TaxTMI 
TaxTMI 
TaxTMI 
2013 (2) TMI 689
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the appellant M/s. Kalinga Mining Corporation applied to the Government of Orissa for a prospecting licence. This was granted by the State Government on 15th September, 1961 in respect of an area of 480 acres in Kalaparbat Hill range of Keonjhar district subject to compliance of lease stipulations. The appellant applied for the grant of mining lease also for iron manganese ore over 420 acres in Kalaparbat Hill range of Keonjhar district. As the same was not considered by the State Government, the appellant filed a revision before the Central Government. The same was disposed of by the Central Government on 23rd July, 1962 by intimating the State Government that since the prospecting licence was not granted in favour of the appellant, the mining lease application could not be considered. The direction was issued to the State Government to consider the application of the appellant for mining lease which was dated 4th September, 1961 on merit by 1st January, 1964. Since no decision was taken by the State Government by stipulated date, the application of the appellant dated 4th January, 1961 was deemed to have been refused. By notification dated 20th July, 1965, the State Government o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rojini Pradhan. 7. Challenging the aforesaid order, both the appellant and Dr. Pradhan filed the revision petitions before the Central Government. The Central Government by its order dated 2nd May, 1978 rejected the revision filed by Dr. Sarojini Pradhan but allowed the revision filed by the appellant with a direction to the State Government to pass a fresh order on merits. 8. It appears that Dr. Pradhan filed a writ petition being OJC No.829 of 1978 challenging the order passed by the Central Government dated 2nd May, 1978. On 4th September, 1987, the High Court allowed the writ petition with the following directions : "We direct the Central Government to reconsider the question of grant of approval for the grant of lease of iron ore and manganese in respect of the area after giving all parties concerned an opportunity of hearing. The mode and manner of hearing shall be regulated by the Central Government and it shall convey its decision by a speaking order, i.e. by giving reasons for the decision." 9. We may notice here that in the aforesaid writ petition, the appellant and the other applicants had filed applications for intervention. However, the cases of interveners were n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ate that on the death of Dr. Pradhan, her writ petition will abate. 13. Thereafter on 11th May, 1990, the Central Government conveyed to the State Government its approval of grant of mining lease in favour of the legal representatives of Dr. Pradhan. The appellant, however, claims that no such order, with reasons, was made available to the parties. In view of the aforesaid approval, the State Government by its order dated 24th May, 1990 asked the legal representatives of Dr. Pradhan to furnish certain information and documents regarding the grant of mining lease. By a letter dated 26th June, 1990, the legal representatives of Dr. Pradhan furnished the information and documents to the State Government. At this stage, the appellant filed OJC No.4316 of 1990 challenging the order dated 11th May, 1990 passed by the Central Government, even though the said order was not made available to the parties. On 18th December, 1990 the High Court passed an interim order staying the operation of the order of Central Government dated 11th May, 1990. 14. Whilst this controversy between the parties about the abatement of the application of Dr. Pradhan for mining, as also the writ petition filed by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vernment approved the recommendations of the State Government for grant of mining lease in favour of legal representatives of Dr. Pradhan. 19. The appellant filed a fresh OJC No.3662 of 2002 (writ petition) challenging the grant of lease dated 27th September, 2001, on the basis that it constituted a new cause of action. At this stage, according to the appellant, another significant change took place in that on 9th September, 2003, this Court set aside the order passed by the High Court in OJC No.1269 of 1982 on 23rd February, 1993, which had been filed by the legal representatives of Dr. Pradhan for certain other areas. It was held by this Court in Saligram Khirwal Vs. Union of India & Ors. (2003) 7 SCC 689 that legal heirs cannot pursue an application for mining lease. Thus, the interpretation placed on Rule 25A by the High Court to the effect that it was clarificatory in nature, was reversed by this Court. It was held that Rule 25A was only prospective. Upon such interpretation, this Court further observed that the legal heirs shall be at liberty to make a fresh application in their own right. 