Judgment

RANGANATHAN, J.:- The petitioner company obtained mining leases from the Government of Assam to extract sillimanite in the Khasi and Iaintia Hills District. In pursuance thereof, three lease deeds were executed by the State Government in favour of the petitioner. The first was a lease deed dated 25-4-1962 for a period of 15 years in respect of an area of 129.60 hectares at Lalmati. The second, dated 10-4-1968, was for a period of 15 years in respect of an area of 777.60 hectares at Nongmawait. The third one dated 8-6-1967 was for a period of 15 years and covered an area of 363 hectares at Warnsophi. The three lease deeds were to expire on 25-4-77, 9-4-78 and 7-6-82 respectively but there was a clause further renewal.

2. The petitioner company had also established a refractory Plant in 1961 near Ramgarh in District Hazaribagh. It appears, however, that petitioner faced a number of difficulties in operating the refractory plant and was explaining its difficulties to the State of Meghalaya which was formed in 1970.

3. Between 1970 to 1972, the Union of India, through its public sector companies, Hindustan Steel Ltd. and Bokaro Steel Ltd. negotiated with the petitioner for the purchase of its refractory plant and also for having the mining leases transferred to them. Though the refractory plant was not functioning properly and was on the verge of closure, the petitioner was not willing to transfer its mining leases to the public sector companies but was willing to supply the required quantity of sillimanite to the Bokaro Steel Plant. It is also stated that some negotiations took place as a result of which the petitioner was planning to re-open the factory on 6-11-1972. However, in the meantime on the 2nd of November, 1972, the Central Government took over the management of the refractory plant under Section 18-AA of the Industries Development and Regulation Act, 1951. Possession of the plant as well as its management was also taken over by the Hindustan Steel Ltd. on the same day. This take over was challenged by the petitioner company but its challenge was repelled by the Delhi High Court and a Special Leave Petition was filed, which is pending in this Court. We are not concerned with this issue in the present case.

4. On 12-9-1972, the Mines and Minerals (Regulation and Development) Act, 1951, was amended by Act No. 56 of 1972. By this amendment, Section 4-A was introduced in the Act, which reads as follows :

(1) Where the Central Government, after consultation with the State Government is of opinion that it is expedient in the interest of  regulation of mines and mineral development so to do it may request the State Government to make a premature termination of a mineral, other than a minor mineral, and, on receipt of such request, the State Government shall make an order making a premature termination of such mining lease and granting a fresh mining lease in favour of such Government Company or Corporation owned or controlled by Government as it may think fit.

(2) Where the State Government, after consultation with the Central Government, is of opinion that it is expedient in the interest of regulation of mines and mineral development so to do, it may, be an order, make premature termination of a mining lease in respect of any minor mineral and grant a fresh lease in respect of such mineral in favour of such Government Company or Co-operation owned or controlled by Government as it may think fit."

This amendment came into effect in September, 1972.

5. At this juncture it may be mentioned that Act 37 of 1986 has further amended the 1951 Act and substituted S. 4A by the following section, which, insofar as it is relevant for our present purposes reads as follows :

"4A. (1) Where the Central Government, after consultation with the State Government is of opinion that it is expedient in the interest of regulation of mines and mineral development, preservation of natural environment, control of floods, prevention of pollution, or t