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Madhya Pradesh High Court · body

2000 DIGILAW 192 (MP)

Ghanshyamdas Vyas v. Union of India

2000-02-28

C.K.PRASAD

body2000
ORDER C.K. Prasad, J. 1. Both the writ petitions have been directed to be heard together. Facts emanating from the pleading of W.P. No. 5462/99 are being narrated hereinafter for disposal of both the writ petitions. 1-a. Petitioner applied for grant of prospecting licence in respect of an area measuring 44.82 hectares in village Sendmuda and Motrapara on 26-7-1998. He further filed application for grant of prospecting licence on 11-7-1989 for an area measuring 45.17 hectares in village Latapara. Third application filed by the petitioner for grant for prospecting licence over an area of 95.954 hectares at village Jangra was on 24-9-1990. These villages are in the district of Raipur. Aforesaid applications of the petitioner suffered deemed rejection, as the matter was not decided within the prescribed period and aggrieved by the same, petitioner preferred revision before the Central Government under Rule 54 of the Mineral Concessions Rules, 1960. The revisional authority set aside the deemed rejection and remitted the matter back to the State Government to decide the application preferred by the petitioner within 200 days from the date of communication of the order. The State Government however, rejected the prayer of the petitioner for grant of prospecting licence on the ground that it has decided to lease out whole of the area in Raipur District having deposits of precious minerals to the M.P. State Mineral Development Corporation. Petitioner, once again preferred revision before the Central Government against the order of rejection of his prayer for grant of prospecting licence. Revisional Authority, by order dated 19-5-1995, set aside the order of the State Government refusing to grant prospecting licence to the petitioner and remitted the matter back to the State Government to pass fresh order on his application on merits, in accordance with law. When no decision was taken by the State Government; in spite of directions of the Central Government, petitioner filed W.P. No. 2310/96 before this Court and the said writ petition was disposed of by order dated 28-6-1996 directing the State Government to take final decision, in pursuance of the order of the Central Govt. dated 19-5-1995 within six weeks from the date of receipt of copy of that order. 2. Thereafter, in exercise of powers conferred by Rule 75 of the Mineral Concession Rules, 1960, by notification dated 20th November, 1996, State Govt. dated 19-5-1995 within six weeks from the date of receipt of copy of that order. 2. Thereafter, in exercise of powers conferred by Rule 75 of the Mineral Concession Rules, 1960, by notification dated 20th November, 1996, State Govt. appointed the M.P. State Mineral Development Corporation Limited (hereinafter referred to as the 'Mineral Corporation') as the agent of the State Govt. to explore and exploit gold and diamond resources in various districts including the District of Raipur. Eventually, by order dated 30-4-1997, the State Govt. rejected the prayer of the petitioner for grant of prospecting licence for Topaz and other same precious stones. Prayer of the petitioners for grant of prospecting licence was rejected on the ground that by notification dated 20-11-1996, the State Government has appointed Mineral Corporation as its agent to explore and exploit gold and diamond resources in the District of Raipur. As the petitioners' prayer for grant of prospecting licence was rejected, in view of the decision of the State Government to appoint the Mineral Corporation as its agent in exercise of power conferred by Rule 75 of the Mineral Concession Rules, petitioners filed W.P. No. 1081/97 before this Court challenging the validity of the said notification. The Mineral Corporation, in order to form a Joint Venture Company (hereinafter referred to as the 'JVC') to undertake survey, exploration, evaluation and subsequent exploitation and marketing of diamonds in 11 blocks located in the District of Raipur and other districts, issued advertisement inviting applications for the said purpose. Aforesaid notice inviting offers for formation of the JVC was published during the pendency of the aforesaid writ petition and the attempt of the Mineral Corporation to form the JVC was questioned in the said writ petition. The Secretary to the Government of Madhya Pradesh in the Mineral Resources Department submitted an undertaking on 25-3-1998 in which he had inter alia stated that with the change of policy, the State Government has taken a decision not to act upon the notification dated 20-11-1996. The Secretary to the Government of Madhya Pradesh in the Mineral Resources Department submitted an undertaking on 25-3-1998 in which he had inter alia stated that with the change of policy, the State Government has taken a decision not to act upon the notification dated 20-11-1996. He had further given an undertaking that the State Government has taken a decision to form a JVC by adopting a transparent policy through invitation of offers and as and when a JVC is formed, that shall apply and obtain a prospecting licence or mining lease, as the case may be, in accordance with the provisions of Mines and Mineral (Regulation & Development) Act, 1957 (hereinafter referred to as the 'MMRD Act') and Rules made there under. In view of the aforesaid undertaking, W.P. No. 1081/97 filed by the petitioner was dismissed as infructuous. 