I find from the proceedings that no notice has been issued in the contempt petition. The proceeding of January 28, 2009 reveals that the Court only ordered copy of the contempt petition to be supplied to learned counsel appearing for the State of Jharkhand to enable it to file its response. In the order passed on January 28, 2009, the Court made it very clear that it was not inclined to issue any notice in the contempt petition. Now, since the appeal preferred by Abhijeet Infrastructure Ltd., has been dismissed, the contempt petition is also liable to be dismissed and is dismissed.
… J.
(R. M.Lodha) New Delhi July 26, 2012 159 Page 159 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
Civil Appeal No. 3285 OF 2009
Monnet Ispat & Energy Ltd. ... Appellant Versus Union of India and Ors. ... Respondents with
Civil Appeal No. 3286 OF 2009
Adhunik Alloy and Power Ltd. ... Appellant Versus Union of India and Ors. ... Respondents with
Civil Appeal No. 3287 OF 2009
Abhijeet Infrastructure Pvt. Ltd. ... Appellant Versus Chief Secretary, State of Jharkhand and Ors. ... Respondents with
Civil Appeal No. 3288 OF 2009
Ispat Industries Ltd. ... Appellant Versus Union of India and Ors. ... Respondents with
Civil Appeal No. 3289 OF 2009
160 Page 160 Jharkhand Ispat Pvt. Ltd. ... Appellant Versus Union of India and Ors. ... Respondents with
Civil Appeal No. 3290 OF 2009
Prakash Ispat Ltd. ... Appellant Versus Union of India and Ors. ... Respondents and
Contempt Petition (C) No.14 OF 2009
in
Civil Appeal No.3287 OF 2009
J U D G E M E N T H.L. Gokhale J.
All these appellants claim to be companies interested in developing iron and steel projects, and therefore sought grant of leases of iron-ore mines situated in the state of Jharkhand. Applications of ten such companies including the appellants were forwarded by the Government of Jharkhand sometime around August 2004 to the Union of India, for its consideration for grant of lease in certain areas. Subsequently, on realising that those areas were reserved for exploitation in the public sector, the State Government by its letter 161 Page 161 dated 13.09.2005, sought to withdraw nine of these proposals including those of all the appellants. The Central Government however, did not merely return the nine proposals, but rejected the same by its letter dated 6.3.2006 addressed to the Government of Jharkhand. All these appellants therefore, along with some others filed writ petitions to challenge these two letters dated 13.9.2005 and 6.3.2006, and sought a direction to grant the mining leases to them in the proposed areas, and to seek appropriate reliefs. The Writ Petitions filed by the six appellants herein were respectively bearing following nos. (1) W.P. (C) No. 4151 of 2006, (2) W.P. (C) No. 1769 of 2006, (3) W.P. (C) No. 2629 of 2006, (4) W.P. (C) No. 5527 of 2006, (5) W.P. (C) No. 7636 of 2006 and (6) W.P. (C) No. 7363 of 2006. All those writ petitions were dismissed by a Division Bench of the Jharkhand High Court by a common judgment and order dated 4.4.2007. Being aggrieved by the same, six of them have filed these appeals to this Court.
2. An interim order came to be passed in these appeals on 7.5.2007, that until further orders no fresh leases shall be granted in respect of the disputed mining area. We may note that at one stage same workable arrangements were considered by this Court but they did not materialise. These appeals have been admitted thereafter on 30.4.2009. The Union of India and the State of Jharkhand are the main contestants in all these appeals, though a few other entities like the 162 Page 162 National Mineral Development Corporation (NMDC), Tata Iron Steel Company (TISCO) and Arclor Mittal (India) Ltd. have intervened to oppose them. Learned Senior Counsels Sarvashri C.A. Sunderam, Dr. Rajeev Dhawan, Ranjit Kumar, Dhruv Mehta, Dr. Abhishek Manu Singhvi, L. Nageswara Rao, and G.C. Bharuka have appeared in support of these appeals. Senior Counsels Shri Dilip Sinha, and Shri Ashok Bhan have appeared for the State of Jharkhand, and Union of India respectively. Shri P.S. Narasimha, Senior counsel for NMDC, Shri Vikas Singh, Senior Counsel for TISCO, Shri Krishnan Venugopal, Senior counsel for Arclor Mittal (India) Ltd. and Shri J.K. Das, learned counsel for M/s Rungta Sons Pvt. Ltd., have appeared to oppose these appeals.
Facts leading to these appeals:-
3. The facts in all these appeals are by and large similar. We may refer to the facts of the first Civil Appeal in the case of M/s Monnet Ispat and Energy Ltd. (for short ‘Monnet’) as somewhat representative. It is the case of Monnet that it wanted to set-up an iron and steel plant in the State of Jharkhand. It was ready to invest an amount of Rs.1400 crores on this project, and for that purpose it was interested in the allotment of iron and manganese ore mines situated in the Ghatkhuri Forest area of West Singhbhum District (which has its headquarters at Chaibasa). A high level meeting was held in Ranchi for that purpose on 7.7.2002 between the officers of Monnet and Jharkhand Government, 163 Page 163 subsequent to which, minutes of the meeting were drawn recording the discussion between the two parties. Thereafter, a memorandum of understanding (MOU) was arrived at between the Government of Jharkhand and Monnet on 5.2.2003, for the establishment of an integrated steel plant. The MOU reaffirmed the commitment of Monnet to establish the integrated steel plant, and that of the Government of Jharkhand to provide therefor the land containing iron and manganese ore mines, a coal block and other facilities. The MOU recorded that the plant will produce sponge iron of the capacity of 4 lac tonnes per annum, and mild steel of 2 lac tonnes and alloy steel of 2 lac tonnes. It was expected to provide employment to 10,000 persons. The MOU recorded that the State Government agrees to recommend the proposal of Monnet to Government of India, for the allotment of areas containing iron ore and manganese ore deposits and coal blocks situated in Ghatkhuri Forest area of West Singhbhum District. This clause reads as follows:-
III. MINES:
COAL:……..
IRON ORE AND MANGANESE ORE: The State Government agrees to recommend to Government of India for the allotment of iron ore and manganese ore deposits expected to contain sufficient reserves to cater the needs of the project. The iron ore reserves suitable for sponge iron making as identified are Ghatkhuri area in Chaibasa District. The State Government also agrees to recommend to Government of India for allotment of additional mines able deposits in West Singhbhum area to cater the project need.”
164 Page 164 We may as well note that paragraph VII (d) of the MOU stated as follows:-
In the event of non-implementation of the project, support/commitment of the State Government in the MOU shall be deemed to be withdrawn.
4. Accordingly, the Jharkhand Government vide its letter dated 6.8.2004 recommended the proposal of Monnet to Union of India under Section 5 (1) and 11 (5) of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to “MMDR Act”). The letter stated that some 58 applications were received, seeking grant of the mining leases over an area of 3566.54 hectares in Ghatkhuri reserved forest. All applicants were given sufficient opportunity of hearing. As far as Monnet is concerned, State Government had recommended the amended area of 705 hectares for the consent of the Central Government for grant of lease under Section 5 (1) of the Act. The letter also stated that priority was being given to Monnet in terms of Section 11 (3) of the Act on the basis of its technical mineral based industry and financial capacity.
5. On receiving that application and after considering that the mining lease was to be granted for a period of 30 years, the Central Government asked the State Government, vide its letter dated 6.9.2004, to forward its justification in support of the proposal, since in its view an adequate justification, in the interest of mineral 165 Page 165 development, had not been sent. The State Government explained its position, vide its reply dated 17.11.2004, as to why priority was given to Monnet, and sought the approval of Government of India under Sections 5 (1) and 11 (5) of MMDR Act. It enclosed therewith a comparative statement of the claims of 58 applicants who had applied for grant of mining leases of iron ore on 3566.54 hectares area in the reserved forest at Mauza Ghatkhuri in West Singhbhum District.
6. It so happened that at that stage the District Mining Officer of Chaibasa brought it to the notice of the concerned authorities of State Government, by his letter dated 17.11.2004, that the undivided state of Bihar (when Jharkhand was a part of it) had reserved certain areas for the exploitation of minerals in the public sector, by its notification dated 21.12.1962, and it included the recommended area of Singhbhum District. This notification had been followed by another notification of the undivided State of Bihar dated 28.2.1969 which reiterated that an area of 168.349 hectares in Ghatkhuri reserved forest block no.10 in district of Singhbhum was reserved for exploitation of minerals in public sector. A copy of the said notification had been marked to the District Mining Officer, Chhaibasa.
7. The two notifications read as follows:-
(1) Government of Bihar Department of Industries & Mines (Mines) 166 Page 166 NOTIFICATION:
Patna, the 21 December, 1962 30th Agrahand, 1884-S Memo No. A/MM-40510/6209/M. It is hereby notified for the information of public that the following iron ore bearing areas in this State are reserved for exploitation of the mineral in the public sector.
167 Page 167 By the order of the Governor of Bihar Sd/-
B.N. Sinha Secretary to Government 1962 Memo No. 6209/M Patna, the 21st Dec., 30 Agrah Copy forwarded to the Superintendent, Secretariat Press, Gulzarbagh, Patna for publication of the notification in the next issue of the Bihar Gazette.
2. He is also requested to kindly supply two hundred copies of the Gazette notification to this Department.
1962 Sd/-
B.N. Sinha Secretary to Government Memo No. 6209/M Patna, the 21st Dec., 30 Agrahan, 1884-S Copy forwarded to the Commissioner of Chhotanagpur Division, Ranchi/All District Officers/All District Mining Officers for information.
Sd/-
B.N. Sinha Secretary to Government (2) GOVERNMENT OF BIHAR DEPARTMENT OF MINES AND GEOLOGY NOTIFICATION 168 Page 168 Patna, the 28th February, 1969 Phalgun, 1890-S No. B/M6-1019/68-1564/M. It is hereby notified for information of public that Iron Ore bearing areas of 416 acres (168.348 hectares) situated in Ghatkuri Reserved Forest Block No. 10 in the district of Singhbhum are reserved for exploitation of mineral in the public sector. For full details in this regard District Mining Officer, Chaibasa should be contacted.
By the order of Governor of Bihar Sd/-
C.P. Singh Dy. Secretary to Government Memo No. 1564/M Patna, the 28th February, 1969.
