Research › Search › Judgment

Orissa High Court · body

2010 DIGILAW 139 (ORI)

Kalyan Sahu v. State of Orissa

2010-03-04

I.M.QUDDUSI, SANJU PANDA

body2010
JUDGMENT S. PANDA, J. : In this writ petition, the petitioner has challenged Rule 3 of the Orissa Minerals (Prevention of Theft, Smuggling & Illegal Mining and Regulation of Possession, Storage, Trading and Transportation) Rules, 2007 (in short, “2007 rules”) as ultra vires of the Constitution of India and 2007 Rules de hors Section 23C of the Mines and Minerals (Development and Regulation) Act, 1957 (in short, “the Act”). 2. The facts, as narrated in the writ petition, are as follows: The coal licence was granted in favour of the petitioner in the year 1995 and the same was being renewed from time to time. In the renewal licence, one of the conditions was that the peti¬tioner would fulfill the requirement of coal by the local public/retailer on priority basis. The said licence of the peti¬tioner was renewed on 1.2.2007. While the matter stood thus, the petitioner applied for renewal of licence before completion of the licence period. Accordingly, his licence was renewed on 4.9.2007 for a period of two years from 5.9.2007 to 4.9.2009. The said licence was granted to the petitioner only for Selling/Trad¬ing of coal. Being aggrieved by the said licence, the petitioner filed an appeal before the Director of Mines, Orissa, Bhubanes¬war, opposite party no.2, to reconsider the matter and grant him necessary licence for storing the coal also. Opposite party no.2 in his order dated 22.12.2007 came to the conclusion that the appellant had to deposit non-refundable fees of rupees five thousand along with appeal memorandum. Since the said fees were not deposited by the appellant, opposite party no.2 rejected the said appeal filed by the petitioner. 3. Learned counsel appearing for the petitioner submitted that earlier the petitioner was granted licence for storing/selling/trading coal. The licencing authorities on 14.12.2000 decided to renew only 10 numbers of licences for operating coal depots each within 40 Kms. of Talcher coalfields and IB valley coalfields till opening of adequate numbers of Open Sale Coal depots by M/s. M.C. Ltd. and to ensure that, all such coal depots were checked by the competent authority at least once in a fortnight in order to prevent illegal storing and trading of coal. The petitioner’s depot was one of such depots whose licence was renewed from 2000 till 2007. He continued to store the coal within 40 kms. radius of Talcher coalfields. The petitioner’s depot was one of such depots whose licence was renewed from 2000 till 2007. He continued to store the coal within 40 kms. radius of Talcher coalfields. The learned counsel for the petitioner also submitted that the restriction imposed under Rule 3 of the 2007 Rules not only restricts the trade and business in not granting licence for storage of minerals for trading within a radius of 40 km. from the source of minerals but also debars the local people from getting coal for their require¬ment. The restriction of 40 kms radius has no rational nexus with the objective which is sought to be achieved by the said Rules. He further submitted that though the authorities had denied the petitioner to grant licence to store coal within 40 kms. radius of the coal bearing area, they had renewed the licence of two li¬cence holders, namely, M/s. Aryan Energy Pvt. Ltd. and M/s. Global Coal and Mining Pvt.Ltd., for storing, procuring, process¬ing and trading of coal within 40 kms. radius. He submitted that Rule 22 of the 2007 Rules is the savings clause where it has been provided that notwithstanding anything to the contrary contained in these rules, things done, action taken, or orders passed under the Orissa Minerals (Prevention of Theft, Smuggling & Other Unlawful Activities) Rules, 1990 shall be deemed to have been done, taken or passed under these rules. Since the petitioner’s licence was being renewed from 1995 till date and the petitioner was earlier granted licence for storing of coal within 40 kms. of the mineral sources, the action of the authorities by not grant¬ing him licence to store coal within 40 kms. radius of the miner¬al sources is illegal and arbitrary. The 2007 Rules is violative of Article 19 (i)(g) and Article 14 of the Constitution of India. 