JUDGMENT Hon’ble Sunil Ambwani, J.—M/s Sonbhadra Minerals Pvt. Ltd. (SMPL) a private limited company with its registered office at 14/364 Ram Mandir Colony, Obra District Sonbhadra, and its Director Mr. Jagmander Sen Agrawal have prayed to recall the directions dated 5.7.2006 and order dated 20.9.2006 in Civil Misc. Objection Application No........... of 2005 filed on behalf of RPJ Minerals Private Limited (RPJMPL) and Civil Misc. Objection Application No......... of 2005 filed by U.P. State Mineral Development Corporation Ltd. (UPSMDC) in Civil Misc. Application No. 4 of 1997 (in the matter of liquidation of U.P. State Cement Corporation Ltd.) in respect of Bari and Baghmanwa Dolomite mines and to pass any such other and further orders as may be deemed fit and proper in the circumstances of the case. 2. The application was filed on 12.12.2006. On the same day the notices were accepted by Official Liquidator, State of U.P., UPSMDC and Jaiprakash Associates Ltd. (JAL). The matter was heard on 19.12.2006, when the Court prima facie did not find any good ground to vacate the interim order and then on 11.1.2007 when it was noticed that both UPSMDC and Official Liquidator do not want to file any reply. JAL filed its reply and State Government took further time to file counter affidavit. On 24.1.2007, UPSMDC. changed its stand and filed a counter affidavit. The applicant took time to give reply to the counter affidavit of UPSMDC and a rejoinder affidavit to the counter affidavit of JAL. On 19.2.2007 the State Government took further time and filed its reply on 22.2.2007. The matter was heard on 22.2.2007, and the orders were reserved. 3. Shri Viplav Sharma assisted by Shri S.K. Singh appeared for SMPL-the applicant; Shri Ashok Mehta for Official Liquidator; Shri Sanjai Om for UPSMDC; Shri Anil Mehrotra for State of U.P. and Shri Yashwant Verma for JAL. 4. In order to consider the prayers made in the application, it is necessary to briefly give the background of the liquidation proceedings and the sale of assets of the company (in liquidation). 5. U.P. State Cement Corporation Ltd. a Government Company under Section 617 of the Companies Act, 1956 with entire paid up share capital subscribed by the Government of U.P. was declared as a Sick Industrial Company by Board for Industrial and Financial Reconstruction on 7.10.1992. 5. U.P. State Cement Corporation Ltd. a Government Company under Section 617 of the Companies Act, 1956 with entire paid up share capital subscribed by the Government of U.P. was declared as a Sick Industrial Company by Board for Industrial and Financial Reconstruction on 7.10.1992. After exploring the possibilities of rehabilitation and the revival plans by IDBI as Operating Agency, and allowing opportunity to the workers, banks and financial institutions, and also considering the proposals made by cement manufacturing companies, the Board formed an opinion under Section 20 (1) of the Sick Industrial Companies (Special Provisions) Act 1985 (SICA), to recommend to High Court to wind up the company and forwarded the reference dated 2.7.1997 to this Court, which was registered as Company Application No. 4 of 1997. The AAIFR dismissed the appeal filed by the company on 19.2.1998. 6. The Cement Workers Union (CITU) and 13 other trade unions filed a Writ Petition challenging the order dated 19.2.1998, which was opposed by the Government of U.P. on the ground that it was not viable to run the company with about 6000 employees. The writ petition was dismissed by the Court on 8.12.1999. A Special Leave Petition No. 7796 of 2000 against the judgment was dismissed by the Supreme Court on 9.5.2000. 7. The objections filed by the workers to the winding up of the company was dismissed by the Company Court and that the company was directed to be wound up on 8.12.1999. A Special Appeal No. 38 of 2000 filed by the Cement Workers Union was dismissed on 31.7.2000. The ‘Statement of Affairs’ verified by Shri Yashpal Sharma, the Company Secretary of the company (In Liq.) was filed on 6.3.2000. 8. The State Government filed an application No. 47788 of 2001 (A-31) on 17.5.2001 to direct the Official Liquidator to take appropriate steps in the light of the order passed by the Court on 8.12.1999, and to give due consideration to the offer made by M/s Grasim Industries, so that liabilities of the company may be discharged and the interest of labour and other staff be protected. The Allahabad Bank opposed the application. In the affidavit of Shri Hari Krishna, the Secretary, Heavy Industries, Government of U.P., Lucknow supporting the application it was stated that the advertisements were published by the State Government in newspapers inviting tenders for taking over cement plants of the company (In Liq.). The Allahabad Bank opposed the application. In the affidavit of Shri Hari Krishna, the Secretary, Heavy Industries, Government of U.P., Lucknow supporting the application it was stated that the advertisements were published by the State Government in newspapers inviting tenders for taking over cement plants of the company (In Liq.). The advertisements were published in ‘Economics Times’ and ‘Business Standards’ on 10.2.2001 and 12.2.2001, offering the assets and a number of reliefs and concessions to be granted by the State Government. It was alleged that the State Government adopted a transparent process of sale in which three cement companies were initially interested, however, finally only one company namely M/s Grasim Industries Ltd. had made an offer. The Sale Committee comprised of the Commissioner Industrial Development, Chairman; the Secretary, Small Industries Development; the Secretary, Finance Department; the Secretary, Heavy Industries and the Managing Director, UPSIDC. The reliefs and concessions and the assets offered for sale were included in the Memorandum of Information (MOI) the guidelines for submitting of tenders. Apart from other reliefs and concessions including renewal of limestone leases in favour of the company, the State Government offered limestone leases at Ninga and Kajrahat having over hundred million tones of lime stone deposits and Dolomite mines at Bari Baghmanwa, adjacent to the factory site. The report of Director of Geology and Mining giving details of the quantity and composition of stone was attached to the tender form. 9. During the course of hearing in December 2001 the Court summoned Cabinet Proceedings for appreciating the concerns of the Banks, financial institutions and offer of Grasim Industri Ltd. After going through the comments of Department of Law, Industrial Development, Sales Tax, Finance and Electricity, which did not favour with the reliefs and concessions, the Court found that the State Cabinet had taken a decision to offer them to the intending purchaser. The State Cabinet accepted the proposal of the Principal Secretary and Industrial Development Commissioner for reliefs be given by the State Government. It was noticed by the Court in the order dated 14.2.2002 rejecting the application of the State Government for sale to Grasim Industries Ltd. that the Cabinet had accepted the proposal of the Principal Secretary and Industrial Development Commissioner, against the objections taken by almost all the departments for giving reliefs and concessions. It was noticed by the Court in the order dated 14.2.2002 rejecting the application of the State Government for sale to Grasim Industries Ltd. that the Cabinet had accepted the proposal of the Principal Secretary and Industrial Development Commissioner, against the objections taken by almost all the departments for giving reliefs and concessions. The recommendations to exclude 254 acres of land, building and factory at Churk and 564 acres of land at Ghurma from the assets for sale, as limestone is not available at these places, valued at about Rs. 30 crores, which could be used for Government purposes was also accepted. 