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HIGH COURT OF ORISSA
G. K. Misra, C. J. And S. K. Ray, J.
STATE OF ORISSA, THROUGH THE SECRETARY, DEPARTMENT OF MINING - Appellant
Versus
UNION OF INDIA - Respondent
O. J. C. 486 Of 1969
Decided On : April 16, 1971
MINES AND MINERALS ACT, 1957 - CONSTITUTIONALITY - MINERAL CONCESSION RULES, 1960 - VALIDITY - REVISION OF ORDER - POWER OF CENTRAL GOVERNMENT - AVAILABILITY OF AREA FOR GRANT - RELAXATION OF CONDITIONS - DISCRIMINATION - MALA FIDES - WRIT PETITION BY STATE GOVERNMENT - MAINTAINABILITY.
Fact of the Case:
The State of Orissa, the petitioner, owned an area of land containing chromite mineral ores. The mining lease for the area had expired, and the petitioner decided not to renew it, intending to exploit the ores in the public sector. Tulloch, the previous lessee, applied for renewal, but his application was rejected. Tulloch filed a revision petition with the Union of India, which rejected it. Opposite party No. 2 applied for a mining lease for a portion of the area, but the application was not considered by the State Government. Opposite party No. 2 filed a revision petition with the Union of India, which directed the petitioner to grant the lease after relaxing the provisions of Rule 58(1)(b) under Rule 58(2). The petitioner filed a writ petition challenging the Act, the Rules, and the impugned order, contending that the Act was ultra vires the Constitution, the Rules were ultra vires the Act and the Constitution, and the impugned order was discriminatory, mala fide, and interfered with its proprietary rights.
Finding of the Court:
The Court held that the Act was constitutional and the Rules were valid. The Central Government had the power to revise the order of the State Government and relax the conditions for grant of mining lease. The impugned order was not discriminatory or mala fide. The State Government could not maintain a writ petition challenging the impugned order as it was a subordinate statutory authority and could not question the legality and correctness of the impugned order passed by the Central Government.
Issues: 1. Whether the Mines and Minerals Act, 1957, and the Mineral Concession Rules, 1960, are constitutional and valid? 2. Whether the Central Government has the power to revise the order of the State Government and relax the conditions for grant of mining lease? 3. Whether the impugned order is discriminatory or mala fide? 4. Whether the State Government can maintain a writ petition challenging the impugned order?
Ratio Decidendi: 1. The Act is constitutional as it falls within the ambit of Entry 54 in List I of the Seventh Schedule of the Constitution, which empowers Parliament to regulate mines and mineral development to the extent declared expedient in the public interest. Entry 23 in List II, which deals with regulation of mines and mineral development, is subordinate to Entry 54 in List I. 2. The Central Government has the power to revise the order of the State Government and relax the conditions for grant of mining lease under Section 30 of the Act and Rule 55 of the Rules. 3. The impugned order is not discriminatory as it was passed in exercise of the Central Government's revisional power and the conditions prescribed in Rule 58(2) were adhered to. The order is not mala fide as the Central Government's interest in opposite party No. 2 through the Life Insurance Corporation of India and the Unit Trust of India does not establish mala fides. 4. The State Government cannot maintain a writ petition challenging the impugned order as it is a subordinate statutory authority and cannot question the legality and correctness of the impugned order passed by the Central Government.
Final Decision: The writ petition was dismissed.
G. K. MISRA, C. J.
( 1 ) THE State of Orissa through the Secretary, Department of Mining and Geology, is the petitioner. Its case may be stated in short. It is the owner in possession of an area of 462. 16 acres of land in village Boula in the district of Keonjhar. The said area contains chromite minerals ores. This area had been held under a mining lease by Sri M. A. Tulloch (hereinafter to be referred to as Tulloch ). The term of that lease expired on 1-6-1965. On 27-11-1964 Tulloch applied, for renewal of the lease. By an order (Annexure I) dated 27-5-1965 the application was rejected by the petitioner on the ground inter alia that the State Government had decided not to grant lease of the area to private parties and the same was required for exploitation by the State itself. There was an overall shortage of chromite in the state and it was intended that the ores raised from the area would feed the industries run by the State in the public sector. On 10-6-1965 Tulloch filed a revision petition before the Union of India (opposite party No. 1) under Rule 54 of the Mineral Concession Rules, 1960 (hereinafter to be referred to as the Rules) against the order (Annexure I ). Comments were invited from the petitioner by opposite party No. 1 under Rule 55, The petitioner in reply pointed out by the letter (Annexure II) dated 16-7-1966 that the State had a limited deposit of hard and lumpy chromite in the districts of Keonjhar, Cuttack and Dhenkanal and that the State Government had decided not to grant any mineral concession for chromite ore to private parties considering the importance of that ore for future industrial use and over-all shortage of chromite. The petitioner also pointed out that it had already set up a public undertaking in the name of Orissa Industrial Development Corporation which was going ahead with a ferro chrome plant and for that purpose both industrial and import licence had been obtained from the Government of India as it had been decided by the petitioner that the Orissa Mining Corporation, an undertaking of the Government itself, would work out the chromite ores held by the State. For utilisation of the ores in the ferro chrome plant and other industrial undertakings of the State the petitioner had recommended to opposite party No. 1 that the revision petition filed by Tulloch should be rejected. In Annexure III dated 19-6-1967 opposite party No. 1 rejected the revision petition with the following observation:--"since the State Government has decided not to grant mineral concession for chromite to private parties over the area as they want to exploit the mineral in the public sector, the State Government's order of rejection of the renewal application does not appear to be illegal and there are no grounds for interfering with the decision of the Government of Orissa. . . . . " opposite party No. 2 applied for mining lease of 187. 03 acres in respect of chromite mineral ores out of the total area of 462. 16 acres. The application was not taken into consideration by the State Government as it did not want to lease out that area. As the application was not disposed of within nine months from the date of its receipt it was deemed to have been refused under Rule 24 (3) Opposite party No. 2 filed a revision petition before opposite party No. 1 under Rule 54. In annexure IV dated 6-11-1968 the petitioner furnished its comments on the revision petition. Therein the petitioner stated that Tulloch's renewal application had been rejected on the ground that the State Government would not grant mineral concession over the area to any private party and the said decision had been affirmed by opposite party No. 1 in the public sector. In exercise of its revisional powers under Rule 55 opposite party No. 1 directed the petitioner by an order (Annexure V) dated 18-2-1969 to grant mining lease for chromite over the area in favour of opposite party No. 2 after relaxing the provisions of Rule 58 (1) (b) under Rule 58 (2 ). T
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