2013 Supreme(Bom) 1837

IN THE HIGH COURT OF BOMBAY AT NAGPUR
B.P. DHARMADHIKARI & A.S. CHANDURKAR, JJ.
Rare (H) Minerals Private Limited
Versus
The Union of India & Others
Writ Petition No. 1502 of 2011
Decided on: 17-09-2013

Headnote:Offshore Areas Mineral (Development and Regulation) Act, 2002 - Sections 12 and 13 - Grant of Exploration licence. - Petitioner, proposes to set up an industry, not entitled to grant of offshore Exploration licence. - Except for stating in Clause (xvi) of Form-G that it proposed to set up an industry as a joint venture when a production lease was granted to it, there is no other material on record to enable Court to hold that the application of the petitioner was entitled to be considered in the manner as prescribed by the provisions of Section 12 (3) (b) (I) so as to be entitled to preference. On the contrary, perusal of Section 12 (3) (b) (II) of the Act of 2002 indicates that in case of those applicants who were not covered under sub-clause (I), the administering authority could grant licence based on a comparative evaluation of the matters stated in items (i) to (iv) of the proviso to sub-clause (I). It is, therefore, clear that if there is an applicant who neither owns an industry or who has not taken sufficient steps to set up such an industry then his application is required to be considered in the manner as prescribed by the provisions of Section 12 (3) (b) (II). In such situation, there is no question of any preference being given to such applicant and the licence is required to be granted on the basis of a comparative evaluation of the criteria mentioned in proviso to sub-clause (I). Therefore, in the wake of the material on record and the respective pleadings, it is difficult to hold that the application of the petitioner was required to be considered under sub-clause (I) of Section 12 (3) (b) of the Act of 2002. After the respondent No. 2 had specifically asserted in its affidavit dated 30.9.2011 that the case of the petitioner was covered by provisions of Section 12 (3) (b) (ii), though the petitioner filed further affidavit dated 7.11.2011, it has not been stated that either it already owned an industry or that it had taken sufficient steps to set up, such industry and therefore, its application was required to be considered under the provisions of Section 12 (3) (b) (I) of the Act of 2002. Similarly, nothing has been stated about sufficient steps having been taken by the petitioner to set up such industry. A mere statement that it proposed to set up an industry as a joint venture, when a production lease would be granted to it in future can hardly be said to qualify the applicant as one “who has taken sufficient steps to set up such industry“.

       In fact, what is stated by the petitioner in Form-G is contingent on a production lease being granted it in future. It would, therefore, be an academic exercise to consider the challenge to the guidelines on the ground that separate treatment was given to an industry already owned by an applicant compared to an applicant who has taken sufficient steps to set up such industry in these facts of the matter. In view of the above, Court is not inclined to consider the aforesaid sub-section of the senior counsel to hold guidelines dated 29.12.2010 illegal.

       Offshore Areas Mineral (Development and Regulation) Act, 2002 - Sections 12 and 13 - Guidelines for Evaluation of applications. - Issuance of guidelines for comparative evaluation of applications for grant of Exploration licence is valid. - The criteria that is required to be evaluated while selecting applicants for grant of exploration licence is that which finds place in Section 12 (3) of the Act of 2002. The Screening Committee in its wisdom and with its expertise has sought to classify each item into various heads and it has thereafter, allotted points for each such head. It is no doubt true that the provisions of Section 12 (3) (b) (I) treat an industry already owned and an industry for which sufficient steps have been taken to set up as part of the same category. The revised guidelines seek to allot ten points for an industry already set up and owned by an applicant and alternatively five points are allotted to an applicant who has taken sufficient steps to set up such an industry. However, this by itself would not be sufficient to hold the revised guidelines as arbitrary or unreasonable. As noticed above, there is another category of the applicants who are not covered under sub-clause (I). In case of such applicants who neither owned an industry or who have not taken sufficient steps to set up such industry, the licence is required to be granted on a comparative evaluation of the matters stated in items (i) to (iv) of the proviso to sub-clause (1). Such applicants are required to be selected after evaluating the technical capability, exploration work proposed, its financial resources and data submitted along with the work proposed. Similarly, in absence of any specific assertion on the part of the petitioner that it already owned an industry or that it had taken sufficient steps to set up such industry, it is difficult to hold that on account of allotting lesser points for an industry that has taken sufficient steps for being set up than an industry already owned by the applicant the case of the petitioner has been prejudiced. Court has already referred to the application form submitted by the petitioner in which it was stated that it was proposed to set up an industry as a joint venture when a production lease was granted it in future. There is nothing on record to indicate that any steps/sufficient steps were taken to setup such industry by the petitioner.

