ORISSA MANGANESE AND MINERALS LTD. v. STATE OF ODISHA
2015-03-04
B.N.MAHAPATRA, I.MAHANTY
body2015
DigiLaw.ai
ORDER I. Mahanty, J - Since this batch of writ petitions involve common question of law and similar relief have been sought for, on the consent of the learned counsel for the respective parties, the cases are taken up for disposal by the following common order. The admitted facts of the present cases are that the petitioners herein are all mining lessees of various mines of Iron ore, Manganese etc. in the State of Odisha and have made applications for renewal of their respective mining leases and are covered by the judgment of the Hon'ble Supreme Court in the case of Common Cause v. Union of India and others, reported in 2014 (7) SCALE 91 . In the said judgment, the petitioners herein are included as 26 lessees operating second and subsequent renewal without any express orders of renewal passed by the State Government and directions were issued to the State Government to consider the renewal application of these petitioners for second or subsequent renewal, in consonance of Section 8(3) of the Mines and Minerals (Development and Regulation) Act, 1957 (for short, MMDR Act) within six months from the said judgment (which stood extended by the subsequent orders of the Hon'ble Supreme Court). 2. It is submitted on behalf of the petitioners that in view of the judgment of the Hon'ble Supreme Court in the aforementioned case, since the Hon'ble Supreme Court came to the conclusion that these 26 lessees cannot be allowed to operate their mines until the State Government passes express orders in terms of Section 8(3) of the MMDR Act after it forms an opinion that in the interests of mineral development it is necessary to renew the leases and recording reasons to that effect. Admittedly, petitioners herein have applied for renewal and their renewal applications are pending consideration in terms of the directives issued by the Hon'ble Supreme Court in the aforementioned matter. Prayer made in the present writ petitions is for seeking permission of the State Authorities, particularly Director of Mines to permit transportation of ore extracted by the petitioners on or before 16th May, 2014, i.e., the date on which the Hon'ble Supreme Court rendered the judgment in the case of Common Cause (supra). 3.
Prayer made in the present writ petitions is for seeking permission of the State Authorities, particularly Director of Mines to permit transportation of ore extracted by the petitioners on or before 16th May, 2014, i.e., the date on which the Hon'ble Supreme Court rendered the judgment in the case of Common Cause (supra). 3. Learned counsel for the State, on the other hand, places reliance on the judgment of the Hon'ble Supreme Court in the case of Common Cause (supra) as well as order dated 14.10.2014 passed by the Hon'ble Supreme Court in the Interlocutory Application No. 86 of 2014 filed by applicant-M/s. Bandekar Brothers Private Limited, in the case of Goa Foundation Vs. Union of India (UOI) and Others, (2014) AIRSCW 6014 : (2014) 5 JT 486 : (2014) 5 SCALE 364 : (2014) 6 SCC 590 . Learned Counsel for the State effectively contend that although it was claimed by M/s. Bandekar Brothers that mineral ores had been extracted by them prior to 22.11.2007, i.e., the date on which the deemed first renewal of the mining leases expired, its prayer for permission to sell the ore has come to be rejected by the Hon'ble Supreme Court. Consequently, it is submitted that the prayer of the present petitioners also ought to be rejected on the selfsame ground. The State also places reliance on the judgment of the Hon'ble Supreme court in the case of Common Cause (supra), to the effect that, the Hon'ble Supreme Court had reached the finding that the remaining 26 leases were operating the mines as second and subsequent deemed renewals were pending under Rule 24A(6) of the Mineral Concession Rules, 1960 (for short, 'MC Rules'), without any express order of renewal being passed by the State Government. In the case of Goa Foundation (supra), the Hon'ble Supreme Court had came to the conclusion that provisions of "deemed renewal" under Rules 24A(6) of MC Rules shall not be available for second or subsequent renewal of mining leases.