3. Against the rejection of prayer of the petitioner for grant for prospecting licence by the State Government by its order dated 5-5-1997, petitioner preferred revision before the Central Government. In the said revision, application filed before the Central Government, State Government filed reply in which the facts regarding formation of a JVC with respondent No. 5 M/s. B. Vijay Kumar and Company was mentioned in detail, The Central Government, by order dated 11-8-1999, set aside the order of the State Government and the case was remitted back for decision on merits in accordance with law. While setting aside the order, revisional authority held as follows:-- "20. The case was heard on 29-5-1999. The petitioner, State Government and the impleaded party were represented. Accordingly, by the impugned order, the prospecting lease of the petitioner has been rejected on the ground that area was reserved for the M.P. State Mineral Development Corporation vide notification dated 20-11-1996 published in the State Gazette on 22-11-1996. However, according to Rule 75 (A) (2) of the Mines and Mineral (Regulation and Development) Act, 1957, the approval of the Central Government is necessary before the State Government can reserve an area for prospecting/mining operations. The approval of the Central Govt. was not taken before the notification dated 20-11-1996 was published in the State Gazette. Moreover, in the Writ Petition No. 1981/97, the State Government informed that it would take no action on the basis of notification dated 20-11-1996." 4. The approval of the Central Govt. was not taken before the notification dated 20-11-1996 was published in the State Gazette. Moreover, in the Writ Petition No. 1981/97, the State Government informed that it would take no action on the basis of notification dated 20-11-1996." 4. After formation of the JVC, the State Govt., by its letter dated 25-8-1999 wrote to the Central Government that the petitioner as also other applicants for grant of prospecting licence do not possess high technical skill, financial strength and required experience supported by laboratory equipments etc. The State Government went on to communicate to the Central Government that the JVC in which the State of M.P. and the Mineral Corporation are the partners, is having world level technical support from their joint venture partners, high skill and experience in mining, good financial net-worth and well-equipped laboratories to ascertain accurately, the results of the aerial survey and bring proficiency which may ultimately be proved best, in the State economy. The State Govt. further pointed out that other ap- plicants have applied for very small areas which are impediment in the wider economic development and virtually against the public interest. In the said letter, the State Government communicated that the JVC is the only applicant available which can be described as the best option available amongst all the applicants, to be chosen for aerial survey of the entire 4600 sq. kms. of Beharadih block of Raipur District. The State Govt. opined that on comparative evaluation of all the applicants, it is of the firm opinion that the JVC Le., M/s. B. Vijay Kumar, Chhattisgarh Exploration Private Ltd., Le., respondent No. 5 herein, only possesses the required capabilities and is entitled to have preference under Sections 11(3) and 11(4) of the MMRD Act, 1957 over all the other applicants. Accordingly, the Central Government, was requested to grant preference to the aforesaid M/s. B. Vijay Kumar, Chhattisgarh Exploration Private Limited for preferential right under Sections 11(3) and 11(4) of the Act. The State Govt. further wrote to the Central Government by its letter dated 1-9-1999 to take decision in the matter and communicate the approval of the Government of India. In the said letter, the State Government, wrote as follows:-- "The State Government is of the opinion that except the Joint Venture Company, all other 22 applicants do not possess such level of high skill, equipment and financial resources. In the said letter, the State Government, wrote as follows:-- "The