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IN THE HIGH COURT OF ORISSA, CUTTACK
Dr. S. Muralidhar, B.P. Routray, JJ.
Sarda Mines Pvt. Ltd. & Anr. - Appellants
Versus
State Of Odisha & Ors. - Respondents
Writ Petition (Civil) Nos. 17905, 3115, 6905 of 2021 and CONTC No. 3650 of 2021.
Decided On : 10-01-2022
The Court held that the State Government's order revising the commencement date of renewal of the mining lease from 14th August 2001 to 1st August 1964 was illegal, absurd, and a colourable exercise of power by the State violating the Petitioners' rights under Articles 14 and 19 of the Constitution of India. The Court further held that the lease deed dated 14th August 2001 was not in violation of the MMDR Act and that the Petitioners were entitled to operate the lease for the full period of 30 years from 2001 to 2031.
Fact of the Case:
The Petitioners, Sarda Mines Pvt. Ltd. (SMPL), were granted a mining lease for a period of 30 years from 14th August 2001 to 13th August 2031. The State Government, however, issued an order on 20th May 2021 revising the commencement date of renewal of the mining lease from 14th August 2001 to 1st August 1964, a date 37 years earlier. SMPL challenged this order, arguing that it was illegal, absurd, and a colourable exercise of power by the State violating their rights under Articles 14 and 19 of the Constitution of India.
Finding of the Court:
The Court held that the State Government's order revising the commencement date of renewal of the mining lease was illegal, absurd, and a colourable exercise of power by the State violating the Petitioners' rights under Articles 14 and 19 of the Constitution of India. The Court further held that the lease deed dated 14th August 2001 was not in violation of the MMDR Act and that the Petitioners were entitled to operate the lease for the full period of 30 years from 2001 to 2031.
Issues: 1. Whether the State Government's order revising the commencement date of renewal of the mining lease was legal and valid. 2. Whether the lease deed dated 14th August 2001 was in violation of the MMDR Act. 3. Whether the Petitioners were entitled to operate the lease for the full period of 30 years from 2001 to 2031.
Ratio Decidendi: 1. The Court held that the State Government's order revising the commencement date of renewal of the mining lease was illegal, absurd, and a colourable exercise of power by the State violating the Petitioners' rights under Articles 14 and 19 of the Constitution of India. The Court relied on the following principles: * The order was in violation of the Petitioners' rights under Articles 14 and 19 of the Constitution of India, which guarantee the right to equality and the right to carry on any trade or business. * The order was not supported by any rational or justifiable basis. * The order was issued with mala fide intention to deprive the Petitioners of their legitimate rights. 2. The Court held that the lease deed dated 14th August 2001 was not in violation of the MMDR Act. The Court relied on the following principles: * The lease deed was executed in accordance with the provisions of the MMDR Act and the rules and regulations made thereunder. * The lease deed was not in violation of any of the terms and conditions of the mining lease. * The lease deed was not in violation of any public policy. 3. The Court held that the Petitioners were entitled to operate the lease for the full period of 30 years from 2001 to 2031. The Court relied on the following principles: * The Petitioners had a valid and enforceable lease deed for a period of 30 years from 2001 to 2031. * The Petitioners had not violated any of the terms and conditions of the mining lease. * The Petitioners had not been deprived of their legitimate rights by any illegal or arbitrary action of the State Government.
Final Decision: The Court held that the State Government's order revising the commencement date of renewal of the mining lease was illegal, absurd, and a colourable exercise of power by the State violating the Petitioners' rights under Articles 14 and 19 of the Constitution of India. The Court further held that the lease deed dated 14th August 2001 was not in violation of the MMDR Act and that the Petitioners were entitled to operate the lease for the full period of 30 years from 2001 to 2031.
JUDGMENT
Dr. S. Muralidhar, CJ. - Introduction
1. These are three writ petitions and one contempt petition filed by M/s. Sarda Mines Pvt. Ltd. (SMPL) (Petitioner No.1) and its Director and Shareholder (Petitioner No.2).
2. In W.P.(C) No.3115 of 2021, the Petitioners have sought a direction to the Opposite Party-Department of Steel and Mines, State of Odisha (DSM) to execute a lease deed in favour of Petitioner No.1 (SMPL) "for the remaining bifurcated period of 10 years of the 30 years period" in terms of the directions dated 28th June and 18th December, 1991 of this Court in OJC No.2567 of 1984 and 30th June 1998 in OJC No.1803 of 1986 and also in terms of the order dated 11th February, 1999 passed by the DSM.
3. The prayer in W.P.(C) No.6905 of 2021 is for quashing of a demand notice dated 8th February, 2021 issued by the Joint Director of Mines, Joda, District: Keonjhar (JDM) (Opposite Party No.1) in the writ petition directing the Petitioner to pay a sum of Rs.2045.51 crores as compensation on excess production; quashing the notice dated 20th May, 2021 issued by the JDM asking SMPL not to cross the pro rata limit of production against the quantity stipulated in the Environmental Clearance (EC), accorded by the Ministry of Environment and Forest (MoEF), Government of India and in case the said limit is already reached, to stop production immediately; to quash a letter dated 21st May, 2021 by which SMPL was informed by the JDM that on verification from the I3MS login, it was found that SMPL had already achieved production of 22,75,848 MT thus crossing the pro rata limit of production and therefore, SMPL was asked to stop production of iron ore in the mines 'immediately'.
4. In the third writ petition i.e. W.P.(C) No.17905 of 2021, SMPL, Petitioner No.1 and its Director and Shareholder (Petitioner No.2) have challenged an order dated 20th May, 2021 issued by DSM, Government of Odisha, retrospectively revising the date of renewal of lease deed which was executed on 14th August, 2001 to 1st August 1964.
5. Apart from the above, CONTC No.3650 of 2021 has been filed by SMPL alleging that the Opposite Parties have willfully disobeyed the order dated 7th June, 2021 passed by this Court in I.A. No.7623 of 2021 in W.P.(C) No.6905 of 2021.
Background facts
6. The background facts are that two mining leases (Block-A and Block-B) over an area measuring 2590.4 acres and 2340.2 acres respectively in village Murgabeda and Soyabali of Thakurani Iron Ores Mines in Keonjhar District were granted in favour of late Shri Babu Hiralal Sarda by the then Raja of Keonjhar by a lease deed dated 1st August, 1934. The leases were originally granted for a period of 30 years commencing 1st August, 1934 and expiring on 31st July, 1964. The lease deed had a clause providing for renewal for another period of thirty years.
7. Shri Hiralal Sarda died in 1947, whereafter his son Shri Baijnath Sarda carried on the mining operation. On 4th September 1956, the Mining Lease (Modification of Terms) Rules, 1956 ('1956 Rules') was issued. Under Rule 4 of the 1956 Rules, existing leases were required to be brought in conformity with the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act).
8. In respect of the mining lease over an area of Ac 2340. 20 dec in Soyabali, the Controller of Mining Leases (CML), Northern Region issued a show cause notice (SCN) dated 28th May, 1957 under Rule 6 of the 1956 Rules inter alia stipulating that the dead rent shall be enhanced to Rs.5/- per acre per annum for iron ore and Rs.10/- per acre per annum for manganese ore; that except for the modifications made by the said SCN, the lease would be subject to the Rules made or deemed to have been under Sections 13 and 16 of the MMDR Act and that the royalty should be payable in accordance with Section 9 of the MMDR Act instead of according to the stipulations in the lease deed.
9. On 28th May, 1957 the CML issued a show cause notice (SCN) to the erstwhile lessee, Shri Baijnath Sar
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