Copy forwarded to the Superintendent, Secretariat Press, Gulzarbagh, for favour of public of the Notification in the Extra-ordinary issue of the Bihar Gazette at any early date.
2. 100 spare copies of the notification may also be sent to this Department immediately.
Sd/- Dy. Secretary to Government Memo No. 1564/M Patna, the 28th February, 1969 Copy forwarded to the Dy. Commissioner, Singhbhum/Dy. Director of Mines, 2, College Road, Circuit House Area, Jamshedpur 7/ District Mining Officer, Singhbhum, Chaibasa/Director, Mines, Bihar/Dy. Director of Geology, Bihar/Advisor in Geology, Bihar for information.
Sd/-
C.P. Singh Dy. Secretary to Government
8. Thereafter, in continuation with the correspondence with the State Government, the Central Ministry of Mines by its letter dated 15.6.2005, wrote to the Secretary to the State Government, Department of Mines, seeking a meeting of the concerned officers of 169 Page 169 the State Government and the Ministry of Mines of the Central Government for the clarification on the following issues:-
(i) The State Government had rejected even those applicants who were prior applicants but were not willing to set up the mineral based industry in the State. This stipulated condition of State Government is not as per the National Mineral Policy.
(ii) As against the applicants at Sl. Nos.18, 20, 23, 29, 33, 41, 44 and 58, the State Government had stated that they had not submitted any solid proposals. The Central Government wanted to know what the State Government meant by ‘solid proposals’.
(iii) There was wide variation between the area recommended and the proposed plant capacity.
(iv) The total area of the ten proposals came to 3693.05 hectares whereas the total area reported to be available in Ghatkhuri was 3566.54 hectares. It was also stated that in the case of the proposal of M/s Bihar Sponge Iron Ltd., the total area in Ghatkhuri reserve forest was shown as 4692.46 hectares.
9. It was in this background that the Government of Jharkhand called back nine out of the ten proposals (excluding the one in favour of Bihar Sponge Iron Ltd.), by its letter dated 13.9.2005. The letter specifically stated that the proposals overlapped the areas reserved for the public undertakings and the areas already held by two 170 Page 170 other companies. This was one of the two letters impugned in the writ petitions to the High Court. This letter reads as follows:-
“Government of Jharkhand Mines and geological department No.Khni (Chaya)-78/03 (Part)-501/M-C Ranchi Dated 13.09.2005 From: Arun Kumar Singh Secretary to the Government To, Sh. Anil Subramaniam Under Secretary Ministry of Mines Government of India Shastri Bhawan, New Delhi – 110 001.
Sub: In connection with return of recommendations sent for mining lease of Iron ore in the reserved Forest Land in Mauza Ghat Khuri, under the West Singhbhum District.
Sir, Kindly refer to your letter No.5/40/2004/MIV dated 30.08.2005 on the above mentioned subject. Proposal was sent by the mines and mineral department Jharkhand, for sanction of mining lease to 10 companies for mining of iron ore and Manganese Mineral, in the reserved Forest Land in Mauza Ghat Kuri (West Singhbhu District), in the light of Section 5(1) and 11(5) of the Mines and Mineral (Regulation and Development) Act, 1957.
171 Page 171 On analysis in the department, it has become clear that out of the 10 proposals above said sent in the past, leaving apart Bihar Sponge and Iron Ltd. at Sl. No.1, the rest of the nine proposals over-lap the public undertaking/ S/Shri General Produce Company Madhu Bazar Chhaibasa and S/Shri Rungta Sons Ltd. Chhaibasa.
After complete consideration, the Government has taken this decision that out of the ten proposals sent in the past, leaving apart the proposal of S/Shri Bihar Sponge Iron Ltd., in connection with the rest of the nine proposals, for consideration as per law, they may be called back from the ministry of mines Government of India.
In the light of the above said it is requested that kindly return the above said mines proposals to the mines and minerals department Jharkhand Ranchi, so that by reconsidering on them, further action could be taken at the level of the State Government.
Singh) Government”
Yours faithfully Sd/-
(Arun Kumar Secretary to the
10. The Government of India, however, did not merely return those nine proposals, but summarily rejected the same on the very grounds stated in the letter of Government of Jharkhand. It sent a letter accordingly to the Government of Jharkhand on 6.3.2006. This is the other letter which was under challenge in the writ petitions to the High Court. The letter reads as follows:-
“REGISTERED GOVERNMENT OF INDIA 172 Page 172 MINISTRY OF MINES No. 5/55/2004-M.IV New Delhi, the 6th March, 2006 To The Secretary to the Government of Jharkhand, Deptt. of Mines and Geology Ranchi (Jharkhand) Sub: Request made by State Government to return various proposals for grant of mining lease for iron and manganese ore in Mauza Bokna, District West Singhbhum, Jharkhad.
Sir, I am directed to refer to the request made by the State Government vide its letter no. 501/M dated 13.9.2005 on the subject mentioned above and to summarily reject and return (in original) the following nine proposals which had been earlier sent to this Ministry for grant of prior approval under section 5(1) of the Mines and Minerals (Development and Regulation) Act, 1957 on the ground that the recommended areas in said the nine proposals either fall in areas or overlap areas which are either reserved for exploitation by Public Sector Undertaking (PSU) or held by the other applicants namely M/s Rungta Sons Pvt. Ltd. and M/s General Produce Company:-
173 Page 173
i) Kh. Ni. (Pa. Singhbhum)-78/03- 114/D.S.M./M dated
ii) 1520/M dated 24.11.2004
i) Kh. Ni. (Pa. Singhbhum)-78/03- 111/D.S.M./M dated
ii) 1518/M dated 24.11.2004
i) Kh. Ni. (Pa. Singhbhum)-78/03- 110/D.S.M./M dated
ii) 1515/M dated 24.11.2004
i) Kh. Ni. (Pa. Singhbhum)-78/03- 118/D.S.M./M dated
ii) 1497/M dated 17.11.2004
i) Kh. Ni. (Pa. Singhbhum)-78/03- 101/03-134/M dated
ii) 1515/M dated 22.1.2005
i) Kh. Ni. (Pa. Singhbhum)-78/03- 12/D.S./M dated of India”
Yours faithfully Sd/-
(Anil Subramaniam) Under Secretary to the Government
11. In these appeals we are basically concerned with the legality of the decision of the State Government seeking to withdraw its recommendations for mining leases, and the subsequent decision of the Central Government to reject those very recommendations. We 174 Page 174 may record that the Government of Jharkhand had issued one more notification subsequently, dated 27.10.2006, by which it was decided that the areas described in the 1962 and 1969 notifications will not be given to anyone, except to the public sector undertakings or joint venture projects of the State. The appellants amended their Writ Petitions in the High Court and challenged the subsequent notification also. This notification reads as follows:-
THE JHARKHAND GAZETTE EXTRA ORDINARY PUBLISHED BY AUTHORITY No. 581 8 Kartik 1928 (S) Ranchi, Monday the 30th October, 2006 DEPARTMENT OF MINES & GEOLOGY, RANCHI NOTIFICATION The 27th October, 2006 No. 3277 It is hereby notified for the information of the general public that for optimum utilization and exploitation of the mineral resources in the State and for establishment of mineral based industry with value addition thereon, it has been decided by the State Government that the iron ore deposits at Ghatkuri would not be thrown open for grant of prospecting licence, mining lease or otherwise for the private parties. The deposit was at all material times kept reserved vide gazette notification No. A/MM-40510/62-6209/M dated the 21st December, 1962 and no. B/M-6-1019/68-1564/M dated the 28th February, 1969 of the State of Bihar. The mineral reserved in the said area has now been decided to be utilized for exploitation by Public Sector undertaking or Joint Venture Project of the State Government which will usher-in maximum benefit to the State and which generate substantial amount of employment in the State.
175 Page 175 The aforesaid notification is being issued in public interest and in the larger interest of the State.
The defining co-ordinates of the reserved area enclosed here with for reference.
By order of the Governor.
S.K. Satapathy. Secretary to Government Submissions on behalf of the appellants:-
12. (i) There is not much difference between the facts of the other appellants and Monnet, except that as far as the appellant in Civil Appeal No.3286/2009 i.e. Adhunik Alloy and Power Ltd. (‘Adhunik’ for short) is concerned, it contends that based on the forwarding of its proposal by the State Government to the Central Government, it had made some substantial investment. It had already invested some 82 crores of rupees out of its proposed investment of Rs.790 crores, and therefore it had a better case on the basis of promissory estoppel. Additional material is placed on the record of its Civil Appeal in justification the investment made by the appellant.
(ii) Since the facts of all these appeals are by and large similar, though various submissions have been raised on behalf of the appellants, they are also by and large similar, and complimentary to each other. The learned senior counsels appearing for the respective parties have, however, emphasised various facets of facts and law with good research put in.
176 Page 176
13. (i) Shri C.A. Sunderam, learned senior counsel appearing for Ispat Industries Ltd. (‘Ispat’ for short) firstly submitted that after the MMDR Act was passed in exercise of the power of the Union Government under List I Entry 54 of the Seventh Schedule of the Constitution of India, the State Government had no longer any power to issue the notifications making any reservations in favour of public sector undertakings and the notifications of the 1962 and 1969 were bad in law. These notifications which were defended as being issued under Section 4(a) of the Bihar Land Reforms Act, 1950, could not be valid after the passing of the MMDR Act. This is because Entry No. 23 List II (State List) of the Seventh Schedule giving power to the State Government specifically stated that it was subject to the provisions of the entries in List I (Union List) in this behalf. Entry No. 54 of List I states that Regulation of Mines and Mineral development is within the power of the Union Government, to the extent a declaration is made by Parliament in that behalf in public interest, and such a declaration has been made and is to be found in Section 2 of the MMDR Act. This being the position, the provisions of Bihar Land Reforms Act 1950 (Act No. XXX of 1950) (Bihar Act, for short) cannot be pressed into service by the respondents.
(ii) Shri Sundaram contended that the field was already occupied by the MMDR Act when these notifications were issued, since the Parliament had already legislated on the field. Section 17 and 17A of 177 Page 177 the MMDR Act give special power to the Central Government to undertake the mining operations and effect reservations. Section 18 of the Act casts a duty on the Central Government to take steps for the conservation and systematic development of minerals and for the protection of environment by preventing or controlling any pollution which may be caused by the prospecting or mining operations. These powers were not with the State Government. The reservations in the notifications of 1962 and 1969 will therefore have to be held as outside the powers of the State Government
(iii) This will be the position even when read with Rule 59 (1) (e) of the Mineral Concession Rules, 1960 (M.C. Rules 1960 in short) which speaks about reservation of areas by the State Government and re- grant thereof. Even the subsequent notification of 27.10.2006, providing for a joint venture is contrary to 17A of MMDR Act, and therefore bad in law.
