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Chandrakanth S. Patil v/s State of Karnataka, Department of Commerce & Industries, Rep. by its Secretary, Bengaluru & Others


Company & Directors' Information:- INDIA E-COMMERCE LIMITED [Active] CIN = L99999MH1968PLC014091

Company & Directors' Information:- PATIL INDUSTRIES LIMITED [Active] CIN = U26954MH2012PLC296273

Company & Directors' Information:- PATIL INDUSTRIES LIMITED [Active] CIN = U26954PN2012PLC145740

Company & Directors' Information:- S H COMMERCE PRIVATE LIMITED [Active] CIN = U51109WB2008PTC121420

Company & Directors' Information:- A. M. COMMERCE PRIVATE LIMITED [Active] CIN = U51909WB2011PTC168744

Company & Directors' Information:- G S E-COMMERCE PRIVATE LIMITED [Active] CIN = U52100KA2013PTC067567

Company & Directors' Information:- V K COMMERCE PVT LTD [Amalgamated] CIN = U51109WB1984PTC037122

Company & Directors' Information:- P. R. COMMERCE PRIVATE LIMITED [Active] CIN = U51909WB2008PTC122333

Company & Directors' Information:- M & P E. COMMERCE PRIVATE LIMITED [Active] CIN = U74300DL1999PTC099198

Company & Directors' Information:- R S COMMERCE PVT LTD [Converted to LLP] CIN = U51909WB1995PTC074372

Company & Directors' Information:- P S COMMERCE PRIVATE LIMITED [Active] CIN = U51909WB1997PTC084487

Company & Directors' Information:- T S R I COMMERCE PRIVATE LIMITED [Strike Off] CIN = U65910TG1999PTC032173

Company & Directors' Information:- AND E-COMMERCE PRIVATE LIMITED [Active] CIN = U74120AP2015PTC096206

Company & Directors' Information:- D B S COMMERCE PRIVATE LIMITED [Active] CIN = U52190MH2009PTC190773

Company & Directors' Information:- A P COMMERCE LIMITED [Strike Off] CIN = U51909WB1981PLC033798

Company & Directors' Information:- C. B. PATIL AND COMPANY PRIVATE LIMITED [Strike Off] CIN = U45200MH1964PTC012879

Company & Directors' Information:- K P INDIA COMMERCE PRIVATE LIMITED [Strike Off] CIN = U51909AS2001PTC006701

Company & Directors' Information:- Y S E-COMMERCE PRIVATE LIMITED [Active] CIN = U72200MH2000PTC126344

Company & Directors' Information:- V. K. PATIL CORPORATION PRIVATE LIMITED [Active] CIN = U74900PN2014PTC150789

Company & Directors' Information:- B AND D E-COMMERCE PRIVATE LIMITED [Strike Off] CIN = U74999HP2015PTC000945

Company & Directors' Information:- I P E-COMMERCE PRIVATE LIMITED [Active] CIN = U52399CH2012PTC033585

Company & Directors' Information:- COMMERCE & INDUSTRIES LTD [Strike Off] CIN = U51109WB1958PLC023756

    Writ Petition No. 45925 of 2019

    Decided On, 28 January 2021

    At, High Court of Karnataka

    By, THE HONOURABLE CHIEF JUSTICE MR. ABHAY S. OKA & THE HONOURABLE MR. JUSTICE SACHIN SHANKAR MAGADUM

    For the Petitioner: S.Y. Shivalli, Advocate. For the Respondents: I. Tharanath Poojary, Additional Government Advocate.



Judgment Text

(Prayer: This Writ Petition filed under Articles 226 and 227 of the Constitution of India, praying to quash order dated 11.7.2019 passed by the R-3 as being Arbitrary, erroneous and contrary to law equity and Justice [Annexure - M] and etc.,)

Abhay S. Oka, CJ.

