Jharkhand High Court
Kohinoor Steel Private Limited vs Union Of India on 19 November, 2024
Bench: Sujit Narayan Prasad, Navneet Kumar
IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P(C) No. 454 of 2016 Kohinoor Steel Private Limited, a Company incorporated under the Companies Act, 1956 having its registered office at 16A, 'Everest House', 46C, Jawaharlal Nehru Road, Kolkata-700071 through its Senior Corporate Executive, Sri Anindya Sengupta, son of late Achintya Sengupta, r/o LIG-2K/5, Harmu Housing Colony, PO-Harmu, PS-Argora, District-Ranchi ......... Petitioner Versus 1. Union of India, through the Secretary, Ministry of Mines, having its office at Shastri Bhawan, P. O & PS -Parliament Street, District New Delhi. 2. Director, Ministry of Mines, Government of India, having its office at Shastri Bhawan, PO-Shastri Bhawan, PS-Parliament Street, District- New Delhi 3. The State of Jharkhand through the Chief Secretary, having its office at Project Bhawan, PO and PS-Dhurwa, Town & District-Ranchi 4. Secretary, Department of Mines and Geology, Government of Jharkhand, having its office at Nepal House, PO & PS-Doranda, District- Ranchi 5. Deputy Commissioner, Chaibasa, PO & PS-Chaibasa, District-West Singhbhum 6. District Mining Officer, Chaibasa, PO & PS-Chaibasa, District- West Singhbhum ..... ... Respondents CORAM: HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD HON'BLE MR. JUSTICE NAVNEET KUMAR ------- For the Petitioner : Mr. Indrajit Sinha, Advocate Mr. Ankit Vishal, Advocate For the Respondent-UOI : Mr. Anil Kumar, ASGI Mr. Shiv Kumar Sharma, CGC For the Respondent-State : Mr. Gaurang Jajodia, AC to GP-II --------- th C.A.V on 17 October 2024 Pronounced on 19th November 2024 Per, Sujit Narayan Prasad, J.
Prayer
In the present writ petition under Article 226 of the Constitution of India
the petitioner-Firm has prayed for the following reliefs:
a. For issuance of an appropriate writ, order or direction,
declaring that Section 10A(1) of the Mines and Minerals
(Development & Regulation) Act, 1957 (as amended by Mines
and Minerals (Development & Regulation) Amendment Act,
2015) is unconstitutional and ultra vires the Article 14 of
Constitution of India.
b. For issuance of further appropriate writ, order or
direction, including writ in the nature of certiorari, for quashing
the letter issued by the Ministry of Mines, Government of India,
bearing No.5/89/2010-MIV dated 12.11.2015, by which the
proposal for grant of prospecting licence for Iron Ore and
Manganese Ore over an area of 71.914 Ha. in Mauja Barabaljori
and Merelgarha, District West Singhbhum in favour of the
petitioner for a period of three years has been declared as
ineligible in the light of Section 10A (2) of the Mines and
Minerals (Development & Regulation) Act, 1957 (as amended by
Mines and Minerals (Development & Regulation) Amendment
Act, 2015) (hereinafter to be referred as ‘MMDR Act’) and has
been closed;
c. For issuance of further appropriate writ, order or
direction, declaring that the application/proposal of the petitioner
for grant of mineral concession is otherwise eligible in terms of
Section 10A(2)(c) of the MMDR Act, for the reason that the State
Government has communicated its approval in terms of Section
5(1) of the MMDR Act and has recommended for grant of
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prospecting licence vide its letter dated 13.8.2010 prior to coming
into force of the Amendment Act.
Factual Matrix
2. The brief facts of the case as per the pleadings made in the writ
petition are that the petitioner-Firm is incorporated on or about
16.02.2005 and established its industry at village Kuchidih within the
district Saraikela (Jharkhand) under the provisions of Companies Act,
1956.
3. The Petitioner-Firm is an integrated steel plant which commenced
production in April, 2006. On 18th July 2005 the petitioner-Firm entered
into a Memorandum of Understanding with the Government of Jharkhand
whereby and whereunder the Government of Jharkhand agreed to provide
all assistance to the petitioner in procuring iron ore and industrial
minerals in accordance with the need of the petitioner’s proposed
integrated steel plant.
4. On the date of entering into the Memorandum of Understanding
(MOU) between the petitioner-Firm and the State Government, i.e., on
18th July 2005 the petitioner-Firm has not set up its establishment but on
the assurance of the State Government the petitioner-Firm invested a sum
of Rs.400 crores to set up the said integrated Steel Plant in Jharkhand
State. Thereafter the petitioner-Firm applied for a Mining Lease of Iron
ore over an area of 177.70 acres in the Mouza Barabaljori, West
Singhbhum, Jharkhand but the State authorities has granted “Tati Buru”
Block for the mining to the petitioner-firm which was claiming by Indian
Iron and Steel Company Limited on lease.
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5. Being aggrieved, the petitioner-Firm approached this High Court
by filing writ petition being W.P (C ) No.2846 of 2007 before this Court
in which this Court directed the State authority to allot a alternative iron
ore block to the petitioner-Firm whereupon on 3rd April, 2008, the
Secretary, Department of Mines and Geology, Government of Jharkhand
was directed to appear in Court to explain the position of the Government
and it was further directed that no further recommendation would be
made in the meantime.
6. On 15th April 2008, the Secretary, Department of Mines and
Geology, Government of Jharkhand appeared in Court and stated that the
petitioner could opt for the allotment of any other iron ore block
whereupon the same would be considered and disposed of before
25.5.2008. The State authority assured that the same will be allotted to it
before 25.5.2008 but thereafter the State authority repeatedly requested
for extension of time instead of allotment of the iron ore block to the
petitioner-Firm.
7. Upon this, for willful and deliberate violation of the order of this
Court dated 15.04.2008 passed in W.P(C) No.2846 of 2007 a contempt
case being Contempt Case (Civil) No. 709 of 2008 was filed before this
Court by the petitioner-Firm.
8. Thereafter, a committee by its recommendation dated 18.03.2009
recommended that the Mining Lease in respect of Barabljori Block be
granted to the petitioner-Firm but the State Government refused to accept
such recommendation and to forward the same to the Union Government.
Vide order dated 28.06.2010 passed in Contempt Case (Civil) No.709 of
2008, the Hon’ble Court directed the Secretary concerned to appear in the
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Court in person and in pursuance thereof the Secretary concerned had
requested some more time to make recommendation in favour of the
petitioner-Firm and ultimately, a recommendation was made vide its letter
dated 13.8.2010 for grant of mining lease to it which is a different area
situated at Mouza Barabaljori and Maralgarha, District-West Singhbhum
ad-measuring 50.908 Ha.
The aforesaid Contempt Case was disposed of by this Court vide
order dated 16.08.2010, by taking into consideration of the
recommendation as made by the state Government on 13.08.2010.
9. It is further pleaded that the respondent nos. 1 and 2 wrote to the
respondent nos.4 and 6, calling upon them to provide diverse papers,
documents and clarifications in support of the recommendation made in
favour of the petitioner-Firm. Thereafter, the petitioner-Firm requested
the respondent no.1 to allot the area actually applied for by it and not the
area recommended for allotment by letter dated 13.8.2010.
10. It is pleaded that having regard to the fact that a copy of the said
letter dated 01.11.2010 was endorsed to it, the petitioner-Firm vide its
letter dated 1.12.2010 also wrote to the Respondent no.1 to provide all
clarifications and documents and gave detailed particulars of the exact
area applied for by the petitioner-Firm together with copies of maps so as
to remove all doubts as to the area allotted to it.
11. By letter dated 30.12.2010, the Government of India, Ministry of
Mines called upon the Government of Jharkhand, Department of Mines
and Geology to offer its comment with regard to the letter of the
petitioner-Firm dated 01.12.2010.
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12. It is the case of the petitioner that in spite of repeated requests
by the Government of India and in spite of the facts of all related
information and documents were duly provided by the petitioner-Firm for
being forwarded to the Government of India, the Government of
Jharkhand deliberately and in order to harass and victimize the petitioner-
Firm failed to forward the necessary documents to the Government of
India.
13. Consequently, by its letter dated 07.06.2011 addressed to the
Director of Mines and Geology, Government of Jharkhand, the petitioner-
Firm once again made a detailed representation to the State respondents
to ensure that the clarifications, information and documents sought by the
Central Government be provided to it forthwith. At the request of the
State-respondents, the petitioner-Firm under cover of its letter dated
15.06.2011, submitted yet another map of the Area applied for by it duly
certified by the Circle Officer, Noamundi, Jharkhand that the said area
had not been allotted to anyone else.
