2005 (11) TMI 497 - SC - Indian Laws

Court upholds lease decision granting 6.90 acres in Mayurbhanj District, emphasizing industry establishment.

The Court upheld the decision of the State of Orissa to grant a lease over 6.90 acres in Mayurbhanj District to respondent No.4, rejecting the appeal by ... Priority to a person who has already set up an industry for processing of minor minerals - time of consideration as determinative for priority - meaning of 'set up' or 'setting up' in relation to establishment of industry - requirement to record reasons under Rule 6(5-a) vis-a -vis Rule 6(6-a)Priority to a person who has already set up an industry for processing of minor minerals - time of consideration as determinative for priority - meaning of 'set up' or 'setting up' in relation to establishment of industry - Whether respondent No.4 was entitled to priority under Rule 6(6-a)(i) as a person who had already set up an industry for processing the concerned minor mineral. - HELD THAT: - The Court held that sub-rule (6-a)(i) grants priority to a person who has already set up an industry for processing the specified minor minerals. The determinative moment for assessing entitlement to priority is the date of consideration of the applications, not the date of filing. The expression 'set up' connotes that the industry has been established (i.e., placed on foot or ready to commence), distinct from mere commencement or ongoing steps to establish. Here, documentary material (including the Corporation's letter) showed that M/s Valley Granites (P) Ltd. had an established processing unit which had been handed over to respondent No.4 and was being run; by the time the applications were considered respondent No.4 therefore fell within the category of persons who had 'already set up' an industry. In contrast, the appellants had only entered into an agreement to purchase land and placed machinery orders and had not established an industry. Applying the established test and relevant authority, the Court concluded respondent No.4's claim to priority was correctly recognised.Respondent No.4 was rightly accorded priority under Rule 6(6-a)(i) because it had already set up an industry as of the date of consideration; appellants, who had not set up an industry, had no superior claim.Requirement to record reasons under Rule 6(5-a) vis-a -vis Rule 6(6-a) - Whether the authorities were obliged to record reasons when granting priority to respondent No.4 under Rule 6(6-a), analogous to the requirement in Rule 6(5-a). - HELD THAT: - The Court distinguished sub-rule (5-a), which permits the State Government to prefer a later application 'for reasons to be recorded in writing' when in the interest of mineral development, from sub-rule (6-a), which provides an explicit order of priority. The Court observed that where the statutory scheme itself furnishes the criterion for preference (as in sub-rule (6-a) - i.e., an applicant who has already set up an industry), the enumeration of priority operates as the rationale and there is no separate requirement to record reasons. Since appellants did not contend that the statutory order of priority was irrational, absence of separate reasons did not vitiate the decision.No obligation arose to record reasons under Rule 6(6-a); the priority criterion in sub-rule (6-a) itself supplies the rationale, and the decision need not be quashed for lack of separate reasons.Final Conclusion: The High Court's dismissal of the writ petition was correct: respondent No.4 rightly enjoyed priority under Rule 6(6-a)(i) as having already set up an industry at the time of consideration, and no separate reasons were required to be recorded under sub-rule (6-a); the appeal is dismissed. Issues:Challenge to lease grant decision by State of Orissa in Department of Steel and Mines over 6.90 acres in Mayurbhanj District, Priority of lease application between appellant No.1 and respondent No.4 under Rule 6(6-a)(i) of Orissa Minor Mineral Concession Rules, 1990.Analysis:The judgment in question involves the legality of a decision by the State of Orissa in the Department of Steel and Mines to grant a lease over 6.90 acres in Mayurbhanj District to respondent No.4, which led to the rejection of appellant No.1's application. Appellant No.1 had applied for a quarry lease for decorative stones, while respondent No.4 applied for a similar lease over a larger area after acquiring a sick unit engaged in processing the same mineral.The main contention raised by the appellant was that their application should have precedence over respondent No.4 as it was filed earlier. The appellant argued that respondent No.4's acquisition of a non-functional unit did not grant it priority under Rule 6(6-a)(i) of the Rules. The appellant questioned the lack of reasons provided for prioritizing respondent No.4 over them.In response, it was argued that Rule 6(6-a)(i) prioritizes applicants who have already set up an industry for processing the relevant mineral. The State and respondent No.4 contended that the acquired unit was engaged in processing the mineral, justifying the priority given. They also highlighted that appellant No.1 did not establish eligibility under Rule 6(6-a)(ii) and was considered under a residual category.The judgment analyzed Rule 6 of the Rules, which outlines criteria for granting quarry leases and prioritizing applicants. It distinguishes between different categories of priority, with specific provisions for cases involving decorative stones and industrial minerals. The judgment emphasized the importance of the term 'set up an industry' in determining priority under Rule 6(6-a)(i).The Court clarified that the crucial factor was whether the industry had been established, not necessarily operational, at the time of application consideration. It cited precedents to define 'set up' as establishing a business ready to commence operations. The judgment highlighted that the priority assessment should be based on the factual position at the time of application consideration.Regarding the lack of reasons provided for prioritizing respondent No.4, the judgment differentiated between Rule 6(5-a) and Rule 6(6-a) requirements. While reasons must be recorded under Rule 6(5-a) for granting preference to later applicants, Rule 6(6-a) itself provides the reason for prioritizing those who have set up an industry.Ultimately, the Court found no grounds for interference with the High Court's judgment, dismissing the appeal and emphasizing the rationality of the priority decision under Rule 6(6-a)(i). The judgment concluded by making costs easy for the parties involved.