In the case of Goa Foundation (supra), the Hon'ble Supreme Court had came to the conclusion that provisions of "deemed renewal" under Rules 24A(6) of MC Rules shall not be available for second or subsequent renewal of mining leases. Placing reliance on the above, it is submitted on behalf of the State that operation of the mining lease have been stopped since no express order has yet been passed by the State and the "deeming" provision can no longer be extended to second or subsequent renewals, operation of the mining beyond 16.05.2014 is unauthorized in law and consequently prayer made herein for being granted with permission to sell and transport the ore extracted prior to 16.05.2014, i.e., the date of judgment in the case of Common Cause (supra), ought to be rejected. 4. In reply to the aforesaid contentions, learned counsel for the petitioners submitted that, submissions of the learned counsel for the State are based on incorrect facts. It is asserted on behalf of the petitioners that the case of Goa Foundation (supra) was a case, which was decided by the Hon'ble Supreme Court on the basis of law that applied to mining lessees in the State of Goa.
It is asserted on behalf of the petitioners that the case of Goa Foundation (supra) was a case, which was decided by the Hon'ble Supreme Court on the basis of law that applied to mining lessees in the State of Goa. The Hon'ble Supreme Court has dealt with in detail in paragraphs 2, 3 and 4 of the said judgment the fact situation that had arisen therein and their Lordships taken into account both the Goa, Daman and Diu Mining Concessions (Abolition and Declaration as Mining Leases) Act, 1987 (for short, 'Abolition Act') which got the assent of the President on 23.05.1987 and further amendment brought to the MC Rules, more particularly insertion of sub-rules (8) and (9) in Rule 24-A of the Mineral Concession Rules, 1960, the same are quoted herein below: "(8) Notwithstanding anything contained in sub-rule (1) and sub-rule (6), an application for the first renewal of a mining lease, so declared under the provisions of section 4 of the Goa, Daman and Diu Mining Concession (Abolition and Declaration of Mining Lease) Act, 1987, shall be made to the State Government in Form J before the expiry of the period of mining lease in terms of sub-section (1) of section 5 of the said Act, through such officer or authority as the State Government may specify in this behalf: Provided that the State Government may, for reasons to be recorded in writing and subject to such conditions as it may think fit, allow extension of time for making of such application upto a total period not exceeding one year. (9) If an application for first renewal made within the time referred to in sub-rule (8) or within the time allowed by the State Government under the proviso to sub-rule (8), the period of that lease shall be deemed to have been extended by a further period till the State Government passes orders thereon." 5. In the said judgment, the Hon'ble Supreme Court came to the conclusion that sub-rules (8) and (9) of MC Rules, 1960, as amended apply only to the State of Goa and by the very nature of the said amendment the right of deemed renewal of leases in Goa are entitled only to "first renewal" and period of such first renewal expired on 22.11.2007. Paragraph 82 of the said judgment in Goa Foundation (supra), the Hon'ble Supreme Court has held as follows:-- "82.
Paragraph 82 of the said judgment in Goa Foundation (supra), the Hon'ble Supreme Court has held as follows:-- "82. As we have held that the deemed mining leases of the lessees in Goa expired on 22.11.1987 and the maximum period (20 years) of renewal of the deemed mining leases in Goa has also expired on 22.11.2007, mining by the lessees in Goa after 22.11.2007 was illegal. Hence, the Order dated 10.9.2012 of the Government of Goa suspending mining operations in the State of Goa and the Order dated 14.9.2012 of MoEF, Government of India, suspending the environmental clearances granted to the mines in the State of Goa, which have been impugned in the writ petitions in the Bombay High Court, Goa Bench (transferred to this Court and registered as transferred cases) cannot be quashed by this Court. The Order dated 10.9.2012 of the Government of Goa and the Order dated 14.9.2012 of MoEF will have to continue till decisions are taken by the State Government to grant fresh leases and decisions are taken by MoEF to grant fresh environmental clearances for mining projects." In view of the legal situation that arose in the State of Goa and in particular, due to amendment to Rule-24-A being bought by insertion of sub-rules (8) and (9), various directions were issued by the Hon'ble Supreme Court and it would be relevant to extract those directions contained in paragraphs 85 and 88.7 of the said judgment. "85. As we have held that renewal of all the deemed mining leases in the State of Goa had expired on 22.11.2007, the mining lessees will not be entitled to the sale value of the ores sold in e-auction but they will be entitled to the approximate cost (not actual cost) of the extraction of the ores. On account of suspension of mining operations in the State of Goa, the workers who were employed by the lessees claim that they have not been paid their wages.