(iv) Shri Sundaram submitted that the High Court’s view that the State Government had the inherent power over the mining areas was equally erroneous.
14. (i) Learned senior counsel Dr. Rajeev Dhawan appearing for the appellant in C.A. No. 3289/2009 i.e. Jharkhand Ispat Pvt. Ltd. (‘Jharkhand Ispat’ for short) mainly canvassed two submissions. Firstly, in view of the federal structure of Indian Constitution, and the provisions of MMDR Act, any mining can be done only under the MMDR 178 Page 178 Act with Central permission, though mining is included is in the State List. In this behalf, Dr. Dhawan took us through the Constitution Bench judgments of this Court in Hingir-Rampur Coal Co. Ltd. & Ors. Vs. State of Orissa & Ors. reported in AIR 1961 SC 459, State of Orissa & Anr. Vs. M/s M.A. Tulloch & Co. reported in AIR 1964 SC 1284 and Baijnath Kadio Vs. State of Bihar and Others reported in 1969 (3) SCC 838, and submitted that the subsequent judgment of this Court in Amritlal Nathubhai Shah Vs. Union of India reported in 1976 (4) SCC 108 which has been relied upon by the State of Jharkhand and accepted by the High Court to repel the challenge, did not consider these three judgments and the true import of the propositions laid down therein.
(ii) Secondly, the Learned Counsel submitted that the State Government’s decision was ultra-vires to Section 17A (2) of the MMDR Act. He relied upon Para 6 of the judgment of this Court in Janak Lal Vs. State of Maharashtra reported in 1989 (4) SCC 121 to draw the distinction between un-amended Rule 59 and new Rule 59. In his view, the 2006 notification was also invalid since it was only a revival of 1962 and 1969 notifications.
(iii) It was then submitted that the appellant has also set up a factory and reliance was placed on the doctrine of promissory estoppel and legitimate expectations. It was also contended that the two notifications were not acted upon and suffered from Desuetude.
179 Page 179 Lastly, it was submitted that the State Government cannot act unreasonably in view of the provision of Article 19 (1) (g) of the Constitution.
15. Learned Senior Counsel Shri Ranjit Kumar, appearing for Monnet raised the following additional submissions.
(i) The State Government did not have the power to issue the two notifications in 1962 and 1969 under the rules as they then existed, particularly the notification of 1962, since the Rule 58 of the concerned rules as then existing did not give any such power to the State Government.
(ii) Rule 58 has been deleted without any saving clause by the amendment Act No. 36 of 1986.
(iii) The two notifications of 1962 and 1969 providing for reservation in favour of the public sector undertakings suffered on account of ‘Desuetude’, since they were never acted upon.
(iv) In view of the proviso Rule 63A, once a recommendation is made, the State Government becomes functus officio, and it has no power to recall the recommendation.
(v) The right of hearing of Monnet was affected in as much as the decision of the State Government to reject its application was taken behind its back. It was not provided with any opportunity of being heard under Rule 26, of the M.C. Rules 1960 before refusing to grant the mining lease. Besides, their remedy to file a revision to the Central Government under Rule 54 thereof was affected.
180 Page 180
(vi) The appellants disputed the fact that at the time of rejection of their applications, M/s Rungta Sons were having any subsisting allotment in their favour. It was submitted that the grant in favour of M/s Rungta Sons had already expired, and in fact they had applied for renewal in 2006. The area recommended to Monnet was not under any previous reservation of any public sector undertaking or otherwise.
(vii) There was unjustified discrimination in favour of Bihar Sponge Iron Ltd. since their case was supposed to be similar to that of Monnet.
(viii) The decision of the State Government was hit by the doctrine of promissory estoppel, since in the meanwhile Monnet had deposited Rs.50 lacs with the State Government for allotment of land, and it was taking further steps expecting the allotment.
(ix) The provisions of the MMDR Act and the MC Rules will have to be read to mean that the regulatory regime has been taken over by the Central Government, and the State Government will have to be held as without any power to impose reservations.
16. Learned senior counsel Shri Dhruv Mehta, appearing for Prakash Ispat Ltd. in C.A. No.3290/2009 submitted that as stated in Section 14 of MMDR Act, Sections 5 to 13 of the act do not apply to minor minerals, and the State Govt’s. power is only to regulate the minor minerals under Section 15 of the Act. In this behalf he referred to the judgment of this Court in D.K. Trivedi and Sons Vs. State of Gujarat reported in 1986 Supp (1) SCC 20. He submitted that the 181 Page 181 rule making power with respect to major minerals was only with the Central Government. The State Government had no power until Rule 59 was amended in 1980 to provide reservation for public sector concerning the major minerals. He further submitted that rule making power cannot be exercised retrospectively and relied upon Hukam Chand Vs. Union of India reported in 1972 (2) SCC 601. He contended that in view of the provision in Rule 59 of the MC Rules 1960, an area which has been reserved can be made available for re- grant to private sector, and in support of this proposition he referred to the judgment of this Court in Indian Metals and Ferro Alloys Ltd. VS. Union of India reported in 1992 Supp (1) SCC 91.
17. Learned senior counsel Shri Abhishek Manu Singhvi and L. Nageswara Rao, appearing for Adhunik submitted that the High Court had committed an error in relying upon the above referred amended Rule 59. The 1962 notification was issued when prospecting and mining was not within the jurisdiction of the State Government The judgment of this Court in Air India Vs. Union of India reported in 1995 (4) SCC 734 (para 4 to 8) was relied upon to submit that subordinate legislation can survive the repeal of a statute only when it is saved. It was further submitted that the impugned notifications were issued without prior approval of the Central Government and were therefore bad in law.
182 Page 182
18. (i) Learned senior counsel Shri G.C. Bharuka, appearing for Abhijeet Infrastructure Pvt. Ltd. (‘Abhijeet’ for short) submitted that Central Government had opened up the minerals for private participants. In 1962, the Government had no power to issue the notification in the absence of any legislation conferring any executive power. He relied upon the judgment of this Court in Bharat Coking Coal Ltd. Vs. State of Bihar reported in 1990 (4) SCC 557 (para 19), and submitted that the State can act only under a legislation or under Article 162 by way of an executive order and not otherwise. He submitted that the 1962 notification was issued under the un-amended Rule 59, and that time there was no power to issue such notification. In his view the subsequent notification dated 27.10.2006 which is issued under Section 17A (2) was also bad in law because it was issued without the prior approval of the Central Government (ii) It was then submitted by Shri Bharuka, that Abhijeet’s proposal was sent to the Central Government on 06.08.2004. State Government withdrew it on 13.09.2005, and Central Government rejected it on 06.03.2006. In the meanwhile the petitioner took steps for investment. He relied upon two judgments to explain the import of the doctrine of promissory estoppel, namely M/s Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh reported in 1979 (2) SCC 409 and State of Punjab Vs. Nestle India Ltd. reported in 2004 (6) SCC 465. He canvassed the Contempt Petition moved by 183 Page 183 Abhijeet by contending that Abhijeet ought to have been granted lease in pursuance of this Court’s earlier order dated 15.12.2008.
Reply on behalf of the State of Jharkhand
19. Learned Senior Counsel Shri Ajit Kumar Sinha, appearing for the State of Jharkhand, traced the power of the State Government to reserve the mines situated within its territory for Public Sector Undertakings, to begin with, to the State’s ownership of the Mines. He submitted that these mines and minerals vested absolutely in it, and this position was fortified in view of the declaration of the consequences of vesting to be found in Section 4(a) of the Bihar Act. The validity of this provision had been upheld by a Constitution Bench of this Court way back in State of Bihar Vs. Kameshwar Singh reported in AIR 1952 SC 252. In any case, the Act had been placed at Entry No. 1 in Ninth Schedule which was added by Constitution (First Amendment) Act, 1951 and was protected by Article 31-B. As held by this Court in Waman Rao Vs. Union of India reported in 1981 (2) SCC 362, the Act was clearly beyond the pale of challenge. The State had the inherent power to reserve any area for exploitation in its capacity as the owner of the land and the minerals vested therein. The Sovereign executive power of the State under Article 298 of the Constitution to carry on any trade or business and to acquire, hold and dispose of the property and make contracts, certainly included the 184 Page 184 power to reserve the land for exploitation of its minerals by the public sector.
20. It was further submitted by Shri Sinha, that there was no conflict between the right of the State Government to deal with the mines as the owner thereof, and the provisions of the MMDR Act. The MMDR Act does not disturb the ownership of the mines and minerals of the State in the land situated within its territory. The power to issue appropriate notifications concerning the mines and minerals situated within the State is not taken away by any of the provisions of the MMDR Act. In the instant case the Central Government, in its counter affidavit at para 5 (a) and para 10 filed before the High Court, had given deemed/de-jure approval to the reservation upon examination of the 1962 & 1969 notifications. This was apart from the impugned order, dated 6.3.2006, rejecting the proposals of the appellants on the ground that the recommended areas in the said nine proposals were either reserved for public sector undertakings, or overlapped the areas held by M/s. Rungta Sons Pvt. Ltd. and M/s. General Produce Company. In the counter affidavit filed in this appeal by the Central Government, it has been specifically stated in paragraph 5 that the State Government is the ‘owner of the minerals.’
21. It was submitted by Shri Sinha that the notifications of 1962 and 1969 continued to be applicable and protected even after the creation of state of Jharkhand by virtue of Section 85 of the Bihar 185 Page 185 Reorganisation Act, 2000, which provides that the existing laws prior to reorganization shall have effect till they are altered, repealed or amended. Shri Sinha, pointed out that the notifications of 1962 and 1969 had, in fact, been reiterated by the State of Jharkhand vide its notification dated 27.10.2006.
22. He submitted that the power to issue the impugned notifications was very much available under the MMDR Act and the Rules 58 and 59 of the M.C. Rules as they stood at the relevant time. The notification dated 27.10.2006 was clearly traceable to Section 17A (2) of the MMDR Act. The mere absence of mentioning of the source of power in the concerned notifications did not make them ineffective. Shri Sinha relied upon paragraph 13 of the judgment of this Court in Dr. Ram Manohar Lohia Vs. State of Bihar reported in AIR 1966 SC 740 in support of this proposition.