10. In the proceedings, the learned Advocate General in response to a query made by the Court made a statement that the State Government had received the offer of Grasim Industries Ltd. after a fair and transparent exercise and that the State Government has no objection if the Court explores the possibility for a higher bid, and that the State Government would in that event, extend the same reliefs and concessions, as those offered to M/s Grasim Industries Ltd. The Court was not satisfied with the statement and required it to be placed on record in the form of an affidavit. In compliance of the order dated 2.1.2002 the State Government filed an affidavit of Shri S.N. Shukla, Industrial Development Commissioner, U.P. dated 1.1.2002. The contents of this affidavit reproduced in the order dated 14.2.2002 are : “(1) That the deponent is presently posted as Industrial Development Commissioner and Principal Secretary, Government of U.P. Lucknow and as such he is fully acquainted with the facts deposed to below. (2) That the present affidavit is being filed in compliance with the order dated 20.12.2001 passed in the aforesaid matter, by the Hon’ble Court. (3) That the State Government’s primary concern has been revival of unit at the earliest though privatization in the interest of the workers. The idea is not merely disposal of assets by their transfer to a purchaser who has the necessary resources, competence and experience to run the unit. (4) That the offer of M/s Grasim Industries has been received after open public tender and they are one of the largest cement producers in the country. The idea is not merely disposal of assets by their transfer to a purchaser who has the necessary resources, competence and experience to run the unit. (4) That the offer of M/s Grasim Industries has been received after open public tender and they are one of the largest cement producers in the country. (5) That the request made by the State Government to the Hon’ble Court was by way of helping and assisting the Liquidator in the disposal of the Company’s property under Section 457 (1) (c) to save time instead of initiating the process afresh at his level. (6) That the State Government has no objection to this Hon’ble Court exploring the possibility of a higher bid and the State Government would in that event extend the same reliefs and concessions as those offered to M/s Grasim Industries. However, it is submitted that the following concerns of the State Government may kindly be also kept in view while taking a decision in this regard : (i) The process of restarting the Unit may not get unduly delayed. (ii) There is no guarantee for a higher bid and meanwhile we may loose the offer already received. (iii) Besides, the bid amount, the resources, competence, experience and the commitment of the bidder to run the unit also has to be kept in view. (7) That, however, in case it is decided to retender then the present offer of M/s Grasim Industries should remain valid and the amount offered by them should be kept as the minimum reserved price. Moreover in case any higher bid is received in all fairness M/s Grasim Industries may be given the first option to purchase the property at that price. (8) That besides the State Government the consent of the Financial Institutions and Banks to extend similar accommodation the new purchaser is also necessary.” 11. The Court took into account its powers under Section 446 of the Companies Act to stay the proceedings and did not agree with the State Government that the Official Liquidator will take 20 years of time in selling the assets. It was noticed that the State Government was fully aware of the fact that the company was wound up by the Court and that all its assets were in constructive possession of the Court. It was noticed that the State Government was fully aware of the fact that the company was wound up by the Court and that all its assets were in constructive possession of the Court. All the departments of the State Government had opposed the sale and for providing exemptions or creating any further liability. The application was, consequently, rejected on 14.2.2002 both on the ground that the State Government was not competent to offer the assets for sale after winding up and that the offer was much less the actual valuation, which included limestone deposit of over 100 million tones as well as the reliefs and concessions, taken together, and that there was no reason to exclude the assets at Churk and Ghurma from the sale. 12. The Court after rejecting the application, directed the Official Liquidator to constitute a committee for sale of assets including him as Chairman; a nominee of IDBI not below the rank of Deputy General Manager; a nominee of State Bank of India not below the rank of Chief Manager and Industrial Development Commissioner and Principal Secretary, Government of U.P. or his nominee not below the rank of Secretary in the Government of U.P. The sale was to be carried out by making wide advertisement in global markets after approval of draft advertisement from the Court. The tender document prepared by the State Government was to be considered as basic document for such purpose, with modification and changes to be considered and proposed by the company with the approval of the Court. Apart from the global tender the invitation was to be sent to all leading cement manufacturers in the country. All the prospective bidders were to be allowed inspection and the bids were to be received in sealed covers with reserve price at Rs. 271 crores (Rs. 241 crores offered by Grasim Industries Ltd. + assets of Rs. 30 crores, which were excluded by the State Government). 13. The first valuation report of the assets was submitted by M/s A.F. Ferguson and Co. (1995), and the second valuation report was prepared by M/s N.K. Aggarwal (2001). In the Special Appeal filed by State Government, Allahabad Bank and Grasim Industries Ltd. a third valuation was carried out by G.S. Birdie (2002). 13. The first valuation report of the assets was submitted by M/s A.F. Ferguson and Co. (1995), and the second valuation report was prepared by M/s N.K. Aggarwal (2001). In the Special Appeal filed by State Government, Allahabad Bank and Grasim Industries Ltd. a third valuation was carried out by G.S. Birdie (2002). In the course of hearing of the special appeal, initially some offers and counter offers were made in the Court, however, these offers were not accepted and that on 8.12.2004 the Special Appeal was dismissed and the matter was remitted to the Company Judge for carrying out the advertisement and sale. 14. That after the dismissal of the special appeal the Official Liquidator under directions of the Court sought nominations from IDBI, State Bank of India, Industrial Development Commissioner and Principal Secretary Government of U.P. and directed the Asset Sale Committee to prepare and adopt the guidelines for ‘fair and transparent procedure for sale’. In the Asset Sale Committee the State Government raised certain queries with regard to reliefs and concessions. In the order dated 23.2.2005 the Court took objections to the deliberation over the reliefs and concessions by the Asset Sale Committee and directed that if the State Government had any reservation, they may make appropriate application to the Court. Shri Ravindra Singh, the Secretary (Industries) U.P. Government was member of the Committee and participated in its proceedings. 15. The application of IDBI to engage a professional agency in sale was rejected and the global advertisement was carried out in leading newspapers. The advertisements were also placed on the internet. The ‘Expression of Interest’ of four bidders were opened by the Asset Sale Committee on 4.10.2005. They found that all the four bidders were qualified having turn over of more than one hundred crores and expertise in manufacture of cement. All the four bidders, who had deposited Rs.10 crores as earnest money took extensive inspections of the site and mines. 16. Before the date of financial bids on 16.11.2005, the bidders placed their queries with regard to reliefs and concessions, delivery of physical possession of the assets and the benefits to be given to the Ex-Workmen. All the four bidders, who had deposited Rs.10 crores as earnest money took extensive inspections of the site and mines. 16. Before the date of financial bids on 16.11.2005, the bidders placed their queries with regard to reliefs and concessions, delivery of physical possession of the assets and the benefits to be given to the Ex-Workmen. The Court found that in the background of the case, the tender document running into thousands of pages with report of Geological surveys and three valuation reports, and the proceedings in the special appeal, the stage for any further queries was long over and that the parties may bid on the material available on record. The Asset Sale Committee under orders of the Court dated 5.10.2005 held meeting to satisfy the queries. Further pre bid meetings were held in the chambers vide orders dated 5.12.2005 and 6.12.2005. The matter was taken in special appeal. By a detailed judgment the Special Appeal Nos. 1465 and 1465 were dismissed by the Division Bench on 16.1.2006. With the consent of all the parties the matter was taken up in chambers for financial bidding in which JAL was declared to be highest bidder with the offer of Rs. 459 crores. M/s Dalmia Cement (Bharat) Ltd. the next highest bidder offered Rs. 376 crores. Lafarge India Private Ltd. made an offer at the reserved price of Rs. 271 crores. Grasim Industries Ltd. did not offer any bid. The highest bid of JAL with a difference of Rs.83 crores was accepted. JAL deposited 25% of the offer on 15.2.2006 and made an offer to deposit the balance in three instalments, the last of which was due on 19th Sep. 2006. The offer was accepted with the condition that the JAL will furnish bank guarantees for the remaining money. The JAL deposited the last and final installment on 11.11.2006 and the sale was confirmed in its favour. 