IMPORTANT POINT
Central Government cannot be subjected to contempt proceeding in absence of any direction issued to it.

Headnote:(A) Contempt of Courts Act, 1971 – Section 12 – Mines and Minerals (Development and Regulation) Act, 1957 – Section 10A (As introduced by Mine and Minerals (Development and Regulation) Amendment Act, 2015) – Grant of mining lease – Direction was given to State Government to send recommendation for grant of mining lease to petitioner – As per law prevailing at that time, role of State Government was only to send recommendation to Central Government for allotting mining areas – Ultimate authority/power was vested with Central Government to take a decision on request of State Government – As per procedure then existing, State Government could recommend application submitted by any applicant for grant of mining lease to Central Government and Central Government was given power to grant or refuse to grant approval – Previous approval from Central Government was essential for grant of lease without which State Government could not enter into any such lease agreement with applicant – Letter to Central Government was only recommendatory in nature and ultimate decision rested with Central Government – Insofar as Central Government is concerned, no direction was ever given by Apex Court – It would be for Central Government to consider recommendations of State Government on its own merits and in accordance with law – If that has not been done by Central Government, it cannot be subject matter of present Contempt Petition – Contempt Petition closed. (Paras 14, 15, 16, 25, 26 and 27)
       (B) Words and Phrases – Letter of Intent – Meaning of – Having regard to words 'by whatever name called', expression 'Letter of Intent' is to be given wider connotation – Nomenclature of letter would not be determinative factor – It is substantive nature of letter in question that would determine as to whether it can be treated as Letter of Intent – Letter of Intent is a document that described preliminary understanding between parties who intend to make a contract or join together in another action – A Letter of Intent merely indicates a party's intention to enter into a contract with other party in future. (Para 24)
       Facts of Case:
       Matter concerning wilful disobedience of direction given by High Court. State of Odisha had filed a review petition seeking review of this judgment but same was rejected. Main contention raised was that direction given by High Court in its judgment was incapable of enforcement.
       Findings of Court:
       We are conscious of fact that petitioner had originally succeeded in appeal inasmuch as judgment dated March 14, 2012 was rendered giving direction to State Government to recommend case of petitioner, in terms of MoU entered into between parties, to Central Government. This was not done and decision was reiterated in orders dated April 22, 2014 passed in Contempt Petition (Civil) No. 374 of 2012. It is possible that had State Government acted promptly and sent recommendations earlier, Central Government might have accorded its approval. However, whether it could have done so or not would be in realm of conjectures. Insofar as Central Government is concerned, no direction was ever given by this Court. On the contrary, it was categorically observed in the order dated April 22, 2014 in Contempt Petition (Civil) No. 374 of 2012 that it would be for Central Government to consider recommendations of State Government on its own merits and in accordance with law. If that has not been done by Central Government, it cannot be subject matter of present Contempt Petition. (Para 26)
       Result : Contempt Petition closed with observations.

JUDGMENT :

A.K. Sikri, J.

The erstwhile Bhushan Ltd. (predecessor-in-interest of the petitioner) had proposed setting up of plant in some identified villages in the district of Sambalpur, Odisha. For this purpose, it had made a request for acquisition of land, measuring 1250 acres, which was acquired for Bhushan Ltd. It had also applied for grant of lease of mining of iron ore for use in the proposed plant. These applications were favourably considered by the State of Odisha (hereinafter referred to as the 'State Government') which agreed to accord due priority to Bhushan Ltd. for grant of suitable iron ore areas and also agreed to recommend the proposal to the Government of India for grant of a coal block. Even a MoU was entered into between the State Government and Bhushan Ltd. containing the commitment of the State Government to recommend to the Central Government, grant of iron ore mines for its use in the proposed plant. For this purpose, area earmarked for recommendation were Thakurani area with 96 million tonnes iron ore reserves and Keora area, District Sundargarh for additional 128 million tonnes of iron ore; both for 50 years' requirement of the plant. Though various statutory and other permissions required for setting up of the plant were granted and the plant was also set up, but due to some in-fight between the family members who owned Bhushan Ltd., it faced difficulties in getting the grant of iron ore lease.

2. Insofar as granting of mining lease of iron ore reserves in the aforesaid areas is concerned, it fell into rough weather. It resulted into show-cause notice dated January 18, 2006 by the State Government which led to the decision that mining lease over the Thakurani area could not be allowed on various grounds and the application made by Bhushan Ltd. was premature. Thereafter, the Government of Orissa made a recommendation to the Central Government on February 09, 2006 to grant mining lease in favour of one M/s Neepaz Metallics (P) Ltd. in relaxation of Rule 59(1) of the Mining Rules, for a period of 30 years. Challenging these orders, Bhushan Ltd. filed Writ Petition (Civil) No. 6646 of 2006 in the High Court on May 08, 2006. This writ petition was dismissed by the High Court on December 14, 2007 and challenging this decision a special leave petition was filed in which leave was granted, thereby converting the special leave petition into Civil Appeal No. 2790 of 2012. This appeal was allowed by this Court vide judgment dated March 14, 2012, which was reported as Bhushan Power & Steel Ltd. v. State of Orissa, (2012) 4 SCC 246 with the following directions: (SCC p. 256, paras 41-42)

“41...Accordingly, we allow the appeal and set aside the judgment and order of the High Court of Orissa and also the decision of the State Government dated 9-2-2006, rejecting the appellant's claim for grant of mining lease.

42. During the course of hearing, we have been informed that Thakurani Block A has large reserves of iron ore, in which the appellants can also be accommodated. We, accordingly, direct the State of Orissa to take appropriate steps to act in terms of the MoU dated 15-5-2002, as also its earlier commitments to recommend the case of the appellants to the Central Government for grant of adequate iron ore reserves to meet the requirements of the appellants in their steel plant at Lapanga.”

3. It would be pertinent to mention that the State of Odisha had filed a review petition seeking review of this judgment but the same was rejected vide order dated September 11, 2012. Pursuant to the aforesaid directions, though Bhushan Power & Steel Ltd. has been given Thakurani Block A, the order was not implemented qua Keora, District Sundargarh. The petitioner treated the aforesaid inaction on the part of the State Government as contemptuous and filed Contempt Petition (Civil) No. 374 of 2012 [Bhushan Power and Steel Limited & Ors. v. Rajesh Verma & Ors., (2014) 5 SCC 551]. This petition was contested by the respondents on vario

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2016 Supreme(SC) 991

IMPORTANT POINTCentral Government cannot be subjected to contempt proceeding in absence of any direction issued to it.

Cases Referred (7)

IMPORTANT POINT
Central Government cannot be subjected to contempt proceeding in absence of any direction issued to it.