Jai Durga Iron (P) Ltd. v. Superintendent of Police
2006-05-17
M.M.DAS
body2006
DigiLaw.ai
JUDGMENT M. M. DAS, J. : The petitioners, which is a limited company having its factory in the State of Jharkhand and its Director, have filed the present writ petition claiming the following reliefs : (i) to quash Brahamanitarang P. S. Case No.107/2005 correspond¬ing to G.R. Case No. 1381 of 2005 of the Court of S.D.J.M., Panposh at Uditnagar, Rourkela, (ii) to quash the proceeding under Section 16 of the Orissa Minor Minerals (Prevention of theft, smuggling and other unlawful activities) Act, 1989 (hereinafter referred to as ‘the State Act”) pending before the opp.party No.3 Deputy Director of Mines-cum-Competent Authority, (iii) to quash the order under Annexure-5 issued by the General Manager (S & M) Mahanadi Coalfields Ltd. (for short, ‘M.C.L.’) calling upon the petitioner-company as to why the linkage agreement executed between the parties should not be cancelled permanently; and (iv) to declare the Act and the Rules 1990 framed thereunder as unconstitutional and ultra vires to the M.M. (D & R) Act, 1957. 2. The facts as revealed disclose that the petitioner No.1 is a Private Limited Company manufacturing Sponge Iron having its factory in the State of Jharkhand. By the strength of linkage with the M.C.L./Coal India Limited (for short, ‘C.I.L.’), the petitioner-company was getting 45000 tons of coal per annum which was being transported from the coalfields of M.C.L. by road as well as railway. On 1.8.2005, the Sub Inspector of Police, Brah¬manitarang Police Station reported to the I.I.C. of the said police station that while he was on patrolling duty, getting information about illegal transportation of coal in 12 trucks/Dumpers to Maa Vaishnavi Sponge Iron Plant, IDC, Kalunga, through the transporter Shri Santosh Kumar Sharma, with forged documents to sell the coal at a higher price, he reached near the above Sponge Iron Plant. He found 12 vehicles loaded with coal were parked near the said factory and he arrested seven drivers, from the spot, seized documents on being produced by the said drivers which included transit pass, way bills issued in the name of the petitioner 1-company, gate pass of M.C.L., weighment slip and hand written slips issued by the transporter.
He found 12 vehicles loaded with coal were parked near the said factory and he arrested seven drivers, from the spot, seized documents on being produced by the said drivers which included transit pass, way bills issued in the name of the petitioner 1-company, gate pass of M.C.L., weighment slip and hand written slips issued by the transporter. The Sub Inspec¬tor of Police also reported that the drivers on instruction of the transporter and owners of the trucks were to deliver the coal at Maa Vaishnavi Sponge Iron Plant from the linkage quota given by the M.C.L. On the said report of the S.I. of Police, Brahmani¬tarang P.S. Case No.107/2005 was registered under Sections 420/120(B)/34 I.P.C. read with Section 12 of the Act which corre¬spondence to G.R. Case No.1381 of 2005 of the Court of S.D.J.M., Panposh. 3. It is further revealed that after registration of Brahamanitarang P.S. Case No.107/2005, the I.I.C. handed over the 12 (twelve) seized vehicles loaded with 120 tons of coal to the Mining Officer, Rourkela, in zimanama, with request to the Deputy Director of Mines, Rourkela to initiate confiscation proceeding under Section 16 of the Act. The opp.party No.7-General Manager (S & M), M.C.L. on coming across a news item about registration of the aforesaid P.S. Case No.107/2005 against the petitioner-company and the transporter, issued a letter dated 4.8.2005 suspending the dispatch of coal from the linkage by rail and road to the petitioner No.1- company and asking the petition¬er No.1-company to submit show cause as to why linkage shall not be cancelled permanently. 4. In course of argument, Dr.