23. With respect to doctrine of Desuetude, Shri Sinha submitted that for this doctrine to apply, two conditions have to be satisfied, viz. (i) there must be a considerable period of neglect, and (ii) there must be a contrary practice for a considerable time. In the instant case no such neglect or contrary practice had been shown. The area of mines has been kept reserved, and no mining lease in the reserved area has been granted to anyone contrary to the notifications. He relied in this behalf upon paragraph 15 of the judgment of this Court in State of Maharashtra vs. Narayan 186 Page 186 Shamrao Puranik reported in 1982 (3) SCC 519, and paragraphs 30 to 36 of Municipal Corporation for City of Pune vs. Bharat Forge Co. Ltd. reported in 1995 (3) SCC 434, as well as paragraph 16 of Cantonment Board Mhow vs. M.P. State Road Transport Corpn. reported in 1997 (9) SCC 450.
24. With respect to the submissions on promissory estoppel and legitimate expectations, Shri Sinha submitted that these principles were based on equity, and when a matter was governed by a statute, equity will give way. Besides, the promises as claimed were against the public policy and could not be enforced. He relied upon paragraph 10 of Amrit Vanaspati Co. Ltd. vs. State of Punjab reported in 1992 (2) SCC 411, paragraph of 12 M.P.Mathur vs. DTC reported in 2006 (13) SCC 706, and paragraph 83 of Sandur Manganese & Iron Ores Ltd. vs. State of Karnataka reported in 2010 (13) SCC 1.
25. Shri Sinha submitted that MOU between the Appellants and the State Government could not be treated as a contract under Article 299 (1) of the Constitution of India. It was neither enforceable nor binding. Based on the MOU, the State Government had made a recommendation which was only a proposal. Besides, no one had any legal or vested right for the grant or renewal of a mining lease. In this behalf, he relied upon paragraph 13 of State of Tamil Nadu vs. M/s Hind Stone reported in 1981 (2) SCC 205, paragraph 4 of 187 Page 187 Dharambir Singh vs. Union of India reported in 1996 (6) SCC 702, paragraph 13 of M.P. Ram Mohan Raja vs. State of Tamil Nadu reported in 2007 (9) SCC 78, paragraphs 19 to 22 and 28 of State of Kerala vs. B. Six Holiday Resorts (P) Ltd. reported in 2010 (5) SCC 186, and paragraph 4 of Sandur Manganese & Iron Ores Ltd. vs. State of Karnataka reported in 2010 (13) SCC 1.
26. Last but not the least, Shri Sinha pointed out that the controversy in the present matter was fully covered by the judgment of a bench of three Judges of this Court in Amritlal (supra) wherein the facts were by and large similar. This Court has clearly held in that judgment that the mines and minerals within its territory did vest in the State Government, and it had the full authority to reserve the exploitation thereof for the benefit of public undertakings. There was no conflict between this judgment, and the three judgments in the cases of Hingir-Rampur Coal Co., M.A. Tulloch & Co. and Baijnath Kadio (supra).
Reply on behalf of Union of India
27. The Learned Senior Counsel Shri Ashok Bhan, appearing for Union of India supported the submissions of Shri Sinha. He submitted that the mines and minerals in the State of Jharkhand were owned by the State of Jharkhand, and it had the right to deal with the same appropriately within the scheme of the MMDR Act. It had every right to reserve certain areas for the exclusive utilisation of the Public Sector 188 Page 188 Undertakings, or to give a direction to avoid overlapping. He pointed out that the proposals forwarded by the State Government were examined by the Central Government . It had accepted the reasons contained in the State Government’s letter dated 13.9.2005, and therefore rejected nine out of the ten proposals. He drew our attention to the following paragraphs from the affidavit filed by the Central Government in the High Court. In para 5 (a) of its Counter Affidavit in reply to the Writ Petition filed by Monnet in the High Court, the Under Secretary, in the Ministry of Mines stated that ‘the request of the State Government has been examined by the Central Government, and all nine proposals including the proposal recommended in favour of the petitioner have been rejected and returned to the State Government on 06.03.2006.’ In para 10, it was further stated as follows:-
“10. That, as referred herein above, as per information of the State Government the proposals which were submitted to the Central Government seeking prior approval u/s 5 (1) of the Mines and Minerals (Development & Regulation) Act, 1957, either fall in the areas reserved for exploitation by the Public Sector or overlap with the area earlier held or being presently held by others and therefore on the request of State Government, examined by Central Government, and after rejection returned the proposal to the State Government on 06.03.2006. Under the circumstances if the State Government desires to grant the area under mining lease to a person other than a public sector, it is required to firstly de-reserve the area, notify the same under Rule 59 (1) of the Mineral Concession Rules, 1960 and therefore in present situations the petitioner has no case and writ petition is liable to be dismissed.”
Submissions on behalf of the intervenors 189 Page 189
28. (i) Shri Das Learned Counsel appearing for M/s Rungta Sons pointed out that Rungta had a mining lease in their favour and were entitled to seek the renewal thereof. Therefore, the appellants could not have been granted any lease, in any way overlapping with the mining area allotted to Rungta Sons.
(ii) Learned Senior Counsels Sarvashri Narasinha, Vikas Singh & Krishnan Venugopal have appeared for the interveners to oppose these appeals. Their submissions have been similar to that of Shri Sinha.
29. After the hearing of these appeals was concluded, another SLP arising out of the judgment of Orissa High Court in W.A. No.6288 of 2006 (Geo Minerals and Marketing (P) Ltd. V. State of Orrisa & ors.) came up for consideration wherein one of the issues involved was regarding reservation of mining areas for public sector. The counsel appearing in that matter for the respective parties viz. Senior counsel Sarvashri Harish Salve, KK Venugopal and RK Dwivedi were therefore heard on this issue. Their submissions were similar to those of the respective parties appearing in the present appeals.
Consideration of the submissions of the rival parties:
Authority of the State of Jharkhand to deal with the mines and minerals within its territory 190 Page 190
30. It was submitted on behalf of the State of Jharkhand as well as by Union of India that the mines and minerals within the territory of the State are owned by the State of Jharkhand, and it has full authority to deal with the same. This authority flows from Section 4 (a) of the Bihar Land Reforms Act, 1950. As against that, the counsel for the appellants have challenged the authority of the State of Jharkhand to deal with the mines and minerals on the ground that after the passing of the MMDR Act, the authority of the State Government has come to be curtailed. To examine this issue we may look into some of the salient provisions of the Bihar Act. To begin with the Preamble of the Act declares its objective in following terms:
‘ An Act to provide for the transference to the State of the interests of proprietors and tenure holders in land of the mortgagees and lessees of such interests including interests in trees, forests , fisheries , jalkars, ferries, hats, bazaars, mines and minerals and to provide for the constitution of a Land Commission for the State of Bihar with powers to advise the State Government on the agrarian policy to be pursued by the State Government consequent upon such transference and for other matters connected therewith.’ Section 3 of the Act provides for issuance of notifications of vesting of estates and tenures in the state. Section 4 provides for the consequences of the vesting namely that they shall vest absolutely in the state free from all encumbrances. Section 4(a) of the Bihar Act reads as follows:
191 Page 191
4. Consequences of the vesting of an estate or tenure in the State-
[Notwithstanding anything contained in any other law for the time being in force or any contract and notwithstanding any non- compliance or irregular compliance of the provisions of sections 3, 3A and 3B except the provisions of sub-section (1) of section 3 and sub-section (1) of section 3A , on the publication of the notification under sub-section (1) , of section 3 or sub-section (1) or sub-section (2) of section 3A, the following consequences shall ensue and shall be deemed always to have ensued, namely:]
(a) 2[xxx] Such estate or tenure including the interests of the proprietor or tenure-holder in any building or part of a building comprised in such estate or tenure and used primarily as office or cutchery for the collection of rent of such estate or tenure, and his interests in trees, forests, fisheries, jalkars, hats, bazars, 3[mela] and ferries and all other sairati interests , as also his interest in all subsoil including any rights in mines and minerals whether discovered or undiscovered, or whether been worked or not, inclusive of such rights of a lessee of mines and minerals, comprised in such estate or tenure (other than the interests of raiyats or under - raiyats) shall, with effect from the date of vesting, vest absolutely in the State free from all incumbrances and such proprietor or tenure- holder shall cease to have any interest in such estate or other than the interests expresslly saved by or under the provisions of this Act.
Besides, we must also note that the Constitutional validity of this provision has already been upheld by a Constitution Bench of this Court in State of Bihar Vs. Kameshwar Singh reported in AIR 1952 SC 252 by a detailed judgment where at the end of it in Para 237 the Court has declared the Bihar Act to be valid except as regards S. 4(b) and S.23 (f), which were declared to be unconstitutional and void.
192 Page 192
31. Ownership denotes a complex of rights as the celebrated author Salmond states in his treatise on Jurisprudence (see page 246 of the Twelfth Edition):
‘44. The idea of ownership Ownership denotes the relation between a person and an object forming the subject-matter of his ownership. It consists in a complex of rights, all of which are rights in rem, being good against all the world and not merely against specific persons. Though in certain situations some of these rights may be absent, the normal case of ownership can be expected to exhibit the following incidents.
First, the owner will have a right to possess the thing which he owns……….
Secondly, the owner normally has the right to use and enjoy the thing owned: the right to manage it, i.e., the right to decide how it shall be used; and the right to the income from it. Whereas the right to possess is a right in the strict sense, these rights are in fact liberties: the owner has a liberty to use the thing, i.e. he is under no duty not to use it, in contrast with others who are under a duty not to use or interfere with it.’ The right of the State of Jharkhand to deal with the mines and minerals within its territory including reserving the same for Public Sector Undertakings, or to direct avoidance of overlapping while granting leases of mines, obviously flows from its ownership of those mines and minerals.
