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2019 DIGILAW 1051 (KAR)

Ram Murthy S/o. Narayanappa v. State Of Karnataka rep. By its Secretary (MINES) Department Of Commerce & Industries Vikasa Soudha

2019-05-31

L.NARAYANA SWAMY, P.S.DINESH KUMAR

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ORDER : The Hon’ble Supreme Court of India, by order dated September 12, 2018, in Civil Appeal No.9476/2018 has set-aside the order passed by this Court on September 20, 2017 and remitted the matter for fresh consideration. 2. We have heard Sri.D.L.N. Rao, learned Senior Advocate for the petitioner, Shri.V.G.Bhanuprakash, learned AGA for the State and Shri.D.N.Nanjunda Reddy, learned Senior Advocate for third respondent. 3. Briefly stated the facts of the case are, on July 25, 2005, petitioner applied for grant of quarrying lease to extract multi-colour granite over an area measuring 8 acres in Sy. No.43 of Darbur village in Chikkaballapura Taluk and District. The Deputy Commissioner and the Director of Mines issued the necessary ‘No Objections’. It is averred that petitioner was pursuing the matter with the Mines Department for grant of mining lease. Petitioner learnt that on October 6, 2016, the Director of Mines had recommended for grant of mining lease in favour of third respondent to the Government and accordingly, a Notification dated December 12, 2016 was issued. Feeling aggrieved, petitioner has presented this writ petition. 4. Assailing the recommendation made by the Director of Mines and Geology and the order passed by WP No.3040/2017 the State Government sanctioning mining lease, Shri. D.L.N. Rao, urged following contentions: • by an amendment of the Karnataka Minor Mineral Concession Rules, 1994 (for short ‘1994 Rules’) with effect from 12.08.2016, Rule 8B and Rule 11 were substituted. Rule 12 was omitted and Rule 53(2B) was inserted. • after amendment in the year 2016, in terms of Rule 8B of the 1994 Rules, all applications received and pending for grant of lease prior to the date of commencement of Rules became ineligible; • however, applications defined in Rule 8B(2) remained eligible for consideration; • the Director of Mines and Geology has submitted a proposal to the State Government under Rule 53(2B) of the 1994 Rules for grant of mining lease in favour of third respondent. This was impermissible because third respondent’s application was not referred by the Competent Court. The directions contained in Writ Petition No.39628/2015 filed by the third respondent had worked for themselves pursuant to rejection of third respondent’s application by the Rule 11 Committee on November 24, 2015. The subsequent writ petition No.58492/2015 stood dismissed as ‘premature’. This was impermissible because third respondent’s application was not referred by the Competent Court. The directions contained in Writ Petition No.39628/2015 filed by the third respondent had worked for themselves pursuant to rejection of third respondent’s application by the Rule 11 Committee on November 24, 2015. The subsequent writ petition No.58492/2015 stood dismissed as ‘premature’. Therefore, as on the date of recommendation by the Director of Mines and Geology there was no reference by any Competent Court; • the Director of Mines and Geology has considered third respondent’s case under Rule 12(1)(iii) on the premise that third respondent has established a small scale industry. Petitioner has also obtained necessary permission to establish a granite cutting and polishing unit in 2014 and he is entitled to establish the small scale industry within two years from the date of mining lease. Ignoring this aspect, the Director has considered petitioner’s case as an ‘individual’. 5. In substance, Shri. D.L.N. Rao contended that in the absence of a reference by a Competent Court, the Director could not have considered third respondent’s case under Rule 53(2B). Ignoring petitioner’s license to establish a small scale industry, preference could not have been given to the third respondent. 6. Shri.V.G. Bhanuprakash, argued that this Court in W.P. No.39628/2015 has directed the Rule 11 Committee to consider third respondent’s case. With regard to priority treatment to third respondent, he submitted that it is not in dispute that third respondent has already established a Small Scale Industry whereas petitioner ‘proposes’ to establish an Industry. As per Section 8B(2)(e), applications are required to be considered as per provisions which existed before amendment. Therefore, third respondent is entitled for priority treatment. 