4. In course of argument, Dr. Pal, learned Senior Counsel appearing on behalf of the petitioners couched his submissions into four compartments, namely, the police case initiated against the petitioner No.1-company having made out absolutely no case against the said petitioner No.1-company, even on accepting the entire allegation in toto, the said case is liable to be quashed; the M.M. (D & R) Act, 1957 being amended with effect from 18.12.1999 bringing in its fold similar provisions as provided under Sections 12 and 16 of the Act with respect to minerals like coal which is covered under M.M. (D & R) Act; provisions of Sections 12 and 16 cannot be made applicable to coal as has been done in the instant case and, thus, the criminal case as well as the confiscation proceeding is without jurisdiction; issuance of letter dated 4.8.2005 by the O.P. No.7 suspending the linkage and proposing to permanently cancel the same, is unsustainable on the ground that the suspension of supply of coal will result in bringing adverse civil consequences to the petitioner No.1- company and, as such, the suspension without adherence to the principle of natural justice and without prior notice to the petitioner No.1-company is a colourable exercise of power and further the Standing Linkage Committee being the authority to sanction for linkage to various industries including Sponge Iron factory, on long term basis and to recommend the Coal India Limited to make allocation to such units, the authorities of the M.C.L. had no jurisdiction to either suspend such linkage or take steps to cancel the same permanently. Dr. Pal also raised the question regarding the vires of the provisions of the Act on the ground that it contravenes the provisions of the M.M. (D & R) Act legislated by the Union of India and, therefore, it is ultra vires to the Constitution. 5. With regard to the applicability of the provisions of Sections 12 and 16 of the Act, Dr.
5. With regard to the applicability of the provisions of Sections 12 and 16 of the Act, Dr. Pal submitted that the State Government enacted Orissa Minerals (Prevention of theft, Smug¬gling and other Unlawful Activities) Act, 1988 by deriving its power from Clause 3 of Article 246 of the Constitution of India as per Entry 23 of List-II under Schedule-7 of the Constitution where as the Central Government has enacted the M.M. (D & R) Act, 1957 in exercise of its power derived from Clause I of Article 246 of the Constitution as per Entry 54 in List-I under Schedule - 7 of the Constitution. He further submitted that Entry 23 in the State List relates to Regulation of Mines and Minerals Develop¬ment subject to the provisions of List-I with respect to such Regulation and development under the control of the Union Govern¬ment. He, therefore, taking us in entail through the various provisions of both the State Act as well as the Central Act, submitted that after the amendments were made in the M.M. (D & R) Act with regard to similar provisions contained in the State Act, the said provisions of the State Act lost their applicability to the case of minerals governed by the M.M. (D & R) Act. On the above premises, Dr. Pal contended that once the provision of the Act is held to be inapplicable in case of transportation of coal, question of commission of any offence by the petitioner under the said Act cannot arise and, therefore, the criminal cases insti¬tuted against the petitioners as well as the confiscation pro¬ceeding are liable to be quashed. Dr. Pal further submitted that as the basis of the criminal case initiated against the petition¬ers is an offence alleged to have been committed under the provi¬sions of the State Act, once it is held that the said provisions have become inoperative in view of the amendment made in the M.M. (D & R) Act, the foundation having vanished, the super structure thereon cannot stand and, therefore, the criminal case becomes baseless and cannot be proceeded with. 6. Mr.
6. Mr. Sanjit Mohanty, learned Senior Counsel appearing on behalf of the Mahanadi Coalfields Limited, on the other hand, relying upon the counter affidavit filed on behalf of the M.C.L. submitted that the authorities of the M.C.L. coming across a newspaper repot that on the interception of police, 12 trucks of coal meant for the petitioner No.1-company were seized near the premises of M/s. Maa Vaishnavi Sponge Iron Pvt. Ltd., the General Manager (Sales and Marketing) M.C.L., Sambalpur in exer¬cise of powers conferred under paragraph-8.5 of the guidelines dated 30.8.1996 issued by the Government of India, Ministry of Coal for supply of coal read with the undertaking given by the petitioner No.1-company, issued the letter dated 4.8.2005 to the petitioner No.1- company intimating that further despatches of coal to the petitioner No.1-company by rail and road are kept in abeyance and called upon the petitioner No.1-company to show cause as to why the linkage granted to it shall not be cancelled permanently. Mr.
