TaxTMI 
TaxTMI 
2012 (7) TMI 1097
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....sh Mittal, Sachin Sharma, Sridhar Potaraju, Gaichang Gaamei, Sriram Parakkat, D. Siri Rao, Annapurna, Sandeep Gover, Siddhartha, Advs. for Luthra and Luthra, Madhurima Tatia, Sadhana Sandhu, Sunita Sharma, Gargi Khanna, S.S. Rawat, Advs. for D.S. Mahra, Adv., Avijeet Bhujabal, P.P. Nayak, Advs. for Parmanand Gaur, Adv. for S.L. Aneja, Subramonium Prasad, Mumtaz Bhalla, Sidhartha, Arijit Mazumdar, Ajay Aggarwal, Rajan Narain, Partha Sil, Devashish Bharuka, Anil K. Jha, S.K. Divakar and Chhaya Kumari, Advs. For the Respondent : None JUDGMENT R.M. Lodha, J. Introduction 1. This group of six appeals occupied considerable judicial time. These matters were heard on ten days between November 2, 2011 and November 29, 2011. Although the facts differ from one another in some respects but since fundamental issues appeared to be common and all these matters arise from a common judgment dated April 4, 2007 passed by the Division Bench of the Jharkhand High Court at Ranchi, we have heard all these matters together which are being disposed of by this common judgment. Prayers 2. The prayers in the writ petitions filed by the Appellants before the High Court also differ. Howeve....
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....or Sub-section (2) of Section 3A, the following consequences shall ensue and shall be deemed always to have ensued, namely; (a) Suchestate 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 ... as also his interest in all sub soil 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 are 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 encumbrances and such proprietor or tenure-holder shall cease to have any interest in such estate or other than the interests expressly saved by or under the provisions of this Act. 4. The brief facts relating to each of these appeals may be noticed now. Factual features Civil Appeal No. 3285 of 2009, Monnet Ispat and Energy Ltd. v. Union of India and Ors. 5. The Appellant company, referred to as Monnet, is registered under the Companies Act, 1956. Monnet is engaged in the business of mining, production....
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....les should be obtained by the State Government for grant of leases in this area to avoid complications. 5.4. The Central Government vide its letter dated June 15, 2005 informed that a joint meeting of officers of Ministry of Mines, Government of India and concerned officers of the State Government be held to clarify certain issues in connection with the Ghatkuri Reserve Forest. 5.5. On June 29, 2005, a joint meeting of the officials of the Central Government and State Government on the issues relating to proposals for grant of mining leases in Ghatkuri was held wherein the Secretary of the State Government is stated to have requested the Central Government to hold on the processing of the pending applications. 5.6. On September 13, 2005, the State Government requested the Central Government to return the proposals of mining lease of nine out of ten applicants, including Monnet. 5.7. On September 14, 2005, a joint meeting of the officials of the State Government and the Central Government took place. In that meeting also the officials of the State Government informed the Central Government that it has decided to withdraw nine pending mining lease proposals, including tha....
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....e State Government and Adhunik in connection with an integrated steel plant at Village Kandra in the District of Seraikela - Kharswan setting out the details of the project; capacity per annum, project cost and implementation period. 6.4. On August 4, 2004, the State Government recommended Adhunik's case to the Central Government for grant of mining lease for iron ore for captive consumption over an area of 426.875 hectares. In its letter dated August 4, 2004 seeking prior approval of the Central Government for grant of mining lease for iron ore in favour of Adhunik, the State Government gave various reasons justifying grant of mining lease to Adhunik. 6.5. Adhunik claims that substantial progress has been made in construction of its Rs. 790 crores integrated steel plant and the plant has been seriously affected due to shortage of iron ore. Civil Appeal No. 3287 of 2009, Abhijeet Infrastructure Ltd. v. Union of India and Ors. 7. The Appellant M/s. Abhijeet Infrastructure Limited, referred to as Abhijeet, was earlier known as Abhijeet Infrastructure Pvt. Limited. Abhijeet has been in the business of iron and steel for last many years. On November 21, 2003, Abhijeet s....
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....ant in Ramgarh. 9.1. Jharkhand Ispat applied to the State Government for grant of iron ore mining lease over an area of 950.50 hectares at Mauza Ghatkuri. It also entered into an MOU dated February 26, 2004 with the State Government for establishment of sponge iron and steel plant in the Hazaribagh District. As per para 4 of the MOU, State Government would assist Jharkhand Ispat in selecting the area for iron and other minerals as per requirement depending upon quality and quantity. The State Government agreed to grant mineral concession as per existing law. 9.2. On August 4, 2004, the State Government prepared a report containing its decision and proposal in favour of Jharkhand Ispat for grant of mining lease over an area of 346.647 hectares at Mauza Ghatkuri and forwarded the same to the Ministry of Mines, Government of India. Civil Appeal No. 3290 of 2009, Prakash Ispat Limited v. Union of India and Ors. 10. The Appellant Prakash Ispat Limited, referred to as Prakash, is a company registered under the Companies Act, 1956. Prakash carries on business in steel and claims to have annual turnover of Rs. 2200 crores. Prakash applied to the State Government for mining leas....
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.... No. A/MM-40510/62-6209/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: Name of the district -Shinghbhum Description of the areas reserved. 1. Sasangda Main Block - BOUNDARY South - The southern boundary is the same as the northern boundary. It starts from the Bihar, Orissa boundary opposite the gorge of the southern tributary of Megnahatu nala and runs west-north-west along the gorge till the foot of the hill. East - The boundary between the States of Bihar and Orissa. East & South - East Bihar-Orissa boundary from 2680 upto a point 2-3/4 miles north-east of it, meeting the southern boundary of Sasangda Main Block. North - The northern boundary is the same as the southern boundary of Sasangda Main Block and follows the gorge at just over one mile northwards of .2935. 5. Dirisumburu Block - BOUNDARY South and South-West Starting from the ChuruIkir Nala at about 5 furlongs east - north-east of Kiriburu Kolaiburu village (220 11'30": 85 14'), in east-south-east direction for one mi....
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....the State and for establishment of mineral based industry with value addition thereon, it has been decided by the State Govt. that the iron ore deposits at Ghatkuri would not be thrown open for grant of prospective 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 Govt. which will usher in maximum benefits to the State and which generate substantial amount of employment in the State. 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 Description of the area reserved in Ghatkuri is given below: District: Singhbhum Main Block: Ghatukuri ....
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....ndertaking. Learned senior Counsel submitted that power of reservation by the State Government for public sector undertakings was introduced for the first time by way of amendment to Rule 58 of the 1960 Rules in 1980 and as such no power existed prior to 1980 for the State Government to reserve areas for public sector undertakings. Alternatively, he submitted that even if 1962 and 1969 Notifications were held to be validly issued with proper authority of law at that point of time, the fact that Rule 58 was omitted in 1988 without any saving clause necessarily meant that 1962 and 1969 Notifications were no longer valid and could not be relied upon. He argued that current power of reservation contained in Section 17A of the 1957 Act is consistent with the erstwhile Rules 58/59 since Section 17A expressly requires the prior approval of the Central Government before State Government issues any notification for reservation of mining area for public sector undertakings. 21. The decisions of this Court in Hingir-Rampur Coal Company Limited and Ors. v. State of Orissa and Ors. AIR 1961 SC 459; State of Orissa and Anr. v. M/s M.A. Tulloch and Company AIR 1964 SC 1284; Baijnath Kadio v. S....
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....erred such power from Rule 59 of the 1960 Rules. Rule 59, as originally framed in 1960, permitted reservation only for "any purpose other than prospecting or mining for minerals". Vide Notification dated July 9, 1963, the words "other than prospecting or mining for minerals" were deleted and, therefore, on December 21, 1962 when the Notification was issued by the State of Bihar reserving the lands in dispute for exploitation by public sector, it had no power to do so. Learned senior Counsel submitted that Amritlal Nathubhai Shah dealt with situation post 1963 amendment in Rule 59 and not pre-amendment. 24. Learned senior Counsel submitted that the "reservation of mineral bearing areas for exploitation by public sector" is covered under the declaration made by Parliament Under Section 2 of the 1957 Act in view of List I, Entry 54 of Seventh Schedule to the Constitution of India. The topic relating to "reservation" is covered within the field of "regulating the grant of mining lease" and that would include the power to grant or not to grant mining lease to a particular person. The "reservation" would come within the scope of "regulating the grant of mining lease" for which the Cen....