14. Thereafter, on the further request of the State-respondents, the
petitioner-Firm by letter dated 10.08.2011; forwarded the village map,
Topo Sheet, land schedule, etc. to the State-respondents with a request to
forthwith forward the same to the Central Government. On 29.11.2011,
Assistant Mining Officer, Chaibasa submits an enquiry report regarding
the area applied for by the petitioner-Firm. The said report confirmed the
original area, original plan and topo sheet of the petitioner-Firm.
15. Thereafter, a meeting was held between the authorized
representative of the petitioner-Firm and Director and Deputy Director,
Department of Mines and Geology, Ranchi on 07.12.2011. Believing in
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and relying upon the said representation made by and on behalf of the
respondent Nos. 4 and 6 and being desirous of normalizing the
acrimonious relations between the petitioner-Firm and State authorities,
the petitioner-Firm on/or about 05.12.2011 withdrew the Cr.M.P No.
1500 of 2009 which was filed against the State authorities for misleading
the Court by making false statement.
16. The District Mining Officer, Chaibasa made a thorough inquiry
and submitted his report vide letter No. 180 dated 30.01.2012 whereby
and whereunder he specifically mentioned that there is a slight difference
in the rectified map/topo sheet and the original topo sheet only with
respect to the eastern boundary. Although the difference between the
original topo sheet and the rectified map/topo sheet was negligible, as is
apparent from the said report, the Additional Director, Mines with an
intention to somehow further delay the matters vide letter dated
09.02.2012 directed the petitioner-Firm to submit a clarification as to
why there is a difference in both the maps.
17. The Petitioner-Firm vide letter dated 29.02.2012 immediately
replied and stated that the negligible difference was only due to oversight
at the time of making recommendation by the State Government. The
petitioner-Firm had already clarified vide letters dated 11.11.2010 and
01.12.2010 that due to oversight, the State Government had forwarded
the wrong map/topo sheet without proper verification.
18. It is the case of the petitioner that in order to further delay the
matters, the Additional Director, Mines vide letter No. 499 dated
15.03.2012 again directed the Assistant Mining Officer, Chaibasa to
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submit a clarification with respect to the differences found in the said
map/topo sheet.
19. In response thereof, the Assistant District Mining Officer,
Chaibasa vide letter No. 1027 dated 05.06.2012 submitted a clarification
whereby the said Mining Officer has, by means of a map signed by him
and enclosed with the said letter clearly demarcated the area to be
actually allotted to the petitioner-Firm in green ink and confirmed that the
said area marked in green ink corresponds to the area applied for
allotment by it.
20. In spite of the same, the Additional Director, Mines again vide
letter No. 1136 dated 11.06.2012 requested the Assistant Mining Officer,
Chaibasa to clarify as to whether the verification of the map/topo sheet
and the boundary description was factually done or not. In response
thereof, the Assistant Mining Officer, Chaibasa vide letter No. 1263 dated
11.07.2012 gave a detailed report stating the boundary of the land applied
with the maps confirming that the boundary provided was in accordance
with the maps and topo sheets submitted by it. Thereafter, the Director,
Department of Geology wrote to the petitioner-Firm informing that the
area applied by it is correct as per the topo sheet.
21. Even after lapse of considerable time and requesting the
authorities of the State Government to decide the application of the
petitioner-Firm, the same was not decided upon and recommendation was
not made, which constrained the petitioner-Firm to file another writ
petition before this Hon’ble Court, being W.P.(C) No.5059 of 2012, inter
alia, praying therein for issuance of an appropriate writ, order or
direction, commanding the State authorities to recommend and grant
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prospecting licence to the petitioner-Firm for the year applied for. In the
aforesaid writ petition, an interlocutory application, being I.A. No.1012
of 2013, was filed praying for a direction on the State Government to
send the documents and clarification as sought by the Central
Government vide its letters dated 1.11.2010 and 30.12.2010.
22. Upon hearing the parties, this Hon’ble Court vide order dated
11.12.2013 directed the State Government through the Secretary,
Department of Mines to send the required information and clarification to
the Central Government within two weeks from the date of
receipt/production of a copy of the order.
23. Deliberating the issue further, the petitioner-Firm kept on
communicating with the State as well as the Central Government vide its
several letters. On 08.01.2014, 24.10.14 and 24.01.2015, the petitioner-
Firm wrote letters to the Hon’ble Chief Minister of Jharkhand, requesting
him to direct the concerned department to dispose of the application of
the petitioner-Firm and to make a recommendation concerning the exact
area of grant of prospecting licence.
24. Meanwhile, Mines and Mineral (Development and Regulation)
Amendment Ordinance, 2015 came into force. Vide another letter dated
15.04.2015, the petitioner-Firm sought immediate rectification of
recommendation already allotted as Barabaljori Block and expedite the
issue for grant of prospecting licence.
25. Vide letter, bearing no.1338 dated 3.7.2015 the Department of
Mines, Government of Jharkhand sent its clarification to the Ministry of
Mines regarding grant of area of prospecting licence. Thereafter, the
petitioner-Firm again requested the Ministry of Mines, Government of
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India to issue a direction upon the State Government to approve the
allotment of Barabaljori Iron Block in its favour at the earliest in terms of
the order of the Hon’ble High Court failing which the petitioner-Firm
shall suffer closure of its plant affecting the lives of more than ten
thousand people.
26. Upon this, the petitioner-Firm received letter bearing
No.5/89/10/MIV dated 12.11.2015 by which the petitioner-Firm has been
communicated that upon amendment of the MMDR Act, the application
of the petitioner-Firm for grant of prospecting licence has become
ineligible on 12.1.2015 in terms of section 10A(1) of the MMDR
Act(Amended) 2015, as it was not saved in terms of Section 10A(2) of
the said Act.
27. Therefore, the petitioner Firm has preferred the instant petition
for redressal of grievances by challenging the vires of the amended
provision i.e. section 10A(1) of the MMDR Act and other consequential
relief.
28. It is evident that petitioner-Firm had established its industry at
village Kuchidih within the district Saraikela (Jharkhand). The petitioner-
Firm is an integrated steel plant which commenced production in April,
2006. On 18th July 2005 the petitioner-Firm entered into a Memorandum
of Understanding with the Government of Jharkhand whereby and
whereunder the Government of Jharkhand agreed to provide all assistance
to the petitioner in procuring iron ore and industrial minerals in
accordance with the need of the petitioner’s proposed integrated steel
plant.
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29. Thereafter the petitioner-Firm applied for a Mining Lease of Iron
ore over an area of 177.70 acres in the Mouza Barabaljori, West
Singhbhum, Jharkhand but the State authorities has granted “Tati Buru”
Block for the mining to the petitioner-firm which was claiming by Indian
Iron and Steel Company Limited on lease.
30. Being aggrieved, the petitioner-Firm approached this High Court
by filing writ petition being W.P (C ) No.2846 of 2007 in which on 15 th
April 2008, the Secretary, Department of Mines and Geology,
Government of Jharkhand appeared in Court and stated that the petitioner
could opt for the allotment of any other iron ore block whereupon the
same would be considered and disposed of before 25.5.2008 but
thereafter the State authority repeatedly requested for extension of time
instead of allotment of the iron ore block to the petitioner-Firm.
31. Upon this, for willful and deliberate violation of the order of this
Court dated 15.04.2008 passed in W.P(C) No.2846 of 2007 a contempt
case being Contempt Case (Civil) No. 709 of 2008 was filed before this
Court by the petitioner-Firm.
32. In aforesaid Contempt Case, in light of the direction passed by
this Court a recommendation was made vide its letter dated 13.8.2010 for
grant of mining lease to it which is a different area situated at Mouza
Barabaljori and Maralgarha, District-West Singhbhum ad-measuring
50.908 Ha. Thereafter, the petitioner-Firm requested the respondent no.1
to allot the area actually applied for by it and not the area recommended
for allotment by letter dated 13.8.2010.
33. It is the case of the petitioner that in spite of repeated requests by
the Government of India and in spite of the facts of all related
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information and documents were duly provided by the petitioner-Firm for
being forwarded to the Government of India, the Government of
Jharkhand deliberately and in order to harass and victimize the petitioner-
Firm failed to forward the necessary documents to the Government of
India.
34. At the request of the State-respondents, the petitioner-Firm under
cover of its letter dated 15.06.2011, submitted yet another map of the
Area applied for by it duly certified by the Circle Officer, Noamundi,
Jharkhand.
