1. Appeal against recommendation and approval of mining lease for chromite under Mines and Minerals Act. (Para 2 , 3 )
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2002 Supreme(SC) 1241
Supreme Court Of India
G.B.PATTANAIK, CJI., K.G.BALAKRISHNAN,S.B.SINHA, JJ.
Indian Charge Chrome - Appellant
Versus
Union of India - Respondent
Civil Appeal No. 8501 of 2002 with C.A. No. 8502 of 2002 and T.C. (C) No. 9 of 2002 (@ SLP (C) Nos. 10404 and 11857 of 2001)
Decided On : 12/17/2002
Important Points
The state may grant mining leases to later applicants by recording "special reasons" under Section 11(4) of the MMDR Act, regardless of pending expert committee reports. A general relaxation under Rule 59(2) of the Mineral Concession Rules covers individual grants within the relaxed area.
Subject
Civil Law - Mining and Mineral Law
Act Referred
Headnote
(A) Mines and Minerals (Regulation and Development) Act, 1957 - Sections 11(4) and 11(5) - Preferential right of applicants - Power of State Government to grant mining lease to a later applicant for "special reasons" to be recorded - Such reasons may include status as a local industrial unit or lack of captive area - Compliance with this section validates the exercise of discretionary power in assigning priority. (Paras 9, 10)
(B) Mineral Concession Rules, 1960 - Rule 59(1) and 59(2) - Availability of areas for re-grant - Central Government's power to relax provisions for reasons recorded in writing - If relaxation is granted for a specific area to facilitate grants to multiple applicants, separate relaxations for each single grant from that balanced area are not required. (Para 8)
(C) Administrative Law - Subsequent events - A subsequent policy decision to reserve an area for a public sector undertaking does not necessarily render a challenge to the legality of prior recommendations infructuous, especially when the court is examining the legality of the process rather than enforcing a specific right. (Para 7)
Facts of the case:
A significant area of land for mining a major mineral was previously held under lease. Upon partial renewal, a balance area became available for others. Multiple parties applied, and an expert committee assessed their requirements. The State Government subsequently recommended granting a portion of this area to a later applicant, citing specific industrial needs and local status. The Central Government approved this recommendation. A rival claimant challenged the validity of this recommendation, arguing that the state could not selectively grant the area before the final report of a second expert committee was submitted. During the pendency of the appeal, the State decided to withdraw the recommendation to reserve the land for a public sector undertaking.
Findings of Court:
The court found that the State Government had recorded sufficient special reasons under Section 11(4) of the Act to prefer a later applicant. It held that the Central Government's prior relaxation of Rule 59(1) for the area covered the grant in question. The court also determined that the state's statutory power as the owner of minerals was not restricted by the appointment of committees. The subsequent decision to reserve the area for a public sector undertaking did not eliminate the need to determine the legality of the original recommendation. A dissenting opinion emphasized that recommendations must be made by the competent authority under the Rules of Business and that the lack of formal authorization rendered the recommendation non-est, necessitating a fresh relaxation under Rule 59(2).
Issues: The court addressed whether a subsequent reservation for a public sector undertaking ends the right of the parties to challenge the original grant, whether fresh relaxation under Rule 59(2) was required for every single grant from a relaxed area, whether "special reasons" were adequately recorded for preferential treatment under Section 11(4), and whether the state was barred from considering individual applications before a committee's final report.
Ratio Decidendi: The state government, as owner of mineral resources, is entitled to exercise preferential rights under Section 11(4) of the Act by recording special reasons, and this power is not fettered by the existence of an expert committee. A general relaxation of Rule 59(1) for an area is sufficient for individual grants within that area. Legal analysis of an administrative action's validity is not necessarily precluded by subsequent policy shifts.
Result: appeals as well as the T.C. stand dismissed.
(B) Mineral Concession Rules, 1960 - Rule 59(1) and 59(2) - Availability of areas for re-grant - Central Government's power to relax provisions for reasons recorded in writing - If relaxation is granted for a specific area to facilitate grants to multiple applicants, separate relaxations for each single grant from that balanced area are not required. (Para 8)
(C) Administrative Law - Subsequent events - A subsequent policy decision to reserve an area for a public sector undertaking does not necessarily render a challenge to the legality of prior recommendations infructuous, especially when the court is examining the legality of the process rather than enforcing a specific right. (Para 7)
Facts of the case:
A significant area of land for mining a major mineral was previously held under lease. Upon partial renewal, a balance area became available for others. Multiple parties applied, and an expert committee assessed their requirements. The State Government subsequently recommended granting a portion of this area to a later applicant, citing specific industrial needs and local status. The Central Government approved this recommendation. A rival claimant challenged the validity of this recommendation, arguing that the state could not selectively grant the area before the final report of a second expert committee was submitted. During the pendency of the appeal, the State decided to withdraw the recommendation to reserve the land for a public sector undertaking.