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....ent. From April 13, 1988 under Rule 59(2) of the 1960 Rules, the Central Government could relax the provisions of Sub-rule (1) in any special case. According to learned senior Counsel, reservation under 1969 Notification was technically permissible because Rule 59 was amended in 1963 by removing 'no mining restriction' but reservations after 1980 and especially 1988 could be made only under a new statutory regime. 28. Dr. Rajeev Dhavan also based his argument on the doctrine of federalism and submitted that the State of Bihar had no legal power to reserve the area de hors the 1957 Act. He submitted that 1957 Act was wholly occupied field on the subject of mines and minerals and that ousts the state legislative and congruent executive power wholly and squarely. In support of his submissions, he referred to the decisions of this Court in Hingir-Rampur Coal Company AIR 1961 SC 459, Baijnath Kadio 1969 (3) SCC 838, State of Assam and Ors. v. Om Prakash Mehta and Ors. 1973 (1) SCC 584, State of W.B. v. Kesoram Industries Limited and Ors. 2004 (10) SCC 201 and Sandur Manganese and Iron Ors. Limited v. State of Karnataka and Ors. 2010 (13) SCC 1. 29. Dr. Rajeev Dhavan submit....
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...., specifically excluded reservation with regard to prospecting or mining of mineral prior to June 9, 1963. 31. As regards 2006 Notification, Mr. Mehta submitted that the said Notification firstly, was not a fresh exercise of reservation as it refers to reservation already made by 1962 and 1969 Notifications. Secondly, even if it is assumed that 2006 Notification is a fresh order for reservation in exercise of the power Under Section 17A(2) of the 1957 Act, yet the said Notification suffers from diverse infirmities, namely, (a) there is no approval by the Central Government and (b) being an exercise of subordinate legislation, it cannot be given retrospective effect. Reliance was placed by the learned senior Counsel on Hukam Chand etc. v. Union of India and Ors. 1972 (2) SCC 601. Central Government's Stand 32. Mr. Ashok Bhan, learned senior Counsel for the Union of India referred to Entry 54 of the Union List, Entry 23 of the State List, Article 246 of the Constitution, various Sections of 1957 Act and Rules of 1960 Rules and submitted that Central Government having taken power on to itself by enacting 1957 Act, the legislative field relating to 'minerals - Regulati....
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....n is traceable to Section 17A(2) of 1957 Act read with Rule 59(1)(e) as inserted with effect from April 13, 1988. 35. Mr. Ajit Kumar Sinha, learned senior Counsel submitted that even otherwise there was no conflict or encroachment by the State of any occupied field. The State has neither been divested nor barred nor prohibited by 1957 Act or 1960 Rules. Instead, the unfettered power of reservation vested with the State alone under Rule 59 of 1960 Rules from 1962 to 1987 and thereafter Under Section 17A(2). According to him, after 1987 there is a concurrent power of reservation both with State Governments as well as Central Government as provided in Section 17A of the 1957 Act and Rule 59(1)(e) of the 1960 Rules. He relied upon decisions of this Court in Lord Krishna Textile Mills v. Its Workmen AIR 1961 SC 860, Life Insurance Corporation of India v. Escorts Limited and Ors. 1986 (1) SCC 264, Municipal Corporation for City of Pune and Ors. v. Bharat Forge Company Limited and Ors. 1995 (3) SCC 434 and High Court of Judicature for Rajasthan v. P.P. Singh and Anr. 2003 (4) SCC 239. 36. Mr. Ajit Kumar Sinha, learned senior Counsel referred to the provisions of the 1957 Act, partic....
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....athur and Ors. v. DTC and Ors. 2006 (13) SCC 706 and Sandur Manganese and Iron Ores Limited 2010 (13) SCC 1. 38. Mr. Ajit Kumar Sinha, learned senior Counsel submitted that 1962 and 1969 Notifications issued by the then State of Bihar have been reiterated by the State Government on its formation by 2006 Notification. He referred to Section 85 of the Bihar Reorganization Act, 2000 that provides that the appropriate government may, before the expiration of two years adapt and/or modify the law and every such law shall have effect subject to the adaptations and modifications so made until altered, repealed or amended by a competent legislature. He, thus, submitted that by virtue of Section 85 of Bihar Reorganization Act, 2000 read with Sections 84 and 86 thereof, it is clear that the existing law shall have effect till it is altered, repealed and/or amended. Interveners' view 39. Mr. Vikas Singh, Mr. Krishnan Venugopal and Mr. P.S. Narasimha, learned senior Counsel, appeared for interveners. While adopting the arguments advanced on behalf of State of Jharkhand, Mr. Vikas Singh submitted that reservation of minerals is inherent right vested in the State. Mr. Krishnan Venug....
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....Rules, 1949. 45. 1948 Act was repealed by 1957 Act. The introduction of 1957 Act reads as follows: In the Seventh Schedule of the Constitution in Union List entry 54 provides for Regulation of mines and minerals 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. On account of this provision it became imperative to have a separate legislation. In order to provide for the Regulation of mines and the development of minerals, the Mines and Minerals (Regulation and Development) Bill was introduced in the Parliament. Mines and Minerals (Regulation and Development) Act, 1957 and the Amendments 46. 1957 Act came into effect on June 1, 1958. It has been amended from time to time. 47. Section 2 of the 1957 Act reads as follows: S. 2. Declaration as to the expediency of Union control.- It is hereby declared that it is 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 hereinafter provided. 48. Section 3(a),(c),(d),(e),(f), (g) and (h) defines 'miner....
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....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: Ins. by Act 37 of 1986, Section 2 (w.e.f. 10-2-87) [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, Subs. by Act 38 of 1999, Section 5, for "the Atomic Minerals Division" (w.e.f. 18-12-1999) [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:] Ins. by Act 16 of 1987, Section 14 (w.r.e.f. 1-10-1963) [Provided also that nothing in this Sub-section shall apply to any mining lease (whet....
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....on 10 of the 1957 Act provides that application for 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. Inter alia, it empowers the concerned State Government to grant or refuse to grant the permit, licence or lease having regard to the provisions of 1957 Act or 1960 Rules. 55. The original Section 11 of the 1957 Act read as follows: Section 11.(1) Where a prospecting licence has been granted in respect of any land, the licensee shall have a preferential right for obtaining a mining lease in respect of that land over any other person: Provided that the State Government is satisfied that the licensee has not committed any breach of the terms and conditions of the prospecting licence and is otherwise a fit person for being granted the mining lease. (2) Subject to the provisions of Sub-section (1), where two or more persons have applied for a prospecting licence or a mining lease in respect of the same land, the applicant whose application was received earlier shall have a preferential right for the grant of the licence or lease, as ....
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....ther period, as may be extended by the said Government. (2) Subject to the provisions of Sub-section (1), where the State Government has not notified in the Official Gazette the area for grant of reconnaissance permit or prospecting licence or mining lease, as the case may be, and two or more persons have applied for a reconnaissance permit, prospecting licence or a mining lease in respect of any land in such area, the applicant whose application was received earlier, shall have the preferential right to be considered for grant of reconnaissance permit, prospecting licence or mining lease, as the case may be, over the applicant whose application was received later: Provided that where an area is available for grant of reconnaissance permit, prospecting licence or mining lease, as the case may be, and the State Government has invited applications by notification in the Official Gazette for grant of such permit, licence or lease, all the applications received during the period specified in such notification and the applications which had been received prior to the publication of such notification in respect of the lands within such area and had not been disposed of,....
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....By virtue of the power conferred upon the Central Government Under Section 13(2)(e), 1960 Rules have been framed for regulating the grant of, inter alia, mining leases in respect of minerals and for purposes connected therewith. 58. Section 14 states that the provisions of Sections 5 to 13 (both inclusive) shall not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals. Section 15 empowers State Governments to make rules in respect of minor minerals. 59. Section 16 provides for power to modify mining leases granted before 25th October, 1949. The original Sub-section (1) of Section 16 mandated that all mining leases granted before October 25, 1949 shall be brought into conformity with the provisions of 1957 Act and the Rules made Under Sections 13 and 18 after the commencement of 1957 Act. Then it provided that if the Central Government was of the opinion that in the interest of mineral development it was expedient so to do, it might permit any person to hold one or more such mining leases covering in any one State a total area in excess of that specified in Clause (b) of Section 6 or for a period exceeding that specified in Sub-sectio....
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....ions in any area in which the minerals vest in a private person, it shall be liable, to pay prospecting fee, royalty, surface rent or dead rent, as the case may be, from time to time at the same rate at which it would have been payable under this Act if such prospecting or mining operations had been undertaken by a private person under prospecting licence or mining lease. 62. Section 18 states that it shall be the duty of the Central Government to take all such steps as may be necessary for the conservation and systematic development of minerals in India and for the protection of environment by preventing or controlling any pollution which may be caused by prospecting or mining operations and for such purposes the Central Government may make rules. Sub-section (2) of Section 18 empowers the Central Government to make rules and provide for the matters stated in Clause (a) to Clause (q). 63. Section 18A was inserted in 1957 Act to enable the Central Government to authorize Geological Survey of India to carry out necessary investigation for the purpose of obtaining information with regard to availability of any mineral in or under any land in relation to which any prospecting li....