35. It is evident that The District Mining Officer, Chaibasa made a
thorough inquiry and submitted his report vide letter No. 180 dated
30.01.2012 wherein he specifically mentioned that there is a slight
difference in the rectified map/topo sheet and the original topo sheet only
with respect to the eastern boundary, accordingly, the Additional
Director, Mines vide letter dated 09.02.2012 directed the petitioner-Firm
to submit a clarification as to why there is a difference in both the maps.
36. The Petitioner-Firm vide letter dated 29.02.2012 immediately
replied and stated that the negligible difference was only due to oversight
at the time of making recommendation by the State Government.
37. Further the Assistant Mining Officer, Chaibasa vide letter No.
1263 dated 11.07.2012 gave a detailed report stating the boundary of the
land applied with the maps confirming that the boundary provided was in
accordance with the maps and topo sheets submitted by it. Thereafter, the
Director, Department of Geology wrote to the petitioner-Firm informing
that the area applied by it is correct as per the topo sheet.
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38. It is the case of the petitioner that even after lapse of
considerable time and requesting the authorities of the State Government
to decide the application of the petitioner-Firm, the same was not decided
upon and recommendation was not made, which constrained the
petitioner-Firm to file another writ petition before this Hon’ble Court,
being W.P.(C) No.5059 of 2012, inter alia, praying therein for issuance of
an appropriate writ, order or direction, commanding the State authorities
to recommend and grant prospecting licence to the petitioner-Firm for the
year applied for.
39. Upon hearing the parties, this Hon’ble Court vide order dated
11.12.2013 directed the State Government through the Secretary,
Department of Mines to send the required information and clarification to
the Central Government within two weeks from the date of
receipt/production of a copy of the order.
40. It is evident that during the happening of aforesaid procedure,
Mines and Mineral (Development and Regulation) Amendment
Ordinance, 2015 came into force, then vide another letter dated
15.04.2015, the petitioner-Firm sought immediate rectification of
recommendation already allotted as Barabaljori Block and expedite the
issue for grant of prospecting licence.
41. Upon this, the petitioner-Firm received letter bearing
No.5/89/10/MIV dated 12.11.2015 by which the petitioner-Firm has been
communicated that upon amendment of the MMDR Act, the application
of the petitioner-Firm for grant of prospecting licence has become
ineligible on 12.1.2015 in terms of section 10A(1) of the MMDR Act, as
it was not saved in terms of Section 10A(2) of the said Act.
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42. Hence, the petitioner Firm has preferred the instant petition for
redressal of grievances by challenging the vires of the amended provision
in section 10A (1) of the MMDR Act and for other consequential relief.
Argument by the learned counsel for the petitioner:
43. Mr. Indrajit Sinha, the learned counsel assisted by Mr. Ankit
Vishal, the learned counsel appearing for the petitioner-Firm has raised
the following grounds in assailing the impugned judgment:
I. It has been contended on behalf of the petitioner-Firm that the
benefit of section 10A(2)(c) is required to be extended in favour of
the petitioner-Firm in view of the fact that the State has already made
recommendation for grant of mining lease. But due to laches on the
part of the State or the Central Government the letter of intent has
not been issued.
II. The submission, therefore, has been made that the
recommendation since has been made for seeking approval from the
Central Government as required under the MMDR Act, 1957 it may
be considered to be letter of intent and in that view of the matter the
case of the petitioner-Firm will come under the fold of the eligibility
as has been carved out under the provision of section 10 A (2) (b)
and in that view of the matter the provision of section 10A(2)(c) the
petitioner-Firm is entitled to extend the benefit of mining lease to
carry out the mining operation.
III. The learned counsel appearing for the petitioner-Firm has
submitted that although the validity of section 10A(1) has also been
challenged but in course of argument it has been submitted that the
petitioner-Firm since is emphasizing his argument to treat the
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recommendation as a letter of intent so that the case of the petitioner-
Firm may come within the fold of section 10 A (2) (c) and that is the
reason it has been argued to consider the recommendation as the
letter of intent.
Argument by the learned counsel for the respondents:
44. Per contra, Mr. Anil Kumar, the learned Addl. SGI as also
Mr. Gaurang Jajodia, the learned State counsel submitted that the issue
has already been decided by the Hon’ble Apex Court in the case of
Bhusan Power and Steel v. State of Odisha, (2017) 2 SCC 125.
The submission, therefore, has been made that since the
Hon’ble Apex Court has already decided the issue by setting it at rest,
hence, no further issues is required to be adjudicated in the present case.
Analysis
45. We have heard the learned counsels for the parties and gone
through the pleadings made in the writ petition as also in the counter-
affidavit.
46. This Court after having heard the learned counsel appearing for
the petitioner-Firm has gathered that the following issues have been
raised:
I. The recommendation which has been made by the State is
to be treated as a letter of intent so as to get the benefit of
the provision of section 10 A(2)(C) of the MMDR Act, 1957.
II. The said recommendation is to be treated as letter of
intent, since, there is no laches on the part of the petitioner-
Firm and that is the reason the same is to be treated as
letter of intent so as not to deprive from the effect of the
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insertion of the amended rule as enshrined under section10A(2)(b) and 10A(2)(c) of the Act.
III. The main argument of the writ petitioner is to treat the
recommendation made by the State Government vide
communication dated 13.08.2010 before the functionary of
the Central Government be treated as the letter of intent so
as to get the benefit of section 10A(2)(c) and that is the
reason the issue as per the prayer made in the writ petition
which is with respect to the validity of the provision of
section 10A (1) has not been argued as to how the aforesaid
provision is ultra vires.
47. Thus, this Court is of the view that since the said fact has not
been agitated as to how the said provision is statutorily being invalid
hence decided not to consider the same, rather, the second prayer to
extend the benefit of section 10A(2)(c) is to be considered in view of the
argument advanced on behalf of the petitioner-Firm based upon that the
issues have been referred herein.
48. This Court before deciding the aforesaid issues needs to refer
herein the relevant Articles of Constitution of India and the provisions of
the MMDR Act, 1957.
49. It needs to refer herein that Article 246 of the Constitution of
India stipulates legislative powers of Central and State Government.
Wherein, the Seventh Schedule of the Constitution of India provides the
subject-matter of legislation by the Parliament and State Legislatures. As
per Entry 54 of List 1 (Union List), the Central Government has powers
for “Regulation of Mines and Mineral Development to the extent to which
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such regulation and development under the control of the Union is
declared by Parliament by law to be expedient in the public interest”.
According to Entry 23 of List II (State List), the State Governments have
powers for “Regulation of Mines and Mineral Development subject to the
provisions of List I with respect to regulation and development under the
control of the Union.”
50. As per the aforesaid stipulation the Mines and Minerals
(Development &. Regulation) Act, 1957 was enacted by the Parliament
wherein by virtue of Section 2 of the MMDR Act it has been 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. Section 2 of the MMDR Act 1957 reads as
follows: –
“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.”
51. The MMDR Act 1957, inter-alia, provides for procedures to
grant mineral concessions, regulate mining activities and provisions for
mineral development in the country. Section 4 of the MMDR Act 1957
reads as follows:-
“4. Prospecting or mining operations to be under licence or lease.–
(1) No person shall undertake any reconnaissance, prospecting or
mining operations in any area, except under and in accordance with
the terms and conditions of a reconnaissance permit or of a
prospecting licence or, as the case may be, of a mining lease, granted
under this Act and the rules made thereunder. …….
(2) No reconnaissance permit, prospecting licence or mining leaseshall be granted otherwise than in accordance with the provisions of
this Act and the rules made thereunder.”
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52. Section 6 of the MMDR Act, 1957 reads as follows: –
“6. Maximum area for which a prospecting licence or mining lease
may be granted.―[(1) No person shall acquire [***] in respect of any
mineral or prescribed group of associated minerals [in a State]― (a)
one or more prospecting licences covering a total area of more than
twenty-five square kilometres; or (aa) one or more reconnaissance
permit covering a total area of ten thousand square kilometres:
Provided that the area granted under a single reconnaissance permit
shall not exceed five thousand square kilometers; or] (b) one or more
mining leases covering a total area of more than ten square
kilometres: Provided that if the Central Government is of the opinion
that in the interest of the development of any mineral or industry, it is
necessary so to do, it may, for reasons to be recorded by it in writing,
permit any person to acquire one or more prospecting licences or
mining leases covering as area in excess of the aforesaid total area;
(c) any reconnaissance permit, mining lease or prospecting licence in
respect of any area which is not compact or contiguous: Provided that
if the State Government is of opinion that in the interests of the
development of any mineral, it is necessary so to do, it may, for
reasons to be recorded in writing, permit any person to acquire a
reconnaissance permit, prospecting licence or mining lease in relation
to any area which is not compact or contiguous.]