20. On 2nd June, 2006, the High Court passed further order in OJC No. 3662 of 2002 di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....have heard the learned counsel for the parties at length. 24. Mr. K.K. Venugopal, learned senior counsel appearing for the appellant, submitted that the dismissal of the earlier SLP on the preliminary issue will not act as a bar against the SLP challenging the order passed at the final stage. He submitted that in SLP (C) No. 13556 of 2001, this Court did not entertain the challenge against the order of the High Court permitting the legal heirs of Dr. Pradhan to be substituted for her and to pursue the litigation with regard to the mining lease. In support of this submission, the learned counsel relied on The Chamber of Colours and Chemicals (P) Ltd. Vs. Trilok Chand Jain (1973) 9 DLT 510 Para 6 , Taleb Ali & Anr. Vs. Abdul Aziz & Ors. AIR 1929 Cal 689 Para 38 , and Shah Babulal Khimji Vs. Jayaben D. Kania & Anr. (1981) 4 SCC 8 Paras 55 and 78 He further submitted that the principle of res judicata would not be applicable when the law is subsequently declared contrary to the law earlier declared, on the basis of which the decision was given which is sought to be reopened. In support of this proposition, he relies upon the law laid in cases of Mathura Prasad Bajoo Jaiswal & Ors. Vs.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat in the facts and circumstances of this case, it is not open to the appellant to question the status of the LRs of respondent No. 10 on the basis of the "order" in the case of Saligram Khirwal (supra). 27. Learned senior counsel submits that the case of Saligram Khirwal (supra) is merely an order and not a judgment. There is no declaration of law in the case of Saligram Khirwal (supra). In fact, this Court has not interpreted Rule 25A of the Rules in the aforesaid order. The order makes it clear that Rule 25A, on its plain reading does not have any applicability to the situation emerging from the facts in that case. He further submitted that even assuming for the sake of argument that Saligram's order lays down any principle of law, the same can not aid the appellant in reopening the status of the LRs of the respondent No. 10 in the present case. He seeks support for the aforesaid proposition from the explanation to Order 47 Rule 1 of the Code of Civil Procedure, 1908. He relies on the judgment of this Court in the case of Shanti Devi Vs. State of Haryana & Ors. (1999) 5 SCC 703 and Union of India & Ors. Vs. Mohd. Nayyar Khalil & Ors. (2000) 9 SCC 252 The learned senior counsel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....foresaid issue of res judicata. On 3rd September, 1971, the State Government passed an order recommending the grant of mining lease in favour of respondent No. 10. Since the Central Government did not approve the recommendation made by the State Government, on 8th June, 1973, it rejected all pending mining lease applications including the application of the appellant and Dr. Sarojini Pradhan. On 2nd May, 1978, in a revision petition filed by the appellant challenging the order of cancellation of its application for grant of lease, the Central Government issued a direction to the State Government to pass a fresh order on merits. This order was challenged by Dr. Pradhan in OJC No. 829 of 1978. The writ petition was allowed by the High Court on 4th September, 1987 by directing the Central Government to reconsider the question for the grant of lease after giving all parties concerned an opportunity of hearing. During the pendency of the revision petitions, Dr. Pradhan died on 10th September, 1987. Since OJC No. 829 of 1978 was still pending in the High Court, the legal heirs of Dr. Sarojini Pradhan by way of a Misc. Case No. 1773 of 1988 brought the fact of her death on the record of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the meantime in another matter being OJC No. 1431 of 1980, the Division Bench rejected the contention of the State that on the death of Dr. Sarojini Pradhan, her writ petition will abate and the substitution of the LRs of Dr. Sarojini Pradhan was allowed. In accordance with the directions issued by the High Court in the orders dated 28th April, 1988 and 11th May, 1988, the LRs of respondent No. 10 duly appeared before the Central Government. Upon hearing the concerned parties, the Central Government took a decision under Section 5(1) of the Mines and Minerals (Development and Regulation) Act, 1957 to approve the grant of mining lease in favour of LRs of Dr. Sarojini Pradhan. Appellant ought to have challenged the status of the LRs before the High Court at the time of the hearing of Misc. Case No. 1773 of 1988 and Misc. Case No. 1977 of 1988. Appellant, it would appear, had accepted the locus standi of the LRs of Dr. Sarojini Pradhan. This is evident from the fact that in the subsequent hearing before the Central Government, which were held consequent upon the directions issued by the High Court in the aforesaid two Misc. cases, the appellant raised no objection with regard to the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Benoy Kishna Mukherjee (supra) held as under: "22. There is ample authority for the proposition that even an erroneous decision on a question of law operates as res judicata between the parties to it. The correctness or otherwise of a judicial decision has no bearing upon the question whether or not it operates a res judicata." 