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....nce for the purposes of these matters. 65. By virtue of Section 29, the rules made or purporting to have been made under the 1948 Act insofar as consistent with the matters provided in 1957 Act were made to continue until superseded by the rules made under the 1957 Act. Thus, the rules framed under 1948 Act continued to operate until 1960 Rules were framed. Mineral Concession Rules, 1960 and the Amendments 66. 1960 Rules were framed by the Central Government in exercise of the powers conferred by Section 13 of the 1957 Act. These Rules were published on November 11, 1960. As noticed above, until these Rules came into effect, the Rules framed under 1948 Act remained operative. 67. By virtue of Rule 8, the provisions of Chapters II, III and IV have been made applicable to the grant of reconnaissance permits as well as grant and renewal of prospecting licences and mining leases in respect of the land in which the minerals vest in the State Government. 68. Rule 9 provides that an application for a prospecting licence and its renewal in respect of land in which the minerals vest in Government shall be made to the State Government in Form B and Form D respectively. The Sta....
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.... (2) An application for the grant or renewal of a mining lease made under Rule 22 or Rule 24A, as the case may be, shall not be refused by the State Government only on the ground that Form I or Form J, as the case may be, is not complete in all material particulars, or is not accompanied by the documents referred to in Sub-clauses (d),(e),(f),(g) and (h) of Clause (i) of sub-rule 22. (3) Where it appears that the application is not complete in all material particulars or is not accompanied by the required documents, the State Government shall, by notice, require the applicant to supply the omission or, as the case may be, furnish the documents, without delay and in any case not later than thirty days from the date of receipt of the said notice by the applicant. 72. Rule 31 provides for the time period within which lease is to be executed. It also provides for the date of commencement of the period. 73. Rule 58, as it originally stood, read as under: 58. Availability of areas for regrant to be notified. (1) No area which was previously held or which is being held under a prospecting licence or a mining lease as the case may be, or in respect of which the orde....
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....ule 59 was again amended in 1980. After amendment, the said rule read as under: 59. Availability of area for grant 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 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 (i) an entry to the 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....
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....ification 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. 75. Rule 60 of the 1960 Rules has been amended twice, first vide Notification dated January 16, 1980 and thereafter by the Notification dated January 17, 2000. After amendment, Rule 60 reads as under: 60. Premature applications.-Applications for the grant of a reconnaissance permit, prospecting licence or mining lease in respect of areas whose availability for grant is required to be notified under Rule 59 shall, if (a) no notification has been issued, under that rule; or (b) where any such notification has been issued, the period specified in the notification has not expired, shall be deemed to be premature and shall not be entertained. 76. Rule 63 of the 1960 Rules provides that where previous approval of the Central Government is required under the 1957 Act or the 1960 Rules, the application for such approval shall be made to the Central Government through the State Government. 77. The above provisions give us complete view of the statutory framework....
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....ss the law. The limitation imposed by the latter part of Entry 23 is a limitation on the legislative competence of the State Legislature itself. This position is not in dispute. 24. ... If it is held that this Act contains the declaration referred to in Entry 23 there would be no difficulty in holding that the declaration covers the field of conservation and development of minerals, and the said field is indistinguishable from the field covered by the impugned Act. What Entry 23 provides is that the legislative competence of the State Legislature is subject to the provisions of List I with respect to Regulation and development under the control of the Union, and Entry 54 in List I requires a declaration by Parliament by law that Regulation and development of mines should be under the control of the Union in public interest. Therefore, if a Central Act has been passed for the purpose of providing for the conservation and development of minerals, and if it contains the requisite declaration, then it would not be competent to the State Legislature to pass an Act in respect of the subject-matter covered by the said declaration. In order that the declaration should be effective....
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....957 Act takes within its fold the area or the subject covered by Act 27 of 1952 Act'. The High Court had held that fee imposed by the Orissa Act was rendered ineffective in view of the 1957 Act. The State of Orissa was in appeal from that judgment. The Court in para 5 and para 6 of the Report noted as follows: 5. Before proceeding further it is necessary to specify briefly the legislative power on the relevant topic, for it is on the precise wording of the entries in the 7th Schedule to the Constitution and the scope, purpose and effect of the State and the Central legislations which we have referred to earlier that the decision of the point turns. Article 246(1) reads: Notwithstanding anything in Clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the Union List) and we are concerned in the present case with the State power in the State field. The relevant clause in that context is clause (3) of the Article which runs: Subject to Clauses (1) and (2), the legislature of any State... has exclusive power to make laws....
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....es would lose legislative competence only to the "extent to which Regulation and development under the control of the Union has been declared by Parliament to be expedient in the public interest". The crucial enquiry has therefore to be directed to ascertain this "extent" for beyond it the legislative power of the State remains unimpaired. As the legislation by the State is in the case before us the earlier one in point of time, it would be logical first to examine and analyse the State Act and determine its purpose, width and scope and the area of its operation and then consider to what "extent" the Central Act cuts into it or trenches on it. In para 9, the question under consideration was whether 'the extent of control and Regulation' provided by 1957 Act took within its fold the area or the subject covered by the Orissa Act. This Court in para 11 observed that the matter was concluded by earlier decision in Hingir-Rampur Coal Company Ltd. AIR 1961 SC 459. While following Hingir-Rampur Coal Company Ltd. AIR 1961 SC 459, it was observed in para 12 of the Report that Sub-sections (1) and (2) of Section 18 of 1957 Act were wider in scope and amplitude and conferred larger....
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.... of the State Legislature but have to work it out from the terms of that Act. In this connection we may notice what was decided in the two cases of this Court. In the Hingir Rampur case a question had arisen whether the Act of 1948 so completely covered the field of conservation and development of minerals as to leave no room for State legislation. It. was held that the declaration was effective even if the rules contemplated under the Act of 1948 had not been made. However, considering further whether a declaration made by a Dominion Law could be regarded as a declaration made by Parliament for the purpose of Entry 54, it was held that it could not and there was thus a lacuna which the Adaptation of Laws Order, 1950 could not remove. Therefore, it was held that there was room for legislation by the State Legislature. 15. In the M.A. Tulloch case the firm was working a mining lease granted under the Act of 1948. The State Legislature of Orissa then passed the Orissa Mining Areas Development Fund Act, 1952 and levied a fee for the development of mining areas within the State. After the provisions came into force a demand was made for payment of fees due from July 1957 to Ma....
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....granted by it, the matter reached this Court. The Court considered Entry 54 of List I, declaration made by Parliament in Section 2 of 1957 Act and State Legislature's power under Entry 23 of List II, and observed that in pursuance of its exclusive power to make laws with respect to the matters enumerated in Entry 54 of List I, Parliament specifically declared in Section 2 of the 1957 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 the Regulation of mines and development of minerals had to be in accordance with 1957 Act and 1960 Rules. While saying so, this Court held as follows: 3. ...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 ....
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....the owner of the mines and the minerals within its territory, which vest in it. But quite apart from that, we find that Rule 59 of the Rules, which have been made Under Section 13 of the Act, clearly contemplates such reservation by an order of the State Government.... 86. In Amritlal Nathubhai Shah 1976 (4) SCC 108, the Court also considered Rules 58, 59 and 60 of the 1960 Rules and it was observed that it was not permissible for any person to apply for a licence or a lease in respect of a reserved area until after it becomes available for such grant. It was held on the facts of the case that the areas under consideration 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 prospecting licence or a mining lease, the State Government was well within its rights in rejecting the applications of the Appellants under Rule 60 as premature and the Central Government was also justified in rejecting the revision applications which were filed against the orders of rejection passed by the State Government. 87. In Chanan Mal 1977 (1) SCC 340, a four-Judge Bench of this Court was concerned with ....
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....'IDR Act') vis-`-vis the State Act under challenge, the majority judgment relying upon the earlier decisions of this Court in Baijnath Kadio 1969 (3) SCC 838 and Chanan Mal 1977 (1) SCC 340, held that to the extent the Union acquired control by virtue of declaration in Section 2 of the IDR Act, as amended from time to time, the power of the State Legislature under Entry 24 of List II to enact any legislation in respect of declared industry so as to encroach upon the field of control occupied by IDR Act would be taken away. It was held that 1957 Act only required that rights to mining granted in such land should be regulated by the provisions contained therein. M/s. Hind Stone 89. In M/s. Hind Stone 1981 (2) SCC 205, the question under consideration was about the validity of Rule 8-C of the Tamil Nadu Minor Mineral Concession Rules, 1959 which provided for lease for quarries in respect of black granite to the government corporation or by the government itself and that from December 7, 1977 no lease for quarrying black granite should be granted to private persons. The matter arose out of the application for renewal of lease. The Court considered Entry 23 of List II and ....