(2) For the purposes of this section, a person acquiring by, or in the
name of, another person a reconnaissance permit, prospecting licence
or mining lease] which is intended for himself shall be deemed to be
acquiring it himself.”
53. The aforesaid provision specifically mentioned with regard to
the maximum area for which a prospecting licence or mining lease may
be granted. If it exceeds the area as contained in clauses (a), (aa) and (b),
it is protected under the proviso to the effect that if the Central
Government is of the opinion that in the interest of the development of
any mineral or industry, it is necessary so to do, it may, for reasons to be
recorded by it in writing, permit any person to acquire one or more
prospecting licences or mining leases covering as area in excess of the
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aforesaid total area. Thereby, the rights have been protected by such
proviso incorporated under Section 6 (b) of the Act itself.
54. Section 11 of the MMDR Act, 1957 reads as follows:-
“11. Preferential right or certain versions•- (I) Where a
reconnaissance permit or prospecting licence has been granted in
respect of any land, the permit holder or the licensee shall have a
preferential right for obtaining, a prospecting licence or mining lease,
as ease may be, in respect of that land over any other person:
Provided that the State Government is satisfied that the permit holder
or the licensee. as the case may be,- (a) has undertaken
reconnaissance operations or prospecting operations, as the case may
be, to establish mineral resources in such land; (b) has not committed
any breach of the terms and conditions of the reconnaissance permit
or the prospecting licence: (c) has not become ineligible under the
provisions of this Act: and (d) has not failed to apply for grant o
Iprospecting licence or mining lease, as the case may be, within three
months after the expiry of reconnaissance permit or prospecting
licence, as the case may be, or within such further 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 fora 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
19
case may be, and the State Government has invited applications bynotification 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, shall be deemed to have been
received on the same day for the purposes of assigning priority under
this sub-section: Provided further that where any such applications
are received on the same day, the State Government, after taking into
consideration the matter specified in sub section (3), may grant the
reconnaissance permit, prospecting licence or mining lease, as the
case may be. to such one of the applicants as it may deem fit.
xxx xxxx xxx.”
55. On perusal of the aforesaid section, it is made clear that where a
reconnaissance permit or prospecting licence has been granted in respect
of any land, the permit holder or the licensee shall have a preferential
right for obtaining, a prospecting licence or mining lease. That
preferential right is subject to Section-5 mentioned above. As per sub
sections (1) and (2) of Section 11, the right given to the applicants is a
preferential right to be considered for grant of reconnaissance permit,
prospecting licence or mining lease, as the case may be over the
applicants whose applications are received latter. Thereby, the provision
has carved out a preferential right in favour of the applicants, who seek
for Reconnaissance Permit, Prospecting Licence or Mining Lease and
they are entitled to get preferential right over and above the applications
received later.
56. In view of the provisions contained in MMDR Act, 1957, once
the Reconnaissance Permit or Prospecting Licence or Mining Lease of an
20
area granted to an applicant, the operation thereof was not done in proper
perspective for the benefits of the public at large and the revenue to be
earned from the minerals. Therefore, amendments to the MMDR Act,
1957 were required to bring in necessary changes, keeping with the
changing scenario in the mining sector as also with the requirement of
complying with various judgments of the Hon’ble Apex Court.
57. The MMDR Act, 1957 and the Rules made thereunder forms a
complete code in respect of minerals. As would be evident from Sections-
3(e), 14 and 15 of the Act, the regulation and control of minor minerals
have been vested with the State Government. So far as major minerals are
concerned, Sections 5(1)(b), 5(2)(b), 7(2), 8(3), 10A(2)(b), 10A(2)(c),
17A(2) and 17(A)(2A) of the Act provide that in case of major minerals
under the statutory scheme, the regulation and control has been
exclusively vested with the Central Government.
58. The reforms in the mining sector through the amendment to the
MMDR Act, 1957 were required to bring in necessary changes in keeping
with the changing scenario in the mining sector as also with the
requirement of complying with judgments of the Hon’ble Apex Court.
The amendment to the MMDR Act, 1957 was required to be carried out
to expedite the mining operation across the country and for the revenue
generation for the State Governments in the interest of public at large.
59. The said Act has been amended several times over the years,
notably in 1972, 1986, 1994 and 1999.
60. The reasons for Amendment Act, 2015 is crystal clear that the
mining sector has been subjected to numerous litigations in the past few
years. The judgements related to the mining sector have been pronounced
21
by the Hon’ble Apex Court, besides judgments on the issue of allocation
of natural resources which have direct relevance to the grant of mineral
concessions.
61. Therefore, the statement of objects and reasons for Amendment
Act, 2015 reads as follows:-
“1. xxx xxx xxx
2. xxx xxx xxx
3. The mining sector has been subjected to numerous litigations in the
past few years. Important judgments related to the mining sector have
been pronounced by the Supreme Court, besides judgments on the
issue of allocation of natural resources which have direct relevance to
the grant of mineral concessions.
4. The present legal framework of MMD Act, 1957, does not permit
the auctioning of mineral concessions. Auctioning of mineral
concessions would improve transparency in allocation. Government
would also get an increased share of the value of mineral resources.
Some provisions of the law relating to renewals of mineral concessions
have also been found to be wanting in enabling quick decisions.
Consequently , there has been a slowdown in the grant of new
concessions and the renewal of existing ones. As a result, the mining
sector started registering a decline in production affecting the
manufacturing sector which largely depends on the raw material
provided by mining sector. The Government has therefore felt it
necessary to address the immediate requirements of the mining sector
and also to remedy the basic structural defects that underlie the
current impasse.
5. In view of the urgent need to address these problems, the Mines and
Minerals (Development and Regulation) Amendment Ordinance, 2015
was promulgated on 12th January,2015 The Present Bill is to replace
this Ordinance. This bill is designed to put in place mechanism for: (i)
Eliminating discretion; (ii) Improving transparency in the allocation
of mineral resources; (iii) Simplifying procedures; (iv) Eliminating
delay in administration, so as to enable expeditious and optimum
development of the mineral resources of the country; (v) Obtaining for
the government an enhanced share of the value of the mineral
resources of the country; and (vi) Attracting private investment and
the latest technology;
22
6. The salient features of MMDR Amendment Bill, 2015 are as
follows: (i) Removal of discretion; auction to be sole method of
allotment The amendment seeks to bring in utmost transparency by
introducing auction mechanism for the grant of mineral concessions.
The tenure of mineral leases has been increased from the existing 30
years to 50 years. There is no provision for renewal of leases. (ii)
Impetus to the mining sector: The mining industry has been aggrieved
due to the second and subsequent renewals remaining pending. In fact,
this has led to closure of a large number of mines. The Bill addresses
this issue also. The Bill provides that mining leases would be deemed
to be extended from the date of their last renewal to 31st March, 2030
(in the case of captive mines) and till 31st March, 2020 (for the
merchant miners) or till the completion of the renewal already
granted, if any, or a period of fifty years from the date of grant of such
leave, whichever is later. (iii) Safeguarding interest of affected
persons: There is provision to establish District Mineral Foundation
in the districts affected by mining related activities. (iv) Encouraging
exploration and investment: The Bill proposes to set up a National
Mineral Exploration Trust created out of contributions from the
mining lease holders, in order to have a dedicated fund for
encouraging exploration in the country. Transfer of mineral
concessions granted through auction will be permitted in order to
encourage private investors. (v) Simplification of procedures and
removal of delay: The amendment removes the need for “previous
approval” from the Central Government for grant of mineral
concessions in case of important minerals like iron ore, bauxite,
manganese etc. thereby making the process quicker and simpler.
Similarly, the State Governments will devise a system for filling of a
mining plan obviating the need for prior approval of the Mining Plans
by the Central Government The Central Government will have
revision powers in case State Governments fail to decide issues within
the prescribed time. (vi) Stronger provisions for checking illegal
mining: In order to address the serious problem of illegal mining, the
penal provisions have been made further stringent by prescribing
higher penalties up to 5 laid) rupees per hectare and imprisonment up
to 5 years. State Governments will now be able to set up Special
Courts for trial of offences under the Act.”
62. As the method of auction provides for transparent mechanism in
the allocation of mineral resources and a need was felt to revisit the
23
provisions of the existing MMDR Act, 1957 for adoption of auction as a
method of grant of mineral concessions. Accordingly, the MMDR Act
was amended in 2015 (w.e.f. 12.01.2015) mandating that mineral
concessions for major minerals shall be granted through auction by a
method of competitive bidding. However, an exception to this was
created under Section 10A.