17. In the meantime the Court was engaged almost every week in proceedings for finalisation of provident fund accounts, taking over of the schools and hospitals, giving direction for summoning and preservations of records, preparing maps and identifying the assets spread over 80 kms. area, advertisement and entertaining claims of the workmen and other creditors for which a Liquidation Claims Committee was set up and is functioning to coordinate the settlement of claims with the deposit of last installment. area, advertisement and entertaining claims of the workmen and other creditors for which a Liquidation Claims Committee was set up and is functioning to coordinate the settlement of claims with the deposit of last installment. The accounts of the two EPF Trust Churk and Dalla Trust was audited through Employees Provident Fund Commissioner. 18. In the course of proceedings the Court was informed that some illegal mining is going on in Kajrahat mines and after verifying the fact from the Ex-General Manager of the company, interim orders were passed on 5.7.2006 and 20.9.2006 restraining the illegal mining activities in the area. By the subject application, the SMPL the applicant seeks to recall these orders. 19. With regard to the limestone mines the UPSMDC stated that it received on transfer 1589.28 acres area from U.P. State Industrial Development Corporation (UPSIDC) with the approval of the State Government vide transfer deed dated 20.5.1976. A lease deed was executed for mining for the period remaining with UPSIDC. The lease was renewed for a period of 20 years vide lease deed dated 1.5.1993. The UPSMDC applied for renewal of the tenure which expired in the year 2002 under Rule 24-A of the Mineral Concessions Rules, 1960. The State Government by order dated 25.2.2004 approved the renewal under the terms of agreement of the joint venture agreement between UPSMDC and RPJMPL for a period of 20 years w.e.f. 2.1.2002 with conditions that under the terms of agreement dated 5.6.2002, UPSMDC will transfer the lease deed to RPJMPL. The transfer however will be made only after terms of the agreement have been complied with. It was submitted that the State Government had taken a decision to renew the lease in favour of UPSMDC covering Block V, VI and VII w.e.f. 2.1.2002 and that the joint venture after completing the formalities acquired the right over these areas on the application of RPJMPL. After hearing the Official Liquidator, State Government and JAL the highest bidder, the Court considered the details of the assets in the ‘Memorandum of Information’ (MOI) calling for ‘Expression of Interest’ and the relevant documents from the Directorate of Geology and Mining, Government of U.P. The Mining Officer, Mirzapur informed that Block V, VI and VII were also included in the sale in which the State Government was a party. These findings were based on the facts that the proven reserves of Block I to IV were only 85 million tonnes whereas the total reserves in the four Blocks were stated in MOI to be 140 million tonnes and that even if the proven reserves as set out in MOI were taken into consideration, the reserves in Blocks I to IV could not be 140 million tonnes. The finding recorded by the Court in the matter of RPJMPL in the order dated 20.9.2006 in paragraphs 46 to 57 on the basis of which the application of RPJMPL was rejected are quoted as below : “46. The facts and circumstances set out in detail, establish on record that a promise was held out in MOI calling for expression of interest, and thereafter bids, for sale of all that, which was contained in the document titled as MOI, prepared by the State Government. The State Government, in preparing the document had prepared a basket, for sale of the unit for not only exploiting the mineral resources of the State but also to pay to the workmen, the creditors, their dues and for rapid industrialization of the State, bringing in revenue and other benefits. This basket prepared by the State Cabinet in the year 2001 included the assets other than the assets of the company. The State was party to the sale proceedings all throughout. The Principal Secretary, Industries, representing the State was member of the Asset Sale Committee. The State as such had full knowledge of the proceedings in Court and was consenting party at all stages. The company (In Liq.) was wholly owned and controlled by the State Government. The decision of sale of the assets of the company with reliefs and concessions and other benefits was taken by the State Government. It was clearly held out by the State Government in the advertisement and in the tender document, made part of the application dated 17.5.2001 for permission of sale to Grasim Industries Ltd., that the reliefs and concessions include the renewal of limestone lease in favour of the company and that the properties on offer include the limestone lease at Ningha and Kajrahat having over 100 million tones of limestone deposits adjacent to the factory-site. The MOI issued by the Secretary, Industrial Development, Government of U.P., Room No. 423, Secretariat Annexe Bhavan, Lucknow-226 001 inviting offers for sale of U.P. State Cement Corporation Ltd. (Appendix-6 to the application of the State Government dated 17.5.2001) supported by the affidavit of Shri Hari Krishna, Secretary, Heavy Industries, U.P. Government, Lucknow, gave salient features in USP’s of the offer as follows : “Extract from News Letter of Directorate of Geology and Mining, Volume 13, dated 1st March, 1996 The Kajrahat Limestone belt, south of Son river is traced in hills between Kota and Obra Villages for about 16 kms. The belt is estimated to contain about 140 million tones of cement grade limestone. The reserves in the central part of this belt (Block IV), contain about 70 million tones and are being exploited for the needs of Dalla and Kajrahat Chunar units. The remaining part of the belt can support additional cement plant or expansion of the Kajrahat project." 47. Part IV gives details of lease rights to be transferred to the prospective buyer alongwith renewal permission of Kajrahat Limestone Deposits (240 27: 830 0) to (24° 27 : 83° 9). The location and approach was given as follows : Name of Location and Approach Deposit Kajrahat The extent of Limestone deposits is about 13.5 kms. roughly in Limestone E-W direction from Deothara hill in the East to Obra town ship Deposits in the West and divided into 7 blocks. (24° 27: The infrastructure in terms of rail road link is fairly well developed. 83° 0) to The Chunar-Garawa road railway line passes from the western (24° 27: part of this belt. Chopan, Billi Obra dam, Salai-Banwa railway 83° 9) station are located close to this belt. The Dalla Cement Factory has it’s independent link with Salai-Banwa- Mirzapur highway. The Varanasi-Shakti Nagar highway passes through Dalla village. The eastern, central and western part of this belt can be approached from Tilgurwa Kota road, Dalla Kajrahat road and Dalla Obra road respectively. 48. The dimension of the block and reserves detailed against the location and approach were given as follows : Dimension Reserves (estimated Phy. The Varanasi-Shakti Nagar highway passes through Dalla village. The eastern, central and western part of this belt can be approached from Tilgurwa Kota road, Dalla Kajrahat road and Dalla Obra road respectively. 48. The dimension of the block and reserves detailed against the location and approach were given as follows : Dimension Reserves (estimated Phy. Grade Average Chemical of each in million tones) Character Composition (%) block Proved Probable CaO MgO SiO2 Block I = 7.18 2.60 Cement 45.0 2.56 11.3 (1.72 kms X 0.35 km) Block II = 12.36 -do- 43.5 2.68 11.9 (1.0 km X 0.20 km) Block III = 13.98 -do- 42.9 3.07 13.0 (1.5 kms X 0.20 km) Block IV= 70.00 -do- 43.50 3.00 13.0 (3.5 kms X (approx. 