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2008 Supreme(Ori) 981
IN THE HIGH COURT OF ORISSA
Sanju Panda, I.M. Quddusi, JJ.
MESCO STEELS LIMITED - APPELLANT
Versus
STATE OF ORISSA AND OTHERS - RESPONDENT
Writ Petition (C) No. 14044 of 2006
Decided On : 16-05-2008
B. Ray and S. Mohanty, D.K. Mishra, B. Mohanty, B. Moharana, D. Chhotray and S. Mohanty, for the Appellant; S.K. Nayak-1, B.K. Sahoo, D. Nayak, A.C. Baral, S. Biswal and S. Ray for O.Ps. Nos. 1 and 2 and J.K. Mishra, ASG for O.P. 3, for the Respondent
The central legal point established in the judgment is the requirement for Central Government approval for the grant of a mining lease for specified minerals, and the importance of compliance with the conditions of the mining lease deed upon its execution.
Headnote:
MMDR Act - Mining Lease - 5(1)(b), 11(4) of MMDR Act, 1957, Rule 27(3) of M.C. Rules - The court discussed the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 and Rule 27(3) of the Mineral Concession Rules, 1960. The court emphasized that the Central Government's approval is necessary for the grant of a mining lease for specified minerals and highlighted the importance of compliance with the conditions of the mining lease deed upon its execution.
Fact of the Case:
The Petitioner sought to quash an order proposing deduction of the area granted for mining lease and to direct the State to execute the deed of mining lease. The Petitioner had applied for mining lease, and the Central Government approved the proposal for a mining lease over an area of 1011.480 hectares and 508.500 hectares. However, the lease deed was not executed, and the State Government initiated proceedings to reduce the granted area.
Finding of the Court:
The court found that the State Government's actions to reduce the granted area and issue a show cause notice were without jurisdiction and contrary to the provisions of the MMDR Act and M.C. Rules. The court held that the Petitioner was entitled to the entire granted area without reduction.
Issues: The issues involved the jurisdiction of the State Government to reduce the granted area, the applicability of Rule 27(5) of the M.C. Rules, and the compliance with conditions for executing the mining lease deed.
Ratio Decidendi: The court ruled that the State Government's actions were without jurisdiction and that the Petitioner was entitled to the entire granted area. The court emphasized the importance of compliance with the conditions of the mining lease deed upon its execution.
Final Decision: The court allowed the writ petition, quashed the impugned order, and directed the State to execute the mining lease in favor of the Petitioner for the entire granted area. The Petitioner was required to comply with the conditions of the mining lease deed upon its execution.
JUDGMENT :
I.M. Quddusi, J. - By means of this writ petition, the Petitioner has prayed for quashing of the impugned order dated 19.9.2006 of the Director of Mines, Orissa as contained in Annexure-8 to the writ petition proposing deduction of area granted to the Petitioner for mining lease and also for a directing to the State to execute the deed of mining lease in respect of the iron ore over an area of 1011.480 hectares (802.6678 hectares as per survey) in village Kadakala and Luhakala and 508.500 hectares (697.8122 as per survey demarcation) in village Sundara and Pidapokhari in the district of Keonjhar declaring that the Petitioner is entitled to the mining lease for the aforesaid areas as approved by the Government of India as early as 7.1.1999 without reduction of any area approved by the Central Government.
2. Vide impugned order as contained in Annexure-8, instead of issuing the order for executing the lease deed, the Director of Mines requested the State Government for reallocation of the resources allotted in favour of the Petitioner after reassessment of-requirements of MESCO Steel and since the Steel Plant has been installed by M/s. MISL instead of MESCO the Director suggested to the State Government as to whether the supply of iron ore from the mining leases granted in favour of MESCO to the steel plant set up by M/s. MISL would not be in violation of the aforesaid terms and conditions for captive use.
3. The brief facts of the case are that the Petitioner, in the year 1994, submitted three mining lease applications for mining lease for the area 1546.618 hectares. Thereafter in the year 1996, Government of Orissa allottecharea of 1565 hectares in favour of the Petitioner in 'S', 'K', 'J' and 'H' Blocks of Malangtoli and Block No. 16 of Luhakala villages in the district of Keonjhar and thereafter sent a letter to the Petitioner to furnish revised mining lease applications to cover the allotted area of 1565 hectares. Consequentially, the Petitioner submitted two revised mining lease applications for an area of 1101.000 hectares and 494.987 hectares total amounting to 1595.987 hectares to cover the entire allocated area of 1565 hectares. Thereafter vide letter dated 23.9.1997, the Director of Mines, Orissa recommended the mining lease applications of the Petitioner to the State Government for grant of mining lease over an area of 1011.480 hectares against M.L. application No. 672 and 508.500 hectares against M.L. Application No. 673 thus total area of 1519.980 hectares out of allotted area of 1565 hectares (by overlapping 61 earlier PL/ML applications). The area of 1011.480 hectares did not include any forest land and the grant was subject to submission of approved mining plan and environmental clearance but the area 508.980 hectares recommended included forest land of 377.690 hectares and the grant was subject to submission of approved mining plan, forest and environmental clearance. Iron ore being a specified mineral, State Government vide letter dated 21.10.1997 recommended the mining lease application of the Petitioner to the Central Government for their approval u/s 5(1)(b) with relaxation of Section 6(1)(b) to meet the captive requirement of the Petitioner and its sister concern (MKSL).
4. On 7.1.1999, the Central Government approved the proposal of grant of mining lease over an area of 1011.480 hectares and 508.500 hectares in exercise of power conferred u/s 5(1) and 11 (4) of the Mines and Minerals (Development and Regulation) Act, 1957 (in short 'MMDR Act) and Rule 27(3) of the Mineral Concession Rules, 1960 (in short "M.C. Rules") with relaxation of Section 6(1)(b) of the Act, 1957 in favour of the Petitioner for a period of thirty years which was communicated to the Petitioner by the Government of Orissa vide letter dated 8.2.1999. The terms and conditions mentioned in that letter for grant of mining lease was accepted by the Petitioner on 15.2.1999. Thereafter on 17.3.1999, the Government of Orissa issued gra