63. Clause (b) of Section 10A(2) provided that a reconnaissance
permit (RP) holder or prospecting licence (PL) holder who was granted
RP or PL before 2015 amendment (12.01.2015), had a right to obtain a
PL followed by a mining lease (ML ), or a ML, as the case may be, if the
State Government is satisfied that such RP or PL holder meets the
conditions mentioned in sub-clauses (i) to (iv) of Section 10A(2)(b).
Further, the proviso to section 10A(2) provided another condition that
previous approval of the Central Government for grant of PL and ML was
mandatory in respect of any mineral specified in the First Schedule of the
Act.
64. The MMDR Act, 1957 was comprehensively amended in 2015
to bring several reforms in the mineral sector, notably, mandating auction
of mineral concessions to improve transparency, establishing District
Mineral Foundation and National Mineral Exploration Trust and stringent
penalty for illegal mining, The Act was further amended in the years 2016
and 2020 to allow transfer of leases for non-auctioned captive mines and
to deal with the emergent issue of expiry of leases .
65. Taking into consideration the object and reasons of Amendment
Act, 2015, the procedure for obtaining prospecting licence or mining
24
lease in respect of land in which the minerals vest in the Government was
indicated in Section 10, 10A, 10-B, which are quoted herein below:-
“10. Application for prospecting licences or mining leases.―
(1) An application for 1 [a reconnaissance permit, prospecting licence
or mining lease] in respect of any land in which the minerals vest in
the Government shall be made to the State Government concerned in
the prescribed form and shall be accompanied by the prescribed fee.
(2) Where an application is received under sub-section (1), there shall
be sent to the applicant an acknowledgment of its receipt within the
prescribed time and in the prescribed form.
(3) On receipt of an application under this section, the State
Government may, having regard to the provisions of this Act and any
rules made thereunder, grant or refuse to grant the permit, licence or
lease].
10A. Rights of existing concession holders and applicants.―
(1) All applications received prior to the date of commencement of the
Mines and Minerals (Development and Regulation) Amendment Act,
2015, shall become ineligible.
(2) Without prejudice to sub-section (1), the following shall remain
eligible on and from the date of commencement of the Mines and
Minerals (Development and Regulation) Amendment Act, 2015:―
(a) applications received under section 11A of this Act;
(b) where before the commencement of the Mines and Minerals
(Development and Regulation) Amendment Act, 2015 a
reconnaissance permit or prospecting licence has been granted in
respect of any land for any mineral, the permit holder or the licensee
shall have a right for obtaining a prospecting licence followed by a
mining lease, or a mining lease, as the case may be, in respect of that
mineral in that land, if the State Government is satisfied that the
permit holder or the licensee, as the case may be,―
(i) has undertaken reconnaissance operations or prospecting
operations, as the case may be, to establish the existence of mineral
contents in such land in accordance with such parameters as may be
prescribed by the Central Government;
(ii) has not committed any breach of the terms and conditions of the
reconnaissance permit or the prospecting licence;
(iii) has not become ineligible under the provisions of this Act; and
(iv) has not failed to apply for grant of prospecting licence or mining
lease, as the case may be, within a period of three months after the
25
expiry of reconnaissance permit or prospecting licence, as the case
may be, or within such further period not exceeding six months as may
be extended by the State Government;
(c) where the Central Government has communicated previous
approval as required under sub-section (1) of section 5 for grant of a
mining lease, or if a letter of intent (by whatever name called) has
been issued by the State Government to grant a mining lease, before
the commencement of the Mines and Minerals (Development and
Regulation) Amendment Act, 2015, the mining lease shall be granted
subject to fulfilment of the conditions of the previous approval or of
the letter of intent within a period of two years from the date of
commencement of the said Act: Provided that in respect of any mineral
specified in the First Schedule, no prospecting licence or mining lease
shall be granted under clause (b) of this subsection except with the
previous approval of the Central Government.
10-B. Grant of mining lease in respect of notified minerals through
auction.―
(1) The provisions of this section shall not be applicable to cases
covered by section 10A or section 17A or to minerals specified in Part
A or Part B of the First Schedule or to land in respect of which the
minerals do not vest in the Government.
(2) Where there is inadequate evidence to show the existence of
mineral contents of any notified mineral in respect of any area, a State
Government may, after obtaining the previous approval of the Central
Government, grant a prospecting licence-cum-mining lease for the
said notified mineral in such area in accordance with the procedure
laid down in section 11.
(3) In areas where the existence of mineral contents of any notified
mineral is established in the manner prescribed by the Central
Government, the State Government shall notify such areas for grant of
mining leases for such notified mineral, the terms and conditions
subject to which such mining leases shall be granted, and any other
relevant conditions, in such manner as may be prescribed by the
Central Government.
(4) For the purpose of granting a mining lease in respect of any
notified mineral in such notified area, the State Government shall
select, through auction by a method of competitive bidding, including
e-auction, an applicant who fulfils the eligibility conditions as
specified in this Act.
26
(5) The Central Government shall prescribe the terms and conditions,
and procedure, subject to which the auction shall be conducted,
including the bidding parameters for the selection, which may include
a share in the production of the mineral, or any payment linked to the
royalty payable, or any other relevant parameter, or any combination
or modification of them.
(6) Without prejudice to the generality of sub-section (5), the Central
Government shall, if it is of the opinion that it is necessary and
expedient to do so, prescribe terms and conditions, procedure and
bidding parameters in respect of categories of minerals, size and area
of mineral deposits and a State or States, subject to which the auction
shall be conducted: Provided that the terms and conditions may
include the reservation of any particular mine or mines for a
particular end-use and subject to such condition which allow only
such eligible end users to participate in the auction.
(7) The State Government shall grant a mining lease to an applicant
selected in accordance with the procedure laid down in this section in
respect of such notified mineral in any notified area.”
66. In view of the aforementioned provisions, it is apparent that
Section 10 deals with application for prospecting licenses or mining
leases, which states about submission of applications in the prescribed
form accompanied by the prescribed fee. On receipt such application, the
application of the applicant will be sent with an acknowledgement of its
receipt within the prescribed time and the prescribed form and on receipt
of an application under this section, the State Government may, having
regard to the provisions of this Act and the Rules made thereunder, grant
or refuse to grant the permit, licence or lease. By inserting Section 10A,
all applications received prior to the date of commencement of the Mines
and Minerals (Development and Regulation) Amendment Act, 2015, i.e.
12.01.2015, shall become ineligible.
67. Section 10A (2) carves out an exception to Section 10A (1)
holding that without prejudice to sub section (1), the following, i.e. clause
27
(a) to clause (c) shall remain eligible on and from the date of
commencement of the Amendment Act, 2015. Section 10A(2)(a)
prescribes the applications received under Section 11-A of this Act, which
deals with granting reconnaissance permit, prospecting licence or mining
lease in respect of an area containing coal or lignite, to which the present
case is concerned.
68. Coming to Section 10A(2)(b), before commencement of the
Amendment Act 2015, a reconnaissance permit or prospecting licence has
been granted in respect of any land for any mineral, the permit holder or
the licensee shall have a right for obtaining a prospecting licence
followed by a mining lease, or a mining lease, as the case may be, in
respect of that mineral in that land, if the State Government is satisfied
that the permit holder or the licensee, as the case may be, satisfies the
requirement as prescribed under sub-clause (i) to sub-clause (iv) of
Section 10A(2)(b).
69. Section 10A(2)(c) specifically prescribes that the mining lease
shall be granted subject to fulfilment of the conditions of the previous
approval or of the letter of intent within a period of two years from the
date of commencement of the said Act. In the proviso, it has been
mentioned that no prospecting licence or mining lease shall be granted
under clause (b) of this sub-section except with the previous approval of
the Central Government. Therefore, the time limit has been prescribed for
two years from the date of commencement of the Amendment Act, 2015
and that too with prior approval of the Central Government.
70. On close scrutiny of the aforementioned provisions, it has to be
held that under the new regime Section 10A made all pending
28
applications in respect of major minerals ineligible. Thus, pending
applications for Prospecting Licence (PL), Mining Lease (ML) or
Reconnaissance Permit (RP) lapsed and the new auction regime set in.
71. However, Section 10A(2)(b) & 10A(2)(c) of the Amendment Act,
2015 temporarily saved some pending applications from before the 2015
Amendment. These exceptions were applicable to the cases where an
applicant for mining lease had prospected the area, or in respect of whom
a recommendation was made by the State Government and grant of
approval by the Central Government was pending.
