M.Y. Eqbal, J.@mdashIn these writ applications, the petitioners have prayed for quashing the letter dated 13.9.2005 issued by the State Government withdrawing the proposal of the petitioners for approval u/s 5(1) of the Mines and Mineral (Regulation and Development) Act, 1960 (in short ''Act of 1960'') and also withdrawing the application of the petitioners for grant of mining lease of Iron Ore in different areas of Mouza Ghatkuri in West Singhbhum district for captive consumption of its Integrated Steel Plant in the State of Jharkhand and further for a direction prohibiting the State Government from promulgating notification for dereservation under Rule 59(1) of the Mineral Concession Rules, 1960 (in short ''Rules of 1960'') regarding the applied area of the petitioners for mining lease.
2. First of all, I shall state the brief facts of the case pleaded by the writ petitioners in their respective writ petitions.
3. W.P.C. No. 1769/2006: The petitioner M/s. Adhunik Alloys & Power Ltd is carrying on business of Iron and Steel and has been operating three fully integrated steel plants in the State of Orissa, West Bengal and Jharkhand. The petitioner proposed to set up 2.2 MTPA Integrated Steel Plant in the State of Jharkhand and for the aforesaid purpose, the petitioner submitted mining lease application with requisite fee and documents to the competent authority of the Government of Jharkhand over an area of 8809.37 acres in Mouza Ghatkuri in West Singhbhum for captive consumption of its proposed Integrated Steel Plant at Kandra, Jharkhand. The said mining lease application was duly accepted by the respondents and the Deputy Commissioner, Singhbhum West, Chaibasa forwarded the said Mining Lease application of the petitioner along with five other applicants to the Director of Mines, Jharkhand along with all the requisite documents vide his letter dated 16.9.2003. The petitioner and other applicants having overlapping applications were directed by the Director of Mines, Jharkhand to be present for a personal hearing under Rule 26(1) of the 1960 Rules. It is stated that on 7.1.2004 personal hearing was given to all the applicants including the petitioner by the Director of Mines and the Deputy Secretary to the Government of Jharkhand. However, the date for personal hearing was postponed to 4.2.2004. On 4.2.2004, personal hearing under Rule 26(1) of the Rules was completed for all the 58 applicants including the petitioner over Ghatkuri area. Ultimately the petitioner was given preference over other applicants for grant of mining lease. Accordingly, on 26.2.2004, a Memorandum of Understanding (MOU) was entered into by and between the Government of Jharkhand and the petitioner to set up and Integrated Steel Plant at village Kandra in the district of Seraikela-Kharsawan at a cost of Rs. 790 crores. In the said MOU, the Government of Jharkhand expressed its desire for utilization of natural resources and rapid industrialization of the State for the prosperity and the well-being of its people and in such context, it also expressed its willingness to extend assistance to suitable promoters to set up new industries in the State. On 4.8.2004, the Government of Jharkhand took a decision to grant mining lease on Iron Ore for captive consumption to the petitioner over a reduced area of 426.875 hectares. Thereafter, vide letter dated 6.9.2004, the Central Government directed the State Government to submit a comparative statement of the merits of all the applicants with adequate justification in the interest of mineral development to justify the grant of mining lease to the petitioner in preference to prior applicants. Instead of complying the aforesaid formalities, the District Mining Officer, Chaibasa for the first time vide letter dated 17.11.2004 informed the Secretary, Department of Mines and Geology, govt. of Jharkhand that certain portions of Mouza Ghatkuri and the adjoining areas were reserved for public sector under the Act and the Rules by two notifications, published in the year 1962 and 1969 respectively. The gazette publication of these notifications were however not available.
4. On the other hand, the Central Government vide letter dated 15.6.2005 informed the State Government that a joint meeting of the Officers of Ministry of Mines, Government of India and the concerned Officers of the Government of Jharkhand shall be held to clarify certain issues for the grant of mining lease to the applicants including the petitioner. The Central Government fixed 20.6.2005 as the date for holding the said meeting. In the meantime, the petitioner completed construction of Phase-I of its Integrated Steel Plant and commissioned the same. The petitioner stated facing acute shortage of Iron Ore. When the proposal for approval of the mining lease was pending before the Central Government, the State Government signed another MOU on 19.8.2005 with the petitioner for additional capacity of 1.8 MTPA in Stage-II in addition to 0.4 MTPA capacity in Stage-I as per the first MoU already signed on 26.2.2004. In the said MOU, the State Government again reiterated its commitment to grant concession to the petitioner as per the existing Acts and Rules.
5. On the other hand, while the meeting of the Officers of the Government of India and the Government of Jharkhand was pending, the State Government withdrew the proposal of the petitioner to the Central Government for approval u/s 5 of the Act by issuing the impugned letter dated 13.9.2005 on the pretext of dereservation. A copy of the said letter has been annexed as annexure-19 to the writ application. Consequently, vide letter dated 14.11.2005, a request was made by the State Government to the Central Government about its decision to withdraw the letter pending for grant of mining lease of the applicants including that of the petitioner.
6. During pendency of the writ petition, the Government of India, Ministry of Mines, on the request of the State Government, sent various proposals including that of the petitioner and issued letter dated 6.3.2006 summarily rejecting the proposals of the applicants including that of the petitioner for grant of approval u/s 5(1) of the Act. A copy of the said letter has been filed by the petitioner along with the amending petition for a relief to quash the said letter as contained in Annexure-26 to the writ application. Some more amendment petitions have also been filed by the petitioner with prayer to quash the subsequent decisions taken by the State Government for not granting mining lease to the petitioner and other persons.
7. W.P.C.No. 4151/2006: The writ petitioner M/s Monnet Ispat and Energy Limited is a public limited company engaged in the business of mining, production of steel, power and Ferro alloys. The petitioner entered into the memorandum of understanding (in short MOU) with the respondent-State of Jharkhand for setting up of Rs. 1400 crores project for manufacturing steel, power and alloys. As per MOU the State Government assured and promised to grant mining lease in the area comprised within mouza Ghatkuri West Singhbhum for the purpose of supply of raw materials to the petitioner''s steel factory. Discussions and meetings took place in the year 2002 onwards for finalizing the MOU. In the meantime, on 29.1.2003 the petitioner filed an application for grant of mining lease. Immediately, thereafter, on 5.2.2003 MOU was signed with the state government for allotment of 705 hectares of mining area. Petitioner''s case is that out of 705 hectares of mining area only 102.25 hectares of mining area was allotted to M/s Rungta Sons Private Limited for mining lease which expired in 1995 and no application was made for renewal of this said lease after 1995. While the recommendation of the application of the petitioner alongwith others was under consideration by the Central Government, the respondent, on 13.9.2005 by a letter addressed to the Central Government asked for return of the recommendation made by it for grant of mining lease in Ghatkuri area to the petitioner and others on the pretext of the mining area being earlier reserved for mining by public sector undertaking. Petitioner''s further case is that the letter dated 13.9.2005 of State of Jharkhand was based on irrelevant consideration inasmuch as the area recommended for allotment mining lease to the petitioner was not reserved for any public sector undertaking and even the small portion of land which was earlier given to the M/s Rungta and Sons Private Limited for mining lease did not have any subsequent renewal for the last eleven years.
8. W.P.C. No. 2629/2006: The case of the petitioner M/s Abhijeet Infrastructure Limited is that the petitioner submitted an application for grant of mining lease over an area of 1633.03 hectares in mouza Ghatkuri in West Singhbhum district for Iron Ore and Manganese for captive consumption of its proposed sponge iron plant and Ferro alloys plant at village Rewali in the district of Singhbhum within the State of Jharkhand at a cost of Rs. 300 Crores. The said mining, lease application was duly accepted by the Milling Department of the State and thereafter, MOU was entered into by and between the petitioner and respondent-State on 26.2.2004 for setting up a sponge iron plant and Ferro alloys plant. The State Government took conscious decision after considering various facts to grant mining lease for iron ore for captive consumption of the petitioner over a reduced area of 429 hectares on its application dated 21.11.2003 and recommendations were made to the Central Government for approval. While meetings were going on in the Department of Mines, Govt. of India, the District Mining Officer, Chaibasa vide his letter dated 17.11.2004 informed the Secretary, Department of Mines and Geology, Government of Jharkhand that certain portion of mouza Gharkuri and the adjoining areas were reserved for public sector exploitation by two notifications of the year 1962 and 1969 respectively. In the meantime the State Government withdrew the proposals of the petitioner and others sent to the Central Government and others on the plea that the area in question was earlier reserved by the State Government for exploitation by the public sector. Petitioner''s further case is that pursuant to MOU signed by the petitioner and State, the petitioner made three applications for acquisition of the land before the Land Acquisition Officer, Hazaribagh for an area of 148.25 hectares in village Aud and for an area 51.27 hectares of land in village Rewali and an area of 72.90 hectares of land in village Damodih in the district of Singhbhum for the proposed project of setting up sponge iron plant and Ferro alloys plant. The petitioner also approached the competent authority in the Ministry of Coal, Govt. of India for allocation of certain blocks of collieries for captive mining of coal for its sponge iron plant and Chief Minister, Jharkhand recommended the same. The petitioner also furnished bank guarantee to the Ministry of Coal for two blocks for captive mining but despite all these facts the State Government illegally and arbitrarily withdrew the recommendations of the petitioner and others.
