was filed by TIS CO

in the year 1991. On behalf of TISCO, a series of alternative arguments was put forth to support TISCO's claim that it was entitled to a second rene\val of its lease. There \Vas also an argu1nent that the la\V as it stood after the 1994 amendment should apply to TISCO's case. However, the H Committee took the view that the law applicable would be the law as it

TATA IRON AND STEEL CO. LTD. v. U.0.1.[AHMADI. CJ.] 821

stood between 1986 and 1994. Interpreting Section 8(3) of the Act, the A Committee was of the view that TISCO could not claim to have any legal right over the renewal of its lease for the second time and, if the Central Government \Vas to rcne\V it~ it \Vould have to record reasons \vhy such a measure \\'ould be in the interest of 111incral devclop1nent.

Moving on to the issue of \Vhether it \Vas necessary to rene\v the mining lease of TISCO in the interest of mineral development, the Committee took note of the various arguments put forth by the learned counsel appearing for TJSCO. The learned counsel submitted that TISCO had played a pioneering role in the development of chromite and other minerals in the area; had been doing scientific tnining in a manner that ensured optimum recovery; had taken steps for environmental management; had complied with the provisions of all the relevant rules and regulations; had n1ade massive investn1cnt in the leasehold area including research and development efforts etc. and, are therefore, entitled lo the rene\val of the cntie area in the interest of n1ineral develop111cnt. The D learned counsel submitted technical reports to show that the technique of mining adopted by TISCO \Vas in consonance \Vith prescribed practices.

He stressed on the fact that the Indian Bureau of Mines had sanctioned the mining plan of TISCO and its operations had also met with the requirements of the Gopalachari Con1mittee, set up by the Government of India to rc\ew mining practices across the country. To appreciate the E technical arguments put forth by TISCO and the other parties before it, the Committee undertook a vast examination of the technical details of the mining of chromite ore including discussions on : mineablc reserve, recoverable reserve and conditional reserves in the Sukinda Valley; the status of geo-tcchnical and geo-hydrological studies; the existing status of F 1nining in the valley; infrastructural facilities; research and development expenditure relating to mining in the valley; the relative merits and demerits of shallow mining, open cast mining and underground mining; the prices of chromite ore, etc.

After considering all these issues, the Con1mittee made its recon1- G mendations. It prefaced the recommendations by stating that it was of the firm opinion that it \vould be necessary in the interest. of mineral develop~ ment to authorise the renewal of chromite lease to TISCO under Section 8(3) of the Act strictly in terms of TISCO's requirement and keeping in view the requirements of needy manufacturing industries. The Co1nmittee H

A was of the view that if renewal was granted to TISCO for the entire area when they would, in effect, be needing and using only a small fraction of the entire area, it could not be said that such a grant would be serving the interest of mineral development or that of the national interest, particularly when there were other needy manufacturers who had been facing serious B problems for want of adequate raw material. The Committee felt that it could not ignore the fact that the other parties had made huge capital investments in establishing their industries and did not have adequate raw materials. The Committee approved the principle of allotting leases to different industries by laking into consideration their requirements for captive mining and for doing so, it relied upon the Rao Report, the Ori"a C fndustrial Policy and the National Mineral Policy. It was, therefore, of the opinion that the best way of benefitting an established Chrome-based

industry \Vith a large ore consun1ptjon \Vas to provide a mineo\vncr status to the different industrial units. Thereupon, the Committee undertook an analysis of the competing interests of the other needy manufacturers. It D took note of the observations of the High Court of Orissa that it was not the forum for distributing mining leases in favour of the other parties; however, in order lo properly appreciate the issue, the Committee examined the need of the other parties as well as their problems of obtaining raw matcria1s. While forming an cstin1ate of TISCO's requiren1ent, the E Committee relied upon the documents submitted by TlSCO as well as other relevant material. It noted the fact that in view of the scarcity of chromite ore, repeated recommendations have been made that underground mining must be planned and taken up for harnessing the available chromite ore. However, over the last four decades during which TISCO had held the lease, it had not relied upon the method of underground F mining lo the required level. The Committee came to the conclusion that open cast mining, which was being primarily employed by TISCO, has an adverse effect upon the environment and the most effective way of lapping the ore was the method of underground mining. It was, therefore, of the view that TISCO should make efforts to initiate underground mining on a G .large scale which would allow it to better exploit the ore within its leasehold area. The learned counsel for TISCO had put forth a number of arguments expressing the difficulty of dividing or splitting its lease-hold

area. The Committee took into account these sub1nissions \vhile assessing what it deemed should be the extent of TISCO's lease. In its view, which H was formed after taking into account a host of technical factors, the