32. (i) It was submitted by the appellants that the power of the State Government under Entry 23, List II of the Seventh Schedule was subject to the provision of Entry No. 54 of List I. Entry 54 of List I 193 Page 193 states that regulation of Mines and Minerals Development is within the power of the Union Government to the extent a declaration is made by the Parliament in that behalf, and such a declaration has been made in Section 2 of the MMDR Act. Having stated so, it becomes necessary to understand the extent of this control of the Union Government, and for that we must see the scheme of the Act with respect to the powers of the Central Government and the State Government to deal with the mines and minerals. This was also the approach adopted by a Constitution Bench of this Court in Ishwari Khetan Sugar Mills (P) Ltd. Vs. State of U.P. reported in 1980 (4) SCC 136 and later by a bench of three Judges in Orissa Cement Ltd. Vs. State of Orissa reported in 1991 Supp.(1) SCC 430.
(ii) In Ishwari Khetan (supra) the Constitution Bench was concerned with the validity of the provisions of U.P. Sugar Undertakings (Acquisition) Act, 1971 enacted by the State of U.P. It was canvassed that the State’s power to legislate in respect of industries under Entry 24 of List II is taken away to the extent of the declaration in that respect made by Parliament under Entry 52 of List I. After examining the relevant provisions, the Constitution Bench held in para 24 as follows:-
“24. It can, therefore, be said with a measure of confidence that legislative power of the States under Entry 24, List II is eroded only to the extent control is assumed by the Union pursuant to a declaration made by the Parliament in respect of declared industry as spelt out by legislative enactment and the field occupied by such 194 Page 194 enactment is the measure of erosion. Subject to such erosion, on the remainder the State legislature will have power to legislate in respect of declared industry without in any way trenching upon the occupied field…….”
(iii) In Orissa Cement Ltd. (supra) a bench of three Judges of this Court was concerned with the validity of the levy of a cess on mining imposed by State of Orissa, and the competence of the State Legislation was challenged on the backdrop of MMDR Act and Entry 54 of the Union List. After referring to the judgment in Ishwari Khetan (supra) the Court stated as follows in paragraph 49:-
“…..As pointed out in Ishwari Khetan, the mere declaration of a law of Parliament that it is expedient for an industry or the regulation and development of mines and minerals to be under the control of the Union under Entry 52 or Entry 54 does not denude the State Legislatures of their legislative powers with respect to the fields covered by the several entries in List II or List III. Particularly, in the case of declaration under Entry 54, this legislative power is eroded only to the extent control is assumed by the Union pursuant to such declaration as spelt out by the legislative enactment which makes the declaration. The measure of erosion turns upon the field of the enactment framed in pursuance of the declaration……”
33. On this background we may look to the relevant provisions of the MMDR Act. Section 4 (1) of the MMDR Act lays down that prospecting or mining operations are to be done as per the provisions of the license or lease. Section 4(3) does not restrain the State Government from undertaking these operations in the area within the State though, when it comes to the minerals in the First Schedule, it 195 Page 195 has to be done after prior consultation with the Central Government. This Section 4 reads as follows:
4. Prospecting or mining operations to be under licence or lease:-
No person shall undertake any reconnaissance, prospecting or mining operations in any area, except under and in accordance with the terms and conditions of a reconnaissance permit or of a prospecting licence or, as the case may be, of a mining lease, granted under this Act and the rules made thereunder]:
Provided that nothing in this sub-section shall affect any prospecting or mining operations undertaken in any area in accordance with the terms and conditions of a prospecting licence or mining lease granted before the commencement of this Act which is in force at such commencement:
[Provided further that nothing in this sub-section shall apply to any prospecting operations undertaken by the Geological Survey of India, the Indian Bureau of Mines, [the Atomic Minerals Directorate for Exploration and Research] of the Department of Atomic Energy of the Central Government, the Directorates of Mining and Geology of any State Government (by whatever name called), and the Mineral Exploration Corporation Limited, a Government company within the meaning of section 617 of the Companies Act, 1956:
Provided also that nothing in this sub-section shall apply to any mining lease (whether called mining lease, mining concession or by any other name) in force immediately before the commencement of this Act in the Union Territory of Goa, Daman and Diu.
(1A) No person shall transport or store or cause to be transported or stored any mineral otherwise than in accordance with the provisions of this Act and the rules made thereunder.
(2) [No reconnaissance permit, prospecting licence or mining lease] shall be granted otherwise than in 196 Page 196 accordance with the provisions of this Act and the rules made thereunder.
[(3) Any State Government may, after prior consultation with the Central Government and in accordance with the rules made under section 18,1[undertake reconnaissance, prospecting or mining operations with respect to any mineral specified in the First Schedule in any area within that State which is not already held under any reconnaissance permit, prospecting licence or mining lease.
34. The authority to grant the reconnaissance permit, prospecting license or mining lease on the conditions which are mentioned in Section 5 of the Act is specifically retained with the State Government. However, with respect to the minerals specified in First Schedule, it is added that previous approval of the Central Government is required. Thus, with respect to the minerals which are specified in the First Schedule to the Act, this has to be done only after prior consultation with and approval of the Central Government. The provision does not in any way detract from the ownership and the authority of the State Government to deal with the mines situated within its territory. The only restriction is with respect to the minerals in the First Schedule which are specified minerals. Part-C of this schedule includes iron-ore and manganese ore at Entries No. 6 and 9. This Section 5 reads as follows:-
“5. Restrictions on the grant of prospecting licences or mining leases
197 Page 197
(1) A State Government shall not grant a [reconnaissance permit, prospecting licence or mining lease] to any person unless such person-
a) is an Indian national, or company as defined in sub- section (1) of section 3 of the Companies Act, 1956 (1 of 1956); and
(b) satisfies such conditions as may be prescribed:
Provided that in respect of any mineral specified in the First Schedule, no [reconnaissance permit, prospecting licence or mining lease] shall be granted except with the previous approval of the Central Government.
Explanation.-For the purposes of this sub-section, a person shall be deemed to be an Indian national,-
(a) in the case of a firm or other association of individuals, only if all the members of the firm or members of the association are citizens of India; and
(b) in the case of an individual, only if he is a citizen of India.
(2) No mining lease shall be granted by the State Government unless it is satisfied that-
(a) there is evidence to show that the area for which the lease is applied for has been prospected earlier or the existence of mineral contents therein has been established otherwise than by means of prospecting such area; and
(b) there is mining plan duly approved by the Central Government, or by the State Government, in respect of such category of mines as may be specified by the Central Government, for the development of mineral deposits in the area concerned.”
35. Section 10 of the Act deals with the procedure for obtaining the necessary licences. It makes it very clear the application is to be made to the State Government, and it is the right of the State 198 Page 198 Government either to grant or refuse to grant the permit, licence or lease. This section reads as follows:-
10. Application for prospecting licences or mining leases-
(1) An application for [a reconnaissance permit, prospecting licence or mining lease] in respect of any land in which the minerals vest in the Government shall be made to the State Government concerned in the prescribed form and shall be accompanied by the prescribed fee.
(2) Where an application is received under sub-section (1), there shall be sent to the applicant an acknowledgment of its receipt within the prescribed time and in the prescribed form.
(3) On receipt of an application under this section, the State Government may, having regard to the provisions of this Act and any rules made thereunder, grant or refuse to grant the2[permit, licence or lease].
36. Again, it is the right of the State Government to give preferences in the matters of granting lease, though this right is regulated by the provisions of Section 11 of the Act. Sub-section 1 of this Section lays down that one who has done the reconnaissance or prospecting work earlier, will have a preferential right for obtaining a prospective licence or a mining lease in respect of that land. Sub- section 2 lays down that where any area is not notified for reconnaissance or prospecting or mining earlier, the application which is received first will be considered preferentially. It is however, further stated that where applications are invited by any particular date, then all of the applications received by that date will be considered 199 Page 199 together. Sub-section 3 of Section 11 lays down the factors to be considered while granting the licence which are:
(3) The matters referred to in sub-section (2) are the following:-
(a) any special knowledge of, or experience in, reconnaissance operations, prospecting operations or mining operations, as the case may be, possessed by the applicant;
(b) the financial resources of the applicant;
(c) the nature and quality of the technical staff employed or to be employed by the applicant;
(d) the investment which the applicant proposes to make in the mines and in the industry based on the minerals;
(e) such other matters as may be prescribed.”
Sub-section 5 lays down that if there are any special reasons, the State can grant the licence to a party whose application might have been received later in time, but after recording the special reasons. This sub-section again makes it clear that where any such out of turn allotment is to be done with respect to a mineral specified in First Schedule, prior approval of the Central Government will be required. Thus, although the Central Government is given the authority to approve the applications with respect to the specified minerals, that does not take away the ownership and control of the State Government over the mines and minerals within its territory.
37. Senior Counsel Shri Sundaram had contended that Section 17 and 17A of the MMDR Act give special power to the Central Government to undertake the mining operations and effect 200 Page 200 reservations. Section 18 of the Act casts a duty on the Central Government to protect the environment and to prevent pollution that may be caused by mining operations. These powers were not with the State Government. Therefore, the reservations in the notifications of 1962 and 1969 were outside the powers of the State Government. Thus, Sections 17 and 17(A) of the Act were pressed into service to canvass the reduction in the authority of the State Government. Section 17 (1) gives the power to the Central Government to undertake prospecting and mining operations in certain lands. However, such operations have also to be done only after consultation with the State Government as stated in sub-section (2) thereof. Besides, sub-section
(3) requires the Central Government also to pay the reconnaissance permit fee or prospecting fee, royalty, surface rent or dead rent as the case may be. Section 17A gives the power to the Central Government to reserve any area not held under any prospecting licence or mining lease with a view to conserving any minerals. However that power is also to be exercised in consultation with the State Government. Similarly, under Sub-section (2) of Section 17A, State Government may also reserve any such area, though with the approval of the Central Government. Thus, these sections and the duty cast on the Central Government under Section 18 do not affect the ownership of the State Government over the mines and minerals within its territory, or to deal with them as provided in the statute.
201 Page 201
38. The provisions of the MMDR Act contain certain regulations. However, to say that there are certain provisions regulating the exercise of power is one thing, and to say that there is no power is another. The provisions of the Act do not in any way take away or curtail the right of the State Government to reserve the area of mines in public interest, which right flows from vesting of the mines in the State Government. It is inherent in its ownership of the mines. In the present case we are concerned with the challenge to the letter of the State Government dated 13.9.2005, and that of the Central Government dated 6.3.2006, and the challenge to the notification dated 27.10.2006 issued by the State Government. There is no difficulty in accepting that the Central Government does have the power to issue a direction as contained in the letter dated 6.3.2006. As far as the notification of 27.10.2006 is concerned, the same is also clearly traceable to Section 17A (2) of the Act. This Section 17A (2) reads as follows:-
“(2) The State Government may, with the approval of the Central Government, reserve any area not already held under any prospecting licence or mining lease, for undertaking prospecting or mining operations through a Government company or corporation owned or controlled by it and where it proposes to do so, it shall, by notification in the Official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such areas will be reserved.”