9. W.P.C.No. 4438/2006: In this case, petitioner M/s Prakash Ispat Limited is a company promoted by Prakash Group of Companies doing the business mainly in Steel Industries and having annual turnover of Rs. 2200 crores. The petitioner also applied for mining lease on 20.1.2004 which was duly completed in all respect for grant of mining lease over an area of 1000 Hectares in mouza Ghatkuri in West Singhbhum district for iron ore for captive consumption of its proposed Steel Plant at Amadia Gaon in the District of West Singhbhum Jharkhand. On 26.3.2004 the State Government also entered into MOU with the petitioner and for setting up Mini Blast Furnace, Iron Ore Mining and Crushing & Coal Mining in West Singhbhum of Jharkhand at the proposed investment of Rs. 71.40 crores. Petitioner''s case is that after MOU was signed the State Government expressed its desire for utilization of its natural resources and rapid industrialization of the State and for well doing of its people and for that object expressed its willingness to extend assistance to suitable promoters to set up new industries in the State. With that object the Government of Jharkhand agreed to grant mineral concession as per the existing acts and rules. The application of the petitioner alongwith others was recommended to the Central Government for final approval. However, by letter dated 21.7.2004 the under Secretary, Govt. of India, Ministry of Coal informed the Secretary, Department of Mines and Geology, of all the State Governments that the available area previously held in mineral concession or reservation for public sector exploitation is required to be renotified for grant of mining lease. On 4.8.2004 the State Government took a conscious and deliberate decision after considering various facts to grant mining lease for iron ore for captive consumption of the petitioner for a reduced area of 294.06 hectares on its application dated 20.1.2004. When the matter was at the final stage before the Central Government, the District Mining Officer, Chaibasa vide letter dated 17.11.2004 informed the Secretary, Department of Mines and Geology Government of Jharkhand that certain portion of mouza Ghatkuri and adjoining areas were reserved for public sector undertaking by to notification of the years 1962 and 1969 respectively. On the basis of that letter and the alleged notification surprisingly the Government of Jharkhand requested the Central Government to withhold the processing of the pending applications and finally the recommendations were withdrawn by the Government on flimsy ground that the area in question was reserved by notification for exploitation by public sector. The petitioner has challenged the action of the respondent-State as being illegal, arbitrary, capricious and without jurisdiction.
10. W.P.C.NO. 5527/2006: In this case the petitioner M/s. Ispat Industries Limited submitted mining lease application on 24.6.2003 duly completed in all respect for grant of mining lease over an area of 725.32 hectares in village Rajabeda in West Singhbhum District for Iron ore. The said mining lease was duly accepted and personal hearing was given by the authorities of the Mining Department, Govt. of Jharkhand and thereafter, a conscious decision was taken by the Government to grant mining lease for Iron ore for captive consumption of the petitioner over an area of 470.06 Hectares on its application dated 24.6.2003. Thereafter, the Directorate of Industry, Government of Jharkhand by letter dated 2.9.2004 intimated the terms and conditions on which preliminary examination and scrutiny of the proposed project submitted for investment in the State of Jharkhand can be made by MECON, an agency appointed by the State Government for examination of the project report. After correspondence made by the Central Government and State Government to the effect that the area in question was not reserved for mining purposes, the State of Jharkhand recommended the case of the petitioner alongwith others to the Central Government for its final approval in the matter of grant of mining lease. In this case also, the Government of Jharkhand subsequently withdrew its recommendation on the false plea that the area in question was earlier reserved for exploitation by public sector by virtue of the notifications of the years 1962 and 1969. Petitioner''s case is that withdrawal of the application of the petitioner was suo motu by the State Government. The premature unilateral withdrawal of the recommendation by the State Government is absolutely, arbitrary and malafide.
11. W.P.C. No. 7363/2006: In this case also the petitioner M/s. Jharkhand Ispat Private Limited has prayed for quashing the purported notifications dated 21.12.1962 and 28.2.1969 declaring the same to be ultra vires, nonest, without jurisdiction and illegal and also for quashing the decision of State Government dated 13.9.2005, asking the Central Government to return the proposal for grant of mining lease to the petitioner and for other reliefs. The case of the petitioner is that it is running Sponge Iron and Steel Plant in Ramgarh for which the basic raw material is Iron Ore. Pursuant to the notification of the Government of Jharkhand for establishing industries for over all socio and economic development of the State the petitioner offered to set up industry in the State of Jharkhand. The Government entered into MOU with the petitioner on 26.2.2004 for establishment of Sponge Iron Plant in the district of Hazaribagh. Accordingly, the petitioner applied for grant of iron Ore Mining Lease over an area of 915.50 hectares at Ghatkuri, which was duly processed through proper channel after fulfilling all the necessary requirements of law. Ultimately, on 4.8.2004, a detailed and reasoned report containing the State Government''s decision and proposal in favour of the petitioner for grant of mining lease over an area of 346.647 Hectares at Ghatkuri was prepared and forwarded by the Mines and Geology Department, Government of Jharkhand to the Ministry of Mines, Government of India in terms of Section 5(1) and 11(5) of the Mines and Mineral Regulation Development Act. After receiving the application of the petitioner the Central Government asked for certain information purporting to the comparative statement of merits of all the applicant companies with adequate justification in the interest of mineral development. After all the formalities were complied with, the Central Government stated holding meeting with its counter part of the State Government and the latter, on the basis of the alleged notifications of years 1962 and 1969 intimated the Central Government that the Ghatkuri area of West Singhbhum was reserved for exploitation by public sector. Accordingly, final decision was taken for withdrawal of the recommendation. The Central Government consequently rejected all the applications and returned the same to the State Governments. The petitioner has therefore, challenged the action of the State Government as being illegal, arbitrary and wholly without jurisdiction.
12. In all the cases, counter affidavits have been filed by the Government of Jharkhand and also Union of India. In all the counter affidavits the Government of Jharkhand took common stand that the Government of Bihar, Department of Mines and Geology vide notification dated 21.12.1962 declared the area mentioned in the notification as reserved for public sector. Similarly vide notification dated 28.2.1969 another area mentioned in the said notification was reserved for public sector undertaking. The respondent-State''s case is that the State of Jharkhand being newly created State, had no knowledge about the said notifications. So far the facts regarding filing of applications by the petitioners and others, sending of recommendations to the Central Government for approval are concerned, the same have not been disputed by the said respondent. However, it is stated that in view of the aforesaid notifications the Government of Jharkhand by letter dated 13.9.2005 has requested the Central Government to return the proposal of the petitioner and others for taking further lawful action. Consequently the proposal was summarily rejected by the Central Government, Ministry of Mines, Government of India. It is stated that the State of Jharkhand has rightly withdrawn the proposals u/s 5(1) and 11(5) of the Mines and Mineral Regulation Development Act.
13. By filing supplementary counter affidavit, respondent-State further stated that the State of Jharkhand has not dereserved any of the area since the creation of the State, further no notification regarding dereservation of the aforesaid area has been issued by the erstwhile Bihar Government. With regard to policy decision of the Government, it is stated that for proper and scientific use of present reserved Iron Ore in the area, State Government may go for developing the area by the public sector or through joint sector mode with mega Investors in order to improve the socio-economic condition of the people of the local area. It is stated that Mega investors who bring in maximum investment and benefit to this State should get due priority for joint venture with the public sector undertaking, namely, Jharkhand State Mineral Development Corporation. It is further stated that the State of Jharkhand has decided that petitioner should allocate mining resources in other places than Ghatkuri block depending upon their investment which can at best fulfill in the interest of the State at large.