4. Opposite parties 1 to 3 have filed a counter stating therein that Section 23C of the Act empowers the State Government to make Rules. As such, the 2007 Rules were framed. Though the licence was granted to the petitioner earlier for storing, sell¬ing and trading within 40 kms. radius source of minerals, the same was restricted in terms of the proviso to Rule 3 of the 2007 Rules and after the Rules came into force, no storage licence has been granted to any trader whose place of trading is within 40 kms. radius source of minerals, the same was restricted in terms of the proviso to Rule 3 of the 2007 Rules and after the Rules came into force, no storage licence has been granted to any trader whose place of trading is within 40 kms. radius of the sources of mineral. Therefore, the restriction is not ultra vires of the Constitution. The 2007 Rules came into force with effect from 16.7.2007 superseding all the previous Rules in this regard. Therefore, the restriction was imposed after the 2007 Rules came into force. The allegations of diffi¬culties of the local people are not acceptable since the local people have not complained any difficulty either before the authorities concerned or before the court for redressal of their grievance, if any. Two storage licences for coal have been grant¬ed, i.e. one at Pallahara and the other at Bansapani, which are beyond 40 kms. radius of the sources of coal. The depots operat¬ing within 40 kms of the sources of mineral (coal) were frequent¬ly seen to be indulging in illegal procurement of coal. Hence, the provision in the statue has been made in order to discourage such illegal procurement. Accordingly, the provisions have been introduced under the 2007 Rules for the said purpose. Two licence holders i.e. M/s. Aryan Energy (P) Ltd. and M/s. Global Coal and Mining (P) Ltd. are not in fact traders of coal but are two coal washeries (Coal Plants) for beneficiation (Upgradation) of coal procured by M/s. KPCL and M/s. EPIGEN Co. respectively. They are value adders of the mineral. Therefore, the petitioner does not stand on the same footing as the aforesaid two licence holders. 5. On the above submissions of the parties,it is to be examined whether the State is competent to make rules and whether the 2007 Rules violate any of the provisions contained in Chap¬ter-III of the Constitution of India and declare the same as ultra vires. 6. For better appreciation, Rule 3 of the 2007 Rules is quoted below: “3. 5. On the above submissions of the parties,it is to be examined whether the State is competent to make rules and whether the 2007 Rules violate any of the provisions contained in Chap¬ter-III of the Constitution of India and declare the same as ultra vires. 6. For better appreciation, Rule 3 of the 2007 Rules is quoted below: “3. Restriction : No person shall carry on the business of buying, possessing, storing, selling, supplying, transporting, distributing or delivering for sale or processing of minerals at any place for the purpose of sale or consumption or otherwise deal with any mineral except under and in accordance with the terms and conditions of a trading licence granted under these rules: Provided that a holder of a reconnaissance permit, prospecting licence or mining lease in respect of the minerals for which he holds a mineral concession shall not be required to obtain a licence for possessing, storing, selling, supplying, transporting, distributing or processing of such mineral(s) within the leasehold area and transportation from the leasehold area as the case may be: Provided further that any person purchasing and transporting mineral(s) for use or consumption shall be required to obtain a licence or a permit as the case may be: Provided also that no licence shall be required for trans¬portation, storing and processing of minerals for scientific test or research work: Provided also no licence shall be granted to any person unless a person is an Indian national or a Company as defined in the Companies Act, 1956; not a defaulter in payment of mining dues payable under the Act and the rules made thereunder and has not been convicted by a Court in any case relating to any viola¬tion under these rules: Provided also that in order to discourage procurement of illegally extracted mineral(s) no licence for storage (depot) of mineral for trading shall be granted within a radius of 40 Km. of the source of such mineral: Provided also that, no licence shall be granted to a person whose licence has been cancelled for violation of terms and conditions of a previous licence issued under these rules.” 7. Section 23C of the Act confers power on the State to make rules within the permissible limit prescribed therein. of the source of such mineral: Provided also that, no licence shall be granted to a person whose licence has been cancelled for violation of terms and conditions of a previous licence issued under these rules.” 7. Section 23C of the Act confers power on the State to make rules within the permissible limit prescribed therein. The State has the legislative competence to frame rules.Since the rules conceived the legislative competency, the same must be legally valid unless it violates any of the fundamental rights provided under Part III of he Constitution of India and also Part IV and Part IV(A) thereof also. The State is entitled to change its policy to control theft and smuggling of minerals even though those policies did not exist earlier. To regulate the possession, storage, trading and transportation of the minerals, the State is entitled to make the rules to prevent its theft, smuggling and illegal mining at the source of minerals. The Legislature with their wisdom framed the rules to achieve the goal. The said rules have been made