On account of suspension of mining operations in the State of Goa, the workers who were employed by the lessees claim that they have not been paid their wages. Under Section 25-C of the Industrial Disputes Act, 1947, when a workman whose name is borne on the muster rolls of an industrial establishment and who has completed not less than one year of continuous service under an employer is laid off, he is entitled to be paid by the employer for all the days which he is so laid off, except for such weekly holidays as may intervene, compensation which shall be equal to 50% of the total of the basic wages and dearness allowance that would have been payable to him had he not been so laid-off. Following this principle of lay-off compensation, we hold that workers who could not be paid wages by the lessees will have to be paid compensation at the rate of 50% of their basic wages and dearness allowance during the period of non-employment on account of suspension of mining operations. Moreover, Marmagao Port Trust will have to be paid 50% of their charges for storage of the mineral ores after 5.10.2012." 88.7 The entire sale value of the e-auction of the inventoried ores will be forthwith realized and out of the total sale value, the Director of Mines and Geology, Government of Goa, under the supervision of the Monitoring Committee will make the following payments: (a) Average cost of excavation of iron ores to the mining lessees; (b) 50% of the wages and dearness allowance to the workers in the muster rolls of the mining leases who have not been paid their wages during the period of suspension of mining operations; (c) 50% of the claim towards storage charges of Marmagao Port Trust. Out of the balance, 10% will be appropriated towards the Goan Iron Ore Permanent Fund and the remaining amount will be appropriated by the State Government as the owner of the ores." 6. It appears that after pronouncement of the aforesaid judgment, an applicant-M/s. Bandekar Brothers Private Limited filed I.A. No. 86 of 2014 of 2014, which came to be dismissed vide order dated 14th October, 2014 and while the Hon'ble Supreme Court dismissed the prayer of M/s. Bandekar Brothers, it has recorded the following finding at paragraph 8 of the said order dated 14.10.2014:-- "8.
Additionally, the provisions of the Mineral Rules mandate that the excavated mineral ore is liable to be removed by the lessee within a period of six months, failing which, after the issuance of a notice, the same would stand forfeited to the State Government. On the issue of forfeiture, this Court clearly directed in Goa Foundation's case (supra), that all the extracted mineral ore contained in the inventory prepared by the Monitoring Committee, would vest in the State Government. The directions of this Court satisfy the vesting of the extracted mineral ore with the State Government, thus negating the requirement of the issuance of any formal notice to the mining lease holders. It is, therefore, difficult for us to accept, the prayers made by the applicant, either for the release of the extracted mineral ore to the applicant, or the liberty to sell the same at its own." As would appear from the directions of the Hon'ble Supreme Court in I.A. No. 86 of 2014, stated hereinabove, was satisfied the "vesting of the extracted mineral ore" with the State Government was by operation of the orders of the Apex Court, thus negating the requirement of issuance of any formal notice of forfeiture to the mining lease holders in Goa. Although aforesaid I.A. No. 86 of 2014 came up to be dismissed by the Hon'ble Supreme Court, in the very same I.A., the Hon'ble Court had occasion to deal with the scope of Form-K (mining lease deed), more particularly, to Clauses- 5 and 6 of Part IX thereof, which is the statutory form in which mining leases for major minerals are granted, and concluded as follows:-- "A perusal of the terms and conditions expressed in the lease required to be executed by a mining lease holders, leaves no room for any doubt, that the mineral ore extracted by the lessee, has to be removed within six calendar months from the date of expiration of the mining lease. And furthermore, if at the end of the above six calendar months, the excavated mineral ore is not removed, then within one calendar month after a notice in writing is issued to the lessee/lessees, the extracted mineral ore is deemed to become the property of the State Government.