14. During the pendency of the writ petitions, several developments took place and consequently amendment petitions were filed challenging the subsequent decisions of the Central Government rejecting the recommendations and sending back the applications to the State Government on the ground of withdrawal of the recommendations by the State Government. By another amendment petition, the petitioners have also challenge the notification dated 27.10.2006 by which decision has been taken that the area described in 1962 and 1969 notifications will not be given to any one except the public sector undertaking or the joint venture project of the State.
15. Learned Counsel appearing for the petitioner in WPC No. 1769/06 submitted that under the MOU dated 26.2.2004 signed by the respondent-State the first phase work was to be completed in 2-3 years time, at a cost of Rs. 95 Cores. The Central Government has shown all its anxiety to cooperate with the petitioner in enabling it in constructing, commissioning and operating the project. Learned Counsel submitted that the application for grant of mining lease was recommended by the State on the satisfaction that the petitioner deserves preferential right u/s 11(5) of the Act and also after appreciating that MOU for Rs. 790 crores had been signed. Learned Counsel submitted that inspite of the fact that the District Mining Officer, Chaibasa informed the State Government that the area in question had been notified in 1962 and 1969 for exploitation by public sector undertaking, the State Government reiterated its recommendation in favour of the petitioner for the reason that the petitioner company had acquired 72 acres of land and the first phase work was progressing very fast and it will start in April 2005. Learned Counsel further submitted that since 26.6.2005 the petitioner company completed its first phase in only one year and four months and it became ready for commercial production by recurring loss of Rs. 30 lacs because in order to run the plant the company is purchasing the iron ore from the market and all the equipments for mining purposes which could be used after grant of lease, are lying idle. Learned Counsel argued on the doctrine of promissory estoppel and relied upon the decision of the Supreme Court in the case
16. On the question of legality and validity of the aforesaid two notifications of the year 1962 and 1969, learned Counsel submitted that on the day when those two notifications were issued, neither the provisions of the Act nor the Rules empowered the State Government to reserve any area for exploitation by public sector undertaking. It was submitted that even assuming that the State could reserve any area without any specific provision, it could not reserve it for an indefinite period. Learned Counsel further submitted that in view of the subsequent amendments of the Act and the Rules which have not saved any action of the State, those reservations have become redundant and non-operative.
17. Mrs. Nalini Chidambram, learned Counsel appearing in WPC No. 4151/06 (Monnet Ispat and Energy Limited v. Union of India) has drawn our attention to the relevant provisions of Mines and Mineral (Regulation and Development) Act and Mineral Concession Rules, 1960 particularly Section 17A of the Act and Rules 58 and 59 of the Rules. Learned Counsel submitted that for seven years the State had unbridled power to reserve any area of exploitation by public sector undertaking but in 1986 when the Amendment Act 36 of 1986 came into force, it introduced an independent provision under the Act i.e. Section 17A, according to which now the State could not reserve any area without approval of the Central Government. Learned Counsel repeated the same argument advanced by the counsels appearing in other cases by submitting that prior to Amendment of Rule 58 and 59 and the introduction of Section 17A, there was no power to the State Government or the Central Government to reserve any mining area for exploitation by any public sector undertaking or any other agency. For the first time, by the amendment introduced in Rules 58 and 59 with effect from 16.1.1980, the State Government was empowered to reserve any area by issuing notification published in official Gazette for exploitation by public sector undertaking. Learned Counsel further submitted that even assuming that such notification was issued in 1962 and 1969, under the provisions of Rule 58 of the Rules, after the said Rule 58 was omitted, the notification issued under the said Rule also lapsed and became nonest since there is no saving clause while deleting Rule 58. According to the learned Counsel, Rule 58 as it stood prior to 1980 and Rule 59 as it stood before 1980, referred to only grant of mining lease and the procedure for reservation. Learned Counsel lastly submitted that the Central Government mechanically returned the recommendations to the State Government without application of mind and without considering the statutory provisions of the Acts and the Rules.
18. In all the writ petitions, common stand taken by the petitioners is that Ghatkuri iron ore deposits, was unreserved at the time of taking decision by the State Government to grant mining lease to the petitioners which is evident from the following facts:
(I) Vide letter dated 29.10.1993, the Central Government wrote to the Secretary of the Mines Department of all State Governments / Union Territories that all the 13 minerals which had hitherto been reserved for exclusive exploitation by the Public Sector have now been thrown open for exploitation by the Private Sector. Iron ore is one of these three minerals.
(II) Vide letter dated 17.5.1994, Additional Secretary, Government of Bihar replied to letter dated 24.1.1994 issued by Government of India to the Chief Secretary, Bihar that as per direction he is to convey that at present no mineral is reserved in Bihar State.
(III) The Director Mines, Government of Bihar vide his letter dated 19th August, 1994 replied to Regional Controller of Mines, IBM, Calcutta that at present no mineral is reserved in Bihar State. All Minerals are thrown open for exploitation by private sector. Under such circumstances, there is no need to submit information asked for.
(IV) In the check list enclosed with the proposal of the State Government for prior approval to the decision of the State Government to grant mining lease to the petitioners on 5.8.2004, the State Government has said ''No'' to the question "whether the area is reserved for exploitation by public sector". Further, the State has said ''No'' to a question whether "any public sector undertaking has also applied for shown interest in the area.
19. On the aforesaid facts, it was contended that stand of the Government that decision for grant of mining lease in favour of the petitioners was bona fide mistake is incorrect and unjustified.
20. Mr. M.S. Ganesh, learned Senior Counsel for the respondent-State at the very outset submitted that the writ petitions filed by the petitioners are not maintainable as neither the petitioners have any legal right of grant of mining lease nor the respondent-State has statutory or legal duty or obligation to grant mining lease to the petitioners, much less in the area already reserved for such use by the public sector under the provisions of Mines and Minerals (Regulation and Development) Act, 1957 and the Mineral Concession Rules, 1960. Learned Counsel further submitted that in absence of any fundamental or statutory or legal right to grant of mining lease sought by the petitioners neither certiorari nor mandamus lie against the State. Learned Counsel further submitted that respondent-State is entitled to reserve for itself any land containing the said minerals to exploit the same itself. The State has power to grant or refuse application for mining lease. Power includes power to refuse to grant on the ground that the land in question was not available for the reason that the areas have been reserved by the State Government for use in public sector. Learned Counsel relied upon two decisions of the Supreme Court in the case of
21. With regard to memorandum of understanding entered into between the petitioners and the State. Learned Counsel for the State firstly submitted that MOU entered into between the parties arc not contracts under Article 299(1) of the Constitution. They are not expressed to be made by the Governor of the State or Executive on behalf of the Governor. Therefore, they are unenforceable. In any event, by virtue of MOU, petitioners have not acquired legal right and the State incurred an enforceable obligation in respect of the grant of mining leases in the areas since reserved for use of public sector, in this connection, learned Counsel relied upon two decisions of the Supreme Court in the case of
22. The first question that falls for consideration is as to whether by virtue of the notifications of the years 1962 and 1969, the areas shown in the notifications were reserved by the State Government for exploitation of minerals by the public sectors. The District Mining Officer, Chaibasa, for the first time, by letter dated 17.11.2004 disclosed about the aforesaid two notifications of the years 1962 and 1969 and in the same very letter, he informed the Secretary, Mines and Geology Department, Government of Jharkhand, Ranchi that originals of those notifications are not available. For better appreciation, the extract of these two notifications dated 21st December, 1962 and 28th February, 1969 are reproduced herein below:
NOTIFICATION
The 21st December, 1962.
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 - Singhbhum.
Description of the areas reserved.
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
Meghahatu nala and runs west-north-west
along the gorge hill the foot of the hill.
East - The boundary between the States of
Bihar and Orissa/East and 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 C huru Ikir
Nala at about 5 fulongs east-north-east
of Kiriburu Kolaibunt village (220011''
: 85014''), in east-south-east direction
for one mile.
South-East- From the above end towards north-east for
2 1/2 miles to reach a point 1 1/4 miles
north-west of Bahada village (22 0 11''30 :
85017''30"),
North-East- From the above end north-westwards upto
the gorge at co-ordinate location 22013''
: 85016'',
North-West - From the above location South-westwards along
the fact of the hill Dirisumburu and the foot
of the adjoining Hakatlataburu to meet the
starting point of the Churu Ikir Nala east-
north-east of kolaiburu village.