0.35 km) 7.0 mln. Mined) Block V= 12.45 -do- 42.1 3.10 13.5 (1.5 kms X (Not 0.12 km) Mineable) Block VI= 20.00 -do- 42.0 3.20 13.5 (3.5 kms X 0.40 km) Block VII= 30.00 Cement 42.0 3.50 13.5 (1.0 km X & BF 1.0 km) Total 153.52 2.60 49. With regard to Dolomite Deposit of Kajrahat Belt the Bari Dolomite Deposits were identified with coordinates of 24° 28 : 83° 2 with location and approach:- The Bari Dolomite deposits are located in the Chopan Pipari road and are about 5 and 7 kms respectively from the towns with dimension of 1.5 kms X 0.4 km. Proved reserves were 7.2/5.3 million tones. In respect of Bagmaria-Sinduria Dolomite deposits (240 29 : 830 1) to (240 30’30" : 830 0) the location and approach was given:- The Bagmana Deposit is located on Chopan Obra road while other deposits are 1 to 3 kms away from the Chopan Obra road and are approachable through kutcha roads. The Chopan railway station will be 3 to 6 kms. The dimension of this block was given as 5.0 kms X .01 km with 7.5 million tones of proved reseves. The Ningha Limestone/ Dolomite Deposits on the next page were shown to be situated under the coordinate 24° 25’30" : 83° 0’30". “The deposit occurs on a steep hill slope above the ground level and also below the ground level”. The location:- Ningha deposit is connected by a 6 kms long road from Dalla (on the Mirzapur Pipri Highway). These deposit occur 1/2 km from Salaibanwa railway station on the Chunar Garwa road rail link. “The deposit occurs on a steep hill slope above the ground level and also below the ground level”. The location:- Ningha deposit is connected by a 6 kms long road from Dalla (on the Mirzapur Pipri Highway). These deposit occur 1/2 km from Salaibanwa railway station on the Chunar Garwa road rail link. The dimension of the block was given as 0.3 km X 0.15 1/2 km with 7.28 million tones as proved reserves. The Ghurma Limestone deposits are given on page 15 of MOI. 50. The details of properties of the Corporation to be part of the offer given on page 11 of MOI of the State Government are as follows : Name of Unit Location Area (Acres) Usage Dalla Kota Village 417.531 Dalla Billi Markundi Village 5.812 Chunar Village Muao, 106.44 Factory Land Dumduma, Jamuhar, Bakiabad Chunar -do- 120.6 Colony Land Chunar -do- 158.952 Hilly Land 51. The reliefs and concessions and the assets put by the State Government in the basket made the sale a unique proposition. It was an offer by the State Government and not by the Court. Ordinarily the Court can offer for sale only the assets of the company (In Liq.). In this case since some more was added by way of reliefs and concessions, to make the package attractive including the surface rights of the properties, which may not have belonged to the company (In Liq.), with the permission of the State Government and by approval of the State Cabinet. 52. A careful consideration of the geological survey map prepared by J.B. Auden in 1934, a Geologist of the Geological Survey of India, geological survey map of 1963 and maps produced by Shri V. K. Sharma, Geologist in the Directorate of Geology and Mining, Government of U.P. and Shri B.P. Yadav, Mining Officer, Sonbhadra clearly demonstrated that Block Nos. V, VI and VII are beyond the Kazrahat Nalla towards west and upto the Obra residential area. There is a dispute whether these three blocks are situated within the coordinates given in the MOI. These three blocks do not have river Sone immediately towards its north and that in respect of these areas, the company (In Liq.) did not possess lease rights. The mining areas and deposits are based on valuation report, which have given the area of Dala Mines (Kajrahat) as 751 hects. These three blocks do not have river Sone immediately towards its north and that in respect of these areas, the company (In Liq.) did not possess lease rights. The mining areas and deposits are based on valuation report, which have given the area of Dala Mines (Kajrahat) as 751 hects. These deposits deep in mines cannot be calculated with certainty, and have to be considered alongwith the report of the valuation and the mining plans, which were submitted by the company (In Liq.) to the State Government. 53. The cement is mineral based industry. The entire invitation to offer was structured on the deposits. The lease rights in the mining area assigned to the company as well as reliefs and concessions and other areas thrown in the package, made the offer attractive to any experienced player, who were interested in exploiting the mineral resources and add its value to the industrialization of the State. The payment to workmen and dues of the banks and financial institutions, were also an important consideration of the invitation to offer for sale. 54. It is important to bear in mind that when the decision was taken to prepare the basket, the UPSMDC, which is also a corporation wholly owned and controlled by the State Government, was nowhere in the picture. A decision was taken by the State Government on 11.1.2000 to close the operations of UPSMDC as it was suffering severe losses and all its operations were handed over to UPSIDC. The decision was reviewed and that the State Government by an order dated 17.2.2003 decided to allow UPSMDC to continue. The package for sale of assets of the company (In Liq.) was prepared in between this period and it is during this period on 2.1.2002, that the lease of UPSMDC of Kajrahat mines expired. The State Government as such included the remaining part of the. Kajrahat Mines in the package for the intending purchaser of the asset of the company (In Liq.). 55. It is admitted to UPSMDC that mining lease renewed in its favour for the second time had expired. A decision has been taken by the State Government to renew the lease. The State Government as such included the remaining part of the. Kajrahat Mines in the package for the intending purchaser of the asset of the company (In Liq.). 55. It is admitted to UPSMDC that mining lease renewed in its favour for the second time had expired. A decision has been taken by the State Government to renew the lease. This decision, however, taken on 25.2.2004 to renew the lease for 20 years w.e.f. 2.1.2002 is subject to condition that UPSMDC will transfer the lease in accordance with the condition of the agreement dated 5.6.2002 with M/s RPJ Minerals and only after the terms and conditions of the agreement are fulfilled. The renewal as such is conditional. The UPSMDC has not placed on record the agreement with M/s RPJ Minerals and the conditions, which are to be fulfilled before the transfer of the lease. Even after two years and seven months the lease deeds have not been executed. The UPSMDC was only given a conditional right for execution of the lease deeds. It is apparent that the State Government acted illegally in giving the sanction, against its own decision taken by the State Cabinet in the year 2001, to include these mining rights in package of sale of assets to the intending purchaser of the assets of the company (In Liq.). 56. Shri A.K. Verma submits that sub-rule (7) of Rule 24-A of Mineral Concession Rules, I960 has been omitted w.e.f. 17.1.2000 and thus the permission of the Central Government for second renewal is not required. He submits that Government order dated 25.2.2004 amounts to disposal of the application for renewal. His submission overlooks the fact that there is no positive statement of the terms of the agreement and whether the terms and conditions in the agreement between UPSMDC and RPJ Minerals have been fulfilled. Section 4 of the Mines and Minerals (Regulation and Development) Act, 1957 read with Rule 24-A of the Mineral Concession Rules, 1960 prohibit mining operations except by and in accordance with the mining lease granted under the Act. A Government order sanctioning such mining lease with certain conditions, cannot substitute the requirement of Section 4 of the Act. The UPSMDC or RPJ Minerals do not have any existing right or claim over block Nos. V, VI and VII of Kajrahat mines. A Government order sanctioning such mining lease with certain conditions, cannot substitute the requirement of Section 4 of the Act. The UPSMDC or RPJ Minerals do not have any existing right or claim over block Nos. V, VI and VII of Kajrahat mines. Further they have not placed the facts on record with regard to other mines having Dolomite deposits claimed by them. 57. The sale of assets of the company (In Liq.) will determine the fate of the families of 6500 workers, the dues of banks, financial institutions and other creditors. The industrialization of the State generation revenues and the development of the area depends upon the start of manufacturing activity, closed since 1994. The entire area is stagnating, with poverty, depriving people of education, health and decent life. Hundreds of ex-workmen have died waiting for their dues and thousands are suffering." 