1. The submissions were heard on the last date. Today, we have heard further submissions.

2. The petitioner was granted a quarrying lease on 12th January 2017 for ten years. The challenge in this writ petition under Article 226 of the Constitution of India is to Annexure-M, which is an order purportedly made by the Senior Geologist by which the quarrying lease granted to the petitioner was cancelled. The cancellation was on the ground that the petitioner was carrying on quarrying operations near the residential buildings of Indian Reserve Battalion. It is stated that the staff of Morarji Desai Residential Minority Girls School was complaining that the school children were suffering from ill health due to dust and noise created by quarrying operations carried out by the petitioner. Annexure-M is purportedly based on the show cause notice dated 18th March 2019. The second prayer in the petition is for restoration of the lease.

3. There is a statement of objections filed by the State Government in which reliance is placed on the effect of quarrying activities carried on by the petitioner near the residential quarters of Indian Reserve Battalion and Morarji Desai Residential Minority Girls School. It is also stated that there is an overhead water tank of 5 lakh liters capacity situated very close to crusher operated by the petitioner.

4. The learned counsel for the petitioner firstly submitted that there is no power vesting in the Senior Geologist under the provisions of Karnataka Minor Mineral Concession Rules, 1994 (for short the said Rules of 1994 ) to determine the lease granted to the petitioner. His submission is that the impugned order is contrary to sub-rule (3) of Rule 6 of the said Rules of 1994 and the same has been passed in breach of the principles of natural justice. He submitted that the show cause notice dated 18th March 2019 is based on the proceedings of the District Stone Crusher Licencing and Regulation Authority meeting held on 18th August 2018 which have been specifically quashed in the earlier writ petitions filed by the petitioner and two others by an order dated 25th April 2019. Therefore, he submitted that no action could have been initiated on the basis of the said proceedings.

5. The learned Additional Government Advocate sought to draw support from the first proviso to Rule 45 of the said Rules of 1994 by submitting that the termination of lease is on specific grounds which are incorporated in the first proviso to Rule 45 of the said Rules of 1994. He submitted that quarrying activities of the petitioner have not only damaged the environment but the same pose a danger to the health of the occupants of the residential quarters of the Indian Reserve Battalion and the students of Morarji Desai Residential Minority Girls School. He submitted that, therefore, no interference is called for.

6. The learned counsel for the petitioner submitted that apart from other submissions, it may be noted that, the first proviso of Rule 45 of the said Rules of 1994 was not on the Rule book when the impugned order at Annexure-M was passed. He urged that the power under the proviso can be exercised only when the holder of the lease commits an offence under sub-section (1) of Section 21 of the Mines and Minerals (Development and Regulation) Act, 1957 (for short said Act of 1957 ).

7. We have carefully considered the submissions. Rule 45 of the said Rules of 1994 as amended on 30th June 2020 reads thus:

45. Termination of lease or licence held by an offender. - Where the holder of a lease or licence has committed an offence under sub-section (1) of section 21, without prejudice to the penalty for which the holder of a lease or licence is liable under that subsection, the Competent Authority may, after such enquiry as it deems fit, terminate the quarry lease or licence held by such person. Provided that, where the Commissioner or Director of Mines and Geology, after consulting the State Government, is of opinion that it is expedient in the interest of regulation of mines and mineral development, preservation of natural environment, control of floods, prevention of pollution or to avoid danger to public health or communications or to ensure safety of buildings, monuments or other structures for conservation of mineral resources or for maintaining safety in the mines or for such other purposes, or encumbered the quarry lease otherwise than in accordance with these rules or the terms of the quarry lease deed as the Commissioner/Director may deem fit, it may, by an order in respect of any minor minerals, make premature termination of a lease or license or composite license with respect to the area or any part thereof covered by such license or lease.

Provided further that, no such order making a premature termination shall be made without giving reasonable opportunity to the Lessee or Licensee.

