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1996(5) Supreme 699
SUPREME COURT OF INDIA
A.M. Ahmadi, C.J.I. and B.L. Hansaria, J.
Tata Iron & Steel Co. Ltd. etc. -Appellant
versus
Union of India & Anr. -Respondents
Civil Appeal No. 9454 of 1996
(Arising out of SLP (C) No. 10838 of 1995
and
I.A. Nos. 1-4 of 1995 in SLP (C) No. 10838 of 1995
with
Civil Appeal Nos. 9455-56 of 1996
(Arising out of SLP (C) No. 11391 & 11392 of 1995)
and
I.A. Nos. 1-4 of 1995 in SLP (C) No. 11391 & I.A. Nos. 1-4 of 1994 in SLP (C) No. 11392
with
Civil Appeal Nos. 9457 of 1996
(Arising out of SLP (C) No. 22710 of 1995)
and
I.A. Nos. 1-2 of 1995 in SLP (C) No. 22710 of 1995
with
Civil Appeal Nos. 9458-59 of 1996
(Arising out of SLP (C) No.
23131-32 of 1995)
and
I.A. Nos. 1-4 of 1995 in SLP (C) No. 23131-32 of 1995
Decided on 23-7-1996
Counsel for the Parties :
For the Appearing Parties : D.P. Gupta, Solicitor General, F.S. Nariman, Kapil Sibal, Gopal Subramaniam, Ms. Indira Jaising, Shanti Bhushan, R.K. Anand, H.N. Salve, A.K. Ganguli, G.L. Sanghi, Y.S.N. Murty, Sr. Advocates, 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, A.K. Sharma, Gautam Mitra Rajiv Lal, Indira Sawhney, K.K. Lahiri, Ejaz Maqbool, B.K. Mishra, D.A. Dave, Praveen Kumar, Virender Kaushal, R.K. Mehta, Indrajeet Roy, P.N. Misra, Ashok K. Gupta and Bharat Sangal, Advocates.
Held : 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 lessees s lease to be renewed further would be in the interest of mineral development, then, it is empowered to do so, provided there exist on record sound reasons for such an action and those reasons are recorded. Since such a measure had 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. (Para 19)
Further held : We have studied the orders of the Central Government dated June 3, 1993 and October 5, 1993. The order dated June 3, 1993 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 dated October 5, 1993 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 us. (Para 20)
(ii) Mines & Minerals (Regulation & Development) Act, 1957-Section 8(3)-Mining lease for chromite-Second renewal-Grant of-Challenged-Order of Central Government granting second renewal did not make any reference to Rao Committee report or decision of the Supreme Court in Indian Metals case-High Court was justified in striking it down for not having taken into account all factors relating to a proper appreciation of concept of mineral development.
Held : 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 time. (Para 23)
Futher held : 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 lease. (Para 24)
(iii) Mines & Minerals (Regulation & Development) Act, 1957-Section 8(3)-Mineral Concession Rules-Rules 59 and 60-Mining lease for chromite-Grant of second renewal-Challenged--Claim based on Rules 59 & 60-Locus Standi of petitioners-High Court allowing hearing to prospective applicants while considering issue of renewal of appellant s lease-Whether High Court was justified in taking them as proper parties and directing the Committee to hear them?-(Yes, considering high stakes, both in terms of commercial value and effect that such a decision will have on concept of mineral development and consequent national interest).
Held : 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 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. (Para 32)
(iv) MINING LEASE-Captive requirement of an industry is a factor that has to be kept in mind while granting leases-It is to be done on a comparative scale-Rao Committee properly appreciated this issue. (Para 39)
(v) Mines & Minerals (Regulation & Development) Act, 1957-Section 8(3)-Mining lease for chromite-Grant of renewal-Central Government s order which declared that renewing appellant company s lease over an area of 406 hectares would satisfy its needs and requirements-Challenged-Whether Central Government was justified in issuing this order ?-(Yes)-Central Government is vested with discretion to determine policy regarding grant or renewal of leases.
Held : 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 policy making, 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 comprising high level functionaries drawn from various Governmental/institutional agencies who were equipped to deal with the entire range of technical and long-term 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 issues. (Para 44)
JUDGMENT
A.M. Ahmadi, CJI - Special leave granted.
These appeal seek to challenge: (1) 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.
2. 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 Limited.
3. The factual matrix of the case 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 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. 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.
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 bene- ficiation plant. It utilises the Chrome ore mined by it for the manufacture of Charge Chrome/Ferro Chrome refractories. It also supplies ore to forty Chrome ore based industries situated in different parts 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 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 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 to furnish relevant information to the Central Government.
Since the lease was to expire on January 12, 1973 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 January 11, 1993, subject to the condition that it would set up a beneficiation plant.
On October 3, 1991, 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 November 28, 1992, the State Government, acting on the basis of a favourable report dated March 31, 1992 submitted by the Director of Mines & 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 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 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
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