TATA IRON AND STEEL CO. J; fD. v. U.0.1. [AllMADl, Cl.J 823

appropriate area catering to TISCO's requirement would total 461 hec- A tares. The Committee also formed an estimate of requirements of the other parties appearing before it. In addition, it rt!commen<le<l the i111position of special conditions which could be kept in mind while granting renewals or fresh leases in future.

We may now set out the issut:s that we consider are central to the adjudication of the t!ispute before us :

i. Whether the High Court of Orissa was justified in striking down the decisions of the Central Government dated June 3, 1993 and October 5, 1993 on the ground that the requirement of Section 8(3) of the Act had not been met;

ii. Whether the report of the Rao Committee and that decision of the Court in Indian Metals case are relevant for the consideration of renewal of leases under Section 8(3) of the Act;

iii. Whether the High Court and the Committee were justifiet! in hearing prospective applicants \vhile considering the issue of renewal of TISCO's lease;

iv. Whether the Committee was justified in interpreting the concept of "mineral t!evelopment" unt!er Section 8(3) of the Act as requir" ing the assessment of the captive mining requirement of different industries and the application of the principle of equitable distribution of mining leases;

v. Whether the Central Government in its order dated August 17, 1995, had correctly analyset! the nect!s and requirements of TISCO in recommending that it's lease be rene\ved over land measuring 406.00 hectares;

We will deal with them scliatwn.

Validity of the Orders of the Cencral G01•emme11t dated June 3, 1993 and October 5, 1993

The !carnet! counsel for TfSCO has contended before us that the Court of Orissa had erred in holding the order dated June 3, 1993 as well

as the order dated October 5, 1993 which renewed TISCO's lease, as H

A unsustainable in law. According to the learned counsel, both these orders

have complied with the requirements of Section 8 of the Act. Before we analyse the provision, il must be noted Lhat this provision has undergone several amendments. Changes \Vere \vrought into the original provision as it stood in 1957 through amendments in 1986 and 1994. Since TISCO's

application for renewal was filed in 1991, both the High Court and the Committee considered the provision as it stood prior to the 1994 amendment, which is extracted as under :

'8. Periods for which mining leases may be granted or renewed-

(l) The period for which a mining lease may be granted shall not exceed l\venty years.

(2) A n1ining lease n1ay be rcne\vcd for l\VO periods each not exceeding ten years :

Provided that no mining lease granted in respect of a n1ineral specified in the First Schedule shall be renewed except with the previous approval of the Central Government.

(3) Notwithstanding anything contained in sub-section (2), if the Central Govcrnn1ent is of opinion that in the interests of inineral dcvelopn1ent it is necessary so to do, it 1nay, for reasons to be recorded, authorize the rene\val of a n1ining lease for a further period or periods not exceeding in each case the period for which the mining ]ease was originally grante<ln.

F Applying the provision to the facts of the present case, it becomes clear that sub-section (1) would be applicable to the first application for lease. Since TISC() already had a lease in existence \Vhen the Act can1c into force, the first clause stood exhausted. When TISCO applied for the renewal of its lease for the first time in 1973, sub-section (2), as it stood prior to its amend1nent ln 1986, envisaged the gratll of a first rene\val for G a single period of 20 years, which is why TISCO was granted a renewal till

1993. When, in 1991, TISCC) applied for the second renewal, the period of time envisaged by sub-section (2) - which has always been of a total of twenty years . had lapsed, and, clearly, that application would have had to be treated as one to which sub-section (3) applied. TISCO's second H renewal was granted by the Central Government's order dated June 3, 1993

