2010 Supreme(SC) 856

2010 (6) Supreme 569
SUPREME COURT OF INDIA
P. Sathasivam and H.L. Dattu, JJ.
Sandur Manganese & Iron Ores Ltd. — Appellant(s)
versus
State of Karnataka & Ors. — Respondent(s)
Civil Appeal No. 7944 of 2010
(Arising out of S.L.P. (C) No. 22077 of 2009)
with
Civil Appeal Nos. 7945-54 of 2010
(Arising out of S.L.P.(C) Nos. 22943-22952 of 2009)
and
Civil Appeal Nos. 7955-61 of 2010
(Arising out of S.L.P.(C) Nos. 24124-24130 of 2009)
Decided on : 13-9-2010

IMPORTANT POINTS
State cannot have any power to frame a policy de hors the Act and the MC Rules.
Rule 59(1), MMDR Act relates to grant of a lease subject to relaxation under rule 59(2).
Where the field is covered expressly by Section 11 of the MMDR Act, equitable considerations cannot be taken into account.

Headnote:(a) Mines & Minerals (Development and Regulation) Act, 1957 – Section 11 – Proceedings before the Chief Minister not in accordance with the criteria envisaged in section 11 – Elimination/selection of parties in three stages by considering irrelevant points – Violative of the provisions. (Paras 20 and 21)

        (b) Mines & Minerals (Development and Regulation) Act, 1957 – Section 11(5) – The provision would apply to favour a later applicant over an earlier applicant only in the event that the main provision of Section 11(2) relating to preference of prior applicants applies and not in the case of notification inviting applications, whether it is under the first proviso to Section 11(2) or 11(4) under the later proviso. (Para 20)

        (c) Mines & Minerals (Development and Regulation) Act, 1957 – Section 11(4) – Only the applications made pursuant to the notification to be taken into account and not applications made prior to the notification – Chief Minister’s proceedings violative of the provision – Not tenable. (Para 21)

        (d) Mines & Minerals (Development and Regulation) Act, 1957 – Section 2 – The State Legislature cannot make any law with respect to the regulation of mines and mineral development to the extent provided in the Act – Therefore State cannot have any power to frame a policy de hors the Act and the MC Rules. (Paras 22 and 25)

        (1964) 4 SCR 461; (1969) 3 SCC 838; (2004) 10 SCC 201; (1990) 4 SCC 557 – Relied upon

        (e) Mines & Minerals (Development and Regulation) Act, 1957 – Section 2 – Prospecting License and Mining Lease – MMDR Act, 1957 and the MC Rules, 1960 contain complete code in respect of the grant and renewal of prospecting licences as well as mining leases in lands belonging to Government as well as lands belonging to private persons – It is not open to the State Government to justify grant based on criteria that are de hors to the MMDR Act and the MC Rules. (Paras 26, 28)

        (1973) 1 SCC 584; (2000) 8 SCC 655; (2002) 1 SCC 633; (2004) 6 SCC 440; (1964) 4 SCR 485 – Relied upon

        (f) Mines & Minerals (Development and Regulation) Act, 1957 – Section 11(3) – Captive consumption being no criteria, impugned decision of the State Government cannot be sustained. (Paras 29 and 47)

        (2006) 12 SCC 331 – Relied upon

        (1996) 9 SCC 709 – Distinguished

        (g) Mines & Minerals (Development and Regulation) Act, 1957 – Section 11(2) – Preference to a prior applicant for grant of reconnaissance permit, prospecting licence or mining lease over later applicants – Applies to ‘virgin’ areas. (Para 32)

        (h) Mines & Minerals (Development and Regulation) Act, 1957 – Section 11(2), First Proviso – Where the State Government subsequently issues a notification inviting applications for grant, the prior and subsequent applications to the notification would be considered as if they were filed on the same day – No priority in order of time would be given. (Para 32)

        AIR 1957 SC 281; 1955 (2) SCR 483 – Relied upon

        1992 Supp. 1 SCC 91 – Referred

        (i) Mines & Minerals (Development and Regulation) Act, 1957 – Section 11(3)(d) – The concept of “captive consumption of minerals” relates to proposed investment and not past investments. (Para 35)

        (2008) 13 SCC 597 – Relied upon

        (j) Mines & Minerals (Development and Regulation) Act, 1957 – Section 11(4) r/w Rule 59(1) and 60 – Applications received prior to the notification would not be entertained – First proviso of Section 11(2) would not cover notifications under Rule 59(1). (Para 36)

        AIR 1961 SC 1170; (1984) 4 SCC 450 – Relied upon

        (k) Minerals Concession Rules, 1960 – Rule 60 – Application for grant of a prospecting licence or a mining lease for an area in absence of notification u/r 59 – Would be premature – Should not be entertained. (Para 40)