6. Banalata Block -
BOUNDARY.
South-East- A line running west-north-west-east-south-east
passing through 2.200 feet contour at the
south-western and of the Banlata ridge south-
east-From 2 1/2 furlongs east of 2187 north-
east wards upto 1/2 mile north-west of
Pechahalu village (22016'': 85020'') and from
here north-north-east upto 3 furlongs east-
south-east of 2567 Painsira Burn).
North- From the above end in west-north-west direction
across the hill for five furlongs to reach the
north-west slope of the hill.
West- From above end in general south-south west
directing along the flank of the hill to reach
the south-west boundary at three furlongs
north-west .2187.
By order of the Governor of Bihar.
Sd/. (B.N. Sinha)
Secretary to Government
* * * * * *
Government of Bihar
Department of Mines & 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 (168.349 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 order of the Governor of Bihar
S/d. 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 publication of the Notification in the Extra-ordinary issue of the Bihar Gazette at an early date.
2. 100 spare copies of the notification may also be sent to this Department immediately.
S/d. - C.P. Singh
Deputy Secretary to Govt.
Memo No. 1564/M. Patna, the 28th February, 1969.
Copy forwarded to the Dy. Commissioner, Singhbhum/Dy. Director of Mines 2, College Road, Circuit House Area, Jamshedpur 7/District Mining Officer, Singhbhum, Chaibasa/Director, Mines, Bihar/Dy. Director of Geology, Bihar/Advisor in Geology, Bihar for information.
S/d. - C.P. Singh
Deputy Secretary to Govt.
23. Mines and Mineral(Regulation and Development) Act 1957 (in short Act of 1957) was enacted for the purpose of regulation of mines and development of mineral under the control of Union.
24. By Section 2 of the Act it was declared that in public interest union should take in its control of regulation of mines and the development of minerals to the extent provided trader the Act. Certain restrictions have been provided in the Act in undertaking perspective and mining operations. As per Section 4 no person shall undertake in his prospective and mining operation in any area except in accordance with terms and conditions of perspective lease for mining lease granted in the Act and the Rules made thereunder.
25. Section 10 prescribes the procedure for obtaining prospective licence or mining lease in respect of the land in which minerals vested in the Government. Section 11 speaks about the preferential right. Section 13 empowers the Central Government to make rules in respect of the minerals for regulating the grant of prospecting licence and mining lease.
26. In exercise of power conferred by Section 13 of the Act the Central Government framed a rule called Mineral Concession Rules 1960, Rule 58 and 59 as originally stood reads 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 or in respect of which an order had been made for the grant thereof but the applicant has died before the execution of licence or lease, as the case may be, or in respect of which the order granting licence or lease has been revoked under Sub-rule (1) of Rule 15 or Sub-rule (1) of Rule 31, shall be available for grant unless-
(a) an entry to the effect 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
(b) the date from which the area shall he available for grant is notified in the official Gazette at least 30 days in advance.
(2) The Central Government may, for reasons to be recorded in writing, relax the provisions of Sub-rule (1) in any special case.]
59. Availability of certain areas for grant 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 Stale Government has refused to grant a prospecting licence or a mining lease on the ground that the land should be reserved of any purpose the State Government shall, as soon as such land becomes again available for the grant of prospecting licence or mining lease, grant the licence or lease after following the procedure laid down in Rule 58.
27. Sub-rule 2 of Rule 58 was added only in 1961. Thereafter, these two rules have undergone several amendments.
28. Rule 58 aforesaid has been omitted and new Rule 58 was substituted in 1980 GSR 146 dated 16.11.1960. New Rule 58 makes provisions for reservation of areas for exploitation in the public sector. The said rule reads as under:
58. Reservation of areas for exploitation in the public sector etc.-The State Government may, by notification in the Officer Gazette, reserve any area for the exploitation by the Government, a Corporation established by the Central, State or Provincial Act or a Government company within the meaning of Section 617 of the Companies Act, 1956 (1 of 1956).
29. Similarly, Rule 59 also had undergone a change and a new Rule 59 was substituted in place of the original one which stood in 1960. New Rule 59 is substituted in 1980 which reads as under:
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 before the grant of the licence or the execution of the 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 be 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 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 is proposed to be granted to a Government Company, no notification 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.]
30. Section 17 of the Mines and Minerals (Regulation & Development) Act 1957 confer special power to the Central Government to undertake prospective or mining operation in certain areas. Section 17 of the Act reads under as under:
17 Special powers of Central Government to undertake prospecting or mining operations in certain lands- (1) The provisions of this section shall apply in respect of land in which the minerals vest in the Government of a State
(2) Notwithstanding anything contained in this Act, the Central Government, after consultation with the State Government, may undertake prospecting licence or mining lease, and where it proposes to do so, it shall, by notification in the official Gazette-
(a) specify the boundaries of such area;
(b) state whether prospecting or mining operations will be carried on in the area;
(c) specify the mineral or minerals in respect of which such operation will he carried out.
(3) Where in exercise of the powers conferred by Sub-section (2), the Central Government undertakes prospecting or mining operation in any area the Central Government shall be liable to pay prospecting fee royalty, surface rent or dead rent as the case may be, 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 a prospecting licence or mining lease.
(4) The Central Government, with a view to enabling it to exercise the powers conferred on it by Sub-section (2) may, after consultation with the State Government by notification in the official Gazette, declared that no prospecting licence or mining lease shall be granted in respect of any land specified in the notification.
31. In 1987 by amendment Act 37 of 1987 Section 17A was inserted in the Act. Section 17A reads as under:
17A- Reservation of area for purposes of conservation: (1) The Central Government, with a view to conserving any mineral and after consultation with the State Government, may reserve any area not already held under any prospecting licence or mining lease and, where it proposes to do so, it shall, by notification in the Official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such area will be reserved.
[1-A] The Central Government may in consultation with the State Government, reserve any area not already held under any prospecting licence or mining lease, for undertaking prospecting or mining operations through a Government company or corporation owned or controlled by it, and where it proposes to do so, it shall, by notification in the Official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such area will be reserved.]
(2) The State Government may, with the approval of the Central Government, reserve any area not already held under any prospecting licence or mining lease, for undertaking prospecting or mining operations through a Government company or corporation owned or controlled by it [ ] and where it proposes to do so, it shall, by notification in the Official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such areas will be reserved.
(3) [Where in exercise of the powers conferred by Sub-section (1-A) or Sub-section (2) the Central Government or the State Government, as the ease may be,] undertakes prospecting or mining operations 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 wider prospecting licence or mining lease.]
32. After Section 17A was inserted in the Act 1987 Rule 58 of the Concession Rules has been omitted in 1988 GSR 449 dated 13.4.1988. Some changes have also been brought in Rule 59 by GSR 949 dated 13.4.1988, Rule 59 as stand today reads as under:
5.9. 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 before the grant of the licence or the execution of the 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 State Government) under Rule 58, [or u/s 17A of the Act shall be available for grant unless-
(i) an entry to be 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 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 u/s 17A of the Act] to be granted to a Government Company, no notification 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]
33. If we minutely read the provisions of Rules 58 and 59 as it originally stood in Rule 1960, it is manifestly clear that the State Government was empowered to refuse to grant prospective licence or mining lease on the ground that the land should be reserved for any purposes. It cannot be disputed that the respondent-State is the owner of minerals which vests in it. The Bihar Land Reforms Act was enacted in 1950 by which Zamindari system was abolished. By virtue of Section 4(a) of the Bihar Land Reforms Act, 1950, all estate or tenure including mines, minerals, hats, Bazars, etc vested in the State. The State became the absolute owner of all mines and minerals comprised within such estate or tenure absolutely, for ever and free from all encumbrances. Section 4 of Bihar Land Reforms Act, 1950 reads as under:
4. Consequences of the vesting of an estate or tenure in the State.- Notwithstanding anything contained in any other law for the time being in force or any contact and notwithstanding any non-compliance or irregular compliance of Section 3.3A and 3B except the provisions of Sub-section (1) of Section 3 and Sub-section (1) of Section 3A, on the publication of the notification under Sub-section (1), of Section 3 or Sub-section (1) of Sub-section (2) of Section 3A, the following consequences shall ensue and shall be deemed always to have ensued, namely:]
(a) Such estate or tenure including the interests of the proprietor or tenure-holder in any building or part of building comprised in such estate or tenure and 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 (mela) and ferries and all other sairati interests, 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 or mines and minerals, comprised in such estate or tenure (other than the interest 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 interests in such estate or other than the interests expressly saved by or under the provisions of this Act.