• TAT/\ IRON AND STEEL CO. LTD. 1. U.0.1. [Al lM/\DJ, CJ.J 825

which was limited by its subsequent order dated October 5, 1993. These orders conveying the acceptance of TISCC)'s lease have been analysed in the impugned judgment. The High Court was of the opinion that they were unsustainable since they did not meet with the requirement of Section 8(3), which required reasons to be stated for reaching the decision that it would he in the interest of mineral development to renew TISCO's lease. The High Court noted that the Central Government had not taken into account the National Mineral Policy and the report of the Rao Committee in reaching its final decision. While inter1ireting the language of Section 8(3), ii took note of the speech delivered by the concerned Minister in Parliament who had, in defence of a motion to drop Clause 8(3), stated as under:

' 1 ...... \Vc should an<l must envisage conditions, though very rare, in \Vhich because of diverse circun1stances son1e rene\vals n1<:ty have to be made beyond those specified in Clause 8."

From this, the High Court inferred that the subsequent renewal of lease as envisaged and contemplated under Section 8(3) refers to 'very D rare' circumstances \vhich may require rcne\vals to be n1ade. The Court, therefore, held that the conditions \Vhich make for the rare cases and diverse circumstances have to be clearly an<l pointedly articulated, for \vhich the recording of proper and detailed reasons \Vas necessary.

It has been argued before . us that the High Court had erred in referring to the .speech of the Minister as it \Vas made in a context other than that which is permitted to be accepted as a tool of statutory interpretation. \Ve are of the view, ho\vcver, that the issue can be decided \Vithout locking horns with the controversy over the situations in which utterances in the legislature are relevant for statutory interpretation. To us, the language of Section 8(3) is quite clear in its import. Ordinarily, a lease is not to be granted beyond the time and the number of periods mentioned in clauses (1) and (2). If, however, the Central Government is of the view that to allow a iessce's lease to be renewed further would be in the interest

of mineral development, then, it is empowered to do so, provided there G exist on record sound reasons for such an action and those reasons are recorded. Since such a measure has been incorporated in the legislative scheme as a safct,'llard against arbitrariness, the letter and spirit of the law musl be adhered to in a strict n1anner.

We have studied the orders of the Central Government dated June H

SUPREME COURT RFPORTS 119'!6] SUPP. 3 S.C.R.

A :i, 1993 and October 5, 1.993. The order dated .lune 3, 1993 is a statement

which declares the grant of a second renewal lo TJSCO. ][ does not profess to givt.: any reasons for such a tlcciion 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 dated October 51 1993 is more generous in terms of the

reason~ it offers: ho, vevcr, the 1-Iigh Court \Va~ of the vie\V that, since it <lid not take into account the Jindings of the Rao Report, the decision of this Court in the lndian 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 us.

Relevance of the Rao Repmt and the decision of this Cou11 in the Indian Metals case to the renewal of TISCO's lease.

The submissions made before us by the learned counsel for TISCO D 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 \Vhere, 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 E before the Court were entitled to obtain leases for the mining of chromite ore in the Stale 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 \Vith renewal of lease, \vhich involves a fun- F damentally 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 vie\\' of this relation, it becomes necessary for us to consider the views expressed therein.

In view of the nature of the issues before it, this Court appointed the G Rao Committee to examine the matter. The Court then held that. the findings of the Rao Committee would, for the purposes of the Act, be treated as a decision of the Central Government. In paragraph 42 of its decision, the Court expressed its appreciation for the detailed and excellent report submitted by Dr. Rao; it further stated that he had brought together H all the relevant data and analysed the various claims put forth before it

TATA IRON t\ND STEEL CO. LTD. v. U.0.1. !Al!Mt\DI, CJ.\ 827

\Vhilc also having ha<l a not~ on chronic <lcpoits in Lhc State of ()risSa prepared by the Chief Mining Geologist of the Indian Bureau of Mines.

We have already extracted the portion of the decision where the Court had stated th al the Rao Report \Vas bound to be of use to the State (iuvernmcnt us \veil as the central Government in deciding grant of mining leases for

chro1nite.