State Government is of the opinion that except the Joint Venture Company, all other 22 applicants do not possess such level of high skill, equipment and financial resources. Besides this, most of the applicants have applied for very small areas which independently cannot be described as economically viable units and which are virtually impediments in the wider economic development of that area. Encouraging these small applicants cannot be ascribed to be in the public interest and, therefore, the State Government do not recommend any of these 22 applications to be considered for the proposed work. The Joint Venture Company is, therefore, the only applicant available, who can be described as the best option available amongst all the applicants to be chosen for aerial survey of the entire 4600 sq. kms. of Beharadih block of Raipur District. The State Government, therefore, proposes that the Joint Venture Company Le., M/s. Vijay Kumar Chhattisgarh Exploration (Pvt.) Ltd., should be granted preference under Section 11(4) of the MMRD Act over all other 22 applicants. The proposal is virtually in the wider public interest of the State." 5. Another letter dated 1-9-1999 was sent to the Central Government emphasizing and requesting for approval of the Central Government to grant prospecting licence to the JVC, Le., respondent No. 5. The Government of India, by its letter dated 22-11-1999 conveyed its approval "under Section 5(1) of the MMRD Act by invoking the provisions of Section 11(4) of the Act in the interest of the mineral development to the giant of prospecting licence for aerial physical survey and exploration of diamond deposits over an area of 4600 sq. kms. in Beharadih block of Raipur District (M.P.) in favour of M/s. Vijay Kumar Chhattisgarh Exploration Private Limited, Raipur (M.P.) for a period of three years". After the aforesaid approval of the Central Government, prayer of the petitioner for grant of prospecting licence as also the prayers of other persons including the JVC namely, M/s. Vijay Kumar Chhattisgarh Exploration Pvt. Ltd., were considered by the State Government and by order dated 16-12-1999, the State Government decided to grant prospecting licence to the JVC referred to above. 6. 6. Initially, in the present writ petition filed under Articles 226 & 227 of the Constitution of India, prayer made by the petitioner was to quash the order dated 22-11-1999 (Annexure P-20) whereby the Central Government conveyed its approval for grant of prospecting licence to the JVC, but later on, by way of amendment, further prayer made by the petitioner is to quash the order of the State Government dated 16-12-1999 (Annexure P-21) whereby the application of the petitioner for grant of prospecting licence has been rejected and the JVC Le., respondent No. 5, has been given the prospecting licence. 7. Mr. Alok Aradhe, appears on behalf of the petitioner. Mr. R.S. Patel appears on behalf of respondent No. 1. Respondent Nos. 2 to 4 & 6 are represented by Shri V.K. Tankha, learned Advocated General, as also Shri S.K. Seth, the Deputy Advocate General. Mr. B.L. Nema, appears on behalf of respondent No. 5. 8. Mr. Aradhe appearing on behalf of the petitioner submits that the grant of prospecting licence to JVC for the purpose of aerial survey, exploration and evaluation of diamonds deposit over an area of 4600 sq. kms. in Beharadih block of Raipur District is in the teeth of the undertaking given by the State Government and the Mineral Corporation, in earlier writ petition, Le., W.P. No. 1081/97 filed by the petitioner. Mr. Tankha, learned Advocate General, however, appearing on behalf of respondents 2 to 4 & 6 submits that in the earlier writ petition, the answering respondents did not give any undertaking that no JVC shall be formed. According to him, what was stated before the Court in the aforesaid writ petition was that because of change of policy, the State Government had taken decision not to act upon the notification dated 20-11-1996 whereby it has notified, appointment of the Mineral Corporation as agent of the State Government to explore and exploit gold and diamond resources in various districts. Mr. Nema appearing on behalf of respondent No. 5 also supports the submission made by the learned Advocate General. 9. Having appreciated the rival submission, I find substance in the submission of Shri Tankha. Mr. Nema appearing on behalf of respondent No. 5 also supports the submission made by the learned Advocate General. 