72. It is further clarified that for the applications saved under Section
10-A(2)(b) & l0-A(2)(c) of the Act, Central Government’s approval was
necessary before the grant of Mining Lease. For pending applications
under Section 10A(2)(b) of the Act, proviso to Section 10A(2)(c) of the
Act mandated the prior approval of the Central Government before a
Mining Lease was granted. Similarly, for pending applications under
Section 10A(2)(c) of the Act, the Mining Lease shall be granted within
two years of fulfillment of the conditions mentioned in the Letter of
Intent (“LOI” for short), only where prior Central Government’s approval
has been communicated. Therefore, in both the cases, i.e. Section
10A(2)(b) and Section 10A(2)(c), previous approval of the Central
Government is necessary in view of the proviso to Section 10A(2)(c).
73. Further, Section 10A(2)(b) provides that a Reconnaissance
Permit (RP) holder or Prospecting Licence (PL) holder who was granted
RP or PL before 2015 Amendment, i.e. 12.01.2015, had a right to obtain a
PL followed by a Mining Lease (ML), or a Mining Lease, as the case may
be, if the State Government is satisfied that such RP or PL holder meets
29
the conditions mentioned in sub-clauses (i) to (iv) of Section 10A(2)(b).
The Proviso to Section 10A(2) provides another condition that previous
approval of the Central Government for grant of PL and ML was
mandatory in respect of any mineral specified in the First Schedule of the
Act.
74. It needs to refer herein that the Amendment Act, 2015 has
undergone further amendment by the Amendment Act, 2021 with effect
from 28.03.2021 by insertion of proviso to Section 10A(2) to Section
10A(2)(b).
75. The aforesaid amendment has been made with a view to further
reforms in the mining sector to increase mineral production and creation
of employment. To achieve this, more mineral blocks have to be brought
into auction regime and any method of grant of mineral concession other
than through a competitive, transparent and non-discriminatory method
had to be brought to an end. Therefore, to resolve the impasse created by
the exception provided in Section 10A(2)(b), the MMDR Act, 1957 was
further amended in the year 2021 to remove any exception to the grant of
mineral concession through auction.
76. The MMDR Act was amended in 2021 with an objective to fully
harness the potential of the mineral sector, increase employment and
investment in the mining sector including coal, increase the revenue to
the States, increase the production and time bound operationalisation of
mines, maintain continuity in mining operations after change of lessee,
increase the pace of exploration and auction of mineral resources and
resolve long pending issues that have slowed the growth of the sector.
30
77. It is apt to mention that many of the applications covered under
Section 10A(2)(b) of the Act, which were pending for decision, in the
absence of a sun-set clause in the Pre-Amended Act, became an
anachronism in the auction-based regime. Therefore, in order to bring
these pending cases to a closure and to enable auction of these mineral
blocks in national interest, it was proposed to amend Section 10A(2)(b)
of the Act.
78. This Court in view of the aforesaid provisions, as referred
hereinabove, is of the view that the MMDR Act, 1957, before amendment
of the year 2015 the lapsing period was not there, i.e, as has been inserted
by amendment carved out in the year 2015 by insertion of section 10A (1)
of the MMDR Act, 1957 as has been referred hereinabove.
79. It is evident from section 10A(2)(c) that the effect of 10A(1) will
not be there subject to fulfillment of the condition as provided under
section 10A(2)(b) r/w section 10A(2)(c) wherein and whereunder it has
been provided that if the Central Government has granted approval as
required under sub-section 1 to section 5 of the MMDR Act, 1957 or the
letter of intent has been issued by the State Government and if the
condition so incorporated in the letter of intent has been undertaken to be
fulfilled within a period of two years either from the date of approval by
the Central Government or from the date of issuance of letter of intent,
then the mining lease can be issued.
ISSUES
80. In the aforesaid backdrop of factual aspects as well legal
provisions as discussed above, the question which requires consideration
herein is:
31
(i) As to whether the recommendation letter issued by the State
Government seeking approval from the Central Government can be
construed to letter of intent.
(ii) The second issue which requires consideration is that the
recommendation letter issued by the State Government which has been
sought to be considered as letter of intent can create a vested right so that
the provision of the amended act will not adversely affect the interest of
the petitioner-Firm.
81. Since both the issues are interlinked and, as such, are being
answered together. But before answering the said issues the legal position
is needed to be referred herein that the amended provision will adversely
affect the right of the party concerned and, if yes, under which
circumstances.
82. It needs to refer herein that the law is well settled that the
statutory provision is not to be implemented with retrospective effect
unless provided under the statute for applying with retrospective effect,
the reference in this regard is made to the judgment rendered by the
Hon’ble Apex Court in P.Mahendran v. State of Karnataka, (1990) 1
SCC 411 wherein at paragraph-5, it has been observed which reads as
“5. It is well settled rule of construction that every statute or statutory
rule is prospective unless it is expressly or by necessary implication
made to have retrospective effect. Unless there are words in the statute
or in the Rules showing the intention to affect existing rights the rule
must be held to be prospective. If a rule is expressed in language
which is fairly capable of either interpretation it ought to be construed
as prospective only. In the absence of any express provision or
necessary intendment the rule cannot be given retrospective effect
except in matter of procedure. The amending Rules of 1987 do not
contain any express provision giving the
32
amendment retrospective effect nor there is anything therein showing
the necessary intendment for enforcing the rule
with retrospective effect. Since the amending Rules were
not retrospective, it could not adversely affect the right of those
candidates who were qualified for selection and appointment on the
date they applied for the post, moreover as the process of selection
had already commenced when the amending Rules came into force, the
amended Rules could not affect the existing rights of those candidates
who were being considered for selection as they possessed the
requisite qualifications prescribed by the Rules before its amendment
moreover construction of amending Rules should be made in a
reasonable manner to avoid unnecessary hardship to those who have
no control over the subject matter.”.”
83. In another judgment rendered by Hon’ble Apex Court in K.S.
Paripoornan v. State of Kerala, (1994) 5 SCC 593, it has been held
which reads as hereunder:
“A substantive law is held to be prospective as a matter of legal policy
since it is founded on public policy that no right be so created as to
work to the disadvantage for whom it is created as it if be so, “it
would be betrayal of what the law stands for.””
84. The Hon’ble Supreme Court in Kusumam Hotels Private
Limited v. Kerala State Electricity Board, (2008) 13 SCC 213 has held
that all administrative orders ordinarily are to be
considered prospective in nature. For giving it a retrospective effect, it
must be stated so expressly or by necessary implication.
85. Further, law is also settled that by virtue of the amended rule
the same will be said to be repealed and the saving clause will only come
if any right has been accrued in favour of the party concerned said to be
vested right so as to follow the principle that by virtue of the amendment
carved out in a Statute the right already accrued in favour of the party
concerned is not to be snatched away, reference in this regard may be
33
taken from Railway Board v. C.R. Rangadhamaiah, (1997) 6 SCC 623
wherein at para 24 it has been held as under:
24. In many of these decisions the expressions “vested rights” or
“accrued rights” have been used while striking down the impugned
provisions which had been given retrospective operation so as to have an
adverse effect in the matter of promotion, seniority, substantive
appointment, etc., of the employees. The said expressions have been used
in the context of a right flowing under the relevant rule which was sought
to be altered with effect from an anterior date and thereby taking away
the benefits available under the rule in force at that time. It has been held
that such an amendment having retrospective operation which has the
effect of taking away a benefit already available to the employee under
the existing rule is arbitrary, discriminatory and violative of the rights
guaranteed under Articles 14 and 16 of the Constitution. We are unable
to hold that these decisions are not in consonance with the decisions
in Roshan Lal Tandon [AIR 1967 SC 1889 : (1968) 1 SCR 185 : (1968) 1
LLJ 576] , B.S. Vedera [AIR 1969 SC 118 : (1968) 3 SCR 575
86. The Hon’ble Apex Court in the case of State of M.P. v. Yogendra
Shrivastava, (2010) 12 SCC 538 has held that it is well settled that rights
and benefits which have already been earned or acquired under the
existing Rules cannot be taken away by amending the Rules with
retrospective effect. For ready reference the relevant paragraph is being
quoted as under:
15. — But it is well settled that rights and benefits which have already
been earned or acquired under the existing Rules cannot be taken away
by amending the Rules with retrospective effect. (See N.C.
Singhal v. Armed Forces Medical Services [(1972) 4 SCC 765] ; K.C.