(b) ...
(c) ...
34. Since the State is the absolute owner of all mines and minerals situated within the State of Bihar perhaps it was decided in the years 1962 and 1969 to reserve Ghatkuri mining area for exploitation of minerals by public sector. The contention of the petitioners'' counsel that the State has no authority under the law before 1980 to reserve any mining area for exploitation by public sector, cannot and shall not be accepted. This question has been elaborately dealt with by the Supreme Court in the case of
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 Government stated further in its revisional orders that the State Government had the "inherent right to reserve any particular area for exploitation in the public sector". It is therefore quite clear that, in the absence of any law or contract etc. to the contrary, bauxite, as a mineral, and the mines thereof, vest in the State of Gujarat and no person has any right to exploit it otherwise then in accordance with the provisions of the Act and the Rules. Section 10 of the Act and Chapters II, III and IV of the Rules, deal with the grant of prospecting licences and mining leases in the land in which the minerals vest in the Government of a State. That was why the appellants made their applications to the State Government.
7. Mr Sen has conceded that it is a valid rule. It clearly contemplates reservation of land for any purpose, by the State Government, and its consequent non-availability for the grant of a prospecting licence or mining lease during the period it remains under reservation by an order of the State Government. 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 Gazette. Rule 60 provides that an application for the grant of a prospecting licence or a mining lease in respect of an area for which no such notification has been issued, inter alia, under Rule 59, for making the area available for grant of a licence or a lease, would be premature, and "shall not be entertained and the fee, if any, paid in respect of any such application shall be refunded". It would therefore follow that as the areas which are the subject-matter of the present appeals 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 a 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. The Central Government was thus justified in rejecting the revision applications which were filed against the orders of rejection passed by the State Government.
35. In 1980 G.S.R. 146 dated 16th November, 1980, Rule 58 was substituted and it was provided that the State Government, by notification, can reserve any area for exploitation by the Government, a Corporation established by the Central Government, State or provincial or Government company. In 1987, by Amendment Act 37 of the 1987, Section 17A was inserted, whereby it was provided that the State Government, before reserving any area for mining operation through a Government Company or Corporation, will have to take approval of the Central Government. It is, therefore, clear that before 1987, the State Government being the absolute owner of the entire mines and minerals within the State of Bihar was fully competent and entitled to reserve any mining area for the purpose of exploitation of minerals by Government or public sector.
36. Entry 54 of List I and entry 23 of List II in the 7th Schedule of the Constitution is clear in the matter of power of the State Government in reserving mining area for use in public sector. Section 2 of MMRD Act empowers the State Government to grant or refuse to grant mining lease.
37. In the case of
4. Thus it would be seen that while granting a prospecting licence or mining lease, the area of discretion has been circumscribed by several factors enumerated in Section 11. In grant of mining lease of a property of the State, the State Government, has a discretion to grant or refuse to grant any prospective licence or licence to any applicant. No applicant has a right, much less vested right, to the grant of mining lease for mining operations in any place within the State. But the State Government is required to exercise its discretion, subject to the requirements of the law. Therefore, the Tribunal of the Central Government has rightly held that it being in the area of discretion of the State Government, merely because the applicant had applied for, the State Government was not enjoined to grant the mining lease. The petitioner had taken the plea that since he alone had discovered the mines, he has got a preferential right over any other person. The Tribunal of the Central Government and the High Court rightly rejected that contention of the petitioner; that contention has not been pressed before us. We find no illegality in the order of the Tribunal refusing to grant mining lease to the petitioner nor is there any illegality in the order of the High Court.
38. In the case of
24. Evidently because it was in their interest, the fifteen units proposing to establish katha factories in Himachal Pradesh (including the units concerned in this batch of appeals) applied to IPARA -- and during the period the IPARA was not in existence, to the Director of Industries -- for approval of their projects. They knew full well that if their applications are approved by the Government, they will have several advantages in the matter of acquiring land, obtaining power connection, obtaining water supplies and in various other matters relevant to successful establishment and running of the industry. Now, it cannot be denied that the power to approve includes the power to decline approval and the power to disapprove. And that is all that has happened now. The Government of Himachal Pradesh has chosen to approve only three units, viz., Doon Katha, Sagar Katha and Orient Herbs and it has refused to approve the rest including Ganesh Wood Products, Naman Wood Products and Dev Bhoomi Industries (Hari Krishan). So far as Indian Wood Products and Chander Katha Products are concerned, their cases were not even put up to the Government because their cases were rejected even by the IPARA. When this is done, it is argued by learned Counsel, Shri Dave, appearing for Ganesh Wood Products that the Government has no power to decline the approval or to disapprove the provisional approval granted by IPARA. Learned Counsel contended that the Government can only register a unit but it cannot de-register it nor can it refuse to register it. We cannot agree. The notifications constituting IPARA, whether of 1974 or of 1993, do not speak of registering any unit. The argument of the learned Counsel, therefore, means that any and every application for establishment of new industry must necessarily be approved by the Government and that the Government has no power to refuse to approve nor can it disapprove any provisional approval granted earlier. We are unable to understand of appreciate the logic behind this argument, more particularly, in view of the further contention of the learned Counsel that since the IDR Act does not govern the establishment of this industry and also because of the liberalisation policy introduced by the Central Government in 1991, no permission of any authority whatsoever is required for establishing the katha industry in small-scale sector. If the contention of the learned Counsel is that by virtue of the liberalisation policy or by virtue of the position of law obtaining as on today -- as understood by him -- a citizen of this country has an absolute and unbridled freedom to establish any small-scale industry anywhere in the country, he is free to do so. The impugned order of the Government does not say that he cannot. It does not prohibit him from establishing the industry. All that the Government says, and means, is that if anyone wants to come to it or to the authority established by it, viz., IPARA, for approval then he must submit to the regimen established by the Government in that behalf and to its policies. While approving the projects, it is certainly open to the Government to say that having regard to the availability of the raw material it shall not approve more than a particular number of units in a particular industry or of more than a particular capacity. It is entitled to say that the available raw material in the State should be exploited in an even and balanced manner keeping in mind the availability of the raw material in the years to come. It is entitled to make an estimate of the raw material available from the government sources as also from the private sources and say that the raw material so available can feed only so many industries and no more.
39. It is true that before and after the applications submitted by the petitioners for grant of mining lease was recommended by the State to the Central Government, several internal departmental correspondences were made by the Mines Department, Government of India and Government of Jharkhand whereby it was informed that no mining area in the State of Jharkhand was reserved for exploitation by the public sector undertaking. This information was communicated by the Government of Jharkhand through its Mines Department; admittedly on the bona fide mistake that they were not aware about the notifications of 1962 and 1969 issued by Government of Bihar reserving Ghatkuri mining area for the exploitation by the public sector. When this fact was brought to the notice by a District Mining Officer, then the Department of Mines, Government of Jharkhand mentioned the same in the Department''s file and the file moved from Deputy Secretary, Department of Mines to the Director Mines, Secretary, Mines and finally upto the Minister of the concerned department and it was finally resolved that in view of the notifications of the year 1962 and 1969, Government has no option but to withdraw the recommendation made by it to the Central Government.
40. Mr. A.K. Ganguly, learned senior counsel appearing for one of the petitioners submitted that even if the State had the power to reserve any area for exploitation by Public Sector undertaking, the said notification became nonest and stood repealed after the Rule 58 was omitted by Amendment Act of 1987 which has no saving clause. I am unable to accept the submission of the learned Counsel.
41. There is a presumption against a repeal by implication for the reason that the legislature while enacting law or the authority framing the rule has a complete knowledge of the existing laws on the same subject matter and therefore when it does not provide a repealing provision, it gives out an intention not to repeal the existing legislation or the rule. In my view, the amending rule omitting Rule 58 will not in any way effect the validity of notifications of 1962 and 1969 issued by the State Government reserving the mining area in exercise of his inherent power coupled with Rule 59 of the Rules as it stood in 1960. In any view of the matter, there is no inconsistency in the two Rules i.e. Rule 58 and 59 vis-a-vis Section 17A of the Act as inserted in 1987. In both the circumstances, it is the State Government who shall exercise power to reserve any mining area for exploitation by the Government or public sector undertaking. The only condition imposed is that the State Government may reserve the area with the approval of Central Government.
