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2023 Supreme(Kar) 499

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
PRASANNA B. VARALE, M.G.S. KAMAL, JJ.
MSPL Limited – Petitioner
Versus
State of Karnataka – Respondent
Writ Petition Nos. 14760, 14795, 23151 of 2022
Decided On : 27-09-2023

Advocates:
Advocate Appeared:
For the Petitioners: Ashok Haranahalli, Aditya Narayan.
For the Respondents: S.S. Mahendra, B.M. Kushalappa.

Successful bidders for mining leases are entitled to transfer of forest clearances despite prior lessees' non-compliance, as per judicial directives and legislative provisions.

Headnote:(A) Forest (Conservation) Act, 1980 - Mines and Minerals (Development and Regulation) Act, 1957 - Section 8B - Writ petitions concerning the transfer of forest clearances and extension of Letters of Intent for mining leases - Petitioners, as successful bidders, contended that they were entitled to transfer of forest clearances in light of judgments and applicable laws, notably the Supreme Court’s direction for transferring approvals during auction of Category 'C' mines. Petitioners alleged inaction by authorities hindered acquisition of these clearances, resulting in the expiration of Letters of Intent. (Paras 2.1 - 2.4, 6, 19, 36)

(B) Legal Obligation of Authorities - The Court emphasized that the authorities are bound by the Supreme Court’s directive for expeditious transfer of clearances as per the amended MMRD Act, and failing to comply contravenes legal obligations. (Paras 12, 36)

(C) Show-cause Notices - The Court quashed the notices issued to petitioners for alleged violations, reiterating their legitimate expectations based on lawful representations made by the State. (Paras 38.1, 38.2)

Facts of the case:
Petitioners successfully bid for mining leases under letters of intent issued on 06.10.2018 but faced obstacles obtaining forest clearances causing the letters to expire. Respondents failed to acknowledge the legal framework allowing clearances to be transferred to new lessees.

Findings of Court:
The petitions were partly allowed; respondents were directed to transfer forest clearances to the petitioners and extend the validity of Letters of Intent.

Issues: The Court addressed issues of legal entitlements regarding the transfer of forest clearances, validity of the show-cause notices issued, and obligations of state authorities following the Supreme Court judgment.

Ratio Decidendi: The Court underscored the binding nature of previous Supreme Court decisions on the transfer of clearances under the amended MMRD Act and reiterated that mere policy changes cannot override statutory rights of petitioners.

Result: The writ petitions are partly allowed.

Table of Content
1. common context of writ petitions. (Para 1)
2. details of each petitioner's claims. (Para 2 , 3)
3. petitioners argue for entitlement of fc transfer. (Para 4 , 5 , 6)
4. arguments presented by both parties. (Para 7)
5. respondent's justification for denying fc transfer. (Para 8 , 9)
6. court's observations on representations made. (Para 11 , 12)
7. background of relevant court orders and mining regulations. (Para 13 , 14 , 15 , 18)
8. legal framework under mmrd act concerning fc transfer. (Para 19 , 20 , 21)
9. discussion on validity of fc transfer conditions. (Para 26 , 30)
10. final decisions on orders issued. (Para 34)
11. final order directing fc transfer to petitioners. (Para 37 , 38)

ORDER :

1. Since the facts and circumstances and the issues involved in the aforesaid writ petitions are common, they are taken up and heard for common disposal.

2. Petitioners in W.P. No. 14760/2022 and W.P. No. 14795/2022 are common and are raising common contentions as under:

    2.1. Petitioners in W.P. No. 14760/2022 are before this Court contending that the respondent No. 1 had put in public auction Lease hold rights in respect of a quarry lease bearing Old ML No. 2563 in respect of 30.09 hectares of forest land in Ramanadurga village, Sandur Taluk, Bellary District, which was earlier granted in favour of Sri. Kanhaiyalal Dudheria (M.L. No. 2563) in which the bid of the petitioner No. 1 was accepted and a Letter of Intent dated 06.10.2018 had been issued in its favour. Similarly, the petitioners in W.P. No. 14795/2022 claimed to have participated in public auction of Lease hold rights in respect of a quarrying lease bearing Old No. 2148 to an extent 60.66 hectares in Dharmapura village, Sandur Taluk, Bellary District, which was earlier granted in favour of Sri. H.G. Rangangouda Mine (M.L. No. 2148) in which the bid of the petitioner No. 1 was accepted and a Letter of Intent dated 06.10.2018 had been issued in its favour.

    2.2. That in terms of the Letters of Intent, issued in their favour as above they were required to obtain permissions and clearances including Forest Clearances (hereinafter referred as ‘FC’ for short) under section 2 of the Forest (Conservation) Act, 1980 (herein after referred to as FC Act for short) within a period of 30 months from the date of issuance of Letters of Intent. That upon obtaining all permissions, respondent No. 1 would execute a mining lease in their favour. That the petitioners had obtained all requisite consents including R&R Plans, environmental clearances and mining plans from Indian Bureau of Mines except FC. That petitioners applied for transfer of FC which was issued in favour of earlier lessee. The said applications were rejected constraining the petitioners to file fresh applications. That despite applications, representations, constant requests and reminders, respondent No. 2 authority failed and neglected to transfer/grant FC to the petitioners. That due to inaction on the part of the respondent Nos. 1 and 2 in transferring/granting FC, the period prescribed under Letters of Intent expired.

    2.3. That the respondents are under obligation to transfer/grant the FC in view of the order dated 30.07.2015 passed by the Apex Court in the case of Samaja Parivartana Samudaya and Others vs. State of Karnataka and Others, (2017) 11 SCC 509 and also in view of amendment to the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to ‘MMRD Act’ for short) which was amended on 28.03.2021 by inserting Section 8B providing for transfer of permissions and licenses in favour of the subsequent lessees. That the respondent authorities contrary to the above judgment of the Apex Court and the aforesaid provisions of law had issued show-cause notices dated 30.06.2022 holding that Letters of Intents issued in favour of the petitioners have expired and have called upon the petitioners to

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