The court established that rights to mining leases cannot be claimed based on vague representations or unfulfilled promises, especially when a company is declared sick and winding up proceedings are initiated.

JUDGMENT :

Manindra Mohan Shrivastava, C.J.

1. This appeal is directed against the order dated 22.12.1995 passed by the learned Single Judge, whereby appellants’ petition seeking directions not to interfere in the mining activities of appellant No.1 over the land ad-measuring 5.45 sq. kms. in Village Kuzotu, Mohanpura, Jodhpura in Tehsil Kotputli, District Jaipur, as also the prayer for issuance of direction for transfer and assignment of the lease to appellant No.1 along with the prayer to prohibit respondent No.3 from interfering with the mining activities as also the direction for immediate removal of operations of respondent No.3 from the subject land, has been dismissed.

Relevant factual matrix of the case:

2. The relevant facts, necessary for adjudication of the controversy involved in the present appeal, are that vide order dated 29.06.1984, the Government of Rajasthan granted mining lease for mining of limestone in favour of Rajasthan State Industrial Development and Investment Corporation (hereinafter referred to as ‘RIICO’) over the area comprising 554 hectares in Village Kojota, Mohanpura, Jodhpura in Tehsil Kotputli. The lease was granted with the condition that RIICO would establish a cement plant within five years of the grant of lease and use limestone for cement manufacturing only. On 03.07.1984, the mining lease agreement was entered into between the Government of Rajasthan and RIICO, which contained specific terms and conditions. Towards manufacturing for the purposes of establishing and operating the cement manufacturing plant, the RIICO and appellant-Company M/s Swadeshi Cement Limited (for short, ‘SCL’), promoted a project in joint sector. Though the cement plant started commercial production in July, 1985, for various reasons, the appellant-Company SCL became a sick industrial company within the meaning of Section 3 of the Sick Industrial Company (Special Provisions) Act, 1985 (for short, ‘SICA’). A reference was, therefore, made to the Board of Industrial and Financial Reconstructions (for short, ‘BIFR’) for the purposes of framing a scheme for rehabilitation. A rehabilitation scheme was also prepared and sanctioned by the BIFR under Section 18(4) of the SICA on 26.02.1990. However, in the meantime, the mining lease granted in favour of RIICO was cancelled by the Government on 06.11.1990, mainly on the ground that mining activities had remained suspended. The Government of Rajasthan thereafter appointed Rajasthan State Mineral Development Corporation as its agent for carrying out mining operations in the area. The appellant-Company challenged the aforesaid order by way of revision before the Central Government, which was allowed on 08.01.1993. However, as no transfer of lease, as claimed by the appellant-Company, took place despite repeated demands and claims, nor the sanctioned scheme for rehabilitation was properly implemented, the appellant- Company, not because of its failure but because of non[ 2023:RJ-JP:41451-DB] (4 of 14) [SAW-396/1996] cooperation of the State Government and RIICO, continued as sick company. At this stage, appellant No.2 took over the appellant No.1- Company making investments, so that the cement plant could be restarted.

3. Feeling aggrieved by non-transfer of mining lease in favour of the appellants, a petition came to be filed. The case of the appellants/writ-petitioners was that as the project for establishment of a cement manufacturing company was a joint venture of RIICO and SCL and even while applying for grant of lease, the RIICO had clearly stated that eventually the lease would be finally transferred in favour of SCL (appellant No.1-Company), the scheme for rehabilitation having already been framed for rehabilitation of the SCL Company and further a specific observation made by the Division Bench of this Court in order dated 09.07.1985 in D.B. Special Appeal No.26/1984- Rameshwar Prasad Bajaj Vs. Mrs. Protima Chatterjee and other connected appeals, the appellants were entit