Arora v. State of Haryana [(1984) 3 SCC 281 : 1984 SCC (L&S) 520]
and T.R. Kapur v. State of Haryana [1986 Supp SCC 584 : (1987) 2 ATC
595] .) Therefore, it has to be held that while the amendment, even if it is
to be considered as otherwise valid, cannot affect the rights and benefits
which had accrued to the employees under the unamended rules. —
87. The amendment of year 2015 in MMDR Act, 1957 has come into
force in order to generate more revenue so far as the mining resources are
concern. Such decision has been taken after the judgment having been
34
rendered by the Hon’ble Apex Court in the case of Goa Foundation v.
Union of India and Others,. [(2014) 6 SCC 590].
88. In Manohar Lal Sharma V. The Principal Secretary & Ors.
(W.P.(Crl) No. 120/2012 disposed of on 25.08.2014), wherein the
subject-matter of consideration was the allocation of coal blocks for the
period from 1993 to 2010, the apex Court observed that allocation of
natural resources has to meet the twin constitutional tests, one, the
distribution of natural resources that vest in the State is to sub-serve the
common good and, two, the allocation is not violative of Article 14. In
paragraphs 71 and 99 of the judgment dated 25.08.2014, the apex Court
observed as follows:-
“71. xxx xxx xxx Obviously, therefore, such allocations has to meet
twin constitutional tests, one, the distribution of natural resources that
vest in the State is to sub-serve the common good and, two, the
allocation is not violative of. Article 14.
99. xxx xxx xxx We are fortified in our view by a recent decision of this
Court (3 Judge Bench) in (Goa Foundation v. Union of India and
Others,. [(2014) 6 SCC 5901) Goa Foundation wherein ,follolving
Natural Resources Allocation Reference, it is stated, “.., it is for the
State Government to decide as a matter of policy in what manner the
leases of these mineral resources would be granted, but this decision
has to be taken in accordance with the provisions of the MMDR Act
and the Rules made thereunder and in consonance with the
constitution provisions.”
89. The parliamentarian, therefore, has taken decision to amend the
statutory provision in the year 2015, i.e., with effect from 12.01.2015 by
which the provision of 10A (1) has been inserted. Section 10A (1) has put
embargo by making reference of ineligibility criteria of one or the other
party in getting the mining lease on or after the commencement of the
said amendment. But exception has been carved out wherein subject to
35
fulfillment of the conditions as provided under section 10A(2)(b) there
will be no effect of embargo put as under section 10A(1) of the Act of
1957 (Amendment Act, 2015).
90. Section 10A(2)(b) is the condition of eligibility while section
10A(2)(c) is the criteria to be fulfilled by one or the other for the purpose
of getting the mining lease which is first approval of the central
Government is required as referred under sub-section 1 of section 5 of the
MMDR Act, 1957 and second the letter of intent, if issued by the State
Government, and the concerned party has given an undertaking to fulfil
the conditions as stipulated in the letter of intent.
91. The aforesaid conditions therefore specify that subject to
fulfillment of two conditions, i.e., the prior approval of the Central
Government or the letter of intent if issued by the State Government or if
the conditions stipulated in the letter of Intent is being undertaken to be
complied with within a period of two years then the mining lease
irrespective of the embargo as provided under section 10A(1) is to be
issued.
92. It is evident that by issuance of the approval by the Central
Government or the letter of intent the issue has been taken in to
consideration that if the right has been accrued in favour of one of the
other by virtue of issuance of approval by the Central Government or the
letter of intent, if issued by the State Government, then, there will be no
adverse affect by the amendment incorporated in the statutory provision
of the Act of 1957.
93. It is, thus, evident that the purport of the aforesaid relaxation
which has been given is only with respect to the fact that in case a right
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has been accrued in favour of one or the other, then, there will not
adverse effect by the amended provision.
94. The accrual of right is to be considered as per the argument
advanced on behalf of the petitioner-Firm who has made an advanced
argument that the State since has already issued a recommendation letter
which be construed to be the letter of intent as has been issued by the
State Government and thereby the same be treated to be the accrual of
right and, hence, the amendment incorporated in the statutory provision
will not have any adverse impact upon the interest of the petitioner-Firm.
95. This Court, in order to appreciate the said issue, is of the view that
the reference of the interpretation of the aforesaid vested right needs to be
referred herein.
96. Rights are ‘vested’ when right to enjoyment, present
or prospective, has become property of some particular person or persons
as present interest; mere expectancy of future benefits, or contingent
interest in property founded on anticipated continuance of existing laws,
does not constitute ‘vested rights.” Thus, vested right is a right
independent of any contingency and it cannot be taken away without
consent of the person concerned. Vested right can arise from contract,
statute or by operation of law. Unless an accrued or vested right has been
derived by a party, the policy decision/scheme could be changed.
97. “Vested right” has been defined by the Hon’ble Apex Court in the
case of MGB Gramin Bank v. Chakrawarti Singh [(2014) 13 SCC 583]
at paragraph 11, 12 and 13, which read hereunder as:–
“11. The word “vested” is defined in Black’s Law
Dictionary (6th Edn.) at p. 1563, as:
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“Vested.–fixed; accrued; settled; absolute; complete. Having the
character or given in the rights of absolute ownership; not contingent;
not subject to be defeated by a condition precedent. Rights are ‘vested’
when right to enjoyment, present or prospective, has become property
of some particular person or persons as present interest; mere
expectancy of future benefits, or contingent interest in property
founded on anticipated continuance of existing laws, does not
constitute ‘vested rights’.”
12. In Webster’s Comprehensive Dictionary (International Edition) at
p. 1397, “vested” is defined as law held by a tenure subject to no
contingency; complete; established by law as a permanent right;
vested interest.
13. Thus, vested right is a right independent of any contingency and it
cannot be taken away without consent of the person concerned. Vested
right can arise from contract, statute or by operation of law. Unless an
accrued or vested right has been derived by a party, the policy
decision/scheme could be changed.
98. Further, so far as the question of taking away the vested right is
concerned, the Hon’ble Apex Court has laid down the proposition in the
case of Chairman, Railway Board v. C.R. Rangadhamaiah, (1997) 6
SCC 623 at paragraph-24, which reads hereunder as follows:–
“24. In many of these decisions the expressions “vested rights” or
“accrued rights” have been used while striking down the impugned
provisions which had been given retrospective operation so as to have
an adverse effect in the matter of promotion, seniority, substantive
appointment, etc., of the employees. The said expressions have been
used in the context of a right flowing under the relevant rule which
was sought to be altered with effect from an anterior date and thereby
taking away the benefits available under the rule in force at that time.
It has been held that such an amendment
having retrospective operation which has the effect of taking away a
benefit already available to the employee under the existing rule is
arbitrary, discriminatory and violative of the rights guaranteed under
Articles 14 and 16 of the Constitution. We are unable to hold that
these decisions are not in consonance with the decisions in Roshan Lal
Tandon [AIR 1967 SC 1889], B.S. Vedera [AIR 1969 SC 118]38
and Raman Lal Keshav Lal Soni [(1983) 2 SCC 33].”
99. It is evident that the vested right as has been defined in the
aforesaid judgment will be a right which has been accrued in favour of
the parties concerned and once the right will be accrued there will not
adversely impact on the amendment if incorporated in the statutory
provision after the right as has been accrued.
100. In the instant case the learned counsel for the petitioner-Firm has
tried to impress upon the Court that the recommendation letter is to be
construed as the letter of intent.
101. But this Court is not in agreement with such submission because
the recommendation cannot be said to be the accrual of right and
moreover, the letter of intent which is to be extended in favour of the
petitioner-Firm as required under the Act has not been issued in favour of
the party concerned.
102. Admittedly herein, the petitioner-Firm has harped upon to accept
the said recommendation to be the letter of intent so that a right is being
said to be accrued in favour of the petitioner-Firm and thereby the
amendment incorporated in the statute be not adversely affect the interest
of the party concerned.
103. But the recommendation cannot be said to be an accrual of right
rather the interpretation of the word “recommendation” cannot be said to
be the binding upon the other, rather the same is to be accepted and not to
be accepted, as such, when the two options are there, i.e., to be accepted
or not to be accepted then such decision cannot be said to bind the
authority who has to take decision.
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104. Further, the said recommendation as would be evident from the
content of the said letter dated 13.08.2010 is not showing any willingness
by the State rather the same is by making a request to the Central
Government to grant the approval as required to be granted MMDR Act,
1957.
105. The letter of intent while on the other hand, if issued, then, it will
be said to the accrual of right and once the letter of intent has been issued,
then the substantial right is said to be created, however, subject to
fulfillment of the conditions as per the requirement under section
10A(2)(c) within a period of two years, then the mining lease will be
issued.