taking into consideration the ground realities and changing conditions both near the mine and at its outskirt. A balance approached is prescribed under the rules with a view to preventing the theft of the minerals as well as regulating its possession, storage and trading. The decision has been taken by the Legislature consciously. Therefore, it cannot be said that the right to trade is defeated by introduction of rules as a policy decision of the State. The Legislature in view of the necessity to prevent the theft, smuggling and illegal mining of the minerals promulgated the rules putting restrictions that the minerals shall not be stored and licence shall not be granted to trade the said minerals within 40 kms. radius from the source of minerals which is reasonable and at the same time there was no restriction to store and do free trading of the said minerals beyond 40 kms radius from the source of minerals. Restrictions have been imposed under Rule 3 of the 2007 Rules not to store coal within 40 kms. radius of the source of minerals for trading purposes in order to discourage procurement of illegal extracted minerals and its theft. Restrictions have been imposed under Rule 3 of the 2007 Rules not to store coal within 40 kms. radius of the source of minerals for trading purposes in order to discourage procurement of illegal extracted minerals and its theft. Therefore, the restrictions imposed under the rules cannot be said that the same violate the fundamental rights of the people to do trade and business freely as ensured in Part III of the Constitution of India and thus the same is not ultra vires in terms of Article 19(i)(g) of the Constitution of India as provided under the said Article and the Court need not interfere with in such matters. The superior courts in exercise of their power of judicial review of legislation would not ordi¬narily determine the merit of the legislation by entering into a broad question as to whether materials placed before the Legisla¬ture were sufficient for bringing out legislation in question or not. Such inquisitonal inquiry on the part of the Court is beyond the province of Court, (See (2000)10 SCC 664 (Narmada Bachao Andolan v. Union of India and others). 8. So far as the second contention of the petitioner is concerned, earlier licence was granted in the year 1995 to the petitioner along with nine other persons within 40 km. of the mineral source. According to the petitioner, he has been discrim¬inated as he has not been granted the said licence while the said licence has been granted to M/s. Aryan Energy (P) Ltd. and M/s. Global Coal and Mining Pvt. Ltd. for storing, procuring, process¬ing and trading of coal within 40 kms. radius from the source of minerals. 9. The apex Court in the case of Chandigarh Administration v. Jagjit Singh reported in (1995)1 SCC 745 has held that “if the order in favour of the other person is found to be contrary to law or not warranted in the facts and circumstances of his case, it is obvious that such illegal or unwarranted order cannot be made the basis of issuing a writ compelling the respondent au¬thority to repeal the illegality or to pass another unwarranted order. The extraordinary and discretionary power of the High Court under Article 226 cannot be exercised for such a purpose.” 10. It is true that Article 14 of the Constitution of India provides a guarantee against arbitrariness. The extraordinary and discretionary power of the High Court under Article 226 cannot be exercised for such a purpose.” 10. It is true that Article 14 of the Constitution of India provides a guarantee against arbitrariness. However, the same does not assume uniformity in erroneous action or decision. The guarantee of equality being a positive concept, cannot be en¬forced in a negative manner. Alternatively it can be said that if an illegality or irregularity has been committed in favour of an individual or even a group of individuals, the same irregularity or illegality cannot be repeated by invoking the jurisdiction of writ courts for enforcement of Article 14 of the Constitution of India on the reasoning that the similar benefit has been given to others.Any direction for enforcement of such claim shall tanta¬mount to perpetuating an illegality which is not permissible under law. A claim based on equality clause has to be just and legal. A judicial forum cannot be used to perpetuate the illegal¬ities. It would,thus,suffice to say that an order made in favour of a person in violation of the prescribed procedure cannot form a legal premise for any other person to claim parity with the said illegal or irregular order. 11. Therefore, having been made aware of the fact that the restriction has been imposed under the statutory rules, the petitioner cannot raise the question of discrimination particu¬larly when the action of the authority is in utter disregard of the statutory rules. Since both the contentions of the petitioner fail, we dis¬miss the writ petition without cost. I.M. QUDDUSI, ACJ. I agree. Petition dismissed.