Findings of Court:
The court found that the State Government had recorded sufficient special reasons under Section 11(4) of the Act to prefer a later applicant. It held that the Central Government's prior relaxation of Rule 59(1) for the area covered the grant in question. The court also determined that the state's statutory power as the owner of minerals was not restricted by the appointment of committees. The subsequent decision to reserve the area for a public sector undertaking did not eliminate the need to determine the legality of the original recommendation. A dissenting opinion emphasized that recommendations must be made by the competent authority under the Rules of Business and that the lack of formal authorization rendered the recommendation non-est, necessitating a fresh relaxation under Rule 59(2).
Issues: The court addressed whether a subsequent reservation for a public sector undertaking ends the right of the parties to challenge the original grant, whether fresh relaxation under Rule 59(2) was required for every single grant from a relaxed area, whether "special reasons" were adequately recorded for preferential treatment under Section 11(4), and whether the state was barred from considering individual applications before a committee's final report.
Ratio Decidendi: The state government, as owner of mineral resources, is entitled to exercise preferential rights under Section 11(4) of the Act by recording special reasons, and this power is not fettered by the existence of an expert committee. A general relaxation of Rule 59(1) for an area is sufficient for individual grants within that area. Legal analysis of an administrative action's validity is not necessarily precluded by subsequent policy shifts.
Result: appeals as well as the T.C. stand dismissed.
Legal Category Hierarchy
-
mining law
-
grant of mining lease
- recommendation and approval (Para 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59)
- preferential right (Para 9, 46, 47, 48)
- relaxation of rules (Para 8, 55, 56)
- subsequent events (Para 7, 58)
- statutory interpretation
-
grant of mining lease
- practice and procedure
Advocates Appeared:
P. Chidambaram, Ashok H. Desai, D. A. Dave, V. A. Bobde and G. L. Sanghi, Sr. Advocates, M/s. Anuradha Dutt, Ekta Kapil, Ms. B. Vijaya Lakshmi Menon, K. K. Lahiri, Ashok Parija, Ejaz Maqbool, Ujjwal Kr. Jha, Aslam Ahmed, Ranjan Kr. Jha, Gourav Kejriwal, Jana Kalyan Das, A. Subba Rao, Ms. Sunita Sharma, D. S. Mahra, Raj Kumar Mehta, Ms. M. Sarada, Ajay Choudhary and S. B. Upadhyay, Advocates with them, for the Appearing Parties.
P. Chidambaram, Ashok H. Desai, D. A. Dave, V. A. Bobde and G. L. Sanghi, Sr. Advocates, M/s. Anuradha Dutt, Ekta Kapil, Ms. B. Vijaya Lakshmi Menon, K. K. Lahiri, Ashok Parija, Ejaz Maqbool, Ujjwal Kr. Jha, Aslam Ahmed, Ranjan Kr. Jha, Gourav Kejriwal, Jana Kalyan Das, A. Subba Rao, Ms. Sunita Sharma, D. S. Mahra, Raj Kumar Mehta, Ms. M. Sarada, Ajay Choudhary and S. B. Upadhyay, Advocates with them, for the Appearing Parties.
Table of Contents
2. Whether subsequent government policy could invalidate prior recommendation; whether legal right accrued without lease deed. (Para 5 )
3. Court can consider subsequent events; no vested right exists until lease deed executed; State Government's power as owner upheld. (Para 7 , 9 , 10 )
4. State Government, as owner of mineral wealth, retains power to consider individual applicants under Section 11(4) for special reasons. (Para 10 )
5. Appeals and transfer case dismissed; recommendation and approval held valid. (Para 10 , 59 )
6. Can a court consider subsequent events when examining the legality of a previous recommendation?
Yes, a court can consider subsequent events, but it does not apply if the court is only testing the legality of a past recommendation and approval. (Para 7 )
7. Does a State Government need fresh relaxation under Rule 59(2) for each subsequent applicant after an initial relaxation?