42. It was argued on behalf of the petitioners that the two notifications of 1962 and 1969 have lost its force because of long obsolescence and disuse. At the same time the conduct of the State Government right since 1994 uptill the return of the recommendation on 13.9.2005 show the contrary practice and stand of the State Government that it has been treated and considered as being unreserved and free from any reservation for exploitation by public sector undertaking. In this regard, learned Counsel relied upon the decision of the Supreme Court in the case of Municipal Corporation for City of Pune v. Bharat Forge Co. Ltd. (1995) 3 SCC 434.
43. I do not find any substance in the submission of learned Counsel of the petitioners. For invoking the "Doctrine of DESUETUDE", the statute must have fallen into disuse or become obsolescent and that there must also be a contrary practice. In the instant case, as noticed above, the area in question after having been reserved for exploitation by public sector in 1962 and 1969 has never been leased out or granted mining lease for exploitation other than by public sector. On the contrary, after the notification issued in 1962 and 1969, the area remained reserved for exploitation by public sector undertaking.
44. The doctrine of desuetude has been considered by the Supreme Court in the ease of
A statute can he abrogated only by express or implied repeal. It cannot fall into desuetude or become inoperative through obsolescence or by lapse of time. In R v. London County Council I, Scrutton, L.J. put the matter thus:
The doctrine that, because a certain number of people do not like an Act and because a good many people disobey it, the Act is therefore ''obsolescent'' and no one need pay any attention to it is a very dangerous proposition to hold in any constitutional country. So long as an Act is on the statute-book, the way to get rid of it is to repeal or alter it in Parliament, not for subordinate bodies, who are bound to obey the law, to take upon themselves to disobey an Act of Parliament.
As to the theory of desuetude, Allen in his Law in the Making, 5th Edn., p. 454 observes:
Age cannot wither an Act of Parliament, and at no time, so far as I am aware, has it ever been admitted in our jurisprudence that a statute might become inoperative through obsolescence.
The learned author mentions that there was at one time a theory which, in the name of ''non-observance'', came very near to the doctrine of desuetude, that if a statute had been in existence for any considerable period without ever being put into operation, it may be of little or no effect. The rule concerning desuetude has always met with such general disfavour that it seems hardly profitable to discuss it further.
45. In the case or Municipal Corporation for City of Pune and Anr. v. Bharat Forge Co. Ltd and Ors. (1995) 3 SCC 434, the Supreme Court was considering the notification dated 12.3.1981 issued under the Cantonment Article 188 levying of Octroi duties in Cantonment of Pune at rates "for the time being" and in respect of several articles dutiable in municipality of Pune and also subsequent notification dated 17.6.1918 issued under the Cantonment Act, 1910 and has elaborately considered the Doctrine of Desuetude. It would be useful to quote para.31 to 35 of the judgment where doctrine of desuetude has been discussed:
31. In Craies Statute Law (7th Edn.) it has been stated at p. 7 that desuetude is a process by which an Act of Parliament may lose its force without express repeal. It does not, however, consist merely of obsolescence or disuse; there must also be a contrary practice, which must be of some duration and general application. Lord Mackay''s view in Brown v. Magistrate of Edinburgh 9 has also been noted, which is as below:
I hold it clear in law that desuetude requires for its operation a very considerable period, not merely of neglect, but of contrary usage of such a character as practically to infer such completely established habit of the community as to set up a counter law or establish a quasi-repeal.
A perusal of this judgment shows that Lord Mackay ventured to prefer the Scottish system to that of England regarding which Lord Eldon, as a member of House of Lords, had stated thus in Johnstone v. Scott 10 at p. 285:
The English lawyer feels himself much at a loss here; he cannot conceive at what period of time a statute can be held as commencing to grow in desuetude, nor when it can be held to be totally worn out. All he can do is to submit to what great authorities have declared the Law of Scotland to be.
Lord Mackay thereafter enunciated the afore-quoted test of desuetude for it to permit quasi-repeal.
32. It would be useful to note what has been stated in this regard in the chapter headed "Repeal and Desuetude of Statutes" by Aubrey L. Diamond, printed in (1975) 28 CLP 107. Diamond has quoted on this subject what Lord Denning, M.R. observed in Buckoke v. Greater London Council 11 at p. 668, which reads:
It is a fundamental principle of our Constitution, enshrined in the Bill of Rights, that no one, not even the Crown itself, has ''the power of dispensing with laws or the execution of laws''. But this is subject to some qualification. When a law has become a dead letter, the police need not prosecute, nor need the Magistrates punish. They can give an absolute Discharge.
33. Diamond has thereafter referred to the Scottish approach to desuetude at pp. 122 and 123 and has noted some decisions wherein an Act of Scottish Parliament was not enforced because of desuetude. It would be of interest to note that when an argument was advanced that the particular Act (which was of 1606) had been left unrepealed by the Statute Law (Repeals) Act, 1906, and must, therefore, be regarded as still in force, the reply given by one of the Law Lords was that "it was for the Court and not for the Statute Law Revision (sic Repeal) Act to determine whether Act of 1606 was or was not in desuetude.
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 application of doctrine of desuetude in our country also. Our soil is ready to accept this principle; indeed, there is need for its implantation, because persons residing in free India, who have assured fundamental rights including what has been stated in Article 21, must be protected from their being, say, prosecuted and punished for violation of a law which has become "dead letter". A new path is, therefore, required to be laid and trodden.
35. In written submissions filed on behalf of respondents, it has been stated that the theory of desuetude can have no application to the facts of the present case, since the challenge by the respondents is to the levy and calculation under the 1963 Schedule, and not to the rates enforced since 1918. This submission has been characterised as "most important". As to this we would observe that if Notification of 1818 were to prevail despite 1918 Notifications, the fact that some changes were made in the Schedule in 1963 has no legal bearing on the question under examination. The theory of desuetude has been pressed into service by the appellant only to take care of relevant 1918 Notifications. If those notifications can be said to stand eclipsed, the fact that changes were made in the rates etc. in 1963 cannot stand in the way of application of the theory of desuetude.
46. In the case of
16. Coming to the conclusion of the applicability of the doctrine of desuetude Mr Lekhi, the learned Senior Counsel strongly relied upon the decision of this Court in Municipal Corporation for City of Pune v. Bharat Forge Co. Ltd. and submitted that the provisions of the Motor Vehicles Taxation Act must be held to be of disuse as no grant as provided in Section 7 of the Taxation Act has ever been made at any point of time after the enactment of the said Act in 1947. This contention is wholly unsustainable in law inasmuch as we are not concerned with the question of grant to local authorities and Cantonment Boards as provided u/s 7 of the Taxation Act but we are concerned with the leviability of tax on motor vehicles u/s 3(2) of the Taxation Act. It is nobody''s case that no tax was being levied on motor vehicles which is used or kept for use u/s 3(2) of the Madhya Pradesh Motor Vehicles Taxation Act, 1947. That apart to apply the principle of desuetude it is necessary to establish that the statute in question has been in disuse for long and the contrary practice of some duration has evolved. In other words to make the aforesaid principle applicable in the case in hand it is required to be established that the provisions of Section 3(2) of the Motor Vehicles Taxation Act has been in disuse for a long period and that the imposition of tax on entry of motor vehicles into the Cantonment limit has been in operation for a fairly long period. Neither of these two ingredients has been satisfied in the case in hand and therefore the aforesaid principle of desuetude is of no application to the case in hand.