(underline supplied)

8. The learned Additional Government Advocate relied upon the power conferred by the first proviso to Rule 45 of the said Rules of 1994 for supporting the impugned order at Annexure-M. The said argument deserves to be rejected for the following reasons:

(i) The first proviso was not on the Rule book when the impugned order at Annexure- M was passed. It was added with effect from 30th June 2020 whereas the impugned order is of 11th July 2019;

(ii) The power conferred to make a premature termination of the lease under the first proviso is on the Commissioner or the Director of Mines and Geology. In the present case, the power is purportedly exercised by the Senior Geologist;

(iii) The condition precedent for formation of the opinion as contemplated by the first proviso to Rule 45 of the said Rules of 1994 by the Commissioner or the Director of Mines and Geology, as the case may be, is the consultation with the State Government. In this case, it is not the case made out by the respondent that there was a consultation with the State Government; and

(iv) The respondents cannot rely upon the first proviso to Rule 45 of the said Rules of 1994, which was not in existence when the impugned order was passed.

9. Since submissions have been made by the learned counsel for the petitioner on the first proviso, we deal with the same.

10. Rule 45 confers a power on the Competent Authority to determine the quarrying lease held by a person who has committed an offence under subsection (1) of Section 21 of the said Act of 1957. On a plain reading of the first proviso, it seeks to confer a power on the Commissioner and the Director of Mines and Geology to take action of the premature termination of lease, if they are of the opinion, after consulting the State Government, that it is expedient to make premature termination of the lease (a) in the interest of regulation of mines and mineral development, or (b) for preservation of natural environment, or (c) control of floods, or (d) for prevention of pollution, or (e) to avoid danger to public health or communications, or (f) to ensure safety of buildings, monuments or other structures, or (g) for conservation of mineral resources, or (h) for maintaining safety in the mines.

11. The power conferred by the first proviso appears to be independent of the first part of Rule 45 of the said Rules of 1994. Even if the holder of a lease has not committed an offence under sub-section (1) of Section 21 of the said Act of 1957, the power of premature termination of lease under the first proviso to Rule 45 of the said Rules of 1994 can be exercised by the Commissioner or the Director of Mines and Geology, as the case may be, after consulting the State Government, provided one of the grounds set out in the first proviso is in existence. Therefore, we reject the argument of the learned counsel for the petitioner that the condition precedent for exercise of the power under the first proviso to Rule 45 of the said Rules of 1994 is that the holder of the lease must have committed an offence under sub-section (1) of Section 21 of the said Act of 1957.

12. We hasten to add that the power under the first proviso to Rule 45 of the said Rules of 1994 can be exercised only after strict compliance with the requirements of the said proviso as well as the second proviso to Rule 45 of the said Rules of 1994.

13. The other provision which existed on the date of passing of the impugned order at Annexure-M empowering termination of lease was under sub-rule (3) of Rule 6 of the said Rules of 1994. The power under the sub-rule (3) of Rule 6 of the said Rules of 1994 can be exercised when a lessee commits breach of the said Rules of 1994 or of the terms and conditions incorporated in the quarrying lease. It is not the case made out either in the impugned order or in the show cause notice at Annexure-K about any such breaches committed by the petitioner. Therefore, the impugned order cannot be sustained on the basis of even sub-rule (3) of Rule 6 of the said Rules of 1994.

14. The impugned order is based on the show cause notice on 18th March 2019 which was issue

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d relying upon the proceedings of the District Stone Crusher Licencing and Regulation Authority meeting held on 18th August 2018. This Court by an order dated 25th April 2019 has quashed the proceedings of the meeting held on 18th August 2018. Hence, no action could have been lawfully initiated on the basis of the said proceedings. 15. For the reasons which are recorded above, the impugned order cannot be sustained. We accordingly pass the following order: (a) The impugned order dated 11th July 2019 (Annexure-M) is hereby quashed and set aside; (b) However, this judgment and order will not prevent the concerned authority from initiating the proceedings under the first proviso to Rule 45 of the said Rules of 1994 in accordance with law; (c) We, however, make it is clear that we have not made any final adjudication on the question where the circumstances specified in the first proviso to Rule 45 of the said Rules of 1994 exist today; (d) The writ petition is partly allowed in the above terms.
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