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.... community. There are clear signposts to lead and guide the subordinate legislating authority in the matter of the making of rules. Viewed in the light shed by the other provisions of the Act, particularly Sections 4-A, 17 and 18, it cannot be said that the rule-making authority Under Section 15 has exceeded its powers in banning leases for quarrying black granite in favour of private parties and in stipulating that 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. To view such a rule made by the subordinate legislating body as a rule made to benefit itself merely because the State Government happens to be the subordinate legislating body, is, but, to take too narrow a view of the functions of that body.... 90. The Court then considered Rule 8-C in light of the statement made in the counter affidavit filed by the State of Tamil Nadu and it was held that Rule 8-C was made in bona fide exercise of the rule making power of the State Government. In paragraph 10 of the Report, the Court stated thus: 10. One of the arguments pressed before us was ....
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.... in the case of a scarce mineral, to permit exploitation by the State or its agency and to prohibit exploitation by private agencies is the most effective method of conservation and prudent exploitation. If you want to conserve for the future, you must prohibit in the present. We have no doubt that the prohibiting of leases in certain cases is part of the Regulation contemplated by Section 15 of the Act. D.K. Trivedi and Sons 91. In D.K. Trivedi and Sons 1986 (Suppl.) SCC 20, this Court was concerned with the constitutional validity of Section 15(1) of 1957 Act; the power of the State Governments to make rules under that Section to enable them to charge dead rent and royalty in respect of leases of minor minerals granted by them and enhance the rates of dead rent and royalty during the subsistence of such lease, the validity of Rule 21-B of the Gujarat Minor Mineral Rules, 1966 and certain notifications issued by the Government of Gujarat Under Section 15 amending the said Rules so as to enhance the rates of royalty and dead rent in respect of leases of minor minerals. The Court traced the legislative history of the enactment; referred to Baijnath Kadioc and in paragraph 27 o....
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.... control. One of the contentions raised in that case was that Section 15 was unconstitutional as the delegation of legislative power made by it to the rule-making authority was excessive. This contention was, however, not decided by the court as the appeals in that case were allowed on other points. While dealing with the meaning of the word 'Regulation', particularly the expression, 'the act of regulating, or the state of being regulated' and Entry 54 in the Union List, this Court stated in paragraph 31 of the Report (Pgs. 48-49) as follows: 31. Entry 54 in the Union List uses the word "Regulation". "Regulation" is defined in the Shorter Oxford English Dictionary, 3rd Edn., as meaning "the act of regulating, or the state of being regulated". Entry 54 reproduces the language of Entry 36 in the Federal Legislative List in the Government of India Act, 1935, with the omission of the words "and oilfields". When the Constitution came to be enacted, the framers of the Constitution knew that since early days mines and minerals were being regulated by rules made by Local Governments. They also knew that under the corresponding Entry 36 in the Federal Legislative....
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....respect of which the Central Government can make rules under Sub-section (2) of Section 13 are, therefore, also matters with respect to which under Sub-section (1) of Section 15 the State Governments can make rules for "regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith". When Section 14 directs that "The provisions of Sections 4 to 13 (inclusive) shall not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals", what is intended is that the matters contained in those Sections, so far as they concern minor minerals, will not be controlled by the Central Government but by the concerned State Government by exercising its rule-making power as a delegate of the Central Government. Sections 4 to 12 form a group of Sections under the heading "General restrictions on undertaking prospecting and mining operations". The exclusion of the application of these Sections to minor minerals means that these restrictions will not apply to minor minerals but that it is left to the State Governments to prescribe such restrictions as they think fit by rules made Und....
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.... support of the impugned judgment, has contended that as a result of this amendment the expression must now be confined to cases of prospecting or mining for minerals and all other cases where the earlier reservation was for agricultural, industrial or any other purpose must be excluded from the scope of the rule. We are not persuaded to accept the suggested interpretation. Earlier the only category which was excluded from the application of Rule 59 was prospecting or mining leases and the effect of the amendment is that by omitting this exception, prospecting and mining leases are also placed in the same position as the other cases. We do not see any reason as to why by including in the rule prospecting and mining leases, the other cases to which it applied earlier would get excluded. The result of the amendment is to extend the rule and not to curtail its area of operation. The words "any purpose" is of wide connotation and there is no reason to restrict its meaning. The Court clarified that intention of amendment in 1963 was to extend the rule and not to curtail its area of operation. Bharat Coking Coal 93. In the case of Bharat Coking Coal 2004 (10) SCC 201, the Court ....
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....ve power in the matter relating to Regulation of mines and mineral development. Moreover, the proviso to Article 162 itself contains limitation on the exercise of the executive power of the State. It lays down that in any matter with respect to which the legislature of a State and Parliament have power to make laws, the executive power of State shall be subject to limitation of the executive power expressly conferred by the Constitution or by any law made by Parliament upon the Union or authority thereof... Orissa Cement Ltd. 94. A three-Judge Bench of this Court in Orissa Cement Limited 1991 Suppl. (1)SCC 430 was concerned with the validity of the levy of a cess based on the royalty derived from mining lands by States of Bihar, Orissa and Madhya Pradesh. The case of the Petitioners therein was that similar levy had been struck down by a seven-Judge Bench of this Court in India Cement Limited 1990 (1) SCC 12. The contention of the States, on the other hand, was that issue was different from the India Cement Limited 1990 (1) SCC 12 as the nature and character of the levies imposed by these States was different from Tamil Nadu levy. The Bench considered Entries 52 and 54 of the....
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.... with, the Central Act (M.M.R.D. Act, 1957) demarcates the sphere of Union control in the matter of mines and mineral development. While concerning itself generally with the requirements regarding grants of licences and leases for prospecting and exploitation of minerals, it contains certain provisions which are of direct relevance to the issue before us. Section 9, which deals with the topic of royalties and specifies not only the quantum but also the limitations on the enhancement thereof, has already been noticed. Section 9A enacts a like provision in respect of dead rent.... 51. If one looks at the above provisions and bears in mind that, in Assessing the field covered by the Act of Parliament in question, one should be guided (as laid down in Hingir-Rampur and Tulloch) not merely by the actual provisions of the Central Act or the rules made thereunder but should also take into account matters and aspects which can legitimately be brought within the scope of the said statute, the conclusion seems irresistible, particularly in view of Hingir-Rampur and Tulloch, that the State Act has trespassed into the field covered by the Central Act. The nature of the incursion made ....
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....e 1960 Rules including Rules 58, 59 and 60 thereof. While dealing with the reservation policy of the State Government in having the area reserved for exploitation in the public sectors, the Court observed in paragraphs 39 and 40 (Pg. 133) as follows: 39. The principal obstacle in the way of ORIND as well as the other private parties getting any leases was put up by the S.G., OMC and IDCOL. They claimed that none of the private applications could at all be considered because the entire area in all the districts under consideration is reserved for exploitation in the public sector by the notification dated August 3, 1977 earlier referred to. All the private parties have therefore joined hands to fight the case of reservation claimed by the S.G., OMC and IDCOL. We have indicated earlier that the S.G. expressed its preparedness to accept the Rao report and to this extent waive the claim of reservation. Interestingly, the OMC and IDCOL have entered caveat here and claimed that as public sector corporations they could claim, independently of the S.G.'s stand, that the leases should be given only to them and that the Rao report recommending leases to IMFA, FACOR and AIKATH sh....
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....ry to consider whether any area so reserved can be exploited in the public sector as we are not here concerned with the scope of such reservation, there having been no notification Under Section 17A(1) after 1986 and after consultation with the S.G. The second type of reservation was provided for in Rule 58 of the rules which have already been extracted earlier in this judgment. This reservation could have been made by the S.G. (without any necessity for approval by the C.G.) and was intended to reserve areas for exploitation, broadly speaking, in the public sector. The notification itself might specify the Government, Corporation or Company that was to exploit the areas or may be just general, on the lines of the rule itself. 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. It is not quite clear whether the notification of March 5, 1974 complied with these requirements but it is perhaps unnecessary to go into this question because the reservation of the areas was aga....
