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2001 Supreme(Ori) 198
High Court Of Orissa
N. Y. HANUMANTHAPPA, R. K. PATRA
INDIAN CHARGE CHROME LTD. - Appellant
Versus
UNION OF INDIA - Respondent
O. J. C. 1830 Of 1999
Decided On : 05/18/2001
A.K.PARIDA, A.Routray, ANURADHA DUTTA, D.C.MOHANTY, INDIRA JAISINGH, L.MENON, S.DAVE, S.S.DAS
The State Government's recommendation for grant of mining lease in favour of opposite party No. 3 is in conformity with the Act, the Rules, the proposals made by various committees and the principles laid down by the Supreme Court in Tata Iron and Steel Co. Ltd. v. Union of India and others : AIR 1996 SC 2462.
Headnote:
The Court held that the State Government's recommendation for grant of mining lease in favour of opposite party No. 3 is in conformity with the Act, the Rules, the proposals made by various committees and the principles laid down by the Supreme Court in Tata Iron and Steel Co. Ltd. v. Union of India and others : AIR 1996 SC 2462.
Fact of the Case:
The petitioner, a company incorporated under the Companies Act, 1956, is engaged in the business of manufacture and sale of High Carbon Ferro Chrome/charge Chrome having its factory at Choudwar in the district of Cuttack which is a 100% Export Oriented Unit. The petitioner requires the chrome ore as a basic raw-material for manufacture of charge chrome. The capacity of petitioner's plant is 62,500 MT per annum on the basis of which the minimum requirement of chromite ore of petitioner is about two lakhs MT per annum. The petitioner's requirement is a relevant factor to be kept in mind while granting the lease or renewing the lease. While the Central Government exercising its discretion in granting or renewing lease, it is clear that the capacity of an industry to effectively exploit the ore, will be a predominant consideration. The recommendation dated 28-1-1999 has conferred largess on opposite party No. 3 thus violating Article 14 of the Constitution of India. When opp. party No. 3 had a contract for work with the TISCO, again same area should not have been recommended in favour of opp. party No. 3. It is also averred that the decision rendered by the Supreme Court in AIR 1996 SC 2462 (supra) that before granting, the need of the parties is to be ascertained. In the instant case the Government is estopped from granting lease for an area out of 855. 476 hectares to any other parties including opp. party No. 3. But the recommendation should have been in favour of four companies. The State Government made the recommendation mechanically without taking into consideration the relevant factors necessary for grant of recommendation. Thus averring it is prayed that the writ petition be allowed.
Finding of the Court:
The Court held that the State Government's recommendation for grant of mining lease in favour of opposite party No. 3 is in conformity with the Act, the Rules, the proposals made by various committees and the principles laid down by the Supreme Court in Tata Iron and Steel Co. Ltd. v. Union of India and others : AIR 1996 SC 2462.
Issues: Whether the State Government's recommendation for grant of mining lease in favour of opposite party No. 3 is in conformity with the Act, the Rules, the proposals made by various committees and the principles laid down by the Supreme Court in Tata Iron and Steel Co. Ltd. v. Union of India and others : AIR 1996 SC 2462?
Ratio Decidendi: The Court held that the State Government's recommendation for grant of mining lease in favour of opposite party No. 3 is in conformity with the Act, the Rules, the proposals made by various committees and the principles laid down by the Supreme Court in Tata Iron and Steel Co. Ltd. v. Union of India and others : AIR 1996 SC 2462. The Court observed that the State Government has the power to grant mining lease only when the conditions stipulated under S. 5 are fulfilled, that too on previous approval of the Central Government. Section 11 (4) confers power of relaxation to prefer a prior applicant provided the State Government records special reasons for such grant with prior approval of the Central Government. The Court further observed that the petitioner is not entitled to the reliefs sought as the State Government has the discretion to grant mining lease to others and the petitioner has not shown how the letter dated 28-1-1999 affected its right or prevented it from seeking the grant of some more area.