As can be seen, this sub-section requires the approval of the Central Government for reserving any new area which is not already held through a Government Company or Corporation, and where the 202 Page 202 proposal is to do so. The notification of 27.10.2006 refers to the previous notifications of 1962 and 1969 whereunder the mining areas in the Ghatkuri forest were already reserved, and reiterates the decision of the State Government that the minerals which were already reserved in the Ghatkuri area under the two notifications will continue to be utilised for exploitation by public sector undertakings or joint venture projects of the State Government. Therefore this notification of 27.10.2006 did not require the approval of the Central Government.
39. When it comes to the challenge to the letter dated 13.9.2005, it is seen that the State Government states therein that nine out of the ten proposals overlap the areas meant for public undertakings and two other companies, and therefore the proposals were called back. The power to take such a decision rests in the State Government in view of its ownership of the mines, though there may not be a reference to the source of power. Absence of reference to any particular section or rule which contains the source of power will not invalidate the decision of the State Government, since there is no requirement to state the source of power as has already been held by this Court in the case of Dr. Ram Manohar Lohia (supra).
40. The appellants have referred to Rules 58 and 59 to contend that there rules do not give the power to the State Government to reserve the mines for public sector. We may therefore, 203 Page 203 refer to the Rules 58 and 59 of M.C. Rules as amended from time to time.
Rule 58 and 59 of M.C. Rules as framed in 1960 read as follows:-
“58. Availability of areas for re-grant to be notified- (I) No area which was previously held or which is being held under a prospecting licence or a mining lease or in respect of which an order had been made for the grant thereof but the applicant has died before the execution of licence or lease, as the case many be, or in respect of which the order, granting licence or lease has been revoked under sub-rule (1) of rule 15 or sub-rule (1) of rule 31, shall be available for grant unless-
(a) an entry to the effect is made in the register referred to in sub-rule (2) of rule 21 or sub-rule (2) of rule 40, as the case may be, in ink; and
(b) the date from which the area shall be available for grant is notified in the official Gazette at least 30 days in advance.
(2) The Central Government may, for reasons to be recorded in writing, relax the provisions of sub-rule (1) in any special case.) “Rule 59. Availability of certain areas for grant to be notified- In the case of any land which is otherwise available for the grant of a prospecting licence or a mining lease but in respect of which the State Government has refused to grant a prospecting licence or a mining lease on the ground that the land should be reserved for any purpose other than prospecting or mining the minerals, the State Government shall, as soon as such land becomes again available for the grant of a prospecting or mining lease, grant the license or lease after following the procedure laid down in rule 58.
41. (i) Rule 58 was amended on 16.11.1980 and the amended Rule 58 reads as under:-
204 Page 204
“58. Reservation of area for exploitation in the public sector etc.- The State Government may, by notification in the Official Gazette, reserve any area for the exploitation by the Government, a Corporation established by the Central, State or Provincial Act or a Government company within the meaning of section 617 of the Companies Act, 1956 (1 of 1956)
(ii) Rule 59 was amended first on 9.7.1963 and later in 1980 along with Rule 58. The amended Rule 59 as amended on 9.7.1963 reads as follows:-
“Rule 59. Availability of certain areas for grant to be notified- In the case of any land which is otherwise available for the grant of a prospecting licence or a mining lease but in respect of which the State Government has refused to grant a prospecting licence or a mining lease on the ground that the land should be reserved for any purpose, the State Government shall, as soon as such land becomes again available for the grant of a prospecting or mining lease, grant the license or lease after following the procedure laid down in Rule 58.”
(iii) Rule 59 when amended in 1980 reads as follows:-
“ 59. Availability of area for regrant to be notified- (1) No area-
(a) which was previously held or which is being held under a prospecting licence or a mining lease; or
(b) in respect of which an order had been made for the grant of a prospecting licence or mining lease, but the applicant has died before the grant of the licence or the execution of the lease, as the case may be; or
(c) in respect of which the order granting a licence or lease has been revoked under sub-rule (1) of rule 15 or sub-rule (1) of rule 31; or
(d) in respect of which a notification has been issued under sub section (2) or sub-section (4) of section 17; or
(e) which has been reserved by Government under rule 58, shall be available for grant unless-
205 Page 205
(i) an entry to be effect that the area is available for grant is made in the register referred to in sub-rule (2) of rule 21 or sub-rule (2) of rule 40, as the case may be, in ink; and
(ii) the availability of the area for grant is notified in the Official Gazette and specifying a date (being a date not earlier than thirty days from the date of the publication of such notification in the Official Gazette) from which such area shall be available for grant:
Provided that nothing in this rule shall apply to the renewal of a lease in favour of the original lessee or his legal heirs notwithstanding the fact that the lease has already expired: Provided further that where an area reserved under rule 58 is proposed to be granted to a Government Company, no notification under clause (i) shall be required to be issued.
(2) The Central Government may, for reasons to be recorded in writing relax the provisions of sub-rule (1) in any special case.)”
42. Rule 58 has been subsequently deleted, whereas Rule 59 was amended on 13.4.1988. It now reads as follows:-
59. Availability of area for regrant to be notified- (1)
No area-
(a) which was previously held or which is being held under a reconnaissance permit or a prospecting licence or a mining lease; or
(b) which has been reserved by the Government or any local authority for any purpose other than mining; or
(c) in respect of which the order granting a permit or licence or lease has been revoked under sub- rule (1) of rule 7A or sub-rule (1) of rule 15 or sub-rule (1) of rule 31, as the case may be; or
(d) in respect of which a notification has been issued under sub-section (2) or sub-section (4) of section 17; or
(e) which has been reserved by the State Government or under section 17A of the Act, 206 Page 206 shall be available for grant unless-
(i) an entry to the effect that the area is available for grant is made in the register referred to insub-rule (2) of rule 7D or sub- rule (2) of rule 21 or sub-rule (2) of rule 40, as the case may be; and
(ii) the availability of the area for grant is notified in the Official Gazette and specifying a date (being a date not earlier than thirty days from the date of the publication of such notification in the Official Gazette) from which such area shall be available for grant:
Provided that nothing in this rule shall apply to the renewal of a lease in favour of the original lessee or his legal heirs notwithstanding the fact that the lease has already expired.
Provided further that where an area reserved under rule 58 or under section 17A of the Act is proposed to be granted to a Government company, no notification under clause (ii) shall be required to be issued:
Provided also that where an area held under a reconnaissance permit or a prospecting licence, as the case may be, is granted interms of sub-section (1) of section 11, no notification under clause (ii) shall be required to be issued.
(2) The Central Government may, for reasons to be recorded in writing, relax the provisions of sub-rule (1) in any special case.”
43. (i) The notification of 1969 is clearly protected under Rule 59 as amended on 9.7.1963, in as much as the rule clearly states that the State Government can refuse to grant a mining lease, should the land be reserved for any purpose. As far as the notification of 1962 is concerned, it is submitted by the appellants that the Rules 58 and 59 207 Page 207 as they stood prior thereto did not contain a specific power to reserve the land for any purpose, in the manner it was incorporated in Rule 59 by the amendment of 9.7.1963. As can be seen, these rules provide as to when the reserved area can be notified for re-grant. The Rules lay down the requirement of making an entry in the register maintained in that behalf, and issuance of a notification in the official gazette about the availability of the area for grant. These provisions are made to ensure transparency. The reference to the judgment in Janak Lal (supra) does not take forward the case of the appellants, since as stated in that judgment the result of the amendment in the rule is only to extend the rule, and not to curtail the area of its operation. The judgment in terms states that the purpose of these rules is obviously to enable the general public to apply for the proposed lease.
(ii) Rule 58 as it originally stood, provided for two contingencies. One contingency is where the applicant has died before the execution of licence or lease, and the other is where the order granting licence or lease has been revoked. Rule 59 as originally drafted provided for the third contingency, namely, where the State Government had earlier refused to grant a prospecting licence or mining lease in respect of certain land on the ground that it was reserved for some other purpose, (e.g. environmental), and such land becomes available for grant. For all these three contingencies, the procedure laid down in Rule 58 was required to be followed, namely making of an entry in the 208 Page 208 specified register, and notifying in the official gazette the date from which the area will be available for grant.
44. The appellants then contended by referring to the amended Rule 59 that because the power to reserve the land ‘for any purpose’ was specifically provided thereunder from 9.7.1963, such power did not exist in the Rules 58 and 59 as they stood prior thereto. It is not possible to accept this construction, for the reason as stated above that the Rules 58 and 59 as they originally stood, merely dealt with three contingencies where the prescribed procedure was required to be followed. This cannot mean that when it comes to reservation of mining areas for public undertakings, such power was not there with the State Government prior to the amendment of 1963. The over-view of various sections of the act done by us clearly shows that the power to grant the mining leases is specifically retained with the State Government even with respect to the major minerals, though with the approval of the Central Government. The power to effect such reservations for public undertakings, or for any purpose flows from the ownership of the mines and minerals which vests with the State Government. The amendment of Rule 59 in 1963 made it clear that the State can reserve land ‘for any purpose’, and the amendment of Rules 58 and 59 in 1980 clarified that State can reserve it for a public corporation or a Government company. These amendments have been effected only to make explicit what was implicit. These amendments 209 Page 209 can not be read to nullify the powers which the State Government otherwise had under the statute. In the present matter we are concerned with the challenge to the power of the State Government to issue the letter of withdrawal dated 13.9.2005 which is issued in view of the two notifications of 1962 and 1969. The challenge to the validity of the said letter will therefore have to be repelled.
45. Learned Senior Counsel Shri Mehta had relied upon Indian Metals and Ferro Alloys Ltd. (supra) to contend that an area which is reserved can be made available for re-grant to private sector. However, that situation can arise when the area becomes de-reserved, and thereafter the specified procedure is followed. The following statement in para 45 of the very judgment cannot be ignored in this behalf:-
“…..Under Rule 59(1), once a notification under Rule 58 is made, the area so reserved shall not be available for grant unless the two requirements of sub-rule (e) are satisfied: viz. an entry in a register and a gazette notification that the area is available for grant……”
Thus, when such a decision to de-reserve the area for re-grant is taken, the above two requirements are expected to be followed. In the instant case there was no such occasion since no such decision had been taken by the State Government. Once the State Government realised that the concerned areas were reserved for the exploitation in public sector, it withdrew the proposals forwarding the applications of 210 Page 210 the appellants to the Central Government, and it was fully entitled to do the same.