It is clear from a study of the Indian Mewls ca.se that in the opinio;; of this Court, the Ra0 Report had made such a comprehensive study of the issue that it merited treatment as a decision of the Central Government. l n our view, once this has been clearly slated by this Court, the Central Government, though not bound to follow the recommendations of the Rao Report, \Va~ at the very least under an obligation to record reasons \vhy it s011ght to depan from the recommendations of the Report; especially in 111atters such as these where leases of considerable co1nmercial value arc granted for long periods of time.

We arc, therefore, of the view that the High Court and the Committee \Vere justified in taking note of the findings of the Report as \Veil as the observations of this Court in the Indian Metals case in considering the issue of renewal of TISCO's lease.

Si!1cc the Order dated ()ctobcr 5, 1993 di<l not n1ake any reference E

Io lhe Rti.o Rcpo1t or the decision of this Court, \Ve feel that the High Court

\Vas justified in striking it do\\1n for not having taken into account al! the factors relating to a proper appreciation of the concept of mineral developn1cnl.

Locus standi of prospective applicants in proceedings co11sirie1ing F lite renewal of TISCO's /ease.

llcforc the High Court, the learned counsel for TlSCO raised a prelin1iuary objection as to the locus standi of the other petitioners, basing his claim on Rules 59 and 60 of the Rules, the relevant portions of which G are extracted as under :

''59. Availability of area for re-grant lo he notified -

(1) No area-

(a) which was pre, iously held or which is being held under a prospecting licence or a mining lease; or H

SU PR EMF COURT REPORTS 11996] SUPP. 3 S.C.R.

(b) ............................................. .

( c) .......................... ··········· .. .

( d) .................................... .

(c) ···············································

shall be available for grant unless -

(i) an entry to the effect tlwt the area is available for grant is made in the register referred to in sub-rule (2) of rule 21 or sub-rule (2) of rule 40, as the case may be, in ink; and

(ii) the availability of the area for grant is notified in the official

Gazette and specifying a date (being a date not earlier than 30 Jays from the date of the publication of such notification in the official Gazette) from which such area shall be available for grant:

Provided that

Provided f urthcr ......... .

(2) The Central Government may, for reasons to be recorded in writing relax the provisions of sub-rule (1) in any special case.

60. Premature applications. - Applications for the grant of prospecting licence or mining lease in respect of areas whose availability for grant is required to be notified under rule 59 shall, if, -

(a) no notification has been is; ued under that rule; or

(b) where any such notification has been issued, the period specified in the nntific'-ltion has not expired;

be deemed to be premature and shall not be entertained, and the application fee thereon, if any paid, shall be refunded."

The learned counsel for TISCO submitted that since, in respect of the land that fell within TISCO's leasehold area, the State Government had H neither m"de an entry in the concerned register that the area was available

• 41

• • Tl>fA IRON AND STEEL CO. LTD. v. U.0.1. [AI-IMADI, CJ.] 829

for grant, nor had it notified its availability in the official Gazette, the A applications of the other parties before this Court should be treated as prc1nature applications under Rule 60 and not be entertained. Hc1 therefore, submitted that none of the other parties could be regarded as aggrieved parties and, therefore, could not be said to have any interest in these proceedings.

The learned counsel for .ISL countered by staling that any decision ... on the second renewal of TISCO's lease was bound lo affect the rights of -

the other parties. He argued that if the entire lease was renewed in TISCO's favour, no part of it would be available for grant to them. He also pointed out that TISCO's lease had expired on , January 11, 1993 whereas c the first order renewing TJSCO's lease was issued only on June 3, 1993. - He contended that the State Government, which was dutybound to make the relevant entry in the register and notify the area as being available for grant, had neglected to do so. He then stated that, had the State Government been mindful of its obligation, the applications of the petitioners D would not have been deemed to be premature under Rule 60 of the Rules and would not have been rejected.