Mr. Mohanty further submitted that the petitioner No.1-company being a Sponge Iron Industry comes under the core sector category and by letter dated 21.6.2004, the Deputy Secre¬tary to Government of India, Ministry of Coal and Mines, Depart¬ment of Coal, granted coal linkage to the petitioner No.1-company for a total quantity of 45 thousand tons per annum of “F” Grade non-coking coal which was required to be supplied from the mines of the M.C.L. It was indicated in the said letter that the peti¬tioner No.1-company will have to sign an agreement with the M.C.L./I.C.L. After such amount of coal was allocated in favour of the petitioner No.1-company as a linkage, the petitioner No.-company furnished an undertaking in the form of affidavit on 3.1.2005 to the M.C.L. stating therein that the entire quantity of coal to be supplied will be consumed and/or utilized by the petitioner No.1- company’s factory and shall not be mis-utilized in any way and used for any other purpose and/or would not be sold, transferred or disposed of to any person/persons for any reasons whatsoever and further declared that in case any discrepancy in regard to coal requirements and consumption thereof or in regard to statements made therein is detected or noticed by Coal India Limited at any time, the Coal India Limited will have a right to stop supply of coal at once and cancel the linkage without giving any prior notice to the petitioner apart from other normal course of action as permissi¬ble in law. The said affidavit has been annexed as Annexure-A/6 to the counter affidavit filed by the M.C.L. Mr. Mohanty basing on the said undertaking by way of affidavit furnished by the petitioner submitted that there is no illegality committed by the M.C.L. in keeping the supply of coal to the petitioner in abey¬ance and in calling upon the petitioner No.-1 company to show cause as to why the linkage should not be cancelled permanently. 7. A separate counter affidavit has been filed on behalf of the Superintending of Police, Sundargarh reiterating the facts, which led to initiation of the criminal case against the petitioners and the transporter. Mr. P. K. Mohanty, learned Addl. Government Advocate appearing on behalf of the opp.party No.1 submitted that sufficient materials have been found during inves¬tigation of the case on the basis of which prima facie, the petitioner No.1-company appears to be involved in the alleged offences.
Mr. P. K. Mohanty, learned Addl. Government Advocate appearing on behalf of the opp.party No.1 submitted that sufficient materials have been found during inves¬tigation of the case on the basis of which prima facie, the petitioner No.1-company appears to be involved in the alleged offences. He further submitted that the transporter was to deliv¬er the coal in the factory of the petitioner No.-1 company but the trucks seized by the police were found near the gate of the Sponge Iron Factory, namely, M/s. Maa Vaisanavi Sponge Iron Pvt. Ltd. He, therefore, submitted that in these premises, there being clear violation of provisions of the Act, a case has been regis¬tered against the petitioner No.1-company and the transporter, which is under investigation. Mr. Mohanty contended that in view of prima facie materials available against the petitioner No.1-company, the prayer of the petitioners for quashing the criminal case cannot be allowed. 8. It is seen from Annexure-A/1 to the counter affidavit filed on behalf of opp.party No.1 that slips of papers bearing number of the vehicles, weightage,fright etc. have been seized from the drivers of the vehicles with “Maa Vainshaw” inscribed over the said slips which are dated 31.7.2005 and from the above slips, the Investigating Officer finding that there was some instructions to the drivers to unload the coal at the factory of M/s. Maa Vaishnavi Sponge Iron Pvt. Ltd. he is proceeding with the investigation. 9. In the rejoinder affidavit filed by the petitioners, it has been asserted that there is absolutely no material on record to show that the linkage coal was being unloaded in the factory of M/s. Maa Vainshnavi Sponge Iron Pvt. Ltd. and, therefore, there cannot be any presumption that an offence has been commit¬ted under Section 12 of the M.M. (D & R) Act. It has been reiter¬ated in the rejoinder affidavit that the Colliery Control Order, 1945 has been superseded by the Colliery Control Order, 2000. The allocation of coking coal to Steel Plants was earlier made by the Coal Controller but after de-regulation of Coking Coal, the same is being made by the Coal Companies themselves on the basis of linkage established by the Competent Linkage Committee or on the basis of their existing commitments. This is evident from Chap¬ter-VII of the Annual Report released by the Ministry of Coal, Government of India for 2004-05.
