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2012 DIGILAW 11 (KAR)

B. G. Eshwarappa v. State of Karnataka

2012-01-04

B.V.NAGARATHNA, VIKRAMAJIT SEN

body2012
ORDER Vikramajit Sen, CJ (Oral) : In this writ petition, the petitioner has, assailed the order made by the Central Government in exercise of its power under Section 30 of the Mines and Minerals (Development and Regulation) Act, 1957 r/w Rule 54 of the Mineral Concession Rules, 1960, rejecting the petitioner's revision petition filed against the order of the State Government dated 17.8.2005 declining to consider petitioner's prayer for grant of prospective licence filed by application dated 10.1.1990. 2. We have heard learned Counsel for the parties in great detail. 3. The grievance of the Petitioner is that the application for grant of a Prospecting Licence applied by his mother on 10.01.1990 has not been allowed by the Respondents. The factual matrix, succinctly stated, is that a large tract of land measuring several square miles was earlier the subject matter of a Mining Lease pertaining to iron ore in favour of M/s. SMIOR in the Reserved Forest of Dharmapura Village, Sandur Taluk, Bellary District. A fragment of this area, i.e., approximately 200 acres subsequently further reduced to 100 acres is the area which is pertinent to the case before us. Apart from the application for grant of a Prospecting Licence, the Petitioner's mother had also applied for a Mining Lease, along with other persons. The application for grant of a Prospecting Licence has not been considered. 4. An immediate clarificatory narration would be apposite here. The Prospecting Licence had been applied for in 10.1.1990 over an area of 250 acres. On 14.12.1991, a Mining Lease came to be applied for in respect of 100 acres of land and a favourable recommendation was made by the Assistant Conservator of Forests on 16.07.1993. However, since no order had been made with regard to the Prospecting Licence, a Revision was filed before the Central Government which was allowed. In compliance with the remand directions, the State Government passed an order rejecting the application for Prospecting Licence predicated on the position that the said land was part of the larger tract held by M/s. SMIOR under a Mining Lease. The Petitioner unsuccessfully challenged this refusal by way of a Revision to the Central Government. It is in these circumstances that the present Writ Petition has been filed. 5. The Petitioner unsuccessfully challenged this refusal by way of a Revision to the Central Government. It is in these circumstances that the present Writ Petition has been filed. 5. According to the submission of the learned Counsel for the Petitioner, the rejection of the application of the Petitioner is violative of Section 5(2) of the Mines and Minerals (Development and Regulation) Act, 1957, which is reproduced hereunder: "5(2) No mining lease shall be granted by the State Government unless it is satisfied that- (a) there is evidence to show that the area for which the lease is applied for has been prospected earlier or the existence of mineral contents therein has been established otherwise than by means of prospecting such area; and (b) there is mining plan duly approved by the Central Government, or by the State Government, in respect of such category of mines as may be specified by the Central Government, for the development of mineral deposits in the area concerned." It is further argued by learned Counsel for the Petitioner that the respondents have committed an infraction of Rule 12 of the Mineral Concession Rules, 1960, which is also extracted for facility of reference: "12. Refusal of application for a prospecting licence.(1) The State Government may, after giving an opportunity of being heard and for reasons to be recorded in writing and communicated to the applicant, refuse to grant or renew a prospecting licence over the whole or part of the area applied for. (1A) An application for the grant or renewal of a prospecting licence made under Rule 9 shall not be refused by the State Government only on the ground that Form B or Form E, as the case may be, is not complete in all material particulars, or is not accompanied, by the documents referred to in clauses (d), (e), m and (g) of sub-rule (2) of the said rule. (1B) Where it appears that the application is not complete in all material particulars or Is not accompanied by the required documents, the State Government shall, by notice, require the applicant to supply the omission or, as the case may be, furnish the documents without delay and in any case not later than thirty days from the date of receipt of the said notice by the applicant. (2) An application for the grant of a prospecting licence shall not be refused on the ground only that, in the opinion of the State Government, a mining lease should be granted for the area for which the application for a prospecting licence has been made: Provided that where applications for the grant of prospecting licence and applications for the grant of mining lease in respect of the same area are received on the same date or on different dates within a period of thirty days, the applications for the grant of mining lease shall, if the area was previously held and worked under a mining lease, be disposed of before the application for the grant of prospecting licence are considered: Provided further that the applications prospecting licence shall be liable to 1 have not been already disposed of." 6. Learned Counsel for the Petitioner argument is that since the earlier Mining Lease covered several squaremils, there cannot possibly be a reasonable presumption that every acre whit in it had been mined, or prospecting activity had been carried out. We unable to be persuaded by this argument for the reason that it may be impeated even for a much smaller tract of land, such as the 100 acres for which application both for Prospecting Licence and Mining Lease has been referred. We are of the view that once a Mining Lease or a Prospecting Li nee has been granted, a presumption must emerge that every inch of it has been prospected or could have been mined, as the case may be. Obviously. in the latter case, the presumption is rebuttable. This is in fact what Section 5(2) ordains when it speaks of an earlier Prospecting Licence. It do not state that every inch of the land has to have actually been prospected. Where a Mining Lease has been granted, the presumption of the area being productive of minerals would also be fairly drawn. This is also evident in the case before us, inasmuch as the Petitioner has applied for a Mining Lease along with the Prospecting Licence. 