w w w . L a w y e r S e r v i c e s . i n



M/s. J.K. Cement (Western) Limited, Represented by its Deputy Manager, Prashant Seth, Karnataka v/s The State of Karnataka, Represented by Secretary Department of Industries & Commerce Vikas Soudha, Bangalore & Another


Company & Directors' Information:- CEMENT CORPORATION OF INDIA LIMITED [Active] CIN = U74899DL1965GOI004322

Company & Directors' Information:- J. K. CEMENT LIMITED. [Active] CIN = L17229UP1994PLC017199

Company & Directors' Information:- PRASHANT INDIA LIMITED [Active] CIN = L15142GJ1983PLC006574

Company & Directors' Information:- WESTERN INDUSTRIES LIMITED [Active] CIN = L29150TG1995PLC020532

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

Company & Directors' Information:- CEMENT INDIA LTD [Active] CIN = U26942AS1994PLC004154

Company & Directors' Information:- A M S CEMENT PVT LTD [Active] CIN = U26942ML1995PTC004606

Company & Directors' Information:- H P CEMENT AND INDUSTRIES PVT LTD [Active] CIN = U26942AS1995PTC004559

Company & Directors' Information:- S. P. CEMENT PRIVATE LIMITED [Active] CIN = U26940MP2006PTC018404

Company & Directors' Information:- S. P. CEMENT PRIVATE LIMITED [Active] CIN = U01531MP2006PTC018404

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:- R. J. CEMENT INDUSTRIES PRIVATE LIMITED [Active] CIN = U51909WB1997PTC083205

Company & Directors' Information:- SETH INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74900DL1995PTC069218

Company & Directors' Information:- VIKAS INDUSTRIES (INDIA) PVT LIMITED [Strike Off] CIN = U40109TG2005PTC047537

Company & Directors' Information:- Y AND M CEMENT (INDIA) PRIVATE LIMITED [Active] CIