Back
2011 Supreme(Ori) 178
2011 (II) OLR — 328
L. MOHAPATRA, J.
FAO No.270 of 2003
(From the order dated 10.5.2005 passed in Civil Appeal No.3397 of 2005 arising out of S.L.P.(C) No.10573 of 2005 corresponding to order dated 18.3.2005 passed in F.A.O. No. 270 of 2003)
Birat Chandra Dagara... Appellant
Versus
M/s Taurian Exim Pvt. Ltd.
& another... Respondents
Decided on 17th May, 2011.
For Appellant:M/s. Ashok Kumar Parija, Sarada P. Sarangi, P.P. Mohanty, Pravash Ch. Jena and P.K. Dash
For Respondents:M/s P. Chatterjee and Karunakar Jena
Headnote:MINERAL CONCESSION RULES, 1960 - Rule 37 - Appellant granted mining lease in respect of Suleipat Iron Ore mine - Defendant-appellant executed a general irrevocable Power of Attorney in favour of the plaintiff-respondents to raise, despatch and sale of minerals apart from looking after the official work in Central office at Suleipat - Subsequently the defendant-appellant revoked the Power of Attorney - Whether Rule 37(1)(a) and (b) of the Rules have any impact on the issue involved or not ? - Appellant by executing the power of Attorney created an interest in favour of Respondent No. 1 in violation of Rule 37(1)(a) of the Rules - By permitting Respondent No. 1 to have full control over the functioning of the mines to the exclusion of the appellant, who is the lessee on receipt of a consideration of Rs. 98.00 lakhs, Rule 37(1)(b) of the Rules has also been violated - Held, irrevocable Power of Attorney executed by the appellant in favour of Respondent No. 1 is in contravention of Rule 37(1)(a) and (b) of the Rules.
Under Rule 37(1) (a) a lessee without the previous consent in writing of the State Government cannot create an interest in favour of anyone and under Rule 37(1)(b) the lessee without the previous consent in writing of the State Government cannot enter into or make any bona fide arrangement, contract or understanding whereby the lessee will or may be directly or indirectly financed to a substantial extent, by, or under which the lessee’s operations or undertakings will or may be substantially controlled by, any person or body of persons other than the lessee. Another relevant provision is the last proviso to Rule 37(2). It provides that the lessee shall not charge or accept from the transferee any premium in addition to the sum spent by him, in obtaining the lease and for conducting all or any of the operations referred to in Rule 30 in or over the land leased to him.
On a conjoint reading of both the above Clauses of the Power of Attorney, it is clear that the appellant, who was the lessee in respect of the mines intended to transfer the mines in favour of respondent no.1 awaiting approval of the competent authority under the Rules and during the interregnum period the appellant wanted, respondent no.1 to operate the mines, raise minerals, sale it in the market and also have full control over functioning of the mines. For the interregnum period the appellant had received a consideration of Rs.98.00 lakhs from respondent no.1 Therefore, the appellant not only intended to transfer the lease in favour of respondent no.1, awaiting approval of the competent authority for such transfer but also authorized respondent no.1 to operate the mines, raise and sale minerals and have full control over functioning of the mines. (Paras - 8 to 11)
JUDGMENT
L. MOHAPATRA, J. — This appeal was disposed of by judgment dated 18.3.2005. The appellant filed Civil Appeal No.3397 of 2005 arising out of S.L.P.(C) No.10573 of 2005 before the Hon’ble Supreme Court assailing the said judgment. After hearing the parties, the Hon’ble Supreme Court passed the following order and remitted the matter back to this Court for fresh consideration of the appeal. The order passed by the Hon’ble Supreme Court is quoted below:-
“In our opinion Rule 37 of Mineral Concession Rules, 1960 has a vital bearing on the issue involved in this appeal. This question was either not argued before the appellate Court or was not considered by the Court. Be that as it may, since Rule 37 has a direct impact on the issue involved in the case, we think it appropriate that the impugned order be set aside and the matter be remanded back to the High Court for fresh consideration of the appeal bearing in mind the provisions of Rule 37 of Mineral Concession Rules, 1960.”
2.The impact of Rule 37 of Mineral Concession Rules, 1960 (hereinafter called ‘the Rules’) was neither pleaded in the appeal nor was any argument advanced in relation to the same. Accordingly the Court while disposing of the appeal did not consider the impact of Rule 37 of the aforesaid Rules. After remand, learned counsel for both sides were heard again with regard to impact of Rule 37 of the aforesaid Rules on the issue involved in this appeal.
3.Though from the impugned order passed by the learned Civil Judge (Senior Division), Rairangpur, it appears that impact of Rule 37 of the Rules had been raised, no such pleading was taken in this appeal and consequently learned counsel appearing for the parties did not make any submission in that regard.
4.In order to determine the impact of Rule 37 of the Rules to the issue involved in this appeal, it is necessary to narrate brief facts of the case specially with reference to the irrevocable Power of Attorney executed by the appellant in favour of the respondents.
5.The appellant had been granted mining lease in respect of Suleipat Iron Ore Mine covering an area of 1527.10 acres or 618 hectors. Not being able to operate the mine for want of technical know-how, funds, he persuaded the respondents to advance a sum of Rs.98.00 lakhs and operate the mine under an irrevocable Power of Attorney. It is the case of the plaintiff-respondents that the defendant-appellant also suggested that he was ready and willing to transfer the said lease hold right permanently in favour of the plaintiff-respondents after obtaining due permission from the authority and during that interregnum period i.e. from the date of advancement/execution of irrevocable Power of Attorney till the date of execution and registration of final document of transfer, the absolute right to manage, operate the mines in question, raise, transport and sale of ore, shall rest with the plaintiff-respondents on the basis of the irrevocable Power of Attorney. The plaintiff-respondents accepted such suggestion of the defendant-appellant and advanced a sum of Rs.76.00 lakhs in between 21.6.2002 and 26.7.2002. A further sum of Rs.22.00 lakhs was also paid in cash on different dates making it a total of Rs.98.00 lakhs. The defendant-appellant executed a general irrevocable Power of Attorney in favour of the plaintiff-respondents and registered the same on 09.7.2002. Under the terms of the said Power of Attorney the plaintiff-respondents were to take possession, manage works, raise, despatch-and sale minerals from the said mine. Suddenly the defendant-appellant revoked the Power of Attorney on 16.7.2002, as a result of which the plaintiff-respondents filed the aforesaid suit for declaration that the deed of revocation dated 16.7.2002 is void, illegal and inoperative and for further declaration that in view of the registered irrevocable Power of Attorney dated 09.7.2002 executed by the sole defendant in favour of plaintiff no.1 and backed by payments as indicated in the
