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2016 Supreme(MP) 1028
IN THE HIGH COURT OF MADHYA PRADESH
A.M. Khanwilkar, Sanjay Yadav, J.
Savita Rawat and others - Petitioners
Versus
State of M.P. and others - Respondents
Writ Petition No. 4278 of 2001 and Writ Petition No. 836, 8612, 9801 of 2009, 17175, 18791, 4936 of 2011, 5373, 7158, 7926, 7927, 8918, 11144, 11541, 12431, 12438, 12472, 12474, 12478, 14714, 14716, 14993 and 15621 of 2011, CONC No. 1658 of 2011, Writ Petition No. 20119 of 2011, 6152 and 18677 of 2012, 7006, 11694, 14928 of 2013, 2314 and 276 of 2014, 8110, 8950, 13647, 15124, 16632 and 16771 of 2015 and Writ Petition No. 3909, 4209, 11251 and 14403 of 2010, 5567, 6165, 6169, 7005, 7928, 9124, 17006, 20599 of 2011, 6109 of 2012, 4043 of 2013, 16987, 18714, 18848, 18852 of 2014, 4891, 5167, 5978, 8131, 9887, 11038 and 11956 of 2015, 1742 of 2016, Writ Petition No. 12826, 12835, 12836, 12838, 12840, 14724, 14725, 14726, 14731, 14732, 14733 and 14734 of 2015, 1403 of 2016
Decided On : 11-03-2016
For the Petitioners: Rajendra Tiwari, Nikhil Tiwari, T.K. Khadka, R.P. Agrawal, A.M. Lal, Sanjay K. Agrawal, Nikhil Tiwari, R.S. Jaiswal, K.K. Gautam, Anil Khare, H.S. Chhabra, Kishore Shrivastava, Kunal Thakre, Kapil Jain, Naman Nagrath, Himanshu Mishra, Akshay Dharmadhikari, Shreyas Dharmadhikari, Abhijeet A. Awasthi, Chandrahas Dubey, Siddharth Gupta, Manoj Kushwaha, Priyank Choubey
For the Respondents: Samdarshi Tiwari, K.M. Nataraj, Vikram Singh
The auctioning system introduced by the Amendment Act, 2015, was a reasonable and non-discriminatory method of allocating mineral concessions and did not violate any fundamental rights guaranteed under the Constitution of India.
Headnote:
The Supreme Court of India upheld the constitutional validity of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (Amendment Act, 2015), which introduced significant changes to the allocation and grant of mineral concessions in India. The Court held that the Amendment Act, 2015, which replaced the previous first-come-first-served policy with a system of auctioning mineral concessions, was a valid exercise of legislative power and did not violate any fundamental rights guaranteed under the Constitution of India.
Fact of the Case:
Numerous petitions were filed before the Supreme Court challenging the validity of the Amendment Act, 2015. The petitioners included applicants who had applied for mineral concessions prior to the enactment of the Amendment Act, 2015, but whose applications had become ineligible due to the new auctioning system. Other petitioners included those who had been granted in-principle approval for mineral concessions but had not yet executed the necessary agreements. The petitioners argued that the Amendment Act, 2015, was unconstitutional on various grounds, including that it violated the principles of equality, arbitrariness, and the right to property.
Finding of the Court:
The Supreme Court rejected all the challenges to the validity of the Amendment Act, 2015. The Court held that the auctioning system introduced by the Amendment Act, 2015, was a reasonable and non-discriminatory method of allocating mineral concessions. The Court also held that the Amendment Act, 2015, did not violate the right to property because it did not extinguish any existing rights but merely modified the procedure for obtaining mineral concessions.
Issues: 1. Whether the Amendment Act, 2015, which introduced a system of auctioning mineral concessions, was a valid exercise of legislative power? 2. Whether the Amendment Act, 2015, violated the principles of equality, arbitrariness, and the right to property?