20. The RPJMPL filed a Special Appeal against the order which was dismissed. The matter is pending in a Special Leave Petition No. 19132 of 2006 in Supreme Court. 21. Coming to the present application filed by SMPL, it is stated that the applicant is a joint venture company with UPSMDC (a wholly owned company of Government of U.P.), duly registered under the Companies Act, 1956 in terms of MOU between Katni Mineral Private Ltd. and associates and UPSMDC. The MOU proposed to set up mining venture for crushing, screening and further value addition facility to prospect the area in respect of inter alia for dolomite mineral in Bari mines (including Bhagmanwa) at district Sonbhadra comprising 1656.32 acres. Subsequent to MOU, the UPSMDC vide its letter dated 6.2.2004 accorded permission to the joint venture to carry out mining activities of Dolomite mines in Bari mines. The Bari Dolomite mines were first leased to UP State Industrial Development Corporation (UPSIDC) by Lease Agreement with Government, U.P. dated 10.5.1967 for 20 years. Subsequently by a Tripartite Transfer Deed dated 6.5.1976 between UPSIDC, the State Government and UPSMDC these mines were transferred to UPSMDC for the remaining term of lease period. The State Government, by order dated 19.2.2004 on a renewal application, ordered its renewal and accorded permission to carry out mining activities in the area, which is not covered by reserve forest and for the remaining area subject to approval of the Forest Department. The State Government, by order dated 19.2.2004 on a renewal application, ordered its renewal and accorded permission to carry out mining activities in the area, which is not covered by reserve forest and for the remaining area subject to approval of the Forest Department. The Government by the said order dated 19.2.2004 also accorded its approval to the MOU for working on Bari Dolomite mines and decided that in the event UPSMDC is wound up, the Bari dolomite mines will be transferred in favour of SMPL. 22. Shri Viplav Sharma appearing for the applicant states that since March 2004, SMPL is lawfully carrying out its mining activities in the Bari Dolomite mines in terms of MOU and the orders of the State Government dated 19.2.2004. SMPL has made substantial effort and made Bari Dolomite mines feasible and viable and has secured high valuable Dolomite supply orders worth several crores from Steel Authority of India Ltd. after furnishing bank guarantees of huge amounts as securities for timely performance of such high valued supply orders. He submits that by an erroneous injunction order dated 20.9.2006, the applicant company No. 1 has been wrongly restrained to carry their legitimate and lawful Dolomite mining activities, due to which SMPL is failing to discharge its contractual obligation and will become liable to damages in addition to forfeiting of its bank guarantees. He submits that even in the case of RPJMPL the Court erroneously granted injunction orders. The Dolomite is not used in manufacture of cement and that there was no complaint of any illegal mining or taking out of rejects. 23. Shri Viplav Sharma submits that Bari Dolomite mines were never subject matter of order dated 5.7.2006 by which injunction was granted. SMPL has exclusively mining rights of Bari Dolomite mines. The Bari Dolomite mines, despite being in close proximity to the cement plant of the company (in liquidation), were never its assets. He submits that these mines could not be part of the sale as they were never assets of the company and that in liquidation proceedings the Company Court has no jurisdiction to sell any property, which is not asset of the company (in liquidation). 24. Shri Sharma further submits that even the Court in its order dated 14.2.2002 in Misc. He submits that these mines could not be part of the sale as they were never assets of the company and that in liquidation proceedings the Company Court has no jurisdiction to sell any property, which is not asset of the company (in liquidation). 24. Shri Sharma further submits that even the Court in its order dated 14.2.2002 in Misc. Company Application No. 4 of 1997 directed that the sale of the mining and the tenancy rights shall be subject to laws applicable to the State Government, U.P. The injunctive directions contained in the order dated 20.9.2006 were exclusively with the applicants in terms of the MOU. They were not part of the alleged reliefs and concessions offered by the State Government and were not notified by the State Government in its public tender notice for taking over the cement plant, which only provided to renew the limestone leases in favour of the company. 25. In substance, the contention of Shri Viplav Sharma is that the Court has travelled beyond its jurisdiction in proposing and selling the assets, which were not assets of the company. The Court was misled by wrong statement given by the ex-employees of the company regarding unlawful mining activities. In any case the complaint did not include Bari Dolomite mines. These mines were subject matter of Joint Venture Agreement for which the State Government by order dated 19.2.2004 has accorded approval to the MOU and for renewal of mines, which were never the assets of the company (in liquidation) and were never advertised for sale either by the State Government or by part of MOI by the Court. The fact, that the representative of the State Government, was member of the Asset Sale Committee will not make any difference as the State Government had no authority to include any mines, which were not assets of the company in the advertisement of sale of the company (in liquidation). There was no such offer by the State Government to sell Bari Dolomite mines as part of the sale of the assets of the company (in liquidation). The injunctive orders are not in accordance with the law and take away valuable constitutional rights of the petitioner under Article 300-A of the Constitution of India. There was no such offer by the State Government to sell Bari Dolomite mines as part of the sale of the assets of the company (in liquidation). The injunctive orders are not in accordance with the law and take away valuable constitutional rights of the petitioner under Article 300-A of the Constitution of India. He further submits that the sale in the present case is under Section 20 (1) of Sick Industrial Companies (Special Provisions) Act, 1985 and as such could not be effected by the Official Liquidator. The State Government, under Article 162 of Constitution of India in exercise of its executive powers, could not grant reliefs and concessions with regard to the assets, property, effects and auctionable claims of sick industrial company (in liquidation) ordered to be wound up under SICA/Companies Act, 1956 to the intending purchaser. 26. The State Government has filed a short counter affidavit of Shri J.P.N. Dwivedi, Under Secretary, Industrial Development Department, Government of U.P. Lucknow stating in paragraph 6 that apart from the order dated 20.9.2006, two Office Memorandums dated 10.10.2006 and 13.10.2006 were issued by the Department of Industrial Development, Government of U.P. and Department of Mines and Minerals, Government of UP in which the stand of the State Government has been made clear. In para-7 of the affidavit, the reference is made to the affidavit of Shri Atul Kumar Gupta, the then Industrial Development Commissioner and Principal Secretary, Department of Industrial Development, Government of U.P. filed in Company Appeal No. 1239 of 2006 given details of the waiver, reliefs and concessions and lease hold rights of the mines to be transferred to the prospective buyers. Para 21 and 26 of this affidavit of Shri Atul Kumar Gupta relevant for the purposes of this application are reproduced as below : “21. That it would be pertinent to reiterate here that the lime stone deposits of Block Nos. V to VII and Bari dolomite deposits were included in Part IV of MOI. Two lime stone leases were sanctioned in favour of UPSMDC within the aforementioned Block V to Vll of Kajrahat lime stone deposits. The renewal of the first lease in Billi, Kajrahat, Bhalua was done in 1982 and renewal was valid upto 8.11.2002. Permission was accorded by G.O. dated 10.4.2002 to transfer this lease in favour of M/s RPJ Minerals and lease was executed on 31.7.2002 between UPSMDC and RPJ Minerals. The renewal of the first lease in Billi, Kajrahat, Bhalua was done in 1982 and renewal was valid upto 8.11.2002. Permission was accorded by G.O. dated 10.4.2002 to transfer this lease in favour of M/s RPJ Minerals and lease was executed on 31.7.2002 between UPSMDC and RPJ Minerals. The second lease was executed on 14.12.2001 in favour of UPSMDC by the State Government for a period of 20 years for villages Julgul, Billi, Chamarkha and Jharia. Permission was accorded vide G.O. dated 10.4.2002 to transfer this lease in favour of M/s. RPJ Minerals, Satna. Besides the lease executed on 6.5.1976 in favour of UPSMDC and valid upto 17.5.1987 was further renewed on 19.2.2004 for a period of 20 years, i.e. upto 16.5.2007. Further no lease deed has been executed since 1987. The Government on 19.2.2004 accorded permission to UPSMDC to transfer the said lease to M/s Katni Minerals Limited, Satna. Besides these, there are no other mining right holders in this properties.” 