32. This court also held that "a wrong decision by a court having jurisdiction is as much binding between the parties as a right one and may be superseded only by appeals to higher tribunals or other procedure like review which the law provides." [See State of West Bengal Vs. Hemant Kumar Bhattacharjee (supra)] 33. In view of the aforesaid clear enunciation of the law by this Court, it would appear that even if the judgment dated 2nd July, 2001 rendered by the High Court in OJC No. 11537 of 1999 and the dismissal in limine of SLP (C) No. 13556 of 2001 arising from the aforesaid judgment is considered to be erroneous in view of the judgment in Saligram's case (supra), the matter regarding the locus standi of the LRs of respondent No. 10 to proceed with a mining lease application cannot be permitted to be reopened at this stage since it has become final in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the interpretation of Rule 25A of the Mineral Concession Rules, 1960. In any event, the judgment in the case of Saligram (supra) has concluded that the Rule would have only prospective operation. The legal position having been so stated, it is not necessary for us to dilate upon the same. CIVIL APPEAL NO.1014 OF 2013 [Arising out of SLP (C) No. 5130 of 2009] 36. This now brings us to the second appeal arising out of Special Leave Petition, i.e., 5130 of 2009, wherein the appellant has challenged the final judgment rendered by the High Court in the amended OJC No. 3662 of 2002 which was decided on 24th November, 2008. 37. The appellant now claims that order dated 27th September, 2001 is void as it has been passed in breach of rules of natural justice. Mr. Krishnan Venugopal, Senior Advocate, appearing for the appellant has submitted that in pursuance of the order dated 2nd July, 2001 passed by the High Court in OJC No. 11537 of 1999, parties were heard by Mr. S.P. Gupta, Joint Secretary for two days, i.e., 28th August, 2001 and 13th September, 2001. However, the order dated 27th September, 2001 has been passed by Dr. R.K. Khatri, Deputy Secretary, who did not hear the parties....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... had been communicated by Mr. O.P. Kathuria, Under Secretary to the Government of India. The submissions made in the High Court have been reiterated before us by Mr. Krishnan Venugopal. He submits that the approval granted in favour of legal heirs of Dr. Sarojini Pradhan causes adverse civil consequences to the appellant. Such an order could only have been passed by the officer, who had heard the parties. The order, however, has been passed by a different officer, Dr. R.K. Khatri, on the basis of the notes recorded by Mr. S.P. Gupta in the relevant file. In support of the submission, the learned counsel has relied on the judgment of this Court in Gullapalli Nageswara Rao & Ors. Vs. Andhra Pradesh State Road Transport Corporation & Anr. AIR 1959 SC 308 39. Learned counsel then submitted that even if, for the sake of argument, it is accepted that approval under the proviso to Section 5(1) of the MMDR Act is to be treated as administrative in character, the impugned order dated 27th September, 2001 still deserves to be set aside because it is neither expressed nor can it be deemed to be expressed in the name of the President of India, as required by Article 77 of the Constitution of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....een passed primarily based on the report of the Indian Bureau of Mines for the aforesaid two years. The order is clearly vitiated as it is based on extraneous considerations. In support of this, the learned senior counsel relies on Commissioner of Income Tax, Bombay & Ors. Vs. Mahindra and Mahindra Limited & Ors. (1983) 4 SCC 392 The order passed by the Central Government is contrary to the directions issued by the High Court on 2nd July, 2001 by which the matter had been remanded to the Central Government with a direction to place the recommendation dated 5th February, 1999 of the State Government before the parties, to hear them, and to pass a speaking order with reasons. The High Court did not authorise the Central Government to conduct its own investigations and elicit fresh materials outside the scope of the State Government recommendation. In support of this submission, the learned counsel relies on a judgment of this Court in Sandur Manganese and Iron Ores Limited Vs. State of Karnataka & Ors. (2010) 13 SCC 1 The learned counsel further pointed out that the State Government can not grant a mining lease without the previous approval of the Central Government under the proviso....