Final Decision: The Court dismissed the writ petition.
N. Y. HANUMANTHAPPA, C. J.
( 1 ) THE petitioners have filed this writ petition challenging the proposal made by the Government of Orissa, Department of Steel and Mines by letter No. 550/sm/iii (G) SM-36/97 dated 23-1-1999 sent by the Additional Secretary to Government of India, Ministry of Mines, Shastri Bhawan, New Delhi and seeking the following reliefs. (I) The recommendation made by the State of Orissa (opposite party No. 2) vide letter dated 28-1-1999 bearingno. III (G)SM/36/97/550 be quashed. (II) The Union of India and the State of Orissa, i. e. opposite party Nos. 1 and 2 be restrained from acting on the recommendation made by O. P. No. 2 in the letter dated 28-1-1999 referred to above. (III) Opposite party Nos. 1 and 2 be restrained from granting lease pursuant to the application dated 19-9-1996 made by opposite party No. 3, i. e. M/s Nava Bharat Ferro Alloys Limited, a company registered under the Companies Act, 1956 having its Registered Office at Nava Bharat Chambers, Rajbhavan Road, Hyderabad, Andhra Pradesh. (IV) A writ of mandamus or any other appropriate writ, order or direction be issued directing opposite party No. 2 to grant a mining lease in favour of petitioner/imfa for the balance 50% of the area as per the requirement assessed by the Central Government in its order dated 17/08/1995; and such other reliefs.
( 2 ) A few facts necessary for disposal of the writ petition are indicated hereinbelow : petitioner No. 1, namely, M/s. Indian Charge chrome Limited is a company incorporated under the Companies Act, 1956, having its Registered Office at Bomikhal, P. O. Rasulgarh, Bhubaneswar, District Khurda, Orissa. M/s. Indian Metals and Ferro Alloys Ltd. , (hereinafter referred to as 'imfa') a shareholder of M/s Indian Charge Chrome Limited (hereinafter referred to as 'iccl'), is also a company incorporated under the Compaqnies Act, 1956. Petitioner No. 1 is carrying on the business of manufacture and sale of High Carbon Ferro Chrome/charge Chrome having its factory at Choudwar in the district of Cuttack which is a 100% Export Oriented Unit. IMFA is an instrumentality of petitioner No. 1. It is also carrying on the business of manufacture and sale of Charge Chrome having its factory at Therubali, district Rayagada, Orissa. The need of chrome ore has been assessed for both ICCL and IMFA together, as they constitute groups of companies. Petitioner No. 1 requires the chrome ore as a basic raw-material for manufacture of charge chrome. The capacity of petitioner's plant is 62,500 MT per annum on the basis of which the minimum requirement of chromite ore of petitioner is about two lakhs MT per annum. IMFA's requirement is 90,000mt per annum. It requires about four lakhs tonnes of chrome ore per annum which includes the requirement for making chrome ore pellets for export. The total requirement of IMFA is 5,28,427 tonnes or 6 lakhs tonnes per annum. The requirement of IMFA is based on Sharma Committee Report dated 16-8-1995 and the Central Government approved the same on 17-8-1995. Same was also accepted by the State Government (opposite party No. 2 ). The working mines available with ICCL and IMFA are hardly 5% of their needs.
( 3 ) ORIGINALLY Tata Iron and Steel Company Ltd. , (hereinafter referred to as 'tisco') was granted mining lease over an area of 1812. 993 hectares in Sukinda Valley in the year 1953. In the year 1973 after expiry of the lease period in respect of the mining lease granted to TISCO same was renewed by opp. party Nos. 1 and 2 restricting the area to 1261. 476 hectares. As the period of lease was to expire on 12-1-1993, TISCO made an application to opposite party No. 2 for renewal of the mining lease which was duly recommended on 28-11-1992 to opposite party No. 1 by opposite party No. 2 in exercise of power conferred under S. 8 of the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as the 'act' ). According to the petitioner the said recommendation was contrar
