Back
2021 Supreme(AP) 1065
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
U.DURGA PRASAD RAO, J.
M/s Transworld Garnet India Private Limited - Appellant
Versus
Union of India – Respondent
Writ Petition Nos.10705 and 10773 of 2021
Decided on : 10-08-2022
Advocate Appeared:
For the Appellant : VIJAYA KUMAR SATA
The main legal point established in the judgment is the obligation of the lessee to comply with the terms and conditions of the mining lease, report the discovery of any mineral not specified in the lease, and the requirement for the respondents to adhere to principles of natural justice in their actions.
Headnote:
MMDR Act - Beach Sand Minerals - Section 5(1), Rule 27(3) of MC Rules, 1960, Atomic Minerals under Part- B, First Schedule of MMDR Amended Act, 2016 - The court discussed the provisions of the MMDR Act, 1957, Atomic Mineral Concession Rules, 2016, and Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016. The court emphasized the obligation of the lessee to report the discovery of any mineral not specified in the lease and the need for compliance with the terms and conditions of the mining lease.
Fact of the Case:
The petitioner, a Private Limited Company, applied for a mining lease for Beach Sand Minerals (BSM) in Andhra Pradesh. The company was granted a lease for Garnet mining with conditions to dispose of tailings containing other minerals only to licensed entities. The government later issued show cause notices and confiscated the minerals, leading to the petitioner's challenge in the writ petitions.
Finding of the Court:
The court found that the actions of the respondents in issuing show cause notices and confiscating the minerals without furnishing necessary documents to the petitioner were illegal and violated principles of natural justice. The court exercised its jurisdiction under Article 226 of the Constitution of India and directed the petitioner to make a fresh application, and the respondents to furnish the required documents. The court also directed the respondents to conduct an enquiry and finalize the auction of the seized minerals after duly considering the submissions of the parties.
Issues: The main issue was whether the actions of the respondents in issuing show cause notices and confiscating the minerals were illegal, arbitrary, and violative of principles of natural justice.
Ratio Decidendi: The court held that the respondents' failure to furnish necessary documents to the petitioner and conduct a fair enquiry violated principles of natural justice, warranting the exercise of the court's plenary jurisdiction under Article 226 of the Constitution of India.
Final Decision: The court disposed of the writ petitions and directed the petitioner to make a fresh application, the respondents to furnish the required documents, and conduct an enquiry. The court also directed the respondents to finalize the auction of the seized minerals after considering the submissions of the parties.
ORDER :
Parties and facts, except the prayers, are similar in both these writ petitions and hence they are disposed of by this Common Order.
2. The petitioner’s case succinctly is thus:
(a) The petitioner is a Private Limited Company dealing in Beach Sand Minerals(BSM) mining and Garnet production. BSM deposits in our country contain seven important minerals viz., Ilmenite, Rutile, Leucoxene (Titanium minerals), Monazite (Thorium mineral), Zircon (Zirconium mineral), Garnet and Silimanite (Industrial minerals) coexisting together. Of these, only monazite is radio-active & Prescribed Substance. All these minerals are listed as Atomic Minerals under Part- B, First Schedule of MMDR Amended Act, 2016 (Act 25 of 2016).
(b) The petitioner company applied for mining lease for BSM in the State of Andhra Pradesh. The 2nd respondent issued its recommendation dated 06.09.2000 for prior approval of the 1st respondent under Section 5(1) of MMDR Act and Rule 27(3) of Mineral Concession Rules, 1960 (for short “MC Rules, 1960”). The 1st respondent vide its letter No.4/126/2000-M.IV, dated 12.04.2001 granted approval after consultation with the Department of Atomic Energy (DAE). The DAE suggested certain conditions and accordingly the Central Government issued prior approval imposing the following conditions:
(i) If, while mining garnet, the lessee comes across the deposits of any prescribed substances/atomic minerals, the same shall be disposed of any after obtaining license from DAE.
(ii) The tailings containing prescribed substances shall be disposed of only to another entity which holds a valid license under the Atomic Energy (Working of Mines, Minerals and Handling of Prescribed Substances) Rules, 1984.
(iii) If monazite is produced in the process of exploitation of beach sand minerals, the same shall be disposed of in accordance with the instructions of Atomic Energy Regulatory Board in accordance with the provisions of the Atomic Energy Act and Rules there under.
(iv) Since the applicant is not wholly Indian owned company, the applicant cannot engage in the separation and sale of prescribed substances in accordance with the policy resolution of the Government of India, DAE No.8/1[1], 97-PSU, dated 06.10.1998.
(v) The applicant should have no objection to Atomic Minerals Directorate for exploitation and research exploitation activities and inspection by officials of AMD/Government of India.
With the above conditions, the 2nd respondent granted mining lease to the petitioner company for 95.085 hectors vide G.O.Ms.No.7, dated 05.01.2002 for a period of 30 years from 24.06.2002 to 23.06.2032. Under the said G.O., the 2nd respondent granted permission to the petitioner to mine the garnet and also the right to dispose of tailings as per the conditions stipulated above. BSM are group of minerals which exist together but not in isolation which is a well known geological fact.
In view of their conglomeration, mining of one mineral, necessarily accompanies the mining of other minerals. When one of these minerals is extracted from the beach sand, the residual sand left over after the extraction is known as “Tailings”.
(c) While so, after securing all the necessary permits and making intimation under rules 66A(1) of MC Rules, 1960, the petitioner started extraction of garnet and obtaining permits since 2004. So far, the petitioner company dispatched 2,56,287 MTs of Garnet mineral and 3,23,666 of MTs of tailings after payment of advance royalty and other dues to the State Government. The petitioner subsequently requested the 2nd respondent to include the other heavy non Garnet minerals in the existing mining lease and the same is pending.
(d) While the matter thus pending, the 1st respondent, all of a sudden issued three memos dated 02.11.2018 suspending the mining operations of the petitioner on the allegation of providing incorrect/incomplete information in the annual returns for the year 2016-17. Aggrieved, the petitioner challenged the proceedings in Memo N