And furthermore, if at the end of the above six calendar months, the excavated mineral ore is not removed, then within one calendar month after a notice in writing is issued to the lessee/lessees, the extracted mineral ore is deemed to become the property of the State Government. Accordingly, relying on the afore-stated statutory provisions, it was the submission of the learned amicus, that the ore which had remained unremoved after the expiration of the above period of six months, would be deemed to have vested in the State Government." 7. It is further submitted on behalf of the petitioners that the direction in I.A. No. 86 of 2014 arising out of Goa Foundation (supra) were peculiar to the fact situation and law that is applicable to the State of Goa and consequently would have no direct application to the State of Odisha nor to the relief sought for in the present writ petitions. 8. It is further submitted that in view of insertion of sub-rules (8) and (9) of Rule-24-A to the MC Rules by way of amendment whereby the Hon'ble Supreme Court held that the lessees in the State of Goa have no right to seek any further relief beyond first renewal. Whereas, as per sub-rule (6) of Rule 24-A of MC Rules, all the petitioners have a right for their renewal applications to be considered since their applications for renewal do not fall under sub-rule (8) and (9), which only apply to Goa. In view of the finding of the Hon'ble Supreme Court as quoted hereinabove, petitioners herein submit that even though the judgment of the Hon'ble Supreme Court in the case of Common Cause (supra) was delivered on 16.05.2014 and since closure of mining operation was effected by the State, as a consequence of such judgment, the petitioners have a right under the MC Rules, more particularly Form-K (mining lease deed), paragraphs 5 and 6 of Part IX thereof to seek for permission to remove/utilize/transport/sale of ore raised/excavated by them, prior to 16.05.2014, of course on paying necessary royalty thereon and after obtaining necessary "transit permit". 9.
9. At this juncture, it would be appropriate also to take note of the fact that the Union of India on 18th July, 2014 after the judgment of the Hon'ble Supreme Court of India in the case of Common Cause (supra), has brought amendment to sub-rule (6) of Rule 24A of the Mineral Concession Rules, 1960, which provides as follows:-- "(6) If an application for first renewal of a mining lease made 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 two years or till the State Government passes order thereon, whichever is earlier: Provided that the leases were applications for first renewal of mining lease have been made to the State Government and which have not been disposed of by the State Government before the date of expiry of lease and are pending for disposal as on the date of the notification of this amendment, shall be deemed to have been extended by a further period of two years from the date of coming into force of this amendment of till the State Government passes order thereon or the date of expiry of the maximum period allowed for first renewal, whichever is the earliest: Provided further that the provisions of this sub-rule shall not apply to renewal under sub-section (3) of Section 8 of the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957)." The aforesaid amendment was carried out by the Union of India as a consequence of Judgment dated 16.05.2014 rendered by the Hon'ble Supreme Court in the case of Common Cause (supra) and consequently, the aforesaid amendment i.e. the deemed operation of milling lease of the petitioners obviously remained valid at least till 16.05.2014, i.e., the date of the judgment of the Hon'ble Supreme Court and in the said judgment directions were also issued to the State Authorities to consider the petitioners' applications for renewal on its own merit, of course, petitioners were not allowed to carry on their mining activities including extraction of ore beyond 16.05.2014 and in view of the same, the petitioners only pray/seek for removal/utilization/transport/sale of the ore raised/extracted by them on or before 16.05.2014. 10.
10. After hearing learned counsel for the respective parties and having perused the judgment of the Hon'ble Supreme Court in Goa Foundation (supra) and Common Cause (supra) as well as order dated 14th October, 2014 passed in I.A. No. 86 of 2014 filed by M/s. Bandekar Brothers arising out of Goa Foundation (supra) and on consideration of the aforesaid judgments as cited by learned counsel for the petitioners as well as learned counsel for the State, we are of the considered view that insofar as the petitioners herein are concerned, their renewal applications have been specifically directed by the Hon'ble Supreme Court to be considered for renewal under Rule 24-A(6) read with Section 8(3) of the MMDR Act. The only issue that arises for consideration is whether the prayer of the petitioners seeking direction to the State to allow transportation/sale/lifting of ore extracted/mined prior to 16.05.2014 and issue of transit permit can be considered at this stage while the renewal of applications remain pending for consideration. In the light of the judgment of the Hon'ble Supreme Court in the case of Common Cause (supra), the interpretation given by the Hon'ble Supreme Court while dealing with mining activities in the State of Odisha in particular, since 26 lessees (petitioners form part of such 26 lessees) who are operating as second and/or subsequent renewals without any express orders of the State Government, in this respect, the Hon'ble Supreme Court came to hold that operation of "deemed extension" would not be extended to such applicants and directed immediate stoppage of all mining activities until "express orders" are passed by the State Government in terms of Section 8(3) of the MMDR Act and further directed the State Government to consider and dispose of such renewal applications for second or latter renewals within six months from the date of such judgment. In view of the judgment of the Hon'ble Supreme Court in the case of Common Cause (supra), the mining activities of the petitioners have been brought to a stop. On reading of the judgments of the Hon'ble Supreme Court referred to hereinabove, we are of the considered view that sub-rules (8) and (9) of Rule-24-A have no application to mining lessees in the State of Odisha.