26. That in view of the aforesaid, it is apparent that so far as the stand of Slate Government, with regard to the Block No. V, VI and VII is concerned, the same is absolutely clear and the decision has been taken by the State Government as mentioned in the office memorandum dated 13.10.2006, to accept the said impugned order dated 20.9.2006, at this stage, to the extent thereby the Hon’ble Company Judge has held the Block Nos. V, VI and VII to be the part of the M.O.I., and for compensating M/s U.P. S.M.D.C. for its losses on account of the same at the appropriate stage.” 27. In paras 8, 9 and 10 of the affidavit of Shri J.P.N. Dwivedi, Under Secretary, Industrial Development Department, Government of U.P. it is stated as follows : “8. V, VI and VII to be the part of the M.O.I., and for compensating M/s U.P. S.M.D.C. for its losses on account of the same at the appropriate stage.” 27. In paras 8, 9 and 10 of the affidavit of Shri J.P.N. Dwivedi, Under Secretary, Industrial Development Department, Government of U.P. it is stated as follows : “8. That it is further relevant to mention here that the aforesaid application is related to Bari Dolomite Mines only and from the submissions made in the said affidavit of the said Sri Atul Kumar Gupta the then Industrial Development Commissioner and Principal Secretary, Department of Industrial Development, Government of U.P., Lucknow as well as from the perusal of the relevant paragraphs of the said affidavit, as quoted hereinbefore, and further from the perusal of the said office memorandums, i.e. office memorandum dated 10.10.2006 of the Department of Industrial Development, Government of U.P. and office memorandum dated 13.10.2006 of the Department of Mines and Minerals, Government of U.P. (annexed as Annexure No. SCA-I to the present short counter-affidavit), through the stand of the concerned respondent with regard to Bari Dolomite Mines is also absolutely clear, however, to make it more specific, it is relevant to point out that area of 1656.32 acres, situated in village Bari was initially granted on mining lease for excavation of dolomite in favour of M/s U.P. State Industrial Development Corporation Limited (hereinafter called as the said UPSMDC), and was subsequently transferred in favour of UPSMDC vide Transfer Indenture dated 6.5.1976. The said original mining lease was valid upto 17.5.1987. The UPSMDC applied for renewal of the said mining lease for a further period of 20 years vide its application dated 7.5.1986 i.e., prior to one year before the date of expiry of lease, as contemplated under the provisions of Rule 24-A of the Mineral Concession Rules, 1960. It is further relevant to mention here that on the said application dated 7.5.1986 submitted by the UPSMDC, the State Government vide Government Order No. 123/77-5-2004-257/91 dated 19.2.2004, renewed the aforesaid mining lease subject to the condition that the lessee, i.e., UPSMDC will conduct the mining operation only to the extent of 300.799 acres out of 1656.32 acres and the remaining area of 1355.521 acres would be used for mining purposes after getting prior approval of the Central Government under the provisions of Forest (Conservation) Act, 1980. It is further pertinent to mention here that vide order dated 19.2.2004, the State Government also accorded approval to the Memorandum of Understanding (hereinafter called as the MOU) executed between UPSMDC and M/s Katni Minerals Private Limited and it has also been provided therein that after winding up of the UPSMDC, the said MOU, which was signed during the period of UPSMDC would be transferred in favour of successor organization/corporation. It has further been provided therein that as per the said MOU, the transfer of the lease rights of Bari Mines would be made in favour of M/s Sonbhadra Minerals Pvt. Limited (applicant herein) incorporated under the Companies Act, 1956, as a joint venture between M/s Katni Minerals Pvt. Ltd. & Associates and UPSMDC. 9. That it is also pertinent to mention here that through the permission for the renewal of the Bari Dolomite Mines by the State Government on 19.2.2004 has already been granted, however, the execution of the relevant ‘instrument’ has not taken place till now. 10. That it is also relevant to mention here that this Hon’ble Court vide order dated 20.9.2006 has already held that the area in question of the aforesaid application i.e. Bari Dolomite Mines is an integral part of the MOI issued by the State Government in the year 2001, and the same became an integral part of the package of sale in the MOI issued in the year 2005 and with regard to which the bid of M/s JAL has been accepted. On the other hand vide MOU dated 10.4.2002, executed between the UPSMDC and M/s Katni Minerals Pvt. Ltd., which was subsequently approved by the State Government vide order dated 19.2.2004, the applicant herein has also been accorded permission to excavate the dolomite minerals in the name and style M/s Sonbhadra Minerals Pvt. Ltd., which is a joint venture of the UPSMDC and M/s Katni Minerals Pvt. Ltd. 28. In the end the State Government has clarified its stand in para 12 of the affidavit of Shri J.P.N. Dwivedi as follows : “12. In the end the State Government has clarified its stand in para 12 of the affidavit of Shri J.P.N. Dwivedi as follows : “12. That in view of the aforesaid, the stand of the state of U.P. with regard to the subject matter of the aforesaid application, i.e., with regard to the Bari Dolomite Mines is also clear and the State Government has decided to accept the order dated 20.9.2006 at this stage to the extent whereby this Hon’ble Court has held the Block V, VI and VII as well as ‘Bari Dolomite Mines’ to be the part of the M.O.I., and thus to be granted to the prospective purchaser i.e. M/s JAL in the present case subject to other conditions mentioned in the said office Memorandum dated 13.10.2006 as well as other Office Memorandums issued from time to time including the condition that Mines & Minerals come within the purview of promises to be granted, on account of inclusion in MOI, to the prospective purchaser would be granted to the prospective purchaser i.e. M/s JAL in the present case subject to statutory requirements and payment of the charges/fees etc., as prescribed under law, as well as the same would be available for setting up the Cement Plant of the same capacity at the concerned places mentioned in the concerned M.O.I., as well as specified by the State Government in different Office Memorandum issued from time to time and further for compensating M/s U.P.S.M.D.C. for its losses on account of the same at the appropriate stage.” 29. The State Government, as such, has clearly stated in its affidavit that Bari Dolomite mines were part of MOI and that the State Government has decided to accept the order dated 20.9.2006 and to grant these leases to the JAL-the purchaser of the assets of the company (In Liq.) subject to other conditions mentioned in Office Memorandum dated 13.10.2006 and subject to statutory requirement for payments of charges/fees as prescribed under law. 30. Shri Sanjai Kumar Om, appearing for UPSMDC, has filed counter affidavit of Shri U.S. Pandey, Chief General Manager (Tech.), U.P. State Mineral Development Corporation Ltd. with its registered office at Pragati Kendra Kapoorthla Commercial Complex, Aliganj, Lucknow stating therein in para 6, 8 and 9 as follows : “6. 