47. Learned Counsels appearing for the petitioners have also seriously challenged the notification dated 27.10.2006 issued under the signature of Secretary, Department of Mines and Geology, whereby respondents have purported to take a decision that Iron ore deposited at Ghatkuri would not be thrown open for the grant of prospective licence, mining lease or otherwise for the private parties. By the said notification, the respondent-State further proceeds to declare that State Government has decided that the minerals reserved in the mines in the said area shall be utilized for exploitation by the public sector undertaking or joint venture project of the State. Learned Counsels assailed the said notifications as being illegal and wholly without jurisdiction inasmuch as nothing has been mentioned in the notification as to in exercise of which power of which Act the said notification has been issued by the State Government. The said notification is in the teeth of the provisions of the Act and the Rules. I do not find any substance in the submissions made by the learned Counsels for the petitioner. Firstly I would like to quote the relevant portions of the notification which reads as under:
DEPARTMENT OF MINES & GEOLOGY, RANCHI
NOTIFICATION
The 27th October, 2006
No. 3277 - It is hereby notified for the information of the general public that optimum utilization and exploitation of the mineral resources in 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 21th 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
48. From bare perusal of the aforesaid notification, it transpires that by the said notification a general information has been given to the public that Iron ore deposits at Ghatkuri would not be thrown open for the grant of prospective licence, mining lease or otherwise for the private parties. The deposits was at all material times was kept reserved by Gazette notification of the year 1962 and 1969. In my view, therefore, since it is not a fresh notification of the reservation of any mineral or mining area for exploitation by the public sector, the question of violation of any of the provisions of the Act or the Rules does not arise.
49. The next common argument advanced by the learned Counsels appearing on behalf of the petitioners are on the issue of Memorandum of Understanding (MOU) and promissory estoppel. Learned Counsel submitted that in conformity with National Mineral Policy and the State''s Industrial Policy, the petitioners were extended welcome to come to Jharkhand state and invest in furtherance of the Industrial Policy of the State. After personal hearing given to all the petitioners by the Director of Mines, Govt. of Jharkhand, the petitioners were given preference over other applicant is for grant of mining lease and, accordingly, MOU were entered into by the Government to set up an integrated steel plant at different places in the State of Jharkhand. In this way the petitioners have invested sufficient amount in anticipation of getting mining leases for exploitation. Learned Counsels, however, submitted that MOU, per se, may not be a ground for promissory estoppel, but, if it acts as a link in the chain of events, it cannot be ignored. In this connection reliance has been placed on a decision of the Supreme Court in the case of
50. Before appreciating the submissions of the learned Counsels, I would first like to refer some of the clauses of MOU entered into by and between the State and the petitioners.
Clause (2) of MOU speaks that, the Government of Jharkhand is desirous of utilization of its natural resources and rapid industrialization of the State so as to bring prosperity and well being to its people and has been making determined efforts to facilitate setting up of new industries in different locations in the State. By Clause (3), the petitioners expressed its desire of setting up manufacturing/generating facilities in the State of Jharkhand by establishing iron plants. By Clause (4) of the MOU, the Government of Jharkhand agreed to assist in obtaining land for putting up manufacturing and other related activities, to assist in selecting the blocks for allocation of coal, to assist in selecting the area for establishment of plant, etc. The general clause contained in MOU reads as under:
GENERAL CLAUSE:
1. The Government of Jharkhand appreciates that the M/s Adhunik Alloys & Power Ltd. is a responsible corporate house with a high involvement in employees welfare and social development. The Govt. of Jharkhand, therefore, anticipates that M/s. Adhunik Alloys & Power Ltd. will bring this philosophy to its proposed Integrated Steel Plant at Kandra. For employment, preference will be given to the displaced persons subject to need and their possessing the necessary qualification.
2. The Government of Jharkhand has no objection if M/s Adhunik Alloys & Power Ltd., induct suitable foreign or Indian joint venture partners, choose appropriate financial options, suppliers, credit options and technologies in the best interest of the project.
3. The areas of co-operation mentioned above highlights only the major issues involved in setting up of the plant. Other issues and when they arise and sharing of the responsibilities between parties shall be decided if necessary through mutual agreement case to case basis.
4. Each party shall indemnify and hold harmless the other party and their directors officers, employees, agents and representatives from and against any costs, loses, claims, damages, liabilities and expenses (including reasonable attorney fees) incurred by the indemnified person, indemnifying party or its agents, relating to matter arising out of this MOU.
5. In the event of no efforts being made by M/s Adhunik Alloys & Power Ltd., towards implementation of the project within one year of signing this MOU support of the State Govt. indicated in the MOU shall be deemed to be withdrawn.
FOR WITNESS THEREOF THE PARTIES hereto have set their hands to this MOU on this day 26th February, 2004.
51. From perusal of the MOU entered into between the petitioners and the respondent-State, it is clear that it is not a contract as contemplated under Article 299(1) of the Constitution. Admittedly, the promise made by the State in the said MOU was on the assumption that the mining area in question is free from any reservation. There is no dispute that the notifications of 1962 and 1969 whereby Ghatkuri mine was reserved for exploitation by public sector, were issued by the order of Governor of the undivided State of Bihar from its capital at Patna. By virtue of Bihar Reorganization Act, 2000, the State of Jharkhand was created having its capital in Ranchi. The Mines and Geology Department came into being in the Government of Jharkhand, was not having the records of those notifications issued in 1962 and 1969. It is only because of wrong assumption that any notification reserving Ghatkuri mining area for exploitation by public sector was never issued, the Government of Jharkhand proceeded to invite applications from the prospective persons for grant of mining lease in respect of those areas. When it was brought to the notice of the Government about the two notifications of 1962 and 1969, the Government has no option but to withdraw the recommendations made by it in favour of the petitioners for grant of mining lease. In my view, therefore, firstly the petitioners have not acquired a legal enforceable right for grant of mining lease on the basis of MOU and secondly, the doctrine of promissory estoppel will not apply in the facts and circumstances of the present case.
52. In the case of
12. It was contended by Mr. Harish N. Salve, learned Senior Counsel appearing for ITPL, Mr. Cooper, appearing for GBL. Mr Dave, appearing for STI and other counsel appearing for the appellants that the MoUs and PPAs are concluded contracts and, therefore, it was not open to MPEB to unilaterally change the conditions of those contracts and to invite fresh bids on the basis of the new least tariff criterion. There is no dispute on the point that MoUs and PPAs are concluded contracts but to say that MoUs and PPAs are concluded contracts is one thing and to say that under those contracts the appellants and other IPPs acquired a legal right and MPEB incurred an enforceable obligation in respect of providing an escrow coverage is a different thing. The MoUs and IPPs while providing for payment of dues by MPEB have also at the same time made provisions for securing these payments. Apart from an undertaking by MPEB under those agreements an obligation is imposed upon MPEB to open a revolving letter of credit or letters of credit for payment of the dues. By way of further security it is provided in those contracts that escrow account shall be opened and maintained by MPEB to secure payment of the amount equal to 1.5 times the monthly bill. Those contracts also provide for a guarantee agreement with the State Government for payment of dues of MPEB. Thus the purpose of opening and maintaining an escrow account is to secure payment for the electricity to be supplied by the generating companies to MPEB. The escrow account is, therefore, really required to be opened at that stage and, therefore, it is provided in most of these contracts that the escrow account shall be opened at the time of the first unit commercial operations date.
53. In a recent decision in the case of
13. As regards the first contention, we may observe that promissory estoppel is based on equity or obligations. It is not based on vested right. In equity the court has to strike a balance between individual rights on the one hand and the larger public interest on the other hand. Freedom to contract is a common law civil liberty enjoyed by all persons. But when the Government is contracting with private parties this common law freedom is circumscribed by the principles of administrative law which requires larger public interest to be taken into account. We must remember that larger public interest is not only for accommodating retiree workmen but also to accommodate in-service workmen. Even applying the principles enshrined in Article 39 (b) and (c) of the Constitution, egalitarian equality requires the Government to strike a balance between competing claims.
54. In the case of Jai Beverages Pvt. Ltd.''s case (supra), the issues decided by the Supreme Court will not apply in the facts and circumstances of the present case. In that case, the Government of J&K took a conscious decision to permit the appellant to complete the minimum capital investment and after approval of the proposal by the cabinet, entered into a MOU showing that the Government took a decision to permit the appellant to state manufacture of articles concerned by a specified time. The appellant complied with the conditions imposed by the said MOU. In such circumstances, the Supreme Court held that the Government could not ignore its own decision and deny the benefit to the appellant on the basis that on the date of commencement of commercial production, its investment was less than that required. In the instant case, as noticed above, by virtue of MOU, the Government merely expressed its willingness to assist in the grant of mining lease and establishment of steel plant and in furtherance of that, the State being only the recommending authority, recommended the applications for approval by the Central Government for grant of mining leases. When it was subsequently found that the mining area in question was reserved for exploitation by public sector, the Government withdrew the recommendation.