On reading of the judgments of the Hon'ble Supreme Court referred to hereinabove, we are of the considered view that sub-rules (8) and (9) of Rule-24-A have no application to mining lessees in the State of Odisha. Consequently, the judgment of the Hon'ble Supreme Court in Goa Foundation (supra) would have no applicability to the fact situation that arises for our consideration in the present case. Admittedly, the petitioners' applications for second or latter renewals remain pending consideration and the mining operations were stopped with effect from 16.05.2014. All the petitioners have made applications to the State Government for issue of transit permit and have given undertaking for payment of royalty, but no action has yet been taken on the same. Some petitioners have made advance deposit of royalty; however, no directions have been issued on such applications, hence, necessitating filing of the present batch of writ petitions. 11. We are of the view that although the order of the Hon'ble Supreme Court passed in I.A. No. 86 of 2014 (M/s. Bandekar Brothers) rejected the said I.A., yet it also dealt with rights of a mining lessee under the M.C. Rules, whose lease has been terminated. In view of the above, it is clear that when the mineral ore has been extracted by a lessee during the validity of a mining lease, the lessee also has a right to remove the same within six calendar months from the date of expiration or termination of the mining lease. In the facts of the present case, the date of stoppage of mining i.e. 16.05.2014, even if, taken as the date of termination/stoppage, the lessees do possess the necessary statutory right to remove the raised ore within six months of such stoppage. Furthermore, if at the end of the above six calendar months, the mineral ore is not removed, then a one calendar month notice in writing is required to be issued to the lessee/lessees, and only thereafter the extracted mineral ore is to be deemed to become the property of the State. Admittedly, in the present cases, petitioners have made applications for removal of ore excavated within six calendar months from the date of the judgment of the Hon'ble Supreme Court dated 16.05.2014 in the case of Common Cause (supra).
Admittedly, in the present cases, petitioners have made applications for removal of ore excavated within six calendar months from the date of the judgment of the Hon'ble Supreme Court dated 16.05.2014 in the case of Common Cause (supra). Further, no mandatory notice of one month has been issued by the State and consequently there cannot be any question that ore having been extracted by the lessees has become property of the State. In consideration of the above, in our considered view, the inaction and/or delay on the part of the State Government in granting permission to the petitioners to remove the ore excavated/raised prior to 16.05.2014, cannot be justified in law. We make it clear that this Court is fully conscious of the fact that consideration of petitioners' mining leases remain pending before the State Government and nothing stated hereinabove shall in any manner influence the consideration of the renewal applications. Further, we find no justification in denying the right of the petitioners available to them in terms of paragraphs 5 and 6 of Part IX of Form-K (mining lease deed) of MC Rules, and, accordingly, the writ petition is disposed of with the following directions: "(i) The Director of Mines shall consider and dispose of the petitioners' applications for removal of ore within a period of two weeks from the date of receipt of certified copy of this order. On such communication, the Director of Mines shall compute the royalty payable after adjusting any amount that may be in deposit with the Department in this regard and after service of notice of such demand, the petitioners shall make necessary deposit within a further period of two weeks therefrom. (ii) On deposit of necessary royalty, transit permits shall be issued in favour of the petitioners and the petitioners shall remove the entire ore from the mining leasehold within a period of four months from the date of grant of transit permit. (iii) All the opposite parties are directed to cooperate in this matter and not to cause any impediment in the movement of the ore. (iv) It is made clear that the petitioners undertake to comply with all such directions and deposit all such royalty and fees etc. as may be required in accordance with law." With the aforesaid observations and directions, the writ petitions are allowed to the extent indicated hereinabove. Final Result : Allowed