106. The contention of the petitioner-Firm is also not fit to be accepted
to treat the recommendation letter to be binding in view of the specific
insertion under section 10A(2)(c) wherein in addition to the two
conditions, i.e., the prior approval of the Central Government or the letter
of intent to be issued by the State Government, the condition stipulated in
the letter of intent is to be fulfilled within a period of two years.
107. Admittedly, and it cannot be that in the recommendation letter
dated.13.08.2010. there is no condition stipulated and as such the said
recommendation letter in terms of the provision of section 10A(2)(c)
cannot be construed to be letter of intent.
108. Further, the letter of intent is to be issued by the State, then the
question arises why the State has made a recommendation only and letter
of intent has not been issued even though the issuance of letter of intent
was within the domain of the State.
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109. Apart from the above, it has to be observed that mere making of
the application for grant of mineral concessions by the petitioner, does
not create any right, much less a vested right, and the petitioner cannot
claim that it had pre-existing right to such licence or lease. Its right is
only to make an application, which was given by the policy then existing,
and if the policy is changed, may be by way of an amendment to the Act,
one cannot be stated to have any right on the basis of the earlier policy,
which now does not hold good or find any place in the Statute.
110. Further, merely because the applications were kept pending for
long period by the concerned authorities would not create any right or an
applicant cannot be stated to have a vested right for seeking mining lease
on the basis of the provision which has been substituted by the
Amendment Act.
111. Further, the Hon’ble Apex Court in Geomin Minerals and
Marketing Private Limited v. State of Orissa (2013) 7 SCC 571 wherein
an applicant had sought direction to the State Government to dispose of
all pending applications for Mineral Concessions filed by the applicant in
accordance with its vested right to preferential consideration, has
observed which reads as follows:
“It is well settled that no applicant has a statutory or fundamental
right to obtain prospecting licence or a mining lease. In this
connection one may refer to this Court’s decision in Monnet Ispat
[Monnet Ispat and Energy Ltd. v. Union of India, (2012) 11 SCC 1.
Therefore, the High Court before interfering with the recommendation,
ought to have looked into the nature of recommendation”.
112. Further, it needs to refer herein that natural resources are public
property and any change introduced by the Parliament by way of
41
amendment for the benefit of public at large shall prevail over personal
interest.
113. In Howrah Municipal Corporation V. Ganges Rope Company
Limited, (2004) 1 SCC 663, the apex Court has observed that the benefit
of public at large shall prevail over the individual interest. It has further
been held that while introducing transparent and fair procedure for
distribution of State largesse, interest of few individuals is bound to be
affected for taking care of the larger public interest. For ready reference
the relevant paragraph of the aforesaid judgment is being quoted as
under:
“37. The argument advanced on the basis of so-called creation of
vested right for obtaining sanction on the basis of the Building Rules
(unamended) as they were on the date of submission of the application
and the order of the High Court fixing a period for decision of the
same, is misconceived. The word “vest” is normally used where an
immediate fixed right in present or future enjoyment in respect of a
property is created. With the long usage the said word “vest” has also
acquired a meaning as “an absolute or indefeasible right” [see K.J.
Aiyer’s Judicial Dictionary (A Complete Law Lexicon), 13th Edn.) The
context in which the respondent Company claims a vested right for
sanction and which has been accepted by the Division Bench of the
High Court, is not a right in relation to “ownership or possession of
any property” for which the expression “vest” is generally used What
we can understand from the claim of a “vested right” set up by the
respondent Company is that on the basis of the Building Rules, as
applicable to their case on the date of making an application for
sanction and the fixed period allotted by the Court for its
consideration, it had a “legitimate” or “settled expectation” to obtain
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the sanction. In our considered opinion, such “settled expectation”, ifany, did not create any vested right to obtain sanction. True it is, that
the respondent Company which can have no control over the manner
of processing of application for sanction by the Corporation cannot be
blamed for delay but during pendency of its application for sanction, if
the State Government, in exercise of its rule- making power, amended
the Building Rules and imposed restrictions on the heights of buildings
on G. T. Road and other wards, such “settled expectation” has been
rendered impossible of fulfilment due to change in law. The claim
based on the alleged “vested right” or “settled expectation” cannot be
set up against statutory provisions which were brought into force by
the State Government by amending the Building Rules and not by the
Corporation against whom such “vested right” or “settled
expectation” is being sought to be enforced. The “vested right” of
“settled expectation” has been nullified not only by the Corporation
but also by the State by amending the Byuilding Rules. Besides this,
such a “settled expectation” or the so called “vested right” cannot be
countenanced against public interest and convenience which are
sought to be served by amendment of the Building Rules and the
resolution of the Corporation issued thereupon”.
114. It needs to refer herein that as per Amendment Act, 2015
wherein stipulation has been made in, sub-section (1) of Section 10A that
all applications received prior to the date of commencement of the Mines
and Minerals (Development and Regulation) Amendment Act, 2015, shall
become ineligible. The saving clause, i.e., Section 10A(2)(b), which has
been inserted vide MMDR Amendment Act 2015, w.e.f. 12.01.2015 does
not create vested right automatically. Even the right to obtain a mining
lease is subject to compliance of the terms and conditions mentioned in
43
Section 10A(2)(b), which has also lapsed on coming into effect of the
MMDR Amendment Act, 2021.
115. While dealing with the right of an applicant under Section 10A
(2)(b), it has been provided that the permit holder or licensee shall have a
right for obtaining a mining lease whereas in the case of Section
10A(2)(c), it has been provided that the mining lease shall be granted
subject to the fulfillment of the conditions of the previous approval.
116. Thus, it is evident that the Section 10A(2)(b) inserted in MMDR
Amendment Act, 2015 w.e.f. 12.01.2015 does not create any vested right.
The right to obtain a mining lease is subject to compliance of the terms
and conditions mentioned in Section 10A(2)(b) has also lapsed on
coming into effect of the MMDR Amendment Act, 2021. Further, in view
of the provisions contained in Clause (c) of Section 10A(2), it is
mandated that mining lease cannot, without the previous approval of the
Central Government, be granted, therefore, the proviso to Section
10A(2)(c) is very clear.
Conclusion
117. The recommendation of the State Government for grant of
previous approval of the Central Government for granting mining lease is
the statutory requirement for grant of mining lease by the State
Government, which is mandatory. The proviso to Section 10A(2)(c)
expressly states that a prospecting license under Section 10A(2)(b) shall
not be granted without prior approval of the Central Government.
Therefore, construed contextually, an application is to be treated as
‘pending’ until Central Government has considered the application and
granted it’s approval and the petitioner’s application is to be construed as
44
a ‘pending case’ as the Central Government’s approval was awaited.
Therefore, the first proviso cannot be read to vest any right before Central
Government’s approval is granted.
118. It needs to refer herein that the Hon’ble Apex Court in the case of
Bhusan Power and Steel v. State of Odisha, (2017) 2 SCC 125 while
taking into consideration the aforementioned provisions, has reiterated
the object of Amendment Act 2015 and held that the State must ensure
that it maximizes revenue and “receives adequate compensation for the
allotted resource”.
119. The Bhusan Power & Steel Ltd. (supra), arose out of contempt
petition wherein the Contemnor-State Government had disregarded the
Court’s direction to recommend the case for grant of a mining lease to the
Central Government. Based on this direction and Section 10A (2)(c) of
the Act, the petitioners therein claimed their rights to a ML. The Hon’ble
Apex Court, did not grant any relief for the reason that no prior approval
had been granted by the Central Government to the State Government’s
recommendation.
120. As such on the basis of the aforesaid discussion, the argument
advanced by the learned Counsel appearing for the petitioner that
pendency of the application for grant of mining lease pursuant to
recommendation made by the State Government, a right has been accrued
in favour of the petitioner for consideration, is not fit to be accepted.
121. Both the issues are answered accordingly.
122. This Court, in view of the above, is of the view that merely
because the recommendation has been made by the State the same cannot
be construed to be letter of intent creating any vested or accrued right in
45
favour of the petitioner-Firm, as such, in absence of any accrued right the
amended provision will automatically adversely impact the interest of the
petitioner-Firm and whatever decision is to be taken on the basis of the
amended provision which has come into being said to be prospectively
affected.
123. As a consequence, thereof, the writ petition merits no
consideration and the same stands dismissed.
(Sujit Narayan Prasad, J.)
I agree.
(Navneet Kumar, J.)
(Navneet Kumar, J.)
Sudhir
Dated: 19 /11/2024
Jharkhand High Court, Ranchi
AFR
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