7. Shri.Nanjunda Reddy, learned Senior Advocate reiterating the contentions urged on behalf of the State Government, submitted that the Hon’ble Supreme Court of India has held that this Court in the previous proceedings has overlooked the insertion of Rule 8B of the amended Rules. Therefore, once the said provisions are applied to the facts of this case, third respondent shall be entitled for grant of mining lease. 8. We have carefully considered the rival contentions and perused the records. 9. In the prospectus of the facts of this case, following points arise for our consideration: (a) Whether recommendation made by the Director under Rule 53(2B) is tenable? 8. We have carefully considered the rival contentions and perused the records. 9. In the prospectus of the facts of this case, following points arise for our consideration: (a) Whether recommendation made by the Director under Rule 53(2B) is tenable? (b) Whether third respondent is eligible for priority treatment under Rule 12 prior to amendment? Re.(a) Whether recommendation made by the Director under Rule 53(2B) is tenable? 10. It is not in dispute that necessary ‘No objections’ and technical report were received prior to 12.08.2016, the date on which the amended provisions came into effect. As per Rule 8B(2), applications submitted by both petitioner as well as third respondent were eligible for consideration. 11. The Director has recommended third respondent’s case under Rule 53(2B) and said Rule reads as follows: “53(2B) Notwithstanding anything contained in these rules, any applications which are referred to the committee existed under Rule 11 before the commencement of the Karnataka Minor Mineral Concession (Amendment) Rules, 2016 by the competent Court shall be considered and disposed by the State Government.” 12. In order to consider an application under Rule 53(2B), a reference by the ‘Competent Court’ is necessary. This Court has disposed of W.P. No.39628/2015 filed by the third respondent with following directions: “3. We dispose of this writ petition by directing the Committee concerned to dispose of the application of the writ petitioner for quarrying lease for extraction of pink granite in Sy. No.43 of Dorraburre village in Chikkaballapur Taluk and District, within one month from the date of communication of this order.” 13. As contended by Shri. D.L.N.Rao, it is true that Rule 11 Committee did consider and reject third respondent’s application in the meeting held on November 24, 2015. Third respondent challenged the Rule 11 Committee’s decision in W.P.No.58492/2015. The prayers made in the said writ petition read as follows: (c) Issue a Writ of mandamus or any other Order or Direction, directing Official Respondents to grant Quarrying Lease in Form-GL in respect of an area of 31200 (AGA) in land bearing Sy. Third respondent challenged the Rule 11 Committee’s decision in W.P.No.58492/2015. The prayers made in the said writ petition read as follows: (c) Issue a Writ of mandamus or any other Order or Direction, directing Official Respondents to grant Quarrying Lease in Form-GL in respect of an area of 31200 (AGA) in land bearing Sy. No.43 of Dorraburre Village in Chikkaballapur Taluk & District as per Application dated 28.03.2012 of this Petitioner to extract Pink Granite, pursuant to Order of this Hon’ble Court dated 21.09.2015, produced at Annexure-B. (d) Set aside or Quash the recommendation of Rule 11 Committee dated 24.11.2015 recommending the State Government to reject the Application of this Petitioner dated 28.03.2012 at Agenda No.08/86 produced at Annexure-A.” 14. A combined reading of averments contained in paragraph No.8 of the writ petition and the above extracted prayer shows that the said writ petition was filed seeking a direction to the State Government to grant quarrying lease pursuant to the order passed by this Court on September 21, 2015 in W.P. No.39628/2015. This Court dismissed W.P. No.58492/2015 as premature. 15. Notwithstanding the opinion of the Rule 11 Committee, as per Rule 11(4) of the Rules as stood prior to amendment, the State Government were empowered to order for grant or rejection of application. 16. Shri D.L.N.Rao’s specific contention is that there was no reference by a competent Court to consider third respondent’s case. Therefore, State Government could not have considered third respondent’s application under Rule 53(2B). In our view, this contention must fail because the third respondent approached this Court seeking a direction to the Rule 11 Committee to consider his application and the same was allowed in W.P.No.39628/2015 by passing the order extracted hereinabove. Rule 11 Committee considered and rejected third respondent’s application. However, the opinion of the Rule 11 Committee is subject to further orders by the State Government under Rule 11(4) of the Rules. Therefore, in our view, the order passed by this Court in W.P.No.39628/2015 must be construed as a ‘reference by a competent Court’. Accordingly, we answer first point in favour of third respondent. Re.