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High Court of Judicature at Madras
R. BANUMATHI & M.M. SUNDRESH
K.M. Kamala & Others
Versus
The State of Tamil Nadu & Another
W.A.Nos.1981 of 2001, 3050 of 2002 and W.P.Nos.19657 and 19658 of 2002
Decided On :19-02-2010
The Court held that the determination of mining lease was valid and in accordance with the Rules. The order of District Collector, Salem District directing the Appellant to pay Rs.1,85,17,400/- towards cost of mineral excavated during the period from 21.07.1998 to 11.04.2000 and to sell the stock of 1564 M.Ts. of Magnesite in public auction was upheld.
Fact of the Case:
The case involved a dispute over the renewal of a mining lease for Magnesite. The lessee, Munusamy Chetty, had been granted a mining lease in 1955, which was renewed in 1971. In 1975, Chetty applied for a renewal of the lease, but the application was rejected by the Government of Tamil Nadu on the grounds that Chetty had violated the mining lease conditions. Chetty filed a Revision Petition with the Government of India, which set aside the order of the State Government and directed the State Government to grant a renewal of the mining lease. The State Government complied with the order and renewed the lease in 1982, subject to the condition that the lessee should utilize the mineral in his own industry. Chetty challenged the condition, but the challenge was unsuccessful. In 1988, the State Government determined the lease for failure to execute a supplemental lease deed. Chetty filed a Writ Petition challenging the determination of the lease, but the Writ Petition was dismissed. Chetty then filed a Writ Appeal, which was also dismissed.
Finding of the Court:
The Court found that the determination of the mining lease was valid and in accordance with the Rules. The Court also found that the order of the District Collector, Salem District directing the Appellant to pay Rs.1,85,17,400/- towards cost of mineral excavated during the period from 21.07.1998 to 11.04.2000 and to sell the stock of 1564 M.Ts. of Magnesite in public auction was valid.
Issues: The issues in the case were: 1. Whether the determination of mining lease was valid and in accordance with the Rules? 2. Whether the order of District Collector, Salem District directing the Appellant to pay Rs.1,85,17,400/- towards cost of mineral excavated during the period from 21.07.1998 to 11.04.2000 and to sell the stock of 1564 M.Ts. of Magnesite in public auction was valid?
Ratio Decidendi: The Court held that the determination of the mining lease was valid and in accordance with the Rules because the lessee had failed to execute a supplemental lease deed as required by Rule 31 of the Mineral Concession Rules. The Court also held that the order of the District Collector, Salem District directing the Appellant to pay Rs.1,85,17,400/- towards cost of mineral excavated during the period from 21.07.1998 to 11.04.2000 and to sell the stock of 1564 M.Ts. of Magnesite in public auction was valid because the lessee had illegally quarried the mineral.
Final Decision: The Court dismissed the Writ Appeal and upheld the order of the District Collector, Salem District.
1. Whether determination of mining lease is valid and in accordance with the Rules is the point falling for consideration in the Writ Appeal.
2. Order of District Collector, Salem District directing the Appellant to pay Rs.1,85,17,400/- towards cost of mineral excavated during the period from 21.07.1998 to 11.04.2000 and to sell the stock of 1564 M.Ts. of Magnesite in public auction is the subject matter arising for determination in the Writ Petitions.
3. Since common issues are involved in the Writ Appeals and Writ Petitions, both Writ Appeals and Writ Petitions shall stand disposed by this common Judgment. After the filing of Writ Petitions, original lessee Munusamy Chetty died and his legal representatives K.M. Kamala, K.M. Ramakrishnan, K.M. Govindarajan, K. Sugunakumari, Minors K. Radha and K. Vivek were impleaded in the Writ Appeals and Writ Petitions respectively.
4. Initially, mining lease of Kondappanaickenpatty village, Salem Taluk was granted to one Ramappa on 08.10.1955 and with the permission of Government, the said lease was transferred to Munusamy Chetty. Magnesite is magnesium carbonate, MgCO3. Iron (as Fe2+) substitutes for magnesium (Mg) with a complete solution series with siderite, FeCo3. Magnesite occurs as veins in and alteration product of ultramafic rocks, serpentinite and other magnesium rich rock types in both contact and regional metamorphic terranes. Magniste is useful as a slag former in steelmaking furnaces, in conjunction with lime, in order to protect the magnesium oxide lining. It can also be used as a catalyst and filler in the production of synthetic rubber and in the preparation of magnesium chemicals and fertilizers. In fire assay, Magnesite cupels can be used for cupellation as the Magnesite cupel will resist the high temperatures involved and therefore used in steel manufacturing furnaces. Magnesite is a very rare rich mineral occurring in Salem District in whole of Asia.
5. For appreciating the contentious issues, it is necessary to refer the factual matrix of the case and various rounds of litigations:
Ramappa was granted a mining lease to mine Magnesite over an extent of 78.32 acres of Government lands in S.No.57 of Alagapurampudur; S.Nos.1/1, 1/2, 4/1, 5/1 of Mitta Ayyamperumampatty and S.No.76/2B of Kondappanaickenpatty village, Salem Taluk for a period of 20 years in G.O.Ms. No.3498, Industries Dept. dated 08.10.1955. The said mining lease was transferred to Munusamy Chetty vide G.O.Ms.No.494, Industries Dept. dated 27.02.1971 and the lease was to expire on 05.02.1976. In May, 1975, lessee Munusamy Chetty has filed an Application for renewal of lease period and another Application for transfer of the above lease hold area in favour of M/s. Belpahar Refractories Limited, Orissa. Both the Applications were rejected by the Government of Tamil Nadu on the reasons that lessee had violated the mining lease conditions.
6. On a Revision Petition, Government of India by order dated 12.08.1980, set aside the order of State Government and directed the Statement Government to grant mining lease to the lessee provided he paid all arrears of rent and royalty, etc.
7. W.P. No.10236/1981: As narrated above, even prior to 1982 when the lease was to expire on 05.02.1976, State Government did not renew the lease and Revisions were filed by Munusamy Chetty against the deemed rejection. On 22.5.1979, Central Government have set aside the deemed rejection and directed the State Government to consider renewal Application on merits. Again on 18.6.1979, State Government passed an order refusing to grant the renewal which was again challenged by filling Revision Petition before Central Government. On 12.8.1980, Central Government directed the State Government to grant renewal of mining lease. Since no orders was passed by the State Government, Appellant filed W.P.No.10236/1981 to direct the State Government to renew the lease as per the order to Central Government dated 12.8.1990. The said
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