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Jharkhand High Court · body

2015 DIGILAW 1377 (JHR)

ACC Ltd. v. State of Jharkhand

2015-10-31

SHREE CHANDRASHEKHAR

body2015
ORDER : Seeking quashing of demand contained in letter dated 02.01.2015 issued by the District Mining Officer, Chaibasa for a sum of Rs. 2,15,28,53,376/- for the price of minerals dispatched between 30.09.2005 to 15.09.2014 from the Limestone mines covering an area of 157.82 acres (63.87 hectares) in Village-Kondwa, District-West Singhbhum, and seeking quashing of demand of Rs. 6,66,31,66,663/- for the price of minerals dispatched between the period January, 1991 to September, 2014 from the Limestone mines, covering an area of 598.88 hectares located in Mouza-Rajanka, Village-Kondwa, District-West Singhbhum, the present writ petition has been filed. 2. The petitioner, a Company registered under the Companies Act, 1956 claims that it was granted mining lease for 598.88 hectares at Village-Kondwa, Mouza-Rajanka on 04.06.1943, initially for a period of 30 years. Subsequently, the lease period was reduced by 2 years, 5 months and 3 days and it ended on 31.12.1970. The period of second lease ended on 31.12.1990 and the period of third lease would be between 01.01.1991 to 31.12.2010. The petitioner was also granted a mining lease for 63.87 hectares of Limestone mines at Village-Kondwa and lease-deed was executed on 13.09.1965 for a period of 20 years. The petitioner submitted its application for second renewal on 10.09.1989 and for third renewal of the 1st mining lease on 12.09.2009, which was initially granted on 04.06.1943 for an area of 598.88 hectares at Village-Kondwa. The petitioner also submitted an application for 2nd renewal for the lease pertaining to 63.87 hectares on 06.09.2004 still, the applications were not processed and renewal for the said two leases granted to the petitioner was not ordered by the State Government. And, in the meantime, vide order dated 06.09.2014 the petitioner was directed to stop mining in the aforesaid two mines. For the 1st mining lease (598.88 hectare) the Government of Jharkhand issued letter dated 15.12.2014 granting 2nd renewal for a period of 20 years starting from 01.01.1991 subject to payment of Rs. 80.02 crores and fulfillment of other conditions. A demand for payment of Rs. 2,15,28,53,376/- for the price of mineral mined between 30.09.2005 and 15.09.2014 for the 2nd lease (63.87 hectare), was raised on 02.01.2015. The demand for the 1st lease was revised vide letter dated 21.03.2015 and the petitioner was directed to pay Rs. 6,66,31,66,663/-. 80.02 crores and fulfillment of other conditions. A demand for payment of Rs. 2,15,28,53,376/- for the price of mineral mined between 30.09.2005 and 15.09.2014 for the 2nd lease (63.87 hectare), was raised on 02.01.2015. The demand for the 1st lease was revised vide letter dated 21.03.2015 and the petitioner was directed to pay Rs. 6,66,31,66,663/-. The petitioner vide letter dated 14.09.2015 objected to the aforesaid demands and sought renewal of the mining leases for the period ending on 31.03.2030. The petitioner, in the meantime, continued mining operation in the Limestone mines of 598.88 hectare however, no order for subsequent renewal of the mining lease was issued for the 2nd lease covering 63.87 hectare at Village-Kondwa. The further grievance of the petitioner is to unilateral revision of demand issued vide letters dated 21.03.2015 and 05.10.2015 and the basis for calculation of the price of minerals, that is, retail price of two retailers. Aggrieved, the petitioner has filed the present writ petition. 3. Mr. Gopal Subramaniam, the learned Senior Counsel for the petitioner submits that in view of Section 8A(5) of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, the mining leases shall be deemed to have been granted and extended for the period ending 31.03.2030. The petitioner is not a new applicant rather, mining lease for 598.88 hectares at Village-Kondwa was granted as far back as on 04.06.1943. It is further submitted that the demand raised by the State Government vide letters dated 02.01.2015 and 05.10.2015 are patently erroneous. For calculating the amount for the minerals dispatched by the petitioner-Company, average sale price of two traders namely, Banwari Lal Nevatia and Maruti Maruti Mineral Industries has been taken into account whereas, the State Government should have calculated the amount as per Pit Mouth Value. 