This is evident from Chap¬ter-VII of the Annual Report released by the Ministry of Coal, Government of India for 2004-05. As per the induction materials released by the Ministry of Coal and Mines, Government of India in December, 2005 for deciding linkage for sponge iron units a Long Term Committee is chaired by AS (Coal) Ministry of Coal and representative of their Planning Commission, Ministry of Rail¬ways, Ministry of Steel, Chairman, C.I.L./C.M.D., SCCL and C.M. Ds of Coal Producing Companies. On the above basis, Dr. Pal submitted that the impugned letter by which supply of coal to the petitioner No.1-company has been kept in abeyance by the M.L.C. is totally without jurisdiction, as the M.C.L. has no power either to suspend or terminate the linkage. 10. In view of the submission made by the learned counsel for the parties and the averments in the respective pleadings, it has become necessary for us to answer the following questions :- (i) Whether after amendment of the Mines and Minerals (Develop¬ment & Regulation) Act, 1957 which came into force with effect from 18.12.1999, the provisions of Sections 12 and 16 of the Orissa Minerals (Prevention of Theft, Smuggling and other Unlaw¬ful Activities) Act, 1988 (for short, ‘the State Act’) can be applied in case of mineral/minerals which are covered under the M.M. (D & R) Act ? (ii) Whether the M.C.L. has acted beyond its jurisdiction in issuing the impugned letter under Annexure-5 to the writ petition thereby keeping the supply of coal allocated in favour of the petitioners in abeyance and contemplating permanent cancellation of the linkage with the petitioners ? (iii) Whether in the facts and circumstances of the case, the criminal case instituted against the petitioners as well as the transporter can be quashed in exercise of power under Article 226 of the Constitution ? 11. In order to address the question No.(i) framed above, we feel it expedient to give a comparative chart of the various Sections of the M.M. (D & R) Act, 1957 after its amendment in 1999 and that of the State Act which are as follows :- 12.
11. In order to address the question No.(i) framed above, we feel it expedient to give a comparative chart of the various Sections of the M.M. (D & R) Act, 1957 after its amendment in 1999 and that of the State Act which are as follows :- 12. From the above, it is clear that the State Act legislat¬ed by the State Legislature being in relation to Entry 23 of List-II in the 7th Schedule of the Constitution, which is with regard to Regulation of Mines and Minerals Development, the same is subject to the provisions of List-I with respect to Regulation and Development under the control of the Union. Thus, the above State Act was in force as no similar provisions were included in the M.M. (D & R) Act which is a central legislation under Entry 54 of List-I of the 7th Schedule. In view of the declaration made in Section 2 of the M.M. (D & R) Act, the moment similar provi¬sions as contemplated in the State Act were provided for in the M.M. (D & R) Act by way of amendment with effect from 18.12.1999, the said provisions in the State Act became inoperative being occupied by the Central legislation. 13. In view of the above amendment brought to the M.M. (D & R) Act by the central legislation with effect from 18.12.1999, in our considered view, the provisions of Section 12 of the M.M. (D & R) Act with regard to penalty which can be imposed on a person who fails to comply with or contravene any of the provisions of the State Act and the provisions of Section 16 of the State Act with regard to seizure of property liable to be confiscated and prosecution for such offences under Section 12 of the State Act can no longer be made applicable to minerals which are covered in the M.M. (D & R) Act. 14. It goes without saying that coal is a mineral, which is covered under the M.M. (D & R) Act, 1957. Therefore, it is inevi¬table to conclude that the proceeding for confiscation initiated against the petitioners under Section 16 of the State Act is without jurisdiction and without authority of law. 15.
14. It goes without saying that coal is a mineral, which is covered under the M.M. (D & R) Act, 1957. Therefore, it is inevi¬table to conclude that the proceeding for confiscation initiated against the petitioners under Section 16 of the State Act is without jurisdiction and without authority of law. 15. No doubt, it is true that even though by the amended Section 23 ‘C’ of the M.M. (D & R) Act, it has been provided that the State Government may, by notification in the official ga¬zette, make rules for preventing illegal mining, transportation and storage of minerals and for the purposes connected therewith and such rules may, provide for all the matters as mentioned in Section 23C (2) but no such rules have yet been framed by the State Government. Since we have concluded that no prosecution under the State Act can lie for the offences provided in the amended provisions of the M.M. (D & R) Act, it is expedient in public interest for preventing commission of offences under the amended provisions of the M.M. (D & R) Act, for the State to frame rules as provided in Section 23C (2) of the M.M. (D & R) Act, as early as possible for enabling the said amended provi¬sions of the M.M. (D & R) Act to be operational. 16. In the result, therefore, we quash the confiscation proceeding initiated against the petitioners under Section 16 of the State Act. But, however, we do not think it appropriate to quash the criminal proceeding/F.I.R./investigation against the petitioners, i.e., Brahamanitaranga P.S. Case No.107/2005 regis¬tered under Sections 420/120-B/34 I.P.C. read with Section 12 of the State Act, though according to Dr. Pal, the foundation of the criminal case was the allegation of offence punishable under Section 12 of the State Act, but as a series of acts in one trans¬action may constitute various criminal offences which can be tried in a single case. Even though we have concluded that the petitioners cannot be penalized under Section 12 of the State Act for commission of offences alleged to have been committed under the said Act,allegation of commission of offences under various Sections of Penal Code which may constitute independent offences, committed in the same transaction, having been made, we find no reason to quash the criminal proceeding in its entirety at this stage.