46. It was then contended by Shri Mehta that the State Government’s power is only to regulate the minor minerals under Section 15 of the Act, since, that section gives power to the State Government to make rules in respect of minor minerals, and since Section 14 states that Sections 5 to 13 do not apply to minor minerals. On the other hand the over view of the provisions from sections 4 to 17A as done above clearly shows the power of the State Government either to grant or not to grant the mining leases, prospecting licenses and reconnaissance permits and to regulate their operations even with respect to the major minerals specified in First Schedule to the act though with the previous approval of the Centre Government. This would include the power to effect reservations of mining areas for the public sector. The reliance on Bharat Coking Coal (supra) is also untenable for the reason that the judgment lays down that the executive power of the State is subject to the law made by the Parliament. There is no conflict with the proposition in the facts of this case. The power of the State flows from its ownership of the mines, and it is not in any way taken away by the law made by the Parliament viz. the MMDR Act or the MC rules. It is therefore not possible to accept the submission of Shri Ranjit Kumar that because a regulatory regime is created under the Act giving certain role to the Central 211 Page 211 Government, the power to effect reservations is taken away from the State Government. The reference to the judgment of this Court in D.K. Trivedi & Sons (supra) in this behalf was also misconceived. In that matter a bench of two Judges, of this Court, held section 15 (1) of MMDR Act to be constitutional and valid. The court also held that the rule making power of the State Government, thereunder, did not amount to excessive delegation of legislative power to the executive. In that matter no such submission that the powers of the State Government were restricted only to section 15 was under consideration
47. Similarly, the reliance on Hukam Chand (supra) was also misconceived in as much as in the present case there is no such issue of exercising rule making power retrospectively. Nor has the proposition in Air India (supra) any relevance in the present case since this is not a case of saving any provision after the repeal of a statute. The action of the State cannot as well be faulted for being unreasonable to be hit by Article 19(1) (g) of the Constitution of India since all that the State has done is to follow the Statute as per its letter and its true spirit.
48. Learned Senior Counsel Shri Ranjit Kumar had contended that once the State Government had recommended the proposal to the Central Government for grant of mineral concession it becomes functus-officio in view of the provision of Rule 63 A of the MC Rules, 212 Page 212 1960, and it cannot withdraw the same. As far as this submission is concerned, firstly it is seen from the impunged judgment that this plea was not canvassed before the High Court. Besides, in any case, ‘recommendation’ will mean a complete and valid recommendation after an application for grant of mining lease is made under Rule 22 with all full particulars in accordance with law. In the instant case the State Government found that its own proposal was a defective one, since it was over-lapping a reserved area. In such a case, the withdrawal thereof by the State Government cannot be said to be hit by Rule 63A. In any case, the Central Government subsequently rejected the proposal, and hence not much advantage can be drawn from the initial forwarding of the appellants’ proposal by the State Government.
49. It is also contended that Monnet was not afforded hearing. The submission of denial of hearing under Rule 26 by the State Government is not raised in the Writ Petition. It is material to note that another plea is raised in Para 2 (XVI) of their Writ Petition, namely, that central government ought to have given a hearing before issuing the rejection order, though no specific provision from the rules was pointed out in that behalf. The plea that the appellants could not resort to their remedy of revision under Rule 54 against the letter of State Government dated 13.9.2005 cannot be accepted for the reason that it is the appellants who chose to file their writ petition directly to 213 Page 213 the High Court to challenge the same (along with Central Government letter dated 6.3.2006) without exhausting that remedy. The Central Government cannot be faulted for the same. Incidentally, the Petition nowhere states as to how Monnet came to know about these internal communications between the state and the central government. The other petitioners claim to have learnt about the same through a newspaper report, and Adhunik claims to have got the copies thereof through an application under the Right to Information Act, 2005.
50. The appellants had relied upon three judgments of the Constitution Benches of this Court in Hingir-Rampur Coal Co., M.A. Tulloch & Co. and Baijnath Kadio (supra). In Hingir-Rampur Coal Co. (supra), the Constitution Bench was concerned with the question of legality of the cess under the Orissa Mining Ares Development Fund Act, 1952. One of the grounds canvassed was that the said legislation was bad in law for being in conflict with the previous Mines and Minerals (Regulation and Development) Act, 1948, which was also a Central Act. It was contended that the central legislation was referable to Entry No.54 of the Union List from the Seventh Schedule. It occupied the field and therefore the state legislation which was referable to Entry No.53 was beyond the competence of the state legislature. The Court found that the areas covered by the two acts were substantially the same. However, the 1948 Act was a pre- constitution act and the relevant provisions of the constitution were 214 Page 214 held to be prospective. The Court therefore, held that unless the declaration under Section 2 of the 1948 Act was made after the Constitution came into force, it will not satisfy the requirement of Entry No.54. The cess and the Orissa Act were therefore not held to be bad in law. What this Court observed in Para 23 in this behalf is relevant for our purpose…………….
“23. The next question which arises is, even if the cess is a fee and as such may be relatable to Entries 23 and 66 in List II its validity is still open to challenge because the legislative competence of the State Legislature under Entry 23 is subject to the provisions of List I with respect to regulation and development under the control of the Union; and that takes us to Entry 54 in List I. This Entry reads thus: “Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest”. The effect of reading the two Entries together is clear. The jurisdiction of the State Legislature under Entry 23 is subject to the limitation imposed by the latter part of the said Entry. If Parliament by its law has declared that regulation and development of mines should in public interest be under the control of the Union to the extent of such declaration the jurisdiction of the State Legislature is excluded. In other words, if a Central Act has been passed which contains a declaration by Parliament as required by Entry 54, and if the said declaration covers the field occupied by the impu8gned Act the impugned Act would be ultra vires, not because of any repugnance between the two statutes but because the State Legislature had no jurisdiction to pass the law. The limitation imposed by the latter part of Entry 23 is a limitation on the legislative competence of the State Legislature itself. The position is not in dispute.”
(emphasis supplied)
51. In M.A. Tulloch & Co. (supra), the Constitution Bench was concerned with legality of certain demands of fee under the Orissa 215 Page 215 Mining Areas Development Fund Act, 1952, and the same question arose as to whether the provisions of the Orissa Act were hit by the MMDR Act, 1957 in view of Entry No.54 of the Union List. The validity of the state act was canvassed under Entry No.23 of the State List and was accepted as not hit by the provisions of the MMDR Act, 1957. The Court held the Orissa Act and the demand of fee to be valid. What this Court observed in Para 5 is relevant for our purpose………..
“5. ………….It does not need much argument to realise that to the extent to which the Union Government had taken under “its control” “the regulation and development of minerals” so much was withdrawn from the ambit of the power of the State Legislature under Entry 23 and legislation of the State which had rested on the existence of power under that entry would to the extent of that “control” be superseded or be rendered ineffective, for here we have a case not of mere repugnancy between the provisions of the two enactments but of a denudation or deprivation of State legislative power by the declaration which Parliament is empowered to make and has made.”
52. In Baijnath Kadio (supra), this Court was concerned with the validity of second proviso of Section 10 of the Bihar Land Reforms Act, 1964 for being in conflict with the provisions concerning miner minerals under the MMDR Act, 1957. The Court followed the propositions in Hingir-Rampur Coal Co. and M.A. Tulloch Co. and found that the field was not open to the State Legislature, since it was covered under the Central Act.
216 Page 216
53. As can be seen from these three judgments, if there is a declaration by the Parliament, to the extent of that declaration, the regulation of mines and minerals development will be outside the scope of the State Legislation as provided under Entry No.54 of the Centre List. Presently, we are not concerned with the conflict of any of the provisions under the MMDR Act, either with any State Legislation or with any Executive Order under a State Legislation issued by the State Government. The submission of the appellant is that the Jharkhand Government was not competent at all to issue the notifications of 1962 and 1969 reserving the mine areas for public undertaking. The answer of the State Government is that it is acting under the very MMDR Act, and the notifications are within the four corners of its powers as permitted by the Central Legislation.
54. All these issues raised by the appellants have already been decided by a bench of three Judges of this Court in Amritlal Nathubhai Shah Vs. Union of India reported in 1976 (4) SCC 108. In that matter also the Government of Gujarat had issued similar notifications dated 31.12.1963 and 26.2.1964 reserving the lands in certain talukas for exploitation of bauxite in public sector. The applications filed by the appellant for grant of mining lease for bauxite were rejected by the State Government. The revision application filed by the appellant to the Central Government was also rejected by its order which stated that the State Government was the owner of the 217 Page 217 minerals within its territory and the minerals vest in it, and also that the State Government had the inherent right to reserve any particular area for exploitation in the public sector. The Gujarat High Court had accepted this view.
55. While affirming this view, this Court in Amritlal Nathubhai (supra) held in clear terms that the power of the State Government arose from its ownership of the minerals, and that it had the inherent right to deal with them. In para 3 of its judgment the Court observed as follows:-
“3. It may be mentioned that in pursuance of its exclusive power to make laws with respect to the matters enumerated in entry 54 of List I in the Seventh Schedule, Parliament specifically declared in Section 2 of the Act that it was expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent provided in the Act. The State Legislature's power under entry 23 of List II was thus taken away, and it is not disputed before us that regulation of mines and mineral development had therefore to be in accordance with the Act and the Rules. The mines and the minerals in question (bauxite) were however in the territory of the State of Gujarat and, as was stated in the orders which were passed by the Central Government on the revision applications of the appellants, the State Government is the "owner of minerals" within its territory, and the minerals "vest" in it. There is nothing in the Act or the Rules to detract from this basic fact. That was why the Central Government stated further in its revisional orders that the State Government had the "inherent right to reserve any particular area for exploitation in the public sector". It is therefore quite clear that, in the absence of any law or contract etc. to the contrary, bauxite, as a mineral, and the mines thereof, vest in the State of Gujarat and no person has any right to exploit it otherwise than in accordance with the provisions of the 218 Page 218 Act and the Rules. Section 10 of the Act and Chapters II, III and IV of the Rules, deal with the grant of prospecting licences and mining leases in the land in which the minerals vest in the Government of a State. That was why the appellants made their applications to the State Government.”