       The revised guidelines merely seek to make the provisions of Section 12 of the Act of 2002 workable in more democratic way. The guidelines refer to the matters that would be taken into account while selecting applicants for grant of exploration licence. Said matters find mention in provisions of Section l 2 (3) (b) of the Act of 2002 itself. Hence, the law as laid down in the aforesaid judgments cannot be said to be applicable in the facts of the present case.

       Offshore Areas Mineral (Development and Regulation) Act, 2002 - Sections 12 and 13 - Issuance of guidelines. - Issuance of guidelines for evaluation of applications for grant of Exploration licence after expiry of last date for making application not invalid. - In the present case each the applicants who has applied for an exploration licence in terms of provisions of Section 12 of the Act of 2002, is aware of the matters that would be taken into account for the purposes of making a comparative evaluation amongst the applicants. Thus, by prescribing points for various matters that are already stipulated in Section 12 (3) of the Act of 2002, the revised guidelines merely prescribe the basis for a comparative evaluation to be made by the administering authority. A perusal of the various items as mentioned in the revised guidelines clearly indicate that the said items namely technical capability, exploration work proposed, financial resources and data submitted already find place in Section 12 (3) (b) (I) proviso.

       By merely prescribing various points to be allotted for the respective items/matters which the applicants were well aware while making an application for exploration licence in view of the fact that the said matters are already prescribed in Section 12 (3) of the Act of 2002, it cannot be said that by doing so, the criteria has been changed by the administering authority after the last date of making an application for grant of exploration licence. It is clear that for the purposes of making a comparative evaluation amongst various applicants, allotment of points with regard to matters of which the applicants already had knowledge would not amount to changing the criteria.

       The revised guidelines merely facilitate the process of comparative evaluation of various applications and there is no change in the criteria of selection as urged by framing revised guidelines dated 29.12.2010 for the purposes of making selection of the applicants after evaluating various applications has not resulted in changing the criteria after expiry of last date of making such applications submission of the petitioner based on breach of its legitimate expectation for the reasons aforesaid, also cannot be accepted. As stated above, Section 12 (3) of the Act of 2002 itself being clear with regard to matters that are required to be taken into account for the purposes of making comparative evaluation, it, cannot be said that by framing such revised guidelines, the legitimate expectation of the petitioner that its application would be considered in accordance with the Act of 2002, the Rules of 2006 and the Notification dated 7.6.2010 has been breached.

       The revised guidelines having been framed for processing of applications after taking into consideration the provisions laid down in Section 12 of the Act of 2002, Rule 13 of the Rules of 2006 and the Notification dated 7.6.2010 cannot be said to have taken any applicant by surprise. Hence, it cannot be said that by framing the revised guidelines, the petitioner’s legitimate expectation has been violated.

       Offshore Areas Mineral (Development and Regulation) Act, 2002 - Sections 12, 13, 34 and 35 - Offshore Area Mineral Concession Rules, 2006, Rules 13 and 59 - Constitution of India, Article 226 - Revised guidelines for grant of exploration licence. - Writ petition challenging revised guidelines for grant of exploration licence issued by Administering Authority is maintainable. - In the present case Section 34(1) confers a right to appeal on a person aggrieved by an order made by the administering authority or any other officer under said Act. Rule 59 of the Offshore Areas Mineral Concession Rules, 2006 (hereinafter referred to as Rules of 2006) prescribes the manner of preferring an appeal under Section 34 of the Act of 2002. Perusal of Guidelines dated 29th December, 2010 reveal that the same had been framed for processing of applications taking into consideration the provisions of Section 12 of the Act of 2002, Rule 13 of the Rules of 2006 and Notification dated 7th June, 2010 published by the Controller General IBM, whereby applications were called for grant of exploration licence.

       The evaluation criteria stipulates various items and points to be awarded while evaluating various applications. The same have been titled as revised guidelines for making selection of applicants for grant of offshore exploration licence. Hence by no stretch of imagination can these revised Guidelines be termed as an "Order" made by the administering authority. The said guidelines do not determine rights of any applicant. They merely stipulate the manner in which applications have to be evaluated. Perusal of Section 34 of the Act of 2002 with Rule 59 of the Rules of 2006 clearly indicates that the connotation of an order as contemplated under the Act of 2002 is one which determines rights of a party in the matter of grant of permit, exploration licence or the production lease.