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....s been made in favour of the public sector. We think the answer must be in the negative in view of the statutory provisions. For the S.G. could always denotify the reservation and make the area available for grant to private parties. Or, short of actually dereserving a notified area, persuade the C.G. to relax the restrictions of Rule 59(1) in any particular case. It is. therefore, open to the S.G. to grant private leases even in respect of areas covered by a notification of the S.G. and this cannot be challenged by any instrumentality in the public sector. The legal position post amendment in 1957 Act by Central Act 37 of 1987 was explained (para 46; Pgs. 138-139) in the following manner: 46. Before leaving this point, we may only refer to the position after 1986. Central Act 37 of 1986 inserted Sub-section (2) which empowers the State Government to reserve areas for exploitation in the public sector. This provision differs from that in Rule 58 in some important respects (i) the reservation requires the approval of the C.G.; (ii) the reservation can only be of areas not actually held under a PL or ML; (iii) the reservation can only be for exp....
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.... the State. But, the State Government is required to exercise its discretion subject to the requirement of the law. Bhupatrai Maganlal Joshi 97. In Bhupatrai Maganlal Joshi : 2001 (10) SCC 476, a Constitution Bench of this Court was concerned with the correctness of the High Court's decision on the question whether the reservation of land for exploitation of mineral resources in the public sector was permissible under the 1957 Act read with 1960 Rules. The High Court had answered the question in the affirmative from which the matter reached this Court. In a very brief order this Court agreed with the reasoning and conclusion of the High Court. M.P. Ram Mohan Raja 98. In the case of M.P. Ram Mohan Raja v. State of T.N. and Ors. 2007 (9) SCC 78, this Court relied upon the decision of this Court in M/s. Hind Stone 1981 (2) SCC 205 and reiterated that so far as grant of mining and mineral lease is concerned no person has a vested right in it. Sandur Manganese and Iron Ores Limited 99. In a comparatively recent decision in Sandur Manganese and Iron Ores Limited. 2010 (13) SCC 1 the diverse issues which were under consideration are noted in paragraph 6 of the Report....
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....e date of notification. Sub-rule (2) of Rule 59 empowers the Central Government to relax the conditions set out in Rule 59(1) in respect of an area whose availability is required to be notified under Rule 59 if no application is issued or where notification is issued, the 30-days black-out period specified in the notification pursuant to Rules 59(1)(i) and (ii) has not expired, shall be deemed to be premature and shall not be entertained. 63. As discussed earlier, Section 11(4) is consistent with Rules 59 and 60 when it provides for consideration only of applications made pursuant to a Notification. On the other hand, the consideration of applications made prior to the Notification, as required by the first proviso to Section 11(2), is clearly inconsistent with Rules 59 and 60. In such circumstances, a harmonious reading of Section 11 with Rules 59 and 60, therefore, mandates an interpretation under which Notifications would be issued Under Section 11(4) in the case of categories of areas covered by Rule 59(1). In these circumstances, we are unable to accept the argument of the learned senior Counsel for Jindal and Kalyani with reference to those provisions. Paragraph 7....
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....icular area. Further, having notified the area, the State Government certainly could not thereafter honour an alleged commitment by ousting other applicants even if they are more deserving on the merit criteria as provided in Section 11(3). Whether 1962 and 1969 Notifications are ultra vires? 100. Now, in light of the above, I have to consider whether 1962 and 1969 Notifications issued by the Government of erstwhile State of Bihar notifying for the information of public that iron ore in the subject area was reserved for exploitation in the public sector are ultra vires and de hors 1957 Act and 1960 Rules. Constitutional philosophy about law making in relation to mines and minerals 101. Entry 36 in List I (Federal List) and Entry 23 in List II (Provincial List) in the Seventh Schedule of Government of India Act, 1935 correspond to Entry 54 in List I (Union List) and Entry 23 in List II (State List) in our Constitution. It is interesting to note that in the course of debate in respect of the above entries in the Government of India Bill, the Solicitor General in the House of Commons stated that the rationale of including only the 'Regulation of mines' and 'dev....
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....d occupied in the declaration cannot constitutionally stand. To find out what is left within the competence of the State Legislature on the declaration having been made in Section 2 of the 1957 Act, one does not have to look outside the provisions of 1957 Act but as observed in Baijnath Kadio 1969 (3) SCC 838, 'have to work it out from the terms of that Act'. In order that the declaration made by the Parliament should be effective, the making of rules or enforcement of rules so made is not decisive. 102. The declaration made by Parliament in Section 2 of 1957 Act states that it is 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 itself. Legal regime relating to Regulation of mines and development of minerals is thus guided by the 1957 Act and 1960 Rules. Whether reservation made by 1962 and 1969 Notifications is in any manner contrary or inconsistent with 1957 Act? In my view not at all. Whether the impugned Notifications impinge upon the legislative power of the Central Government? My answer is in negative. Whether the Government of erstwhile State of B....
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....t and discriminating exploitation of minerals. Surely, in the case of a scarce mineral, to permit exploitation by the State or its agency and to prohibit exploitation by private agencies is the most effective method of conservation and prudent exploitation. If you want to conserve for the future, you must prohibit in the present.' State Government's ownership in mines and minerals within its territory and the power of reservation 105. It is not in dispute that all rights and interests, including rights in mines and minerals in the subject area, had vested absolutely in the erstwhile State of Bihar free from all encumbrances. At the commencement of Constitution, the erstwhile State of Bihar was a Part-A State specified in the First Schedule of the Constitution and prior thereto the Province of Bihar. By virtue of Article 294, all properties and assets which were vested in His Majesty for the purposes of the Government of Province of Bihar stood vested in the corresponding State of Bihar. By 1950 Bihar Act, all other lands i.e., estates and tenures of whatever kind, including the mines and minerals therein, stood vested in the State of Bihar. Thus, all lands and mineral....
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....through the agency in public sector, I am of the opinion that since the State Government's paramount right over the iron ore being the owner of the mines did not get affected by 1957 Act, the power existed with the State Government to reserve subject areas of mining for exploitation in public sector undertaking. It was, however, argued that by 1957 Act the State's ownership rights insofar as 'development of minerals' was concerned stood frozen. 'Development' includes exploitation of mineral resources and to allow to exploit or not to allow to exploit is all covered by 1957 Act and by Section 4 the right of the State Government with regard to development of minerals was taken away and the State Government ceased to have any inherent right of reservation. 108. I do not agree. In the first place, the declaration made by Parliament in Section 2 and the provisions that follow Section 2 in 1957 Act have left untouched the State's ownership of mines and minerals within its territory although the Regulation of mines and the development of minerals have been taken under the control of the Union. Section 4 deals with activities in relation to land and does not ....
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....at Coking Coal 1990 (4) SCC 557 and few other decisions where this Court has held with reference to declaration made by Parliament in Section 2 of 1957 Act and the provisions of that Act that the whole of the legislative field was covered were in the context of specific State legislations under consideration. In the context of subject State legislation, the whole legislative field was found to be occupied by the Central law. The same is the position in the case of Hingir-Rampur Coal Companya where whole of the legislative field relating to 'minerals' was found to be covered by the declaration made in Section 2 of the 1948 Act in the context of the State legislation under consideration. In Hingir-Rampur Coal Company AIR 1961 SC 459 while examining the constitutional validity of the Orissa Mining Areas Development Fund Act, 1952 this Court held that the State Act was covered by the 1948 Act. In M.A. Tulloch and Company AIR 1964 SC 1284, this Court was concerned with the same Orissa Act which was under consideration in Hingir-Rampur Coal Company AIR 1961 SC 459 and in light of Section 18(1) of the 1957 Act which was under consideration it was held that the intention of Parliam....
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....erve any particular area for exploitation in the public sector. Mineral vest in them and they are owners of minerals...and Central Government are in agreement with the State Government in so far as the reservation of areas is concerned...." 112. The above position held by the Central Government has been approved by this Court in Amritlal Nathubhai Shah 1976 (4) SCC 108. I have already referred to the facts in the case of Amritlal Nathubhai Shah 1976 (4) SCC 108 and the issue involved therein - an issue similar to the controversy presented before us - in earlier part of this judgment. In Amritlal Nathubhai Shah 1976 (4) SCC 108, the Court referred to Section 4 of 1957 Act and it was held that there was nothing in 1957 Act or 1960 Rules to conclude as to why the State Government could not, if it so desired, 'reserve' any land for itself, for any purpose, and such reserved land would then not be available for the grant of a prospecting licence or a mining lease to any person. The Court then pointed out, 'the authority to order reservation flows from the fact that the State is the owner of the mines and the minerals within its territory'. It was also held that quite ....
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....gal position highlighted by this Court in Hingir-Rampur Coal Company AIR 1961 SC 459, M.A. Tulloch and Company AIR 1964 SC 1284 and Baijnath Kadio 1969 (3) SCC 838 although it did not expressly refer to these decisions. This is apparent from the observations made in para 3 wherein it has been stated 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 1957 Act that it was expedient in the public interest that the Union should take under its control, Regulation of mines and the development of minerals to the extent provided therein. The Bench noticed that State Legislature's power under Entry 23 of List II was, thus, taken away and Regulation of mines and mineral development had therefore to be in accordance with the 1957 Act and 1960 Rules. The legal position exposited in Amritlal Nathubhai Shah 1976 (4) SCC 108 is that even though the field of legislation with regard to Regulation of mines and development of minerals has been covered by the declaration of the Parliament in Section 2 of the 1957 Act, but that can not justify the inference t....