The petitioners, however, are at liberty to approach the appropriate criminal Court for getting discharged from the said offences, if so advised. The above conclusions arrived at by us also answers the question no.(ii) framed above. 17. With regard to the legality of the action of the M.C.L. in keeping the supply of coal allocated in favour of the peti¬tioner No.1-company under linkage, in abeyance, and contemplating permanent cancellation of such supply of coal to the petitioner No.1- company under the letter in Annexure-5, we find that the case of the M.C.L. has been based on the information gathered by them from a newspaper report that the vehicles carrying the local to the factory of the petitioner No.1- company were intercepted by the police and seized near the premises of M/s. Maa Vaishnavi Sponge Private Ltd. Kalunga. The said letter further relies upon the power derived from the Colliery Control Order, 1945. The petitioners have produced before us a copy of the Colliery Con¬trol Order, 2000 published in the gazette notification on 1.1.2000 by the Government of India which expressly states that in exercise of the powers conferred by Section 3 read with Sec¬tion 5 of the Essential Commodities Act, 1955 (Act 10 of 1955) and in supercession of the Colliery Control Order, 1945, the said Colliery Control Order, 2000 has been published. 18. In view of the above position, the M.C.L. cannot take recourse to the various clauses of the Colliery Control Order, 1945 which has been superseded in the meantime. We also find that as per induction material released by the Ministry of Coal and Mines, Government of India in December, 2006 for deciding linkage for sponge iron, the Long Term Committee is chaired by AS (Coal) Ministry of Coal and representative for Planning Commission, Ministry of Railways, Ministry of Steel, Chairman, C.I.L. and managing Directors of Coal Producing Companies. It is, therefore, inevitable to conclude that such linkage which is decided by the above authorities cannot be unilaterally cancelled by the author¬ity of the M.C.L. alone. It is also found from the counter affi¬davit that the C.I.L. has not issued any order against the peti¬tioners confirming the Act of suspension of supply of coal to the petitioners by the M.C.L. and proposing to cancel such allocation permanently.
It is also found from the counter affi¬davit that the C.I.L. has not issued any order against the peti¬tioners confirming the Act of suspension of supply of coal to the petitioners by the M.C.L. and proposing to cancel such allocation permanently. From the letter under Annexure-5, it is also re¬vealed that copy of the said letter was forwarded to the Chief General Manager (Sales and Marketing), C.I.L. for information and necessary advice. This clearly implies that before passing the order under Annexure-5, the authorities of the M.C.L. did not obtain approval of the C.I.L. The M.C.L. also cannot import the guidelines dated 30.8.1996 for keeping the supply of coal to the petitioner No.1-company in abeyance as the said guidelines were issued under the Colliery Control Order, 1945 which has been superseded by the Colliery Control Order, 2000. 19. In view of the above, the order of the authority of the M.C.L. passed under Annexure-5, keeping the supply of coal to the petitioner No.1-company, in abeyance and further proposing to proceed to permanently cancel the allocation of coal to the petitioner No.1-company being without jurisdiction, is quashed. 20. It goes without saying that the M.C.L. should resume supply of coal as allocated to the petitioner No.1-company imme¬diately in order to enable the factory of the petitioner No.1 - company to run for avoiding labour unrest, which according to Dr. Pal is the direct consequence of stoppage of running of the factory of the petitioner No.1 - company due to non-supply of coal by the M.C.L. 21. The writ petition is accordingly partly allowed but in the circumstances without any cost. S. B. ROY, C.J. I agree. Petition partly allowed.