In its impugned judgment, the High Court adopted the view that the other parties before it did have an interest in the proceedings regarding renewal of TISCO's lease. Describing their interest as being of a contingent E nature, the High Court stated that if the Central Government did not think it fit to renew TISCO's lease, it would have to declare the area as available for grant and would have to invite prospective applicants. In that situation, the other parties would have a claim. The Court pointed out that, though none of the other parties could, as a matter of right, claim to the heard while the Central Government was considering the issue of renewal of F TISCO's lease, since its two Orders in this regard had, in fact, adversely affected their rights, the other parties would be entitled to challenge them.

In other words, according to the High Court, they were proper parties even if not necessary parties.

While issuing directions to the Committee that was to be constituted G

to ei; amine the issue at length, the High Court directed that the views of the other parties also be taken into consideration. The other details regarding this direction are mentioned in the portion of the impugned judgment that \Ve have already extracted. The Committee, in compliance \Vith this • direction of the High Court, heard TISCO as well as the other parties at H

A length on a host of legal and technical issues.

It must also be noted that in ils order dated August 17, 1.995, the Central Government had, in exercise of powers conferred on it by Rule 59(2) relaxed the requirement of Rule 59(1) to enable the other parties to be granted leases.

We arc 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 TISCO's 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 legitinu1tely have a stake in the proper formulation of such a vital policy, l:an be heard. No exception can he taken to the High Court treating them as proper parties and directing the Committee to hear !hem.

We, therefore, hold that both the high Court and the Committee were justified in hearing the prospective applicants \Vhile considering the i"uc of renewal of TISCO's lease.

Relevance of the c1ite1ion of captive requiren1ent of n1ining in- E dusuies and the p1inciple of equitable distiibution of mining leases lo the concept of mineral development under Section li(3} of the Act.

The Con1mittec undertook a con1prehensi\'e analysis of the sub1nis~ sions n1adc by the counsel appearing for the various parties before it and also studied the relevant material in order to gain an understanding of the concept of mineral development under Section 8(3) of the Act.

To this end, it analysed the entire scheme of the Act and studied various Sections, \~Z., SccLion 3(c), Section 6, Section 8 and also the Rules G with the benefit of the submissions of the learned counsel appearing for the various parties. It also analysed the Rao Report, the National Mineral Policy, 1993 and the Industrial Policy of the State of Orissa, 1992 to reach its conclusions on this issue.

The Committee noted the following observation of the Rao Commit- H tee:

....

TATA IRON ANO STEEL CO. LTD. v. U.0.1. [AHMADI, Cl.[ 831

"The two laudable aspects of the State Government's policy in this A regard - of reservation of the chromite areas for exploitation in the public sector an<l provision of certain captive n1ining capacities to the chromite based industries - need to he reconciled.'

It then noticed the observations of the 'Rao Report wherein, while analysing the Industrial Policy Resolution, 1956, it had stated that the Policy envisages a predominant role for the public sector in es(ablishing chrome ore industries, though the option of private enterprise being involved in establishing new units was not closed. The Rao Report had, in fact, observed that once an industry is established with the cooperation of the private sector, it WOl.Jld only be fair and reasonable to make available to it a certain captive resource of chrome ore. To this end, the Rao Report had specifically recommended that the captive mmmg requirement be provided for in the grant of the lease in question.

The Committee further noted the observations of the Rao Committee that the cost. of production of the chro1nite ore in the case of captive mines is much lower than the cost of procurcn1cnt from other suppiicrs and, therefore, dependence on others for chron1ite ore has an adverse in1pact on the end user industry and this can be eliminated if captive mining is promoted.

Thereafter, the Committee took note of paragraph 7.11 of the National Mineral Policy, 1993 where, while dealing with the strategy to be employed for mineral development, it was clearly stated as follows :

11ln case of ores \Vhose kno\vn reserves are not abundant, preference will be given to those who propose to take up their F mining for captive usc. 11

The Committee also recorded paragraph 15.2 of the Industrial Policy of Orissa, 1992 where the following is stated :

"15.2. Persons who have firm proposals for setting up industries in G the State for processing and value addition of minerals \\ill be given priority in the grant of prospecting licenses and mining leases."

The Committee also recorded the submissions of the counsel for JSL that preference for captive mines is a valid national policy, having beCn incorporated in certain legislations such as the Coal Mines Nationalisation ,,}I

832 SUPREME COURT Rl'PORTS I 19%1SUPP.3 S.C.R.

A Act, 1973, and is an important factor !o be considered in the interest of mineral development.