56. The Court traced the power of the State Government to refuse to grant lease, to Section 10 of the MMDR Act. It held that this section clearly included the power either to grant or refuse to grant the lease on the ground that the land in question was not available having been reserved by the State Government for any purpose. In para 5 of its judgment this Court has held as follows:-
“5. Section 10 of the Act in fact provides that in respect of minerals which vest in the State, it is exclusively for the State Government to entertain applications far the grant of prospecting licences or mining leases and to grant or refuse the same. The section is therefore indicative of the power of the State Government to take a decision, one way or the other, in such matters, and it does not require much argument to hold that that power included the power to refuse the grant of a licence or a lease on the ground that the land in question was not available for such grant by reason of its having been reserved by the State Government for any purpose.”
57. In para 6 of the judgment, this Court rejected the argument that since Section 17 of the Act provides for the powers of the Central Government to undertake prospecting or mining operations, the State Government could not be said to have the power for reservations. The first part of this para reads as follows:-
219 Page 219 “6. We have gone through Sub-sections (2) and (4) of Section 17 of the Act to which our attention has been invited by Mr. Sen on behalf of the appellants for the argument that they are the only provisions for specifying the boundaries of the reserved areas, and as they relate to prospecting or mining operations to be undertaken by the Central Government, they are enough to show that the Act does not contemplate or provide for reservation by any other authority or for any other purpose. The argument is however untenable because the aforesaid sub-sections of Section 17 do not cover the entire field of the authority of refusing to grant a prospecting licence or a mining lease to anyone else, and do not deal with the State Government's authority to reserve any area for itself. As has been stated, the authority to order reservation flows from the fact that the State is the owner of the mines and the minerals within its territory, which vest in it ”
58. The Judgment referred to Rule 59 of the M.C. Rules also, and held that it clearly contemplates such reservation by the order of the State Government In para 7 this Court held in this behalf as follows:-
“7..…..A reading of Rules 58, 59 and 60 makes it quite clear that it is not permissible for any person to apply for a licence or lease in respect of a reserved area until after it becomes available for such grant, and the availability is notified by the State Government in the Official Gazette. Rule 60 provides that an application for the grant of a prospecting licence or a mining lease in respect of an area for which no such notification has been issued, inter alia, under Rule 59, for making the area available for grant of a licence or a lease, would be premature, and "shall not be entertained and the fee, if any, paid in respect of any such application shall be refunded." It would therefore follow that as the areas which are the subject matter of the present appeals had been reserved by the State Government for the purpose stated in its notifications, and as those lands did not become available for the grant of a prospecting licence or a mining lease, the State Government was well within its 220 Page 220 rights in rejecting the applications of the appellants under Rule 60 as premature ”
59. In view of the discussion as above, the judgment in Amritlal (supra) cannot be said to be stating anything contrary to the propositions in Hingir-Rampur Coal Co., M.A. Tulloch & Co. and Baijnath Kadio (supra), but is a binding precedent. The notifications impugned by the appellants in the present group of appeals were fully protected under the provisions of MMDR Act, and also as explained in Amritlal (supra).
Desueutde
60. The submissions with respect to the two notifications suffering on account of Desuetude has also no merit, as the law requires that there must be a considerable period of neglect, and it is necessary to show that there is a contrary practice of a considerable time. The appellants have not been able to show anything to that effect. The authorities of the State of Jharkhand have acted the moment the notifications were brought to their notice, and they have acted in accordance therewith. This certainly cannot amount to deusteude.
Promissory Estoppel and Legitimate Expectations 221 Page 221
61. As we have seen earlier, for invoking the principle of promissory estoppel there has to be a promise, and on that basis the party concerned must have acted to its prejudice. In the instant case it was only a proposal, and it was very much made clear that it was to be approved by the Central Government, prior whereto it could not be construed as containing a promise. Besides, equity cannot be used against a statutory provision or notification.
62. What the appellants are seeking is in a way some kind of a specific performance when there is no concluded contract between the parties. An MOU is not a contract, and not in any case within the meaning of Article 299 of the Constitution of India. Barring one party (Adhunik) other parties do not appear to have taken further steps. In any case, in the absence of any promise, the appellants including Aadhunik cannot claim promissory estoppel in the teeth of the notifications issued under the relevant statutory powers. Alternatively, the appellants are trying to make a case under the doctrine of legitimate expectations. The basis of this doctrine is in reasonableness and fairness. However, it can also not be invoked where the decision of the public authority is founded in a provision of law, and is in consonance with public interest. As recently reiterated by this Court in the context of MMDR Act, in Para 83 of Sandur Manganese (supra) ‘it is a well settled principle that equity stands excluded when a matter if governed by statute’. We cannot entertain the submission of 222 Page 222 unjustified discrimination in favour of Bihar Sponge and Iron Ltd. as well for the reason that it was not pressed before the High Court nor was any material placed before this Court to point out as to how the grant in its favour was unjustified.
Epilogue
63. Before we conclude, we may refer to the judgment of this Court in State of Tamil Nadu Vs. M/s Hind Stone reported in AIR 1981 SC 711 wherein the approach towards this statute came up for consideration. In that matter this Court was concerned with Rule 8-C of the Tamil Nadu Minor Mineral Concessions Rule, 1959 framed by the Government of Tamil Nadu under Section 15 of the MMDR Act. This rule provided as follows:-
“8-C. Lease of quarries in respect of black granite to Government Corporation, etc.
(1) Notwithstanding anything to the contrary contained in these rules, on and from 7th December 1977 no lease for quarrying black granite shall be granted to private persons.
(2) The State Government themselves may engage in quarrying black granite or grant leases for quarrying black granite in favour of any corporation wholly owned by the State Government.
Provided that in respect of any land belonging to any private person, the consent of such person shall be obtained for such quarrying or lease”
223 Page 223
64. Although in Hind Stone the Court was concerned with the provision of this rule which was concerning a minor mineral, while examining the validity thereof this Court (per O. Chinnappa Reddy J.) has made certain observations towards the approach and the scope of MMDR Act which are relevant for our purpose. Thus in para 6, it was observed as follows:-
“6…………….The public interest which induced Parliament to make the declaration contained in Section 2 of the Mines and Minerals (Regulation and Development) Act, 1957, has naturally to be the paramount consideration in all matters concerning the regulation of mines and the development of minerals, Parliament’s policy is clearly discernible from the provisions of the Act. It is the conservation and the prudent and discriminating exploitation of minerals, with a view to secure maximum benefit to the community ”
65. Again in para 9, this Court observed:-
“9……….Whenever there is a switch over from ‘private sector’ to ‘public sector’ it does not necessarily follow that a change of policy requiring express legislative sanction is involved. It depends on the subject and the statute. For example, if a decision is taken to impose a general and complete ban on private mining of all minor minerals, such a ban may involve the reversal of a major policy and so it may require legislative sanction. But if a decision is taken to ban private mining of a single minor mineral for the purpose of conserving it, such a ban, if it is otherwise within the bounds of the authority given to the Government by the Statute, cannot be said to involve any change of policy. The policy of the Act remains the same and it is, as we said, the conservation and the prudent and discriminating exploitation of minerals, with a view to secure maximum benefit to the community. Exploitation of minerals by the private and/or the public sector is contemplated. If in the pursuit of the avowed policy of the Act, it is thought exploitation by the public sector is best 224 Page 224 and wisest in the case of a particular mineral and, in consequence the authority competent to make the subordinate legislation makes a rule banning private exploitation of such mineral, which was hitherto permitted we are unable to see any change of policy merely because what was previously permitted is no longer permitted.”
Last but not least, in para 13 this Court observed as follows:-
“13……No one has a vested right to the grant or renewal of a lease and none can claim a vested right to have an application for the grant or renewal of a lease dealt with in a particular way, by applying particular provisions…….”
66. Mines and minerals are a part of the wealth of a nation.
They constitute the material resources of the community. Article 39(b) of the Directive Principles mandates that the State shall, in particular, direct its policy towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good. Thereafter, Article 39(c) mandates that state should see to it that operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. The public interest is very much writ large in the provisions of MMDR Act and in the declaration under Section 2 thereof. The ownership of the mines vests in the State of Jharkhand in view of the declaration under the provisions of Bihar Land Reforms Act, 1950 which act is protected by placing it in the Ninth Schedule added by the First Amendment to the Constitution. While speaking for the Constitution Bench in Waman Rao (supra) Chandrachud, C.J. had 225 Page 225 following to state on the co-relationship between Articles 39 (b) and (c) and the First Amendment:-
“26. Article 39 of the Constitution directs by clauses (b) and (c) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. These twin principles of State Policy were a part of the Constitution as originally enacted and it is in order to effectuate the purpose of these Directive Principles that the 1st and the 4th Amendments were passed…..”
67. What is being submitted by the appellants is that the State Government cannot issue such notifications for the reasons which the appellats have canvassed. We, however, do not find any error in the letter of withdrawal dated 13.9.2005 issued by the State of Jharkhand, and the letter of rejection dated 6.3.2006 issued by the Union of India for the reasons stated therein. In our view, the State of Jharkhand was fully justified in declining the grant of leases to the private sector operators, and in reserving the areas for the public sector undertakings on the basis of notifications of 1962, 1969 and 2006. All that the State Government has done is to act in furtherance of the policy of the statute and it cannot be faulted for the same.
226 Page 226
68. For the reasons stated above we do not find any merit in these appeals and they are all dismissed. The interim orders passed therein will stand vacated.
69. The Contempt Petition (C) No.14/2009 is filed by Abhijeet is for the alleged breach of an earlier order dated 15.12.2008. The order dated 28.01.2009 makes it clear that no notice was issued on the Contempt Petition. Since the appeal is being disposed of and dismissed, the Contempt Petition is also dismissed.
70. Iron is a mineral necessary for industrial development. In view of the pendency of these appeals, and the stay orders sought by the appellants therein, grant of lease of iron-ore mines to the public sector undertakings could not be made for over six years. The State of Jharkhand and the people at large have thereby suffered. In view thereof we would have been justified in imposing costs on the appellants. However, considering that important questions of law were raised in these appeals, we refrain from doing the same. The parties will therefore, bear their own costs.
… J.
( H.L. Gokhale ) New Delhi Dated: 26 July, 2012 227 Page 227