30. Shri Sanjai Kumar Om, appearing for UPSMDC, has filed counter affidavit of Shri U.S. Pandey, Chief General Manager (Tech.), U.P. State Mineral Development Corporation Ltd. with its registered office at Pragati Kendra Kapoorthla Commercial Complex, Aliganj, Lucknow stating therein in para 6, 8 and 9 as follows : “6. That in reply to the contents of para No. 7 it is .submitted that UPSMDC had valid lease of 1656.32 acres of dolomite in Bari & Bhagmanwa. As per the submission made by UPSMDC before this Hon’ble Court on 23.8.2006, Bari & Bhagmanwa lease was not part of assets of UPSCCL (in liquidation). The Hon’ble High Court vide its order dated 20.9.2006 rejected the plea of UPSMDC and held this lease also to be an integral part of Memorandum of Information (MoI) prepared for the sale of assets of UPSCCL (in liquidation) which was subsequently accepted by U.P. Govt. vide its office memo dated 13.10.2006 and through an affidavit filed before this Hon’ble Court on 26.10.2006. 8. That in reply to the contents of para No. 9 it is submitted that the Govt. of U.P. accepted the order of Hon’ble High Court dated 20.9.2006 and decided to compensate UPSMDC for the likely losses at an appropriate stage vide office memo dated 13. 10.2006 and accordingly filed an affidavit on 26.10.2006. In this affidavit Government accepted that the said lease alongwith limestone blocks 5, 6 and 7 of Kajrahat belt formed an integral part of the package of sale of assets of UPSCCL (in liquidation). Subsequently, UPSMDC have also accepted the decision of the State Government which was communicated vide office memo dated 13.10.2006. 9. That in reply to the contents of para Nos. 10 and 11 it is submitted that the matter has been clarified in the preceding paras and since the State Government vide G.O. 13.10.2006 has accepted the order of Hon’ble High Court dated 20.9.2006 and have decided to compensate UPSMDC for the likely losses at an appropriate stage which has also been subsequently accepted by the UPSMDC, no further comments are required.” 31. Shri Sanjai Kumar Om appearing for UPSMDC, states that UPSMDC has accepted the decision of the State Government communicated by Office Memorandum dated 13.10.2006 and that since the State Government has accepted the order of the High Court dated 20.9.2006 and has decided to compensate UPSMDC for the likely losses at an appropriate stage, he does not wish to add anything more in the matter. The UPSMDC as original holder of the lease, as a Joint Venture partner of SMPL, has as such clearly accepted the order of State Government, which virtually amounts to revoking the order dated 19.2.2004 by which the State Government has accorded approval to joint venture and had given permission to UPSMDC for mining in Bari Dolomite mines area comprising 300.779 acres out of 1656.32 acres. It is admitted to all the parties that the consequential lease deeds have not been issued and thus the remedies of the SMPL may only extend to seek compensation from the State Government at the appropriate stage. 31. The JAL-the purchaser of the assets of the company (in liquidation) for Rs. 459 crores of which the sale was confirmed on 11.11.2006 represented by Shri Navin Sinha, Senior Advocate has taken a preliminary objection to the maintainability of the application. It is stated in the affidavit of Shri K.M. Abraham, Senior Officer, JAL that in the case of RPJML- a Joint Venture between UPSMDC and M/s Katni Mineral Pvt. Ltd., the present Joint Venture is also the same with a different name. The order dated 19.2.2004 renewed the lease in favour of UPSMDC on the strength of which the SML is carrying out mining activities in Bari Dolomite mines. These mines form part of the lease rights together with renewal permission which were to be transferred to the prospective buyers and were detailed in Part-IV of MOI issued by the Official Liquidator. The Lease Deed of Bari Dolomite mines dated 18.5.1967 for a period of 20 years computed from 18.5.1967 expired in May 1987. By the Deed of Transfer dated 8.5.1976, UPSIDC transferred these rights to UPSMDC for the remaining terms of the lease. UPSIDC did not transfer the rights to UPSMDC beyond May 1987. These transfers did not cast any obligation upon UPSIDC to seek its further renewal nor did it grant a right to UPSMDC to secure renewal of the said lease. By the Deed of Transfer dated 8.5.1976, UPSIDC transferred these rights to UPSMDC for the remaining terms of the lease. UPSIDC did not transfer the rights to UPSMDC beyond May 1987. These transfers did not cast any obligation upon UPSIDC to seek its further renewal nor did it grant a right to UPSMDC to secure renewal of the said lease. After May 1987 no right over the Bari Dolomite mines was inherited or vested in UPSMDC post May 1987 and therefore no right over the said mine can be asserted either by UPSMDC or the applicant on the date when the MOI was executed between UPSMDC and Katni Mineral Pvt. Ltd. on 10.4.2002. No right inhered in UPSMDC over Bari Dolomite mines and the mining operations which continued after May 1987 were in violations of the provisions of the Mines and Minerals (Regulation and Development) Act, 1957 read with Mineral Concessions Rules, 1960. The renewal applications were not accompanied by any mining plan as statutorily required under the provisions of Rule 22 (3) of the Rules of 1960 and in fact no mining plan was approved by the Central Government/Indian Bureau of Mines was ever submitted or accompanied the renewal application submitted by UPSMDC dated 19.2.2004 when the State Government passed the order. The Dolomite mineral forms part of the first Schedule to the Mines and Minerals (Regulations and Development) Act, 1957. Section 8 of the Act, at the relevant time, provides that no mining lease granted in respect of the mineral specified in the First Schedule would be renewed except with the previous approval by the Central Government. This requirement is reiterated in sub-rule (2) of Rule 24-A of the Rules of 1960. Relevant part of Rule 24-A of Rules 1960 is quoted as below : “24A. Renewal of Mining Lease : (4) An application for the renewal of a mining lease shall be disposed of within a period of six months from the date of its receipt. (5) If any application is not disposed of within the period specified in sub-rule (4) it shall be deemed to have been refused. Renewal of Mining Lease : (4) An application for the renewal of a mining lease shall be disposed of within a period of six months from the date of its receipt. (5) If any application is not disposed of within the period specified in sub-rule (4) it shall be deemed to have been refused. (6) If an application for first renewal of a mining lease within the time referred to in sub-rule (1) is not disposed of by the State Government before the date of expiry of the lease, the period of that lease shall be deemed to have been extended by a further period of one year or end with the date of receipt of the orders of the State Government thereon, whichever is shorter.” 32. It is further contended in the affidavit of Shri K.M. Abraham that sub-rule (4) and (5) of Rule 24A of Rules of 1960 were omitted by Mineral Concessions (Amendment) Rules, 1993 published in Gazette of India dated 7.1.1993. Sub-rule (4) provides that application for the renewal is to be disposed of in six months from the date of receipt, and sub rule (5) provides that application, if not disposed of within the period specified in sub-rule (4), would be deemed to have been refused. Sub-rule (6) makes provision that where renewal applications were not disposed of before the expiry of lease, the period of lease would be deemed to have been extended by further period of one year or to end with the date of receipt of orders of the State Government whichever is shorter. A joint reading of these provisions provide that if the renewal application is not disposed of within six months, the maximum available period is for one year and that beyond one year application would be deemed to be refused. The lease dated 7.5.1986 expired in May 1987, on the expiry of one year period, which was the outer limit. Thereafter no mining could be carried out and that the application for renewal of lease will be deemed to be refused. The application made by UPSMDC dated 7.5.1987 shall be deemed to be refused upon expiry of six months from its filing and even otherwise could not survive for consideration after May 1988 on 19.2.2004. The State Government had no jurisdiction to consider or pass orders on the renewal application. The application made by UPSMDC dated 7.5.1987 shall be deemed to be refused upon expiry of six months from its filing and even otherwise could not survive for consideration after May 1988 on 19.2.2004. The State Government had no jurisdiction to consider or pass orders on the renewal application. The order dated 19.2.2004 is thus ultra vires to the provisions of the Act of 1957 as well as Rules of 1960. The necessary permission of the Forest Department has not been obtained and for the remaining area of 300.779 acres, permission of the State Government is without any pre-condition. The Bari Dolomite mine is included under the notification under Section 4 of the Indian Forest Act, 1927 and that no mining activity could be carried out after 12.12.1996 without prior approval of the Central Government vide T.N. Godaverman’s case reported in (1997) 2 SCC 267 . 