4. Mr. Ajit Kumar Sinha, the learned Senior Counsel for the respondent-State of Jharkhand submits that grant of renewal in terms of Section 8A(5) is subject to terms and conditions of the lease and one of the conditions imposed by the State Government is payment for the minerals dispatched which the petitioner must pay. 4. Mr. Ajit Kumar Sinha, the learned Senior Counsel for the respondent-State of Jharkhand submits that grant of renewal in terms of Section 8A(5) is subject to terms and conditions of the lease and one of the conditions imposed by the State Government is payment for the minerals dispatched which the petitioner must pay. It is submitted that the said intention of the legislature is further reflected in Section 10A(2)(c) of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 in as much as, it is specifically provided that grant of mining lease shall be subject to fulfillment of conditions of the “previous approval” or of “letter of intent” within a period of two years from the date of commencement of the said Act. The learned Senior Counsel for the respondent-State of Jharkhand contends that the petitioner is, in fact, liable to make payment from 01.01.1991 for the 1st lease. 5. In reply, the learned Senior Counsel for the petitioner asserts that the conditions under Section 10A(2)(c) of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 would be attracted in cases where the application for grant of mining lease has been made for the first time and it is not attracted in the case of the petitioner. Referring to the decision of Hon'ble Supreme Court in “Common Cause Vs. Union of India & Ors.” Writ Petition (Civil) No. 114 of 2014, the learned Senior Counsel submits that immediately upon formation of an opinion by the State Government for grant of mining lease, the lessee should be granted permission to commence mining and since the State Government has already formed an opinion with respect to the 1st lease which is reflected in letter dated 15.12.2014, an interim order should be granted in favour of the petitioner subject to appropriate conditions so that the petitioner-company can commence its mining operations in the Limestone mines covering an area of 63.87 hectares, that is, the 2nd lease. 6. I have carefully considered the rival submissions of the learned Senior Counsel for the parties and perused the documents on record. 7. Section 2 of the Mines and Minerals (Development and Regulation) Act, 1957 declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent provided in the Act. In “Bharat Coking Coal Limited Vs. 7. Section 2 of the Mines and Minerals (Development and Regulation) Act, 1957 declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent provided in the Act. In “Bharat Coking Coal Limited Vs. State of Bihar & Ors.”, (1990) 4 SCC 557 , the Hon'ble Supreme Court has held that in view of the parliamentary declaration as made in Section 2 of the Act, the State Legislature is denuded of its legislative power to make any law with respect to the regulation of mines and the development of minerals to the extent as provided by the Act. In “State of W.B. Vs. Kesoram Industries Ltd. & Ors.”, (2004) 10 SCC 201 , a Constitution Bench of the Hon'ble Supreme Court has observed that, “the effect is that no State Legislature shall have power to enact any legislation touching: (i) the regulation of mines, (ii) the development of minerals, and (iii) to the extent provided by Act 67 of 1957”. The declaration in Section 2 of 1957 Act has been preserved in the 2015 Amendment Act. The petitioner has pleaded that it has obtained all necessary statutory clearances including, forest clearance and environmental clearance. It has paid a sum of Rs. 190 crores in the last 5 years ending 2013-14 on account of royalty and cess, VAT and other taxes to the State Government. Section 8A(5) and Section 10A(2)(c) of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 are extracted below: Section 8A(5): “Notwithstanding anything contained in subsection (2), (3) and subsection (4), the period of lease granted before the date of commencement of the Mines & Minerals (Development & Regulation) Amendment Act, 2015 where mineral is used for captive purpose, shall be extended and be deemed to have been extended up to a period ending 31st March 2030 w.e.f. the date of expiry of the period of renewal last made or till completion of the renewal period, if any, or a period of fifty years from the grant of such lease, whichever is later, subject to the condition that all the terms and conditions of the lease have been complied with”. Section 10A(2)(c): “where the Central Government has communicated previous approval as required under subsection (1) of section 5 for grant of a mining lease, or if a letter of intent (by whatever name called) has been issued by the State Government to grant a mining lease, before the commencement of the Mines and Mineral Development and Regulation) Amendment, 2015, the mining lease shall be granted subject to fulfillment of the conditions of the previous approval or of letter of intent within a period of two years from the date of commencement of the said Act. Provided that in the respect of any mineral specified in the First Schedule, no prospecting licence or mining lease shall be granted under clause (b) of this subsection except with the previous approval of the Central Government”. 