(b) Whether third respondent is eligible for priority treatment under Rule 12 prior to amendment? 17. Rule 12 prior to amendment read as follows: 12. Therefore, in our view, the order passed by this Court in W.P.No.39628/2015 must be construed as a ‘reference by a competent Court’. Accordingly, we answer first point in favour of third respondent. Re.(b) Whether third respondent is eligible for priority treatment under Rule 12 prior to amendment? 17. Rule 12 prior to amendment read as follows: 12. Priorities.—(1) Selection from amongst the applicants for grant of quarrying lease under this chapter shall be Made in the following order of preference, namely.— (i) a Corporation or undertaking owned or controlled by the State or Central Government and Joint Sector projects with such Government Corporations or Undertakings; (ii) persons who have already established hundred per cent export oriented units for cutting and polishing of granites in the State; (iii) persons who have already established a Small scale Industrial Unit for cutting and polishing of granites in the State; (iv) persons who hold a valid licence for establishment of a granite cutting and polishing unit within the State for the purpose of hundred per cent export and persons who hold a permanent Registration Certificate for establishment of a Smallscale Industrial Unit in the State; (v) a Society registered under the Karnataka Cooperative Societies Act, 1959, and the members of which belong to the Scheduled Castes & Scheduled Tribes; (vi) a Society registered under the Karnataka Cooperative Societies Act, 1959, and the members of which belong to economically weaker sections of the Society and who are also stone quarry workers by tradition; (vii) all others. (2) In case of applicants falling under clause (iv) of this Rule 12 who require specified minor mineral for their proposed industry they shall set up industry in accordance with their industrial programme within a period of twenty-four months from the date of execution of lease deed and shall keep the Director informed of the progress made every six months from the date of execution of lease deed. On setting up of industry the lessees shall inform the fact in writing to the Director failing which the lease shall be deemed to have been terminated on the expiry of the said period of twenty-four months. Where the lessees are unable to set up industry within the said period for reasons beyond their control they may submit before the expiry of the said period an application to the Director explaining the reasons for the same together with affidavits. Where the lessees are unable to set up industry within the said period for reasons beyond their control they may submit before the expiry of the said period an application to the Director explaining the reasons for the same together with affidavits. The Director shall forward such applications to the State Government and it may on being satisfied that such failure in setting up the industry was due to reasons beyond the control of the lessee, extend the period of such lease by one more year either prospectively or retrospectively.” (Emphasis supplied) 18. It is not in dispute that as on the date of consideration of application, third respondent had already established a small scale industry. Language employed in Rule 12 clearly indicates that applications to be considered under this provision must be in the order of preference described therein. Persons who have already established small scale industry fall under category (iii). Applicants who are a Corporation or undertaking owned or controlled by the State or Central Government and Joint Sector Projects with such Government Corporations or Undertakings fall under category (i). Applicants who have established 100% export oriented Units (EOUs) for cutting and polishing of granites in the State fall under category (ii). Petitioner claims to have obtained a licence or approval to establish a small scale industry. Clearly, his case cannot be considered under categories (i) to (iii). Therefore, in our view, consideration of third respondent’s application under category (iii) does not suffer from any legal infirmity. 19. In view of the above discussion, in our view, this petition is devoid of merits and it is accordingly dismissed. No costs.