7. Chapter-III of the Mineral Concession Rules, 1960, deals with grant of prospecting licence in respect of land in which the minerals vest in the Government. Rule 9 pertains to application of prospecting licence and its renewal. 7. Chapter-III of the Mineral Concession Rules, 1960, deals with grant of prospecting licence in respect of land in which the minerals vest in the Government. Rule 9 pertains to application of prospecting licence and its renewal. Rule 11 deals with disposal of application for the grant of renewal of prospecting licence, while Rule 12, which is under consideration concerns refusal of an application for a prospecting licence. 8. Sub-rule (1) of Rule 12 states that the State Government after giving an opportunity of being heard and for reasons to be recorded in writing communicate to the applicant, refusal to grant of renewal of a prospecting licence over the whole or part of the area applied for. 9. Sub-rule (2) states that an application for grant of prospecting licence shall not be refused on the ground only that, in the opinion of the State Government a mining lease should be granted for the area for which the application for a prospecting licence have been made. The first proviso to sub-rule (2) states that where applications for the grant of prospecting licence and applications for the grant of mining lease in respect of the same area are received on the same date or on different dates within a period of 30 days, the applications for grant of mining lease, shall, if the area was previously held and worked under a mining lease, be disposed of before the application for the grant of prospecting licence are considered. The second proviso states that the applications received for grant of licence shall be considered only if they have not been already disposed of. 10. It is needless to observe that the first proviso is to remove or set apart those cases where applications for the grant of prospecting licence and applications for the grant of mining lease in respect of the same area are received on the same date or on different dates, within a period of 30 days. It is only in those circumstances that the applications for the grant of mining lease if the area was previously held and worked under a mining lease has to be disposed of before the applications for grant of prospecting licence are considered. It is only in those circumstances that the applications for the grant of mining lease if the area was previously held and worked under a mining lease has to be disposed of before the applications for grant of prospecting licence are considered. If the circumstances as envisaged in the first proviso does not apply, then in that case, the applications for grant of prospecting licence has to be considered in the light of sub-rules (1) and (2) of Rule 12. 11. The Rules prescribe that it would not be open to the State Government to insist that a Mining Lease must straightaway be applied for. Ordinarily, a Prospecting Licence would be the first step in exploiting the land in the expectation that it would yield major minerals. The first proviso clarifies that where applications for grant of a Prospecting Licence and for the grant of a Mining Lease are almost simultaneously (within a period of thirty days) preferred, the Mining Lease shall first be considered. This fits into the scheme of things, which we have already delineated, i.e., that where an area has been given out on a Mining Lease, there will be a presumption that it need not be prospected upon any further. This is obviously because some person is already reasonably informed or certain that minerals can be mined in the said area and therefore prospecting is not essential. A similar presumption is also available in Section 5(2)(a), i.e., that a prospecting activity would be otiose, where Mining Leases have already been granted. On pragmatic terms, we see no justification in diminishing or restricting the revenues collectable by the State Government, in those instances there are parties willing to take on Mining Leases directly. There Would be unjustified loss to the exchequer in making a pedantic interpretation by insisting that a Prospecting Licence must be issued in the first instance, in all cases. The second proviso to Rule 12(2) further clarifies or restricts the ambit of consideration of a Prospecting Licence, inasmuch as it postulates that if a Prospecting Licence has previously been disposed of, it shall not be considered again. This rationale would apply, a fortiori, where a Mining Lease has previously been granted in respect of the same land or even a smaller segment thereof. 12. This rationale would apply, a fortiori, where a Mining Lease has previously been granted in respect of the same land or even a smaller segment thereof. 12. Returning to the facts of the case, it has been spelt out in the Objections filed on behalf of the State Government that the Petitioner's plea for grant of a Prospecting Licence had previously been rejected by the State Government. In respect of this rejection, a Revision had been filed before the Central Government. According to the learned Counsel for the Petitioner, the Revision was mechanically disposed of, which left the Petitioner with no alternative, but to file the present action. We need not go into this controversy as to whether this is the first Prospecting Licence or the second, for the reason that this is not the ground pressed by the Respondents for rejection of the Licence. We reiterate that where any party has applied for a Mining Lease, an application for a Prospecting Licence would become superficial and otiose. As a logical corollary, if lands have previously been subject matter of a Mining Lease, there can be no insistence that a Prospecting Licence must once again be granted. If the previous Lessee had not succeeded in locating and exploiting minerals, there would be no takers for a Mining Lease and eventually the State Government would become prudent to allow a Prospecting Licence once again. In our opinion, we cannot compel the State Government to accede to such a reality. The statute permits some preference in the matter of the grant of a Mining Lease to the person who had held a Prospecting Licence. But nothing more. There is no merit in the Writ Petition. Dismissed.