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....t was, however, argued by Dr. Rajiv Dhavan that Rule 59, as it then stood, allowed reservation for any purpose other than prospecting or mining for minerals. He relied upon decision of this Court in Janak Lal 1989 (4) SCC 121. In Janak Lal 1989 (4) SCC 121, admittedly the disputed area was reserved for nistar purposes. When an application for grant of mining lease was earlier made by a third party it was rejected on the ground that it was so reserved. It was also an admitted position before this Court that the procedure under Rule 58 was not followed before grant was made in favour of Respondent No. 4 therein and no opportunity was given to any other person before entertaining application of Respondent No. 4. In the backdrop of the above admitted position, the Court considered the question whether Rule 59 was attracted or not. The High Court had accepted the argument of the Respondents that the expression 'reserved for any purpose' in Rule 59 did not cover a case where the area was reserved for nistar purposes or for any purpose other than mining. This Court did not accept the High Court's view. While construing Rule 59 as it originally existed and the amendment brought....
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....ions originally contained in 1957 Act and 1960 Rules insofar as authority of the State Government to reserve any area within its territory for mining in public sector has been made explicit first by amendment in Rule 58 in 1980 and later on by introduction of Section 17A in 1957 Act by virtue of amendment effective from 1987. 121. It was also argued by Mr. C.A. Sundaram, learned senior Counsel for one of the Appellants that even if 1962 and 1969 Notifications were held to be validly issued with proper authority of law at that point of time, the fact that Rule 58 was omitted in 1988 without any saving clause necessarily meant that these Notifications were no longer valid and could not be relied upon. He argued that current power of reservation contained in Section 17A of 1957 Act is consistent with erstwhile Rules 58/59 since Section 17A expressly requires the approval of the Central Government before any State Government issues any notification for reservation of mining area in public sector. 122. The impact of omission of Rule 58 in 1988 from 1960 Rules and the introduction of Section 17A in 1957 Act in the context of reservation of the mining area by the State Government fo....
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.... vested rights acquired under existing laws, or creates a new obligation or imposes a new duty, or attaches a new disability in respect of transactions already past, must be presumed to be intended not to have a retrospective effect. 124. Where an issue arises before the Court whether a statute is prospective or retrospective, the Court has to keep in mind presumption of prospectivity articulated in legal maxim nova constitutio futuris formam imponere debet non praeteritis, i.e., 'a new law ought to regulate what is to follow, not the past'. The presumption of prospectivity operates unless shown to the contrary by express provision in the statute or is otherwise discernible by necessary implication. 125. The aspects, namely, (i) 1993 mineral policy framed by the Central Government envisaged permission of captive consumption of minerals across the country; (ii) in 1994 Central Government asked all the state governments to de-reserve 13 minerals including iron ore and directed them to take steps accordingly; (iii) confirmation by the Government of Bihar to the Central Government in 1994 that no mining areas were reserved for public sector undertaking in the then State o....
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....id. The argument is noted to be rejected. For 1962 and 1969 Notifications are not and have not been found by me to suffer from any legal infirmity. 2006 Notification mentions factum of reservation made by 1962 and 1969 Notifications. It is founded on the policy of the State Government that such reservation will usher in maximum benefits to the State and would also generate substantial amount of employment in the State. The public interest is, thus, paramount. The State Government had authority to do that Under Section 17A(2) of 1957 Act read with Rule 59(1)(e) of 1960 Rules. 127. It was, however, argued on behalf of the Appellants that 2006 Notification has attempted to reserve the area for exploitation by public sector undertaking or in joint venture project whereas Section 17A(2) of 1957 Act allows the State Government to reserve area for a government company or corporation owned or controlled by it and not in joint venture project. The submission was that 2006 Notification is an attempt to bring in indirectly private companies through joint venture project although, Section 17A clearly does not envisage private participation. 128. The mineral reserved in the said area by 2....
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....tate Government had never adopted these Notifications and, accordingly, these Notifications lapsed. None of these two arguments has any merit. 2006 Notification has not been given retrospective operation as contended on behalf of the Appellants. I have already held that 2006 Notification is prospective. Mere reference to 1962 and 1969 Notifications in 2006 Notification does not make 2006 Notification retrospective. 131. The other argument that 1962 and 1969 Notifications had lapsed as the State Government never adopted them is also without any merit and substance. The new State of Jharkhand was carved out of the erstwhile State of Bihar and it came into existence by virtue of the Bihar Reorganisation Act, 2000. Section 85 of that Act provides that the appropriate Government may before expiration of two years adapt and/or modify the law and every such law shall have effect subject to adaptation and modification so made until altered, repealed or amended by a competent Legislature. In light of Section 85 of the Bihar Reorganisation Act read with Sections 84 and 86 thereof, position that emerges is that the existing law shall have effect until it is altered, repealed and/or amended....
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....ng steps for establishment of the factory. It entered into agreement for procuring plant and machinery and also took diverse steps and considerable progress in the setting up of the vanaspati factory took place. Later on, the State Government had a second thought on the question of exemption of sales tax and, ultimately, the government took a policy decision that new vanaspati units in the State which go into commercial production by September 30, 1970 would be given only partial concession in sales tax for a period of three years. Motilal Padampat Sugar Mills 1979 (2) SCC 409 took up the matter with the Government and in the meanwhile its production started on July 2, 1970 which was also intimated to the functionaries of the State. Having been denied total sales tax holiday although promised earlier by the Director of Industries, it filed a writ petition before the High Court. The principal argument advanced on behalf of Motilal Padampat Sugar Mills 1979 (2) SCC 409 was that on a categorical assurance of the State Government that it would be exempted from payment of sales tax for a period of three years from the date of commencement of production that it established a hydrogenerat....
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....e to allow the party making the promise to go back upon it. 133. In para 13, the development of doctrine of promissory estoppel in England was noticed by observing, "that even in England where the Judges, apprehending that if a cause of action is allowed to be founded on promissory estoppel it would considerably erode, if not completely overthrow, the doctrine of consideration, have been fearful to allow promissory estoppel to be used as a weapon of offence, it is interesting to find that promissory estoppel has not been confined to a purely defensive role". 134. In Motilal Padampat Sugar Mills 1979 (2) SCC 409, the Court also referred to American law on the subject. In para 14 after observing, 'the doctrine of promissory estoppel has displayed remarkable vigour and vitality in the hands of American Judges and it is still rapidly developing and expanding in the United States", the Court referred to Article 90 of American Law Institute's "Restatement of the Law of Contracts" and the statement at page 657 of Volume 19 of American Jurisprudence. 135. The Court then considered the view of Justice Cardozo in Allengheny College v. National Chautauque County Bank 57 ALR 9....
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....n reliance on the promise. The detriment is not some prejudice suffered by the promisee by acting on the promise but the prejudice which would be caused to the promisee, if the promisor were allowed to go back on the promise. Whatever be the nature of function which the Government is discharging, the Government is subject to the rule of promissory estoppel and if the essential ingredients of this rule are satisfied the Government can be compelled to carry out the promise made by it. 138. In Union of India and Ors. v. Godfrey Philips India Limited (1985) 4 SCC 369 (para 9, page 383 of the Report), this Court stated as follows: 9. Now the doctrine of promissory estoppel is well established in the administrative law of India. It represents a principle evolved by equity to avoid injustice and, though commonly named promissory estoppel, it is neither in the realm of contract nor in the realm of estoppel. The basis of this doctrine is the interposition of equity which has always, true to its form, stepped in to mitigate the rigour of strict law. This doctrine, though of ancient vintage, was rescued from obscurity by the decision of Mr. Justice Denning as he then was,....
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....d upon the representation made to him. It means, the party has changed or altered the position by relying on the assurance or the representation. The alteration of position by the party is the only indispensable requirement of the doctrine. It is not necessary to prove further any damage, detriment or prejudice to the party asserting the estoppel. The court, however, would compel the opposite party to adhere to the representation acted upon or abstained from acting. The entire doctrine proceeds on the premise that it is reliance based and nothing more. 140. A two-Judge Bench of this Court in Amrit Banaspati Company Limited 1992 (2) SCC 411 entered into consideration of the extent and applicability of doctrine of promissory estoppel and after considering earlier decisions of this Court in Indo-Afghan Agencies (1968) 2 SCR 366, Motilal Padampat Sugar Mills 1979 (2) SCC 409, Godfrey Philips India Limited (1985) 4 SCC 369 and Delhi Cloth and General Mills Limited (1988) 1 SCC 86 culled out the legal position that if a representation was made by an official on behalf of the Government then unless such representation is established to be beyond scope of authority it should be held bin....