        (1976) 4 SCC 108 – Relied upon

        (l) Interpretation of Statutes – A statutory rule, while subordinate to the parent statute, is otherwise to be treated as part of the statute and is effective. (Para 41)

        (1981) 2 SCC 205; (1961) 2 SCR 679; (2007) 7 SCC 718 – Relied upon

        (m) Minerals Concession Rules, 1960 – Rules 59(1) and 59(2) – Rule 59(1) relates to grant of a lease subject to relaxation under rule 59(2) – Therefore only after the relaxation of the requirement of Notification under Rule 59(2), applications could be considered under Rule 59(1) for grant of mining lease. (Para 41)

        (1996) 9 SCC 709 – Distinguished

        (n) Interpretation of Judgment – High Court directing to consider only the application of the MSPL and the applications filed by the impleading applicants and others pursuant to the Notification – The word “others” qualify the phrase “pursuant to” and not the class of applicants who had applied even prior to the “Held Area Notification” – There was no mandamus to consider prior applications. (Para 42)

        Ziaulla Sharieff’s case – Distinguished

        (o) Minerals Concession Rules, 1960 – Rule 35 r/w sections 11(2) and 11(4), MMDR Act, 1957 – Permits differentiation between different ‘end uses’ – Provision not applicable in case of same end use – Provision treats ‘proposed’ and ‘existing’ end use alike – Applicable in cases covered by section 11(2) only and not section 11(4) of the Act – Notification u/r 59(1) being covered u/s 11(4), Rule 35 not applicable instantly. (Para 43)

        (p) Constitution of India – Entry 23, List-II r/w Article 162 – After passing of the MMDR Act State Government has no authority to make commitments to any person that it will, in future, grant a mining lease in the event that the person makes investment in any project – Such past commitments cannot be entertained while granting mining leases. (Para 49)

        AIR 1973 SC 678; (1964) 4 SCR 461; (1969) 3 SCC 838, (2004) 10 SCC 201; (1990) 4 SCC 557; (2002) 1 SCC 633; (2004) 6 SCC 440, (1964) 4 SCR 485 – Relied upon

        (q) Judicial Review – Equity stands excluded when a matter is governed by statute – Therefore where the field is covered expressly by Section 11 of the MMDR Act, equitable considerations cannot be taken into account. (Para 50)

        (1952) SCR 179; (1962) Supp. 1 SCR 739 – Relied upon

        (r) Constitution of India – Article 226 – Writ Court cannot travel beyond the reliefs sought for in the petition. (Para 55)

        (s) Section 5(1) – There being a flaw in the state Government’s recommendations, no purpose will be served by emitting the matter back to the Central Government. (Para 56)

        (1953) 1 All E.R. 1113; (1961) All E.R. 1169; (1996) 8 SCC 298; (2001) 10 SCC 191; (1989) 1 SCC 764; (1987) 4 SCC 431; (2007) 1 SCC 331; JT 2010 (5) SC 553 – Relied upon

       Facts of the case:

        1. On 19.09.1973, the Company’s lease was renewed for an area of 20 sq. miles only instead of 29 sq. miles as originally leased. The Company was further granted renewal of lease for another 1.46 sq. miles out of the area held earlier.

        2. In 1992, one Sri H.G. Rangangoud was granted 60 Hectares out of the same applied/deleted area.

        3. On 24.06.1993, the Company again applied for grant of lease over an area of 513.16 Hectares within the area deleted from its original lease but it was rejected.

        4. On 11.12.1993, the Company challenged the above decision of the State Government before the Government of India. On remand, the State Government informed that out of the area of 513.16 Hectares applied for by the company, only an extent of 256 Hectares was available and it could choose either Block A (168 Acres or 67 Hectares) or Block B (472 Acres or 189 Hectares).

        5. On 15.03.2003, the State Government issued a Notification reserving the entire area and calling for applications from the general public for grant of mining leases and by notifying large extent of previously held areas as available for grant of mines including the area applied by the appellant-Company.

        6. On 16.04.2003, the appellant-Company, applied afresh for grant of mining lease over an area of 200 Hectares in the notified area without prejudice to its rights for consideration of its earlier application dated 24.06.1993.

        7. On 06.12.2004, a letter was issued by the State Government seeking approval of the Central Government for grant of lease to other applicants i.e. Jindal & Kalyani.

        8. The High Court upheld the validity of Notification of the State Government dated 15.03.2003 and the proceedings dated 06.12.2004 and the consequential approval of the Central Government was held valid.

       Finding of the Court:

        The impugned judgments cannot be sustained

       Result : Appeals allowed. Matter remitted to State Government.