55. Similarly, the decision rendered by the Supreme Court in M.R.F.''s case (supra) will not apply in the facts of present case. In that case, the Government, by the original notification issued under the Kerala General Sales Tax Act, 1963 granted exemption for expansion in the manufacture of certain products including rubber based goods. Relying on the said notification, the assessee-manufacturer started commercial production after investing huge amount. The assessee also obtained eligibility certificate from the competent authority. Moreover, it started paying huge amount as excise duty to the State as a condition of exemption. During the currency of the period of exemption, the State Government issued another notification excluding formation of compound rubber from the definition of manufacture for the purpose of original notification. On these facts, the Supreme Court held that it is barred by the principles of promissory estoppel as well as by the doctrine of legitimate expectation. The Supreme Court further held that such premature deprivation to the assess-manufacturer of a benefit of exemption is arbitrary, unjust and unreasonable.
56. In the case of
57. In the case of
29. As for its strengths it was said: that the doctrine was not limited only to cases where there was some contractual relationship or other pre-existing legal relationship between the parties. The principle would be applied even when the promise in intended to create legal relations or affect a legal relationship which would arise in future. The Government was held to be equally susceptible to the operation of the doctrine in whatever area or field the promise is made -- contractual, administrative or statutory. To put it in the words of the Court:
The law may, therefore, now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution. (SCC p. 442, para 24)
* * *
[Equity will, in a given case where justice and fairness demand, prevent a person from insisting on strict legal rights, even where they arise, not wider any contract, but on his own title deals or under statute. (8 SCC 425 )
* * *
Whatever be the nature of the 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. (33 SCC 453 )
(emphasis added)
30. So much for the strengths. Then come the limitations. These are:
(1) Since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires. But it is only if the Court is satisfied, on proper and adequate material placed by the Government, that overriding public interest requires that the Government should not be held bound by the promise but should be free to act unfettered by it, that the Court would refuse to enforce the promise against the Government. (SCC p. 443, para 24)
(2) No representation can be enforced which is prohibited by law in the sense that the person or authority making the representation or promise must have the power to carry out the promise. If the power is there, then subject to the preconditions and limitations noted earlier, it must be exercised. Thus, if the statute does not contain a provision enabling the Government to grant exemption, it would not be possible to enforce the representation against the Government, because the Government cannot be compelled to act contrary to the statute. But if the statute confers power on the Government to grant the exemption, the Government can legitimately be held bound by its promise to exempt the promisee from payment of sales tax. (SCC p. 453)
58. In the case of
10. But promissory estoppel being an extension of principle of equity, the basic purpose of which is to promote justice founded on fairness and relieve a promisee of any injustice perpetrated due to promisor''s going back on its promise, is incapable of being enforced in a court of law if the promise which furnishes the cause of action or the agreement, express or implied, giving rise to binding contract in statutorily prohibited or is against public policy. What then was the nature of refund which was promised by the government? Was such promise contrary to taw and against public policy? Could it be enforced in a court of law? Taxation is a sovereign power exercised by the State to realise revenue to enable it to discharge its obligations. Power to do so is derived from entries in Lists I, II and III of the Seventh Schedule of the Constitution. Sales tax or purchase tax is levied in exercise of power derived from an Act passed by a State under Entry 54 of List II of VIIth Schedule. It is an indirect tax as even though it is collected by a dealer the law normally permits it to be passed on and the ultimate burden is borne by the consumer. But ''the fact that the burden of a tax may have been passed on to the consumer does not alter the legal nature of the tax'' (Halsbury''s Laws of England, Vol. 52, paragraph 20.04). Therefore even a legislature, much less a government, cannot enact a law or issue an order or agree to refund the tax realised by it from people in exercise of its sovereign powers, except when the levy or realisation is contrary to a law validily enacted. A promise or agreement to refund tax which is due under the Act and realised in accordance with law would be a fraud on the Constitution and breach of faith of the people. Taxes like sales tax are paid even by a poor man irrespective of his savings with a sense of participation in growth of national economy and development of the State. Its utilization by way of refund not to the payer but to a private person, a manufacturer, as an inducement to set up its unit in the State would be breach of trust of the people amounting to deception under law.
59. Applying the principle laid down by the Supreme Court in several decisions referred to hereinabove on the doctrine of promissory estoppel, I am of the view that in the instant case, no relief can be granted to the petitioners on the principle of promissory estoppel on two grounds. Firstly the authority of the Mines Department notwithstanding the statutory notification of the year 1962 and 1969 made certain recommendation or promises and after having come to know about the said notification resiled from promise and withdrew the notification. Secondly, the decision of the Government to use reserved mining area for exploitation by the public sector undertaking or a joint venture project and the public sector with the mega investors shall be in the public interest in order to improve the socio-economic condition of the people of Jharkhand.
60. Considering the entire facts and circumstances of the case and in the light of the law laid down by the Supreme Court, I have no hesitation in holding that the Government of Jharkhand cannot be compelled to reconsider the applications of the petitioners afresh and recommend their applications to the Central Government for approval in the matter of grant of mining lease in respect of the Ghatkuri Iron ore mines.
61. However, before parting with the judgment, I would like to refer one decision of the Supreme Court in the case of
45. Our conclusion that the areas in question before us were all duly reserved for public sector exploitation does not, however, mean that private parties cannot be granted any lease at all in respect of these areas for, as pointed out earlier, it is open to the C.G. to relax the reservation for recorded reasons. Nor does this mean, as contended for by OMC and IDCOL, that they should get the leases asked for by them. This is so for two reasons. In the first place, the reservation is of a general nature and does not directly confer any rights on OMC and IDCOL. This reservation is of two types. u/s 17-A(1), inserted in 1986, the C.G. may after consulting the S.G. just reserve any area -- not covered by a PL or a ML -- with a view to conserving any mineral. Apparently, the idea of such reservation is that the minerals in this area will not be exploited at all, neither by private parties nor in the public sector. It is not necessary 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 u/s 17-A(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 again notified in 1977. These notifications are general. They only say that the areas are reserved for exploitation in the public sector. Whether such areas are to be leased out to OMC or IDCOL or some other public sector corporation or a government company or are to be exploited by the government itself is for the government to determine de hors the statute and the rules. There is nothing in either of them which gives a right to OMC or IDCOL to insist that the leases should be given only to them and to no one else in the public sector. If, therefore, the claim of reservation in 1977 in favour of the public sector is upheld absolutely, and if we do not agree with the findings of Rao that neither OMC nor IDCOL deserve any grant, all that we can do is to leave it to the S.G. to consider whether any portion of the land thus reserved should be given by it to these two corporations. Here, of course, there are no competitive applications from organisations in the public sector controlled either by the S.G. or the C.G., but even if there were, it would be open to the S.G. to decide how far the lands or any portion of them should be exploited by each of such corporations or by the C.G. or S.G. Both the corporations are admittedly instrumentalities of the S.G. and the decision of the S.G. is binding on them. We are of the view that, if the S.G. decides not to grant a lease in respect of the reserved area to an instrumentality of the S.G., that instrumentality has no right to insist that a ML should be granted to it. It is open to the S.G. to exercise at any time, a choice of the State or any one of the instrumentalities specified in the rule. It is true that if, eventually, the S.G. decides to grant a lease to one or other of them in respect of such land, the instrumentality whose application is rejected may be aggrieved by the choice of another for the lease. In particular, where there is competition between an instrumentality of the C.G. and one of the S.G. or between instrumentalities of the C.G. inter se or between the instrumentalities of the S.G. inter se, a question may well arise how far an unsuccessful instrumentality can challenge the choice made by the S.G. But we need not enter into these controversies here. The question we are concerned with here is whether OMC or IDCOL can object to the grant to any of the private parties on the ground that a reservation has 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.
62. In the light of the aforesaid decision of the Supreme Court it can be observed in the instant case that the reservation of Ghatkuri mining area by impugned notifications of the years 1962 and 1969 does not mean that private parties cannot be granted any lease at all in respect of those areas as the State Government always denotifies reservation and make the area available to grant for private parties or may persuade the Central Government to relax the restriction and may go for developing the area by the public sector or through joint sector mode with Mega investors in order to improve the socio economic condition of the people of Jharkhand. At the same time the State is warned not in allow monopoly of one person over the entire iron ore mine in the State of Jharkhand.
63. In the result, all these writ petitions, having no merit, are dismissed with the observations made herein above.
D.K. Sinha, J.
64. I agree.