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.... contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make". There is preponderance of judicial opinion that to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine and that bald expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. In our opinion, the doctrine of promissory estoppel cannot be invoked in the abstract and the courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the court, while considering the applicability of the doctrine. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitabl....
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....ty, etc., wholly or partially and subject to such conditions as may be laid down in the notification by the Government in "public interest". Such an exemption by its very nature is susceptible of being revoked or modified or subjected to other conditions. The supersession or revocation of an exemption notification in the "public interest" is an exercise of the statutory power of the State under the law itself as is obvious from the language of Section 25 of the Act. Under the General Clauses Act an authority which has the power to issue a notification has the undoubted power to rescind or modify the notification in a like manner. From the very nature of power of exemption granted to the Government Under Section 25 of the Act, it follows that the same is with a view to enabling the Government to regulate, control and promote the industries and industrial production in the country. Notification No. 66 of 1979 in our opinion, was not designed or issued to induce the Appellants to import PVC resin. Admittedly, the said notification was not even intended as an incentive for import. The notification on the plain language of it was conceived and issued on the Central Government "being sat....
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....emanded a total exemption from payment of customs duty now demanded that the exemption should be withdrawn it was free to act in the manner it did. It would bear a notice that though Notification No. 66 of 1979 was initially valid only up to 31-3-1979 but that date was extended in "public interest", we see no reason why it could not be curtailed in public interest. Individual interest must yield in favour of societal interest. 25. In our considered opinion therefore the High Court was perfectly right in holding that the doctrine of promissory estoppel had no application to the impugned notification issued by the Central Government in exercise of its powers Under Section 25(1) of the Act in view of the facts and circumstances, as established on the record. 142. In State of Orissa and Ors. v. Mangalam Timber Products Limited (2004) 1 SCC 139, this Court held that to attract applicability of the principle of estoppel it was not necessary that there must be a contract in writing entered into between the parties. Having regard to the facts of the case under consideration, the Court held that it was not satisfied even prima facie that it was a case of an error committed by th....
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....tween them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the party who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relationship as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced, even though it is not supported in point of law by any consideration, but only by his word. But that principle does not create any cause of action, which did not exist before; so that, where a promise is made which is not supported by any consideration, the promise cannot bring an action on the basis of that promise. The principle enunciated in High Trees case was also recognised by the House of Lords in Tool Metal Mfg. Company Ltd. v. Tungsten Electric Company Ltd. [(1955) 2 All ER 657]. That principle was adopted by this Court in Union of India v. Anglo Afghan Agencies (AIR 1968 SC 718) and Turner Morrison and Company Ltd. v. Hungerford Investment Trust Ltd.[ (1972) 1 SCC 857]. Doctrine of "promissory estoppel" has been evolved by the courts, on the principles of equity, to avoid injustice. "P....
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....been evolved by equity to avoid injustice. It is neither in the realm of contract nor in the realm of estoppel. Its object is to interpose equity shorn of its form to mitigate the rigour of strict law, as noted in Anglo Afghan Agencies case and Sharma Transport v. Govt. of A.P. (2002) 2 SCC 188] 7. No vested right as to tax-holding is acquired by a person who is granted concession. If any concession has been given it can be withdrawn at any time and no time-limit should be insisted upon before it was withdrawn. The rule of promissory estoppel can be invoked only if on the basis of representation made by the Government, the industry was established to avail benefit of exemption. In Kasinka Trading v. Union of India [(1995) 1 SCC 274] it was held that the doctrine of promissory estoppel represents a principle evolved by equity to avoid injustice. 145. In M.P. Mathur 2006 (13) SCC 706, the Court was concerned with the question whether on the facts of the case, the Plaintiffs could compel transfer of tenements in their favour on the basis of promissory estoppel. The Court (para 14, page 716 of the Report) observed as follows: ...The term "equity" has four dif....
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.... (ii) The doctrine of promissory estoppel may be applied against the Government where the interest of justice, morality and common fairness dictate such a course. The doctrine is applicable against the State even in its governmental, public or sovereign capacity where it is necessary to prevent fraud or manifest injustice. However, the Government or even a private party under the doctrine of promissory estoppel cannot be asked to do an act prohibited in law. The nature and function which the Government discharges is not very relevant. The Government is subject to the rule of promissory estoppel and if the essential ingredients of this doctrine are satisfied, the Government can be compelled to carry out the promise made by it. (iii) The doctrine of promissory estoppel is not limited in its application only to defence but it can also furnish a cause of action. In other words, the doctrine of promissory estoppel can by itself be the basis of action. (iv) For invocation of the doctrine of promissory estoppel, it is necessary for the promisee to show that by acting on promise made by the other party, he altered his position. The alteration of position by the prom....
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....d be obsolete before we reached the middle. By and large they arise in cases of promotions which are in normal course expected, though not guaranteed by way of a statutory right, in cases of contracts, distribution of largess by the Government and in somewhat similar situations. For instance discretionary grant of licences, permits or the like, carry with it a reasonable expectation, though not a legal right to renewal or non-revocation, but to summarily disappoint that expectation may be seen as unfair without the expectant person being heard. But there again the court has to see whether it was done as a policy or in the public interest either by way of G.O., rule or by way of a legislation. If that be so, a decision denying a legitimate expectation based on such grounds does not qualify for interference unless in a given case, the decision or action taken amounts to an abuse of power. Therefore the limitation is extremely confined and if the according of natural justice does not condition the exercise of the power, the concept of legitimate expectation can have no role to play and the court must not usurp the discretion of the public authority which is empowered to take the decis....
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....erence. It depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action, must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case. It follows that the concept of legitimate expectation is "not the key which unlocks the treasury of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits", particularly when the element of speculation and uncertainty is inherent in that very concept. As cautioned in Attorney General for New South Wales case the courts should restrain themselves and restrict such claims duly to the legal limitations. It is a well-meant caution. Otherwise a resourceful litigant having vested interests in contracts, licences etc. can successfully indulge in getting welfare activities mandated by directive principles thwarted to further his own interests. The caution, particularly in the changing scenario, becomes all ....
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....ailing as on the date of the grant of the licence. The court, therefore, would not bind the Government with a policy which was existing on the date of application as per previous policy. A prior decision would not bind the Government for all times to come. When the Government is satisfied that change in the policy was necessary in the public interest, it would be entitled to revise the policy and lay down new policy. The court, therefore, would prefer to allow free play to the Government to evolve fiscal policy in the public interest and to act upon the same. Equally, the Government is left free to determine priorities in the matters of allocations or allotments or utilisation of its finances in the public interest. It is equally entitled, therefore, to issue or withdraw or modify the export or import policy in accordance with the scheme evolved. We, therefore, hold that the Petitioners have no vested or accrued right for the issuance of permits on the MEE or NQE, nor is the Government bound by its previous policy. It would be open to the Government to evolve the new schemes and the Petitioners would get their legitimate expectations accomplished in accordance with either of the tw....
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....pation cannot amount to an assertible expectation. Such expectation should be justifiable, legitimate and protectable. (v) The protection of legitimate expectation does not require the fulfillment of the expectation where an overriding public interest requires otherwise. In other words, personal benefit must give way to public interest and the doctrine of legitimate expectation would not be invoked which could block public interest for private benefit. Whether doctrines of promissory estoppel and legitimate expectation attracted 154. I may now examine whether the doctrines of promissory estoppel and the legitimate expectation help the Appellants in obtaining the reliefs claimed by them and whether the actions of the State Government and the Central Government are liable to be set aside by applying these doctrines. 155. Each of the Appellants has raised the pleas of promissory estoppel and legitimate expectation based on its own facts. It is not necessary to narrate facts in each appeal with regard to these pleas as stipulations in the MOUs entered into between the respective Appellants and the State Government are broadly similar. For the sake of convenience....
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....re also highlighted. 157. Adhunik's case is that on the basis of definite commitment and firm promise made by the State Government for grant of captive mines as stipulated in the MOU and the State's Industrial Policy, it acted immediately on the MOU and has invested more than Rs. 100 crores to construct and commission the plant and facilities in Phase-I of the MOU and it has employed about 3500 people directly and indirectly for construction and operation of plant in Phase-I. According to Adhunik, it has ordered equipments and machinery for Phase-II and Phase-III at a cost of Rs. 25 crores and has also made further financial commitments for more than Rs. 1000 crore to set up the expansion. Adhunik claims to have also borrowed a sum of Rs. 60 crores from banks and financial institutions and invested that sum in the proposed project. 158. According to Adhunik, no integrated steel plant can be viable in the State of Jharkhand without captive iron ore mines and without the definite promise of the State Government to grant the captive mines and it would not have acted on the MOU to make such a huge investment if the State Government were not to make available captive iron ....