Thereafter, the Committee came to the conclusion tliat the National Mineral Policy, 1993, w!tich was tabled in both Houses of Parliament, had resulted in amendments heihg carried out in the Act and the Rules and, being a policy pronounccn1ent, \Vas a guiding factor in 1he decisionn1aking process of the Government. It further slated that both the National Mineral Policy and the Industrial Policy of the State of Ori5'a had recognised the fact that the captive mining requirement merited preferential treatment.

C While dealing with the applicability of the principle of equitable distribution, the Committee took note of the observations, in parab'faphs 88 and 89 of the impugned judgment, made while a1wiysing the Rao Committee Report. The High Court had noted that it had been in policy of the State of Orissa to provide raw materials to those chromite based industries \vhich \Vere O\Vnf!d by the private sector and also to cater to the D requirement of nrnnufacturing industry within the State. The Rao Report had further recommended that in doing so, the State Government should act .iustly and equitably.

After n1aking a technical evaluation based on statistical inforn1ation, Committee observed that the kaseholJ area of TISCO which was E the sought to be renewed has chromite deposit of the order of atleast 102.44 million tonnes. Of this, the reserves upto a depth of JOO metres were estimated at 39.49 million tonnes and the reserves below the depth of 100 metres \Vere esti1natcd at 62.95 n1illion tones. The total reported chromite reserves in the country \Vere cstin1ated at 186 1nillion tonnes. Thus, the F Committee came to the conclusion that the area in question (1261.476 hectares) held by TISCO possessed ahout 55% of the Chromite reserves of the entire country. The Con1miltcc, therefore, posed the question whether it would be in national interest. I.a permit a single party to perpetuate its hold on such large reserves of this strategic mineral?

G 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 ca1ne to the conclusion that, to grunt the rcnc\val of n1ining lease over an area as large as that held by TISCO, in favour of a single applicant whose H O\Vn needs arc li1nitcdi \vhilc several needy tnanufacturcr!-. \Vere d-=privcd

TATA IRON AND STEEL CO. LTD. v. lJ.O.L [AHMADI, CJ.] 833

of adequate sources of raw material, would be to promote 1ronopolislic A tendencies which cannot be allowed.

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 inining requirement of different industries as also the application of the principle of equitable distribution of mining leases.

The learned counsel for TJSCO sought to assail this approach of the Committee. He began by pointing out that before the Rao Committee, the State of Orissa had canvassed the view that the concept of an industry C linked to captive mining is nol cmisaged by the scheme of the Act, nor has it been accepted as a matter of policy. This was for the reason that there are n1ort.: industries than n1ines and, if every industry \Vas entitled to a mine,

1nore industries \vould be starved rather than served and such a policy would nol be feasible. He further submitted that even the Rao Report had D not given its enthusiastic approval to the concept of captive mining and

assuming that it had, its effect would be negatived by the fact that this Court had in the Indian A1etals case expressly rejected the theory of captive n1ining. Learned counsel furtht.; r subn1ittcd that the concept of captive mining has been \Vrongly applied since no mining activity can be carried out only for captive consumption. Different industries require varied E grades of ore for their activities and a single mining area cannot produce a particular type of ore required by one industry alone. Consequently, he submitted that such a condition would lead to ineffective exploitation of the ore. TISCO's counsel further submitted that none of the other parties who were before this Court to stake their claim for mining leases, had any F industry of their o\vn \Vherc the chromite ore could be used for manufacturing purposes and, therefore 1 they were not in a position to use it for captive consu1nption. Hence, he submitted, the argument of captive consumption was wholly misplaced. He further contended that the Committee had erred in applying the principle of equitable distribution of mining leases; according to him the correct principle is that of equitable distribu- G tion of mi:r..erals and not of mining leases.

We have studied the Con1mittee 1s report on this is.sue and \Ve find that most~ if not all, of these contentions have been dealt \Vith in the report..