8. In the background of the law declared by the Hon'ble Supreme Court and relevant provisions of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, when I examine the rival contentions on the question of grant of interim order, I find substance in the contention raised on behalf of the petitioner that once the State Government has formed an opinion in so far as, 1st lease is concerned which is reflected in letter dated 15.12.2014, the State Government should also take a decision for the 2nd lease (63.87 hectare) and it cannot be withheld merely because a demand, which has been disputed by the petitioner, has been raised by the State Government. The order of the Hon'ble Division Bench in W.P.(C) No. 3768 of 2015 and batch cases, has been passed in peculiar facts of the case namely, M/s Tatal Steel Limited agreed to the conditions imposed by the State Government however, without prejudice to its rights and the State Government granted liberty to make payment in three equal monthly installments. In the present case, without prejudice to its right to contend that the petitioner is not liable to make payment, the learned Senior Counsel submits that at this stage, the petitioner is ready to pay Rs. 48 crores for the minerals mined and dispatched by the petitioner-company. Vide letter dated 21.03.2015, the respondent-State of Jharkhand has calculated average price of minerals for the period January, 1991 to 15.09.2014. 48 crores for the minerals mined and dispatched by the petitioner-company. Vide letter dated 21.03.2015, the respondent-State of Jharkhand has calculated average price of minerals for the period January, 1991 to 15.09.2014. Whether, in cases where second renewal was not granted and the lessee continued on a presumption of deemed renewal, the lessee would be liable to pay penalty on the ground of alleged illegal mining or not is a question which has to be decided. The petitioner has come forward to pay price for minerals dispatched between the period 01.04.2014, that is, after the judgment in “Goa Foundation” to 15.09.2014. The learned Senior Counsel for the petitioner has tendered a copy of calculation chart and submits that petitioner is ready and willing to make payment of Rs. 48 crores by 07.11.2015. In all fairness to Mr. Ajit Kumar Sinha, the learned Senior Counsel for the respondent-State of Jharkhand, I record his objection that the calculation given by the petitioner shall not be treated final at this stage and it should be made subject to further calculation/verification. The calculation chart given by the petitioner for the price of the mineral extracted from the aforesaid mines is taken on record. 9. In view of the facts pleaded by the petitioner in the present writ petition which reflects payment of Rs. 190 crores by the petitioner in the last 5 years to the respondent-State of Jharkhand and the captive use of Limestone for the operation of two factories by the petitioner-company coupled with the fact that the petitioner-company would have to pay the amount finally determined by the Court, an interim order for renewal of mining lease for the 2nd lease needs to be issued. [“Morgan Stanley Mutual Fund Vs. Kartick Das” (1994) 4 SCC 225 ]. In so far as, the dispute regarding method of calculation and the payment allegedly to be made by the petitioner or whether the petitioner is liable to make any payment or not are concerned, the same shall be considered after the respondent-State of Jharkhand files counter-affidavit. 10. Accordingly, the petitioner is permitted to make payment of Rs. 48 crores on or before 07.11.2015 however, the payment shall remain subject to further calculation. It is further clarified that the payment made by the petitioner shall be without prejudice to the rights and contentions of both the parties. 10. Accordingly, the petitioner is permitted to make payment of Rs. 48 crores on or before 07.11.2015 however, the payment shall remain subject to further calculation. It is further clarified that the payment made by the petitioner shall be without prejudice to the rights and contentions of both the parties. Consequently, a direction is issued to the respondent-State of Jharkhand to consider and issue an order in terms of Section 8A(5) of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 for the 2nd Limestone mines, area about 63.87 hectare at Village-Kondwa, District-West Singhbum for which 1st mining lease was granted on 13.09.1965. 11. Four weeks time is granted to the respondent-State of Jharkhand for filing response to the writ petition and two weeks time is granted thereafter, to the petitioner for filing rejoinder-affidavit. 12. Post the matter after six weeks. The parties shall be at liberty to mention the matter. Petition granted.