9. Having appreciated the rival submission, I find substance in the submission of Shri Tankha. In W.P. No. 1081/97, initially the prayer made by the petitioner was to quash the notification dated 20-11-1996, but later on by way of amendment, further prayer made by the petitioner was to quash the advertisement issued by the Mineral Corporation inviting offers for formation of the JVC. In the said writ petition undertaking was given by the Secretary to the Government of M.P. in the Mineral Resources Department stating therein that on account of change of policy, the State Government had taken decision not to act upon the notification dated 20-11-1996. In the undertaking, it has been specifically made clear that the State Government had taken a decision to form a JVC by adopting a transparent policy through invitation of offers and as and when the JVC shall be formed, it shall apply and obtain prospecting licence or mining lease, as the case may be, in accordance with the provisions of MMRD Act and Rules made there under. A Division Bench of this Court, while disposing of the aforesaid writ petition, by order dated 25-3-1998, took cognizance of the undertaking and dismissed the writ petition as infructuous. While dismissing the writ petition, as such, this Court made it clear that it has not gone into the merits of the case and has gone into the validity of notification dated 20-11-19% only. 10. Neither from reading of the order of this Court referred to above, nor from the undertaking given by the State Govt. one can decipher that the State Govt. had given an undertaking that it shall not form the JVC. In fact, in the undertaking given by the Secretary to the Government of M.P., he had made it clear that the State Government had taken a decision to form the JVC. He had stated in positive terms that the State Govt. had taken a decision to form the JVC by adopting a transparent policy through invitation of offers and as and when the JVC shall be formed, it shall apply and obtain prospecting licence or mining lease in accordance with the provisions of the MMRD Act and Rules made there under. He had stated in positive terms that the State Govt. had taken a decision to form the JVC by adopting a transparent policy through invitation of offers and as and when the JVC shall be formed, it shall apply and obtain prospecting licence or mining lease in accordance with the provisions of the MMRD Act and Rules made there under. In view of the aforesaid, I do not have the slightest hesitation in holding that no undertaking whatsoever was given by the State Government that it shall not form the JVC. In fact, the State Government has made it explicit that it shall do so. 11. Shri Aradhe then submits that the formation of JVC with the Mineral Corporation to undertake aerial survey, exploration, evaluation and subsequent exploitation and marketing of diamonds, is nothing but reservation of area for the purpose of conservation under Section 17A(2) of the MMRD Act, but condition precedent for invoking the said provision has not been satisfied. Mr. V.K. Tankha, learned Advocate General whose submission has been adopted by Shri Nema; contends that the whole assumption of the petitioner that the area in question, has been reserved for the purpose of conservation under Section 17A of the MMRD Act, 1957, is absolutely erroneous. Mr. Tankha contends that in fact, the JVC applied for grant of prospecting licence under Section 11 of the MMRD Act and the State Government while considering its application and that of the application of petitioner found the prayer of JVC to be in public interest and requested the Central Government for grant of approval as required under Section 11(4) of the Act, and only after approval of the Central Government that the prospecting licence has been granted to the JVC. 12. I have given my most anxious consideration to the rival submissions. It is relevant here to state that the notice inviting formation of JVC was challenged by the petitioner in his earlier writ petition i.e., W.P. No. 1081/97. However, the petitioner did not ask this Court to adjudicate the validity or otherwise of the invitation by the Mineral Corporation to form the JVC. It is only after the JVC has been constituted and has been granted the prospecting licence that the petitioner has chosen to challenge the same inter alia contending that the area has been reserved for it under Section 17A of the MMRD Act. It is only after the JVC has been constituted and has been granted the prospecting licence that the petitioner has chosen to challenge the same inter alia contending that the area has been reserved for it under Section 17A of the MMRD Act. Further, in my opinion, had the area been reserved under Section 17A(2) of the MMRD Act, there was no occasion for the State Government to seek approval of the Central Government under Section 11 of the MMRD Act. From the aforesaid discussion, irresistible conclusion is that area has not been reserved for JVC under Section 17A(2) of the MMRD Act and hence the question of satisfying the requirement enumerated therein does not arise at all. 13. Mr. Aradhe appearing on behalf of the petitioner then contends that in view of the restrictions on the grant of prospecting licence or mining lease under Section 5 of the MMRD Act, prospecting licence can be given only to person who is an Indian National or Company consisting of Indian Nationals. However, in fairness to Shri Aradhe, I may state that he has stated that the JVC is a company as defined under Section 3(1) of the Companies Act. Section 5(1)(a) of the MMRD Act, which is relevant here for the purpose, reads as follows :-- 5. Restrictions on the grant of prospecting licences or mining leases.