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....rnment to do something in breach of these two Notifications which continue to hold the field. The doctrine of promissory estoppel is not attracted in the present facts, particularly when promise was made - assuming that some of the clauses in the MOU amount to promise - in a mistaken belief and in ignorance of the position that the subject land was not available for iron ore mining in the private sector. I do not think that the State Government can be compelled to carry out what it cannot do in the existing state of affairs in view of 1962 and 1969 Notifications. In my opinion, the State Government cannot be held to be bound by its commitments or assurances or representations made in the MOU because by enforcement of such commitments or assurances or representations, the object sought to be achieved by reservation of the subject area is likely to be defeated and thereby affecting the public interest. The overriding public interest also persuades me in not invoking the doctrines of promissory estoppel and legitimate expectation. For the self-same reasons none of the Appellants is entitled to any relief based on these doctrines; their case is no better. 160. As a matter of fact, o....
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.... of desuetude elaborately. After noticing the English law and Scots law in regard to the doctrine of desuetude, the Court noted the doctrine of desuetude explained in Francis Bennion's Statutory Interpretation; Craies Statute Law (7th Edn.) and Lord Mackay's view in Brown v. Magistrate of Edinburgh 1931 SLT (Scots Law Times Reports) 456, 458. 165. The Court also referred to "Repeal and Desuetude of Statutes", by Aubrey L. Diamond wherein a reference has been made to the view of Lord Denning, M.R. in Buckoke v. Greater London Council (1970) 2 All ER 193. Having noticed as above, the Court in paragraph 34 (pages 446-447) of the Report stated: 34. Though in India the doctrine of desuetude does not appear to have been used so far to hold that any statute has stood repealed because of this process, we find no objection in principle to apply this doctrine to our statutes as well. This is for the reason that a citizen should know whether, despite a statute having been in disuse for long duration and instead a contrary practice being in use, he is still required to act as per the "dead letter". We would think it would advance the cause of justice to accept the app....
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....ce, the Notifications are of 1962 and 1969 and non-implementation of such Notifications for 30-35 years is not that long a period which may satisfy the first requirement of the doctrine of desuetude, namely, that the statute or legislation has not been in operation for a very considerable period. Moreover, State of Jharkhand came into existence on November 15, 2000 and it can hardly be said that 1962 and 1969 Notifications remained neglected by the State Government for a very considerable period. As a matter of fact, in 2006, the State Government issued a Notification mentioning therein about the reservation made by 1962 and 1969 Notifications. Thus, the first ingredient necessary for invocation of doctrine of desuetude is not satisfied. Secondly, and more importantly, even if it is assumed in favour of the Appellants that 1962 and 1969 Notifications remained in disuse for a considerable period having not been implemented for more than 30-35 years, the second necessary ingredient that a practice contrary to the above Notifications has been followed for a considerable long period and such contrary practice has been firmly established is totally absent. As a matter of fact, except st....
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....a decision of this Court in Nagarjuna Construction Company Ltd. v. Government of Andhra Pradesh and Ors. (2008) 16 SCC 276. 173. Mr. Ranjit Kumar also argued that once recommendation was made by it to the Central Government, in view of proviso to Rule 63A of the 1960 Rules, the State Government had become functus officio and ceased to have any power to recall the recommendation already made on any ground whatsoever. In this regard he relied upon Jayalakshmi Coelho v. Oswald Joseph Coelho (2001) 4 SCC 181. 174. Relying upon the decision of this Court in Mohinder Singh Gill and Anr. v. The Chief Election Commissioner, New Delhi, and Ors. (1978) 1 SCC 405 it was submitted that the reasons originally given in an administrative order cannot be supplanted by other reasons in the affidavits or pleadings before the Court. He submitted that as regards Monnet, the initial reason by the State Government was not founded on reservation but later on it tried to bring the ground of reservation in fore by supplanting reasons. 175. Mr. Ranjit Kumar vehemently contended that as per the State Government's own case initially, the land that was recommended for mining lease to Monnet was no....
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....h group matters as the arguments advanced on its behalf were identical to the arguments which were canvassed on behalf of other writ Petitioners. The State Government recalled its recommendations by a common communication and the Central Government returned the recommendations and rejected applications for mining lease made by the writ Petitioners by a common order. 179. The State Government had full power to recall the recommendation made to the Central Government for some good reason. Once 1962 and 1969 Notifications issued by the erstwhile State of Bihar and 2006 Notification issued by the State of Jharkhand have been found by me to be valid and legal, the submissions of Mr. Ranjit Kumar noted above pale in insignificance and are not enough to invalidate the action of the State Government in recalling the recommendation made in favour of Monnet. The valid reservation of subject mining area for exploitation in public sector disentitles Monnet -as well as other Appellants -to any relief. 180. It is well settled that no one has legal or vested right to the grant or renewal of a mining lease. Monnet cannot claim a legal or vested right for grant of the mining lease. It is true....
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....anies 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 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,....
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....andum 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 ir....
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....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. 191. The two notifications read as follows: (1) Government of Bihar Department of Industries & Mines (Mines) 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. Name of the District Description of the areas reserved Singhbhum 1. Sasangda Main Block:- Boundary South The southern boun....
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....mo No. 6209/M Patna, the 21st Dec., 1962 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 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....
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.... 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 ....
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....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: S. No Name of applicant Company State Government Ref/date Area (in hects.) in Mauja Ghatkuri Dist. West Singhbhum Details of overlapping areas 1. M/s Ispat Industries Ltd. i) Kh. Ni. (Pa.Singhbhum)-78/03-115/D.S.M./M dated 5.8.2004 ii) 1516/M dt. 24.11.2004 470.06 Held by M/s General Produce Company 2. M/s Bimal Deep Steel Pvt. Ltd. i) Kh. Ni. (Pa. Singhbhum)-78/03- 131/D.S.M./M dated 4.8.2005 ii) 519/M dated 24.11.2004 112.072 Reserved for PSU 3. M/s....
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....blishment 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. 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: 196. (i) There is not much difference between the facts of the other Ap....
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....these notifications were issued, since the Parliament had already legislated on the field. Section 17 and 17A of 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 erroneo....
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.... 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. (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 ....
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....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. 202.(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. v. 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 Go....
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....ines 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.' 205. 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 Reorganisation Act, 2000, which ....
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....ernment 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 v. M/s Hind Stone reported in (2) SCC 205, paragraph 4 of Dharambir Singh v. Union of India reported in 1996 (6) SCC 702, paragraph 13 of M.P. Ram Mohan Raja v. State of Tamil Nadu reported in 2007 (9) SCC 78, paragraphs 19 to 22 and 28 of State of Kerala v. B. Six Holiday Resorts (P) Ltd. reported in 2010 (5) SCC 186, and paragraph 4 of Sandur Manganese and Iron Ores Ltd. v. State of Karnataka reported in 2010 (13) SCC 1. 210. 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 aut....
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.... 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 212. (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. 213. 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 and 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 we....
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....sued, 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 expressly 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 v. Kameshwar Singh reported in AIR 1952 SC 252 by a detaile....
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.... by a Constitution Bench of this Court in Ishwari Khetan Sugar Mills (P) Ltd. v. State of U.P. reported in 1980 (4) SCC 136 and later by a bench of three Judges in Orissa Cement Ltd. v. 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 enactment is the measure of erosion. Subject to such erosion, on the remainder the State legislature will have power to l....
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.... 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 accordance with the provisions of this Act and th....
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....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. 219. 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 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 prescribe....
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....h 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. 221. 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 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 a....
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....dy held through a Government Company or Corporation, and where the 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. 223. 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 Gover....
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....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 forgrant 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 b....
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....vailable for grant unless (i) an entry to the effect that the area is available for grant is made in the register referred to in sub-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 in terms of Sub-section (1) of Section 11, no notification under Clause (ii) shall be required to b....
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....63, 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 ex....
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.... 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 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 and 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 Gover....
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.... petition directly to 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. 234. The Appellants had relied upon three judgments of the Constitution Benches of this Court in Hingir-Rampur Coal Company, M.A. Tulloch and Company and Baijnath Kadio (supra). In Hingir-Rampur Coal Company (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 Uni....
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....tution Bench was concerned with legality of certain demands of fee under the Orissa 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 empow....
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....e 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 Governme....
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....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.... 242. 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 Gaze....
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....o 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 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 ....
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....te 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 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:  ....