       The impugned Guidelines having been issued merely to facilitate the evaluation of applications made cannot be termed as an order and hence it cannot be said that the petitioner had remedy of preferring an appeal under Section 34 (1) of the Act of-2002, for challenging the Guidelines dated 29th December 2010. Preliminary objection raised on behalf of respondents that the petitioner ought to have preferred an appeal under Section 34(1) of the said Act for challenging the Guidelines dated 29th December, 2010 is liable to be rejected.

       Offshore Areas Mineral (Development and Regulation) Act, 2002 - Sections 12, 13 and 35 - Guidelines for grant of exploration licence. - Petitioner, even not owning industry, has sufficient locus standi to challenge guidelines for grant of exploration licence. - It is seen that the challenge in writ petition is to the revised guidelines dated 29.12.2010. One of the grounds of challenge is the lack of authority with respondent No. 2 to frame such guidelines. It is also the case of the petitioner that the guidelines are in themselves arbitrary and unreasonable. Even if it is assumed that the petitioner is not an applicant who requires the minerals for use in an industry already owned by it or that the petitioner has not taken sufficient steps to set up such industry, under the provisions of Section 12 (3) (b) (II) the applicants not covered under sub-clause (I) can be granted licence on the basis of a comparative evaluation of the matters stated in the proviso to sub-clause (I). Hence, the challenge being raised to the revised guidelines itself and the same being required to be applied even in absence of an applicant owning an industry or in absence of an applicant having taken sufficient steps to set up such industry, the comparative evaluation even otherwise is required to be made. Hence, Court found that the petitioner has sufficient locus to challenge the guidelines dated 29.12.2010.

       Offshore Areas Mineral (Development and Regulation) Act, 2002 - Sections 12 and 35 - Authority to issue Guidelines for grant of exploration licence. - Since guidelines not seeking to fill up gaps of Rules framed under Section 35 of Act hence issuance of guidelines by Controller General, IBM for grant of exploration licence just and proper. - It can thus, be seen that an applicant who seeks an exploration licence under Section 12 of the Act of 2002 is aware while making such application that the same would be considered by the administering authority in the manner prescribed by said section. It is also clear to an applicant that if there are two or more applications in respect of the same area or substantially the same area, then the exploration licence would be granted on the basis of a comparative evaluation of various applicants. Similarly, the matters that would be taken into account while making a comparative evaluation of various applications is also stipulated in Section 12 (3) (b) of the Act of 2002. What the guidelines dated 29.12.2010 have done is merely to allot points with regard to various criteria for the purposes of comparative evaluation. The guidelines merely stipulate the various points that are required to be given to an applicant based on the information which was required to be given along with the application as required by Section 12 (3) of the Act of 2002. It, therefore, cannot be said that the administering authority while stipulating various points for the purposes of evaluation of applications has acted beyond the provisions of Section 12 (3) of the Act of 2002. The administering authority having been granted the power to select an applicant for grant of exploration licence on the basis of comparative evaluation of various applications cannot be said to have acted in contravention of the provisions of Section 12 (3) (b) (1) of the Act of 2002. For the same reason, the aforesaid guidelines dated 29.12.2010 allotting points as the basis for evaluation cannot be said to be de hors the Act of 2002.

       As the guidelines merely seek to assist the administering authority in such comparative evaluation, it cannot be said that the administering authority has done something contrary to the manner in which the comparative evaluation is required to be done.

       In the present case, the administering authority itself has been granted the power to make a comparative evaluation of various applications received by it. What has been done by the impugned guidelines is that the points have been allotted against various heads to evaluate various applications. It, therefore, cannot be said that in doing so, the respondent No. 2 acted beyond its authority. It cannot be said that by doing so, it has attempted to fill in the gaps left in the Rules framed under Section 35 of the Act of 2002.

       Offshore Areas Mineral (Development and Regulation) Act, 2002 - Section 35 - Notification or Guidelines. - Document titled as "Revised guidelines" issued by Controller General IBM, published on website and not in Official Gazette, cannot be termed as "Notification" but shall be referred to as "Guidelines".

       OFFSHORE AREAS MINERAL CONCESSION RULES, 2006 - Rules 59 and 13. - Offshore Areas Mineral (Development and Regulation) Act, 2002, Section 34, 35, 12.