-- (1) A State Govt. shall not grant a prospecting licence or mining lease to any person unless such person-- (a) is an Indian National, or Company as defined in sub-section (1) of Section 3 of the Companies Act, 1956 (1 of 1956); and (b) ................... To me, it seems to be plain that Section 5 puts restriction on the grant of prospecting licence or mining lease and it provides for grant of such licence or mining lease, to such person who is Indian National or Company as defined under Section 3(1) of the Companies Act. Admittedly, the JVC is a Company defined under Section 3(1) of the Companies Act and as such it is eligible for grant of prospecting licence. In view of the plain language of Section 5(1)(a) of the MMRD Act, the Company has to be a Company as defined under Sections (1) of the Companies Act and it has not to consist of Indian Nationals necessarily. Acceptance of Mr. In view of the plain language of Section 5(1)(a) of the MMRD Act, the Company has to be a Company as defined under Sections (1) of the Companies Act and it has not to consist of Indian Nationals necessarily. Acceptance of Mr. Aradhe's argument will amount to adding words in the statue which on its plain language is wholly impermissible. I do not find any substance in this submission of Shri Aradhe. 14. Mr. Aradhe, then, contends that grant of prospecting licence to the JVC covering a total area of 4600 sq. kms. is in teeth of Section 6 of the MMRD Act and the same renders the grant of prospecting licence to respondent No. 5, illegal. Mr. Vivek Tankha, learned Advocate General, as also Mr. Nema, on behalf of respondent No. 5 submit that normally prospecting licence covering a total area of more than 25 sq. kms. cannot be granted, but in the interest of development of any mineral, prospecting licence in excess of the aforesaid total area can be granted with the permission of the Central Government. In view of the aforesaid stand of Shri Tankha & Shri Nema; Mr. Aradhe has taken a plea that no such permission has been granted and in this connection Shri Aradhe has drawn my attention to the letter of the Central Government dated 22-11-1999 (Annexure P-20). True, it is that in the aforesaid communication, the Central Government has referred to the provisions of Section 5(1) and 11(4) of the Act and not Section 6 of the MMRD Act. However, it is equally true that in the impugned communication, the Central Government has taken cognizance of the fact that in the interest of mineral development, grant of prospecting licence for aerial physical survey and exploration of diamond deposits over an area of 4600 sq. kms. can be made to the JVC, Notwithstanding the fact that provisions of Section 6 of the MMRD Act has not been referred to by the Central Government while granting approval, but the Central Government being cognizant of the fact that an area of 4600 sq. kms. is to be granted on prospecting licence to the JVC, I have no manner of doubt that the Central Government has permitted for grant of prospecting licence covering a total area of 4600 sq. kms. to the JVC. kms. is to be granted on prospecting licence to the JVC, I have no manner of doubt that the Central Government has permitted for grant of prospecting licence covering a total area of 4600 sq. kms. to the JVC. Permission under Section 6 of the MMRD Act is writ large from the communication of the Central Government and hence mere non-mentioning of the provision will not vitiate the action. 15. It is further relevant here to state that proviso to Section 5(1) and 11(4) of the MMRD Act inter alia provide for previous approval of the Central Government whereas proviso to Section 6(1) of the Act reserves the right of the Central Government to permit any person to acquire one or more prospecting licence covering an area in excess of 25 sq. kms. Central Government has opined that the grant of prospecting licence over 4600 sq. kms. is in the interest of development of mineral and as such it has satisfied the requirement of Section 6 of the Act. I do not find any merit in this submission of Shri Aradhe. 16. All the submissions made on behalf of the petitioners having no substance, I do not find any merit in both the writ petitions and they are dismissed accordingly, but without cost. 17. Writ Petitions dismissed.