X X X X Extracts X X X X
X X X X Extracts X X X X
....part, he submits that the judgment in the case of Bachhittar Singh (supra) was rendered on the basis of its own facts. Furthermore, in that case, the order signed by the Minister was not communicated to the parties and therefore, it was held that there was no effective order. In the present case, the order was passed on the basis of the approval granted and conveyed in the manner prescribed under law. With regard to the order being vitiated as it was passed on consideration of the material subsequent to the date of recommendation of the State Government viz. 5th February, 1999, he submits that the appellant cannot even be permitted to raise such an objection, having willingly submitted materials/information subsequent to the date of the recommendation by the State Government. Mr. Gupta further submits that Section 5(2) of the MMDR Act does not prohibit the Central Government to take into account material subsequent to the recommendations made by the State Government. In the present case, it was necessary as the hearing was being conducted 2½ years after the recommendations have been submitted. Learned counsel further submits that no fraud was played by the legal heirs of res....
X X X X Extracts X X X X
X X X X Extracts X X X X
....interfere in the decision. The scope of judicial review is limited to the decision making process and not to the decision itself, even if the same appears to be erroneous. This Court in the case of Tata Cellular Vs. Union of India (1994) 6 SCC 651 upon detailed consideration of the parameters within which judicial review could be exercised, has culled out the following principles : "70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t, 2001 clearly indicates that the matter was being heard in view of the directions given by the High Court in OJC No. 11537 of 1999 and secondly, notice was issued for hearing on 28th August, 2001. The record further indicated that the matter was heard by Mr. S. P. Gupta, Joint Secretary for two days i.e. on 28th August, 2001 and 13th September, 2001. Both the parties had been given opportunity to place on the record any documents and written submissions in support of their claim. It was also apparent that particulars submitted were made available to all the parties. On 13th September, 2001, Mr. S. P. Gupta, Joint Secretary made a note as under : "Thus, all the documents available with the Central Government are also available with both the parties." 46. The High Court also took note of the fact that independently of all the material supplied by the State Government along with the recommendation and the material made available by the parties, the Central Government had also asked Indian Bureau of Mines to furnish certain reports in support of both the parties. These reports were, in turn, made available to the rival parties. The High Court further noticed that after complying ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ise of its Revisional Powers under Section 30 read with Rules 54 and 55 of the Rules. We also do not find much substance in the submission made by Mr. Krishnan that the order dated 27th September, 2001 is vitiated as it has been passed by an officer who did not give a hearing to the parties. This is clearly a case of an institutional hearing. The direction has been issued by the High Court for a hearing to be given by the Central Government. There was no direction that any particular officer or an authority was to give a hearing. In such circumstances, the orders are generally passed in the relevant files and may often be communicated by an officer other than the officer who gave the hearing. The legality of institutional hearing has been accepted in England since the case of Local Government Board Vs. Arlidge (supra). The aforesaid judgment was quoted with approval by this Court in Pradyat Kumar Bose (supra). This Court approved the following passage from the speech of Lord Chancellor in the aforesaid case: "My Lords, I concur in this view of the position of an administrative body to which the decision of a question in dispute between parties has been entrusted. The result of it....