Ratio Decidendi: 1. The Court held that the Amendment Act, 2015, was a valid exercise of legislative power because it was enacted to achieve legitimate objectives, such as ensuring transparency and efficiency in the allocation of mineral concessions and maximizing revenue for the government. The Court also held that the auctioning system introduced by the Amendment Act, 2015, was a reasonable and non-discriminatory method of achieving these objectives. 2. The Court held that the Amendment Act, 2015, did not violate the principles of equality and arbitrariness because it applied uniformly to all applicants for mineral concessions. The Court also held that the Amendment Act, 2015, did not violate the right to property because it did not extinguish any existing rights but merely modified the procedure for obtaining mineral concessions.
Final Decision: The Supreme Court upheld the constitutional validity of the Amendment Act, 2015, and dismissed all the petitions challenging its validity.
Sanjay Yadav, J.
Realizing the shortcomings in the existing Mines and Minerals (Development and Regulation) Act, 1957 (referred to as 'MMDR Act') as to allocation of natural resources having direct relevance to the grant of mineral concessions, resulting in multiple litigation and experiencing the counter productive effect thereof, And the decisions in Centre for Public Interest Litigation v. Union of India, (2012) 3 SCC 1 and Natural Resources Allocation, In re, Special Reference No. 1 of 2012 (2012) 10 SCC 1; led the Central Government promulgate Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015 on 12.1.2015. In March, 2015 (27.3.2015), Parliament enacted the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (referred to as Amendment Act, 2015).
2. The exhaustive statement of objects and reasons reveals that the extensive amendment in the MMDR Act were effected after extensive consultations and intensive scrutiny by Standing Committee on Coal and Steel, who gave their Report in May, 2013. As is evident from the statement that, the difficulties were experienced because the existing MMDR Act does not permit the auctioning of mineral concessions. It was observed that with auctioning of mineral concessions, transparency in allocation will improve. Government will get an increased share of the value of mineral resources. That, it will alleviate the procedural delay which, in turn would hold slowdown which adversely affected the growth of mining sector.
3. The Amendment Act, 2015, as is evident from the objects, aims at : (i) eliminating discretion (ii) improving transparency in the allocation of mineral resources (iii) simplifying procedures (iv) eliminating delay on administration, so as to enable expeditious and optimum development of the mineral resources of the country (v) obtaining for the Government an enhanced share of the value of the mineral resources and (vi) attracting private investment and the latest technology.
4. The Amendment Act, 2015 ushered in the amendment of Sections, 3, 4, 4A, 5, 6, 13, 15, 21 and First Schedule. Substitution of new sections for Sections 8, 11 and 13. And, insertion of new sections 8A, 9B, 9C, 10A, 10B, 10C, 11B, 11C, 12A, 15A, 17A, 20A, 30B, 30C and fourth schedule.
5. These amendments brought in vogue (i) the auction to be the sole method of allotment (ii) extension of tenure of existing lease from the date of their last renewal to 31.3.2030 (in the case of captive mines) and till 31.3.2020 (for the merchant miners) or till the completion of renewal already granted, if any, or a period of fifty years from the date of grant of such lease (iii) establishment of District Mineral Foundation for safeguarding interest of persons affected by mining related activities (iv) setting up of a National Mineral Exploration Trust created out of contributions from the mining lease holders, in order to have a dedicated fund for encouraging exploration and investment (v) removal of the provisions requiring "previous approval" from the Central Government for grant of mineral concessions in case of important minerals like iron ore, bauxite, manganese etc. thereby making the process simpler and quicker (vi) introduction of stringent penal provisions to check illegal mining prescribing higher penalties up to Rs. 5 Lakh per hectare and imprisonment up to 5 years and (vii) further empowering the State Government to set up Special Courts for trial of offences under MMDR Act.
6. With the introduction of the method of allocation of mineral resources through auctioning, newly introduced Section 10A delineated right of existing concession holders and applicants.
7. Whereas, sub-section (1) mandates that all applications received prior to the date of commencement of the Amendment Act 2015 (i.e. 12.1.2015) shall become ineligible; sub-section (2) carves out an exception and makes such person eligible for grant of prospecting licence and the mining lease who fulfils the stipulati
