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SUPREME COURT OF INDIA
V. GOPALA GOWDA, ARUN MISHRA, JJ.
State of Gujarat & Ors. – Appellants
Vs.
Nirmalaben S. Mehta & Anr. Etc. – Respondents
Civil Appeal Nos. 6209-6211 of 2016 (Arising Out of SLP (C) Nos. 9823-9825 of 2012)
Decided On : 13-07-2016
(1997) 1 SCC 650 – Relied upon
(b) Mineral Concession Rules, 1960 – Rule 27(3) – Mining areas reserved after the lease to respondents by order having prospective operation – Said areas again de-reserved – Notification of reservation can have no effect on mines of the respondents – However, conditions for de-reservation of the area would be applicable to renewal of respondents’ lease also. (Para 30, 32, 33)
Facts of the case:
One Kantilal Mohanlal Mehta entered into lease agreement with the appellant-State on 20.02.1964 for mining lease for bauxite in respect of lands described in Part I of the Schedule to Mines and Minerals (Development and Regulation) Act, 1957.
On 26.02.1964, the appellant-State issued a notification reserving all areas of Jamnagar and Junagadh district for exploitation of bauxite for public sector. However, these areas were de-reserved w.e.f. 02.08.1978.
Central Government granted permission for de-reservation of areas of Jamnagar for exploitation of bauxite mineral, which were earlier reserved, and for the imposition of conditions on mining lease.
On 28.11.2007, respondent no.1-Nirmalaben S. Mehta was granted permission for sale of NPG bauxite subject to condition, interalia, that the respondent no.1 shall deposit royalty of Rs. 120 per metric tonne in advance with the appellant-State.
Respondent no.1 again applied to the appellant-State for sale of 1,12,900 metric tonnes of NPG bauxite. The same was rejected by the appellant-State holding that the respondent no.1 has failed to establish captive plant within a period of two years in accordance with prevailing policy.
Respondent no.1 approached the Central Government by filing Revision Application which was allowed by setting aside the order passed by the appellant-State
The appellant-State approached the High Court by filing Special Civil Application which was dismissed. Cost of Rs.50,000/- was also imposed on the appellant-State.
The appellant-State approached the Division Bench of the High Court in LPA. The High Court partly allowed the appeals to the extent of setting aside imposition of cost.
Finding of the Court:
The impugned order passed by both the Revisional Authority and High Court are vitiated in law and therefore, the same are liable to be set aside.
Result: Appeal allowed.
JUDGMENT :
V. Gopala Gowda, J.
Leave granted.
2. These appeals are directed against the common judgment and order dated 13.12.2011 passed by the High Court of Gujarat at Ahmedabad in LPA No. 683 of 2011 in SCA No. 6897 of 2010, LPA No. 684 of 2011 in SCA No. 6899 of 2010 and LPA No. 685 of 2011 in SCA No. 6898 of 2010 urging various legal grounds and praying to set aside the same.
3. Brief facts of the case are stated hereunder to appreciate the rival legal contentions urged on behalf of both the parties:
One Kantilal Mohanlal Mehta entered into lease agreement with the appellant-State on 20.02.1964 for mining lease for bauxite in respect of lands described in Part I of the Schedule to Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter called the “MMDR Act”). The said lease was for 20 years and was given effect from 09.10.1963.
4. On 26.02.1964, the appellant-State issued a notification bearing no.MND 1760/3788G.V. reserving all areas of Jamnagar and Junagadh district for exploitation of bauxite for public sector. However, on 02.08.1978, again a notification was issued by the appellant-State, whereby the lands, specified in the schedule thereto, which were earlier reserved vide notification dated 26.02.1964, for exploitation of bauxite for the public sector were de-reserved and thus, made available for grant of mineral concession w.e.f. 02.09.1978. The same day, i.e., on 02.08.1978, the appellant-State addressed a letter to the Central Government seeking permission for de-reservation of the areas of bauxite in Jamnagar and Junagadh districts, which were earlier reserved for exploitation of bauxite in public sector for setting up of alumina plant on the ground that many applications were received by it for the establishment of small scale industries in the State based on bauxite as raw material. The appellant-State, therefore, desired to release areas, which were earlier reserved, to industrial units for their captive consumption only. By this letter the appellant-State sought permission not only for de-reservation of the areas, which were earlier reserved for public sector but also to impose certain conditions upon the mining of bauxite with a view to protect the interest of the State and at the same time extending help to industries which require bauxite as a raw material for bonafide captive use. The relevant portion of the aforesaid letter dated 02.08.1978 reads thus:
“5. Central Government may kindly be moved in the interest of mineral development to grant permission under Rule 27 of the Mineral Concession Rules, 1960 for imposing the following conditions for protecting the interest of the State Government and at the same time extending help to industries which need bauxite for its bonafide captive use.
(1) the lessee shall establish an industrial unit consuming bauxite as main raw material within a period of two years from the date of grant of the mineral concession.
(2) the State Government shall have right to review and reduce the areas of mining lease for bauxite granted, if the industrial unit set up works continuously below the rated capacity and areas granted is found excess of its requirements.
(3) the lessee shall utilize maximum quantity of bauxite excavated in his own industrial unit and shall be allowed to sell the bauxite not suitable for its own industrial unit to other industrial unit in the State for their own consumption, provided the quantity of bauxite for sale does not exceed 20% of the total production and also provided that the prior permission of the D.G.M. or an officer authorizes by the State Government is obtained for the sale.
(4) the lessee shall have to sell the bauxite at prevailing market rate to government or the person to whom the State Government may direct, as and when such need arise.
(5) Briefly the Central Government’s approval to the following proposal is required;
(1) to de-reserve the areas of Kalyanpur Taluka of Jamnagar-District mentioned in the Govt. of India letter dated
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