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2013 DIGILAW 23 (AP)

Mahalakshmi Mines and Minerals v. Union of India

2013-01-21

L.NARASIMHA REDDY

body2013
Judgment : The petitioner is a Firm, undertaking the activity of mining. It submitted an application, on 25.10.2008, before the Assistant Director of Mines and Geology, Vizianagaram, the 4th respondent herein, with a request to grant mining lease over an extent of Acs.11.92 cents of land n survey Nos.338/1 to 7 and 339/1 to 18 of B.P.Varakatta Village, Cheepurupalli Mandal, Vizianagaram District. Since Manganese happens to be major mineral, the competent authority to grant lease is the State Government, the 2nd respondent herein. The Mines and Minerals (Development and Regulation) Act, 1957 (for short 'the Act') and the Rules made thereunder mandate that, before the State Government grants mining lease, it should obtain the approval of the Central Government, the 1st respondent. The application submitted by the petitioner was processed by various authorities. Ultimately, the 2nd respondent, submitted proposals to the 1st respondent recommending grant of mining lease for a period of 20 years in favour of the petitioner. The 1st respondent passed order, dated 01.09.2010, returning the proposal in respect of the land applied by the petitioner and certain other proposals, on the ground that the application for grant of mining lease was filed straight away, without there being an application for prospective licence and that the provisions of Section 5(2)(a) of the Act are not complied with. The 2nd respondent re-submitted the proposals, on 26.10.2010 mentioning that the area applied for by the petitioner, at one stage, was reserved in favour of the State Government undertaking and such reservation was affected only on being satisfied that there exists adequate deposits of the mineral. It is also mentioned that in the immediate neighbourhood of the said land, the mining activity for Manganese is going on. However, the 1st respondent passed an order, dated 12.08.2011, returning the proposal. Acting on the same, the 2nd respondent issued a show cause notice to the petitioner on 31.12.2011, requiring it to show as to why the application be not rejected. The petitioner submitted representation on 23.01.2012. Taking the same into account, the 2nd respondent passed an order dated 28.02.2012 rejecting the application of the petitioner. Hence, this writ petition. Acting on the same, the 2nd respondent issued a show cause notice to the petitioner on 31.12.2011, requiring it to show as to why the application be not rejected. The petitioner submitted representation on 23.01.2012. Taking the same into account, the 2nd respondent passed an order dated 28.02.2012 rejecting the application of the petitioner. Hence, this writ petition. The petitioner contends that when the State Government has clearly stated that not only adequate proof as to existence of mineral is available, but also the area was reserved in favour of the State Government undertaking, there was no basis for the 1st respondent in insisting on obtaining prospecting licence. It is further pleaded that the 1st respondent returned proposals in a mechanical manner and the 2nd respondent has passed the orders almost reeling under obligation to do so. The 1st respondent filed a counter-affidavit. It is stated that the exploitation of major mineral can take place, only after obtaining prospecting licence and undertaking necessary exercise to explore the mineral, and in the instant case, the petitioner has filed the application straight away for grant of mining lease. They submit that the plea raised by the petitioner, as regards existence of mineral, or for that matter the recommendation of the State Government, do not fit into Section 5(2) of the Act. No counter-affidavit is filed by the 2nd respondent. Heard Sri S.R. Ashok, learned Senior Counsel appearing for the petitioner, Smt.S.Nanda, learned Additional Standing Counsel for the Central Government, for the 1st respondent, and learned Government Pleader for Mines and Geology, for respondents 2 to 4. In the normal course, two stages are involved in the grant of lease for major minerals. As a first step, an application for prospecting licence has to be made. On being granted the prospecting licence, the licencee shall be entitled to undertake, the preparatory or investigating exercise either to know whether there exist minerals or to estimate the quantities etc. After the expiry of the period of prospecting licence and depending on the developments therein, an application for grant of mining lease is required to be made. It is only on being granted mining lease, that an agency becomes entitled to carry on the mining operations. Section 5(2) of the Act, carves out an exception to the process indicated above. After the expiry of the period of prospecting licence and depending on the developments therein, an application for grant of mining lease is required to be made. It is only on being granted mining lease, that an agency becomes entitled to carry on the mining operations. Section 5(2) of the Act, carves out an exception to the process indicated above. If adequate proof exists, as to the availability of the mineral, in a specified area, or if the area has already been exploited, there would not be any necessity for an individual to make an application for prospecting licence. An application for grant of mining lease can straight away be submitted. In the instant case, the petitioner was prompted, on account of two reasons, to submit the application for grant of mining lease, straight away. The first is that the area has been reserved in favour of the Mineral Development Corporation, and thereafter, it has been de-reserved. It is a matter of common knowledge that it is only when the State Government is satisfied about the existence of mineral, that it would take steps to get the area reserved in favour of State owned Corporation. Even for the reservation of the area in favour of a State unit, the consent of the Central Government is necessary under Section 17-A of the Act. The second reason is that the in the immediate neighbourhood of the area applied for by the petitioner, the mining to quarry manganese is going on. The State Government is the authority conferred with the power to grant mining lease. The Central Government is conferred with the power to give clearance, before mining lease is granted. Basically, it is for the State Government to satisfy itself as to whether a case is made out for invoking Section 5(2)(a) of the Act. In the instant case, the 2nd respondent was very much satisfied that there is no necessity to apply for prospecting licence. The 1st respondent initially considered 22 recommendations made by the 2nd respondent and returned all of them through proceedings, dated 01.09.2010, by observing that the prospecting licence was not obtained. The State Government examined the matter, in detail, and submitted a report in respect of the application made by the petitioner. Various facts, such as the area having been reserved earlier and the activity of mining going on in the immediate neighbourhood, were mentioned. The State Government examined the matter, in detail, and submitted a report in respect of the application made by the petitioner. Various facts, such as the area having been reserved earlier and the activity of mining going on in the immediate neighbourhood, were mentioned. However, once again the proposals were returned in a mechanical manner by the 1st respondent, through proceedings, dated 12.08.2011. This Court is of the view that action taken by the 1st respondent, on both the occasions, in returning the proposal was totally unjustified. The mere fact that the area was reserved in favour of a State Government undertaking, that too, on being permitted by the Central Government was sufficient to extend the benefit under Section 5(2)(a) of the Act to the petitioner. The show cause notice issued by the 2nd respondent to the petitioner proposing to reject the application was almost under compulsion. The 2nd respondent attempted twice to convince the 1st respondent that there exists justification for grant of mining lease. It is only when both the efforts were thwarted by a simple observation, referable to Section 5(2)(a) of the Act, that the 2nd respondent has chosen to issue a show cause notice and to pass the order dated 28.02.2012 rejecting the application. Once this Court has taken the view that the return of the proposals by the 1st respondent was unjustified, the order, dated 28.02.2012, passed by the 2nd respondent deserves to be set aside. Hence, the writ petition is allowed and proceedings dated 01.09.2010 and 12.08.2011 passed by the 1st respondent returning the proposals submitted by the 2nd respondent on the application of the petitioner are set aside. As a consequence, the order, dated 28.02.2012, passed by the 2nd respondent is set aside. The 1st respondent is directed to consider the proposal submitted by the 2nd respondent on the application submitted by the petitioner, afresh, by treating that a case is made out, for extending the benefit under Section 5(2)(a) of the Act to the petitioner. This exercise shall be completed within a period of two months from the date of receipt of a copy of this order. There shall be no order as to costs. The miscellaneous petition filed in this writ petition shall also stand disposed of.