33. It is further stated by JAL that till date no lease deed renewing the earlier lease has been executed by the State Government in favour of UPSMDC and there is no transfer deed in favour of SMPL. The applicant has no legal or subsisting right at all to mining over the area. The application by SMPL, is not maintainable. It is further stated that now when UPSMDC has accepted the order of the Court dated 20.9.2006, it is not open to the present applicant to claim any right over Bari Dolomite mines. The SMPL claims to be Joint Venture of UPSMDC and Katni Mineral Private Limited. A reading of MOU dated 10.4.2002 shows that the associates companies include Shri Balaji Earth Removers which has a direct interest in RPJ Mineral Pvt. Ltd. If the corporate veil is pierced it would be found that all the associate companies such as Katni Mineral Pvt. Ltd., Shree Balaji Earth Removers and RPJ Mineral Pvt. Ltd. and present applicant are all managed by common persons with some vested interests and that the shareholders would have knowledge of the orders of RPJ Mineral Pvt. Ltd. The applicant waited for considerable time before making the application, virtually accepting the order passed in RPJ Minerals case which has been affirmed in Special Appeal No. 1239 of 2006 subject to modification with regard to factual statement regarding inclusion of blocks V, VI and VII of Kajrahat mines by the State cabinet. 34. 34. Shri Ashok Mehta, appearing for the Official Liquidator, has taken same stand, which was taken by the Official Liquidator in the application of RPJ Mineral’s case. 35. I have heard the arguments of learned Counsels appearing for the parties and carefully considered the documents annexed with affidavits brought on record. The original mining lease deeds of Bari Dolomite mines were executed in favour of UPSIDC on 18.5.1967 for a period of 20 years. The lease would have expired in May 1987. The transfer deed dated 6.5.1976 of UPSIDC in favour of UPSMDC granted lease hold rights w.e.f. 6.5.1976 for the remaining terms of the lease i.e. upto May 1987. The transfer deed did not put any obligation upon UPSIDC to seek further renewal. The Tripartite Transfer Deed dated 6.5.1976 between UPSIDC, State Government and UPSMDC transferred the Bari Dolomite mines to UPSMDC for the remaining terms of the period of lease. There is no averment regarding the date nor there is any document on record to show that UPSIDC or UPSMDC applied for renewal within the prescribed period before the expiry of the leases in May 1987. Further, there is no averment or proof that UPSMDC was carrying out any mining operations after expiry of the lease. In any case any application for renewal, if made before the expiry of lease, would be deemed to be refused, if the lease was not renewed within one year. The lease deed as such expired in May 1988, with no further action of renewal and mining in the area for about seventeen years. 36. The renewal of the mining lease is not an empty formality. After an application for renewal is made, a person applying for renewal has to fulfil the statutory conditions including the submissions of mining plan and requisite permissions after depositing the renewal fees. In the meantime, the State Government decided to close business operations of UPSMDC and that from 1996 and 2002 the UPSMDC was not in business. During this period the Company (in liquidation) was wound up on 9.12.1999. In the meantime, the State Government decided to close business operations of UPSMDC and that from 1996 and 2002 the UPSMDC was not in business. During this period the Company (in liquidation) was wound up on 9.12.1999. In this period State Government included the Bari Dolomite mines in the proposed sale to Grasim Industries Ltd. The MOI prepared by the State Government included Bari Dolomite mines in Part-IV and that the Court adopted the same MOI without any objection or protest for the purposes of sale of assets after rejecting the application of State Government for sale of assets to the Grasim Industries Ltd. The Principal Secretary, Industrial Development was a member of the Asset Sale Committee. The State Government was a party in the proceeding throughout before BIFR and in the Court after the date of winding up, and was closely associated with the sale at all stages as a promoter/shareholder of the company (in liquidation). There was no statutory restrictions on the State Government, nor there was any subsisting right in favour of either UPSIDC or UPSMDC or any joint venture in existence to stop it to offer the lease of Bari Dolomite mines to the purchaser of the company (in liquidation), subject to condition of execution of leases and statutory condition including permission from the Forest Department. The State Government actively represented to the Court to include the Bari Dolomite mines in the offer. It never raised any objection in the proceeding and has even now accepted the order dated 20.9.2006 by which the areas, which were not assets of the company (in liquidation) offered for sale included limestone mines at Kajrahat in Blocks V to VII and Dolomite mines at Bari Baghmanwa in the sale, which has been confirmed in favour of JAL on payment of valuable sale consideration of Rs. 459 crores. 37. Ordinarily the Official Liquidator, under the supervision of the Court, has jurisdiction to sell only the assets of the company (in liquidation), but there is nothing in the Companies Act, 1956, which may prohibit the Company Court to include an asset held by the promoters on their representation which is integral part of the sale or may be necessary to be included to make the sale more attractive if the same is offered by promoters/shareholders to avoid their future and contingent liabilities. In this case the State Government is still a guarantor to the loans given by the Banks and FI’s to the Company (In Liq.) and was interested to secure best available price to discharge its contractual liabilities. In the present case, the sale in question alongwith reliefs and concessions and the assets put by the State Government in the basket was a unique proposition. The inclusion of properties and rights, which were not assets of the company, was an offer made by the State Government and not by the Court. The State Government agreed to add some more assets and offered reliefs and concessions to make the package more attractive. It also included the surface rights of the properties which may not have belonged to the company. The sale was made with active representation and permission of the State Government. The stand taken by the State Government and UPSMDC have made it absolutely clear that they do not recognise the rights of any other person in these areas and have no objection to include these assets in this unique sale, for the purposes of development of the area and for expeditious disposal of the assets of the company (in liquidation) for the benefit of secured creditors including banks and financial institutions and about 6000 workmen starving for last light eight years. If the State Government allows the mining rights to be exploited for the purposes of development of an industry, and for proper and expeditious use of the natural wealth of the state subject to the prevalent laws, the Court would not allow the applicant with no existing and legal rights to inter-meddle in the matter. The applicant has also not given any details of the renewal of the lease, execution of documents of lease, mining plans and the deposits made for the purposes of removing the minerals. It has also not pleaded or brought on record necessary approvals of the mining operations to demonstrate that the applicant was carrying out valid and legal mining activity in the area. 38. The application is consequently rejected. ————