We find it difficult lo accept the contention that the Rao Committee had H

A not endorsed the concept of captive mining because, as we have already mentioned, it docs 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 <lid not arise for its consideration; however, it did recornn1cnd that

B chromite ore be supplied to needy applicants in an equitable manner. It must he pointed out that nowhere in the Rao Report not 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, he 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 C on a comparative scale. While the Central government exercises its discretion in granting or rene\ving 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 D accepted. This aspect has been specifically examined by the Committee al pages 260-263 of its report. In order to properly appreciate the issue of captive "consumption, the Co1n1nittec exan1incd the needs of the other parties before it. It stated that each of these parties had manufacturing industries which produce value-added products and earn considerable foreign exchange for the country, and it \Vas therefore of the view that an E analysis of their total rcquircn1ent 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 Iota! period of 50 years, of the captive and net requirements of !CCL, !MFA, FACOR and .ISL. Al page 349 of its report, the Committee has also taken note of F the projected captive and net requirements of !spat 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 vie\v that the Committee had, after having taken note of the prevailing situation and the problems faced by G needy manufacturers, taken the correct vie\V in recommending its implementation.

We are, therefore, of the view that the Committee had correctly interpreted the relevant material available for appreciating the concept of H "mineral development" and adopting the stance that it encompassed the

, -

TATA IRON AND STEEL CO. LTD. v. U.O.l. [AHMADI, CJ.] 835

concept of captive mining as well as the principle of equitable distribution. A

Validity of the Cc/lira/ Gove111111ent's order dated August 17, 1995 which declared that renewing TISCO's lease over an area of 406 hectares ivould satisjj.• its needs and require111e11ts.

The Committee made an estimate of the captive mining requirement B of each of the parties appearing hefore it after coming to the conclusion that this was a fundamental guideline to be kept in mind while renewing TISCO's lease.- To complete this exercise, it relied upon the submissions of coupsel, technical evidence submitted by them and the relevant technical information available. In the case of TISCO, after taking into account all C the technical grounds and objections put forth by the learned counsel for TISCO, the Committee came to the conclusion that its lease should be granted renC\Val for a period of 20 years over a contiguous area of 461. hectares.

By its order dated August 17, 1995, the Central Government while D endorsing the finding of the Con1mittee rccon1mendcd to the State Govcrnn1cnt that TlSCCJ's lease he rcnc\ved for 20 years over a reduced area of 406 hcctars. The reasons for the reduction \Vere also provided.

The decision of the Committee and the consequent order of the Central Government have been assailed by the learned counsel for TJSCO on a number of technical grounds. Many of these have already been dealt with by the Committee.

At this juncture) \Ve think it fit to make a fe\V observations about our general approach to the entire case. This is a case of the type where kgal F issues are intcrt\vined with those involving determination of policy and a plethora of technical issues. In such a situation, courts of law have to be very \vary and 1nust exercise their jurisdiction \Vith circUTI}5pection for they must not transgress into the realn1 of policy making, unless the policy is inconsistent with the Constitution and the laws. ln the present matter, in G its impugned judgment, the High Court had directed the Central Governn1ent to set a Con1mittee to analyse the entire gamut of issues thrO\Vn up by the present controversy. The Central Government had consequently constituted a Committee comprising high level functionaries dra\vn fron1 various Governmental/institutional agencies \Vho \Vere equippc<l to deal \Vith lhe entire range of technical and long-term considerations involved.

A 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 lo determine the policy regarding the grant or B renewal of leases. On matters affecting policy and those that require technical expertise, we have shown deference lo, and followed the recommendations of, the Committee which is more qualified to address these issues.

We arc, therefore, of the view that the Central Government was C justified in issuing its order dated August 17 ,1995.

For the foregoing reasons, we arc of the view that the High Court and the Committee were justified in the view they took. Consequently the appeals filed by TlSCO stand dismissed. IDCOL has filed the appeals on much the same grounds a, s TISCO while additionally claiming that the D Committee should have heard its claim too while hearing the other parties.

Since \Ve have heard thc111 ut length, the grievance docs not survive. Hence IDC()L's appeals n1ust also fail. Cost, cost in the cause.

R.A.

Appeals dismissed.

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