No, once the Central Government relaxes Rule 59(1) for a particular area, the relaxation continues; no fresh relaxation is required for each subsequent applicant. (Para 8 )
8. What is required for a State Government to grant a preferential right under Section 11(4) of the MMDR Act?
The State Government must record special reasons for preferring a later applicant over earlier ones; such reasons must be clear and relate to mineral and industrial development. (Para 9 , 46 , 47 )
9. Does a judgment of the Supreme Court preventing pick-and-choose of applicants bar the State from considering an individual application?
No, unless the judgment expressly prohibits it; a court direction to consider all applicants does not prevent the State from exercising its statutory power for special reasons. (Para 10 )
10. Can a State Government withdraw its recommendation after the Central Government has approved it?
Yes, if the recommendation was unauthorized or not validly made, the State can withdraw it; however, if the Central Government has already acted, the withdrawal may not automatically nullify the approval. (Para 24 , 25 , 28 )
Judgement
PATTANAIK, C.J.I. : - Leave granted.
2. This appeal by grant of special leave is directed against the decision of the Orissa High Court dated 18th of May, 2001, dismissing the appellants writ petition which had been filed against the recommendation of the State of Orissa dated 28-1-1999, seeking approval of the Government of India under Section 5(1) of the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as the Act), in respect of 84.881 Hectares of land, bearing chromite in Village Kalarangiata, Kaliapani in Sukinda Tahsil of Jaipur District, Orissa, in favour of M/s. Nava Bharat Ferro Alloys Limited. The writ petition which had been filed in Delhi High Court and since transferred to this Court is directed against the order of approval of the Government of India dated 9-7-2001, in respect of the selfsame area on the basis of the recommendation made by the State Government.
3. A large chunk of land about 50 Sq. Meters had been granted for mining operation in favour of TISCO in the year 1952. A lease deed had been executed in respect of 1813 Hectares for chromite extraction in favour of TISCO for a period of 20 years on 12-1-1953. In 1973, the State of Orissa, renewed the grant in respect of 1261.476 Hectares in favour of TISCO. The aforesaid lease was to expire on 3-10-1991. Before its expiry, TISCO applied for a second renewal for 20 more years under Section 8(3) of the Act and the State of Orissa had recommended the Central Government for a second renewal in respect of the entire area, but for a reduced period of 10 years. The Central Government however granted approval for renewal in respect of half of the area namely 650 Hectares in favour of TISCO and further directed that the balance area would be made available to other industries in accordance with the provisions of the Act and the Rules. This order of the Central Government was challenged by TISCO in the Orissa High Court in O.G.C. No. 7729 of 1993. In that writ petition, the rival claimants appeared and made their claims. The High Court, therefore, by its judgment dated 4-4-95, decided that the entire matter requires reconsideration by the Central Government. This order of the High Court was assailed in this Court by TISCO in SLP No. 10830/1995. The Central Government, pursuant to the observations made by the Orissa High Court in its judgment, appointed an Expert Committee under the Chairmanship of Shri S. D. Sharma, to examine the matter and assess the requirements of several aspirants. The said Sharma Committee gave a Report on 16-8-1995, by which TISCO was recommended for an area of 406 Hectares. The Sharma Committee also took into consideration the claims of other claimants and assessed their respective need, but did not undertake the task of recommending any area for being granted as lease in favour of any of those claimants. The Central Government, on the basis of the Report of the Sharma Committee, passed an order on 17-8-1995, requesting the State Government to take necessary steps for grant of 406 Hectares in favour of TISCO for a period of 20 years. The Central Government also further directed that the application for mining lease by 4 other applicants namely, Jindal, Ferro, IMFA and Ispat Alloys could be considered in respect of balance area of 855.476 hectares. The Central Government relaxed the provisions of sub-rule (1) of Rule 59 of the Mineral Concession Rules, on account of urgent need of the four applicants referred to earlier. The special leave petition filed by TISCO stood disposed of by Judgment of this Court since reported in (1996) 9 SCC 709. On 29th of June, 1997, the State Government recommended to the Central Government for grant of lease to 4 claimants in respect of the balance area of 855.476 hectares on the basis of 50 per cent of their respective requirements, which had been assessed by the Sharma Committee and further directed that the rest of the area should be thrown upon for consideration of t
