2010 (2) TMI 1238 - HC - Indian Laws

State Government lacks jurisdiction to unilaterally suspend mining leases under Mines and Minerals Act.

M/s. Obulapuram Mining Company Pvt. Ltd., rep., by its Director., M/s. Anantapur Mining Corporation, Bellary rep., by its Parnter. Versus The Government of A.P., rep., by its Secretary to Government, Industries & Commerce Department, Secretariat, Hyderabad and others.

The court held that the State Government's suspension of mining operations was beyond its jurisdiction as per the Mines and Minerals (Development and ... - Issues Involved:1. Legality of the suspension of mining operations by the State Government.2. Alleged violations of the principles of natural justice.3. Jurisdiction and powers of the State Government under the Mines and Minerals (Development and Regulation) Act, 1957.4. Validity and impact of the Central Empowered Committee's (CEC) report and recommendations.Detailed Analysis:1. Legality of the Suspension of Mining Operations by the State Government:The writ petitions challenge the G.O.Rt.No.723 issued by the Government of Andhra Pradesh, which suspended the mining operations of the petitioner-company based on the proceedings of the Principal Chief Conservator of Forests and a letter from the Central Empowered Committee. The petitioners argued that the State Government does not have the legislative power to suspend mining operations under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act). The court held that the State Government acted beyond its jurisdiction as the MMDR Act vests the power to grant and terminate mining leases with the Central Government. The court emphasized that the State Government has only limited power in granting leases and any action to suspend or terminate must be in accordance with the provisions of the MMDR Act, which requires consultation with the Central Government and giving a reasonable opportunity of being heard to the affected parties.2. Alleged Violations of the Principles of Natural Justice:The petitioners contended that the impugned G.O. was issued without affording them an opportunity to be heard, thus violating the principles of natural justice. The court agreed, noting that the right to conduct mining operations is a vested right under statutory leases and any action to curtail this right must follow due process, including providing notice and an opportunity to be heard. The court found that neither the State Government nor the Central Empowered Committee (CEC) issued any notice to the petitioners before making recommendations or issuing the G.O., which resulted in a violation of natural justice principles.3. Jurisdiction and Powers of the State Government under the MMDR Act:The court analyzed the relevant provisions of the MMDR Act, particularly Sections 4 and 5, which outline the powers and restrictions on granting and terminating mining leases. It was held that the State Government does not have inherent power to suspend mining operations unilaterally. The authority to grant, approve, or terminate mining leases lies with the Central Government, and any action by the State Government must be in compliance with the MMDR Act. The court emphasized that the State Government's power is limited to granting leases with the prior approval of the Central Government and that it cannot independently suspend or terminate leases without following the statutory procedure.4. Validity and Impact of the Central Empowered Committee's (CEC) Report and Recommendations:The petitioners challenged the validity of the CEC's report, arguing that it was prepared without visiting the site or issuing notice to the affected parties. The court observed that the CEC was constituted to monitor compliance with Supreme Court orders in specific writ petitions and that its jurisdiction is limited to matters referred to it by the court. The court noted that the Supreme Court had not specifically directed the CEC to file a report in this case and that the CEC's actions were beyond its mandate. The court found that the CEC's report was prepared in violation of natural justice principles and could not be the sole basis for the State Government's action. The court also highlighted discrepancies in the CEC's report and the lack of independent application of mind by the State Government in issuing the impugned G.O.Conclusion:The court concluded that the G.O.Rt.No.723 issued by the State Government was without jurisdiction and violated the principles of natural justice. It held that the State Government does not have the inherent power to suspend mining operations under the MMDR Act and that any action to suspend or terminate leases must follow due process, including consultation with the Central Government and providing an opportunity to be heard to the affected parties. The court set aside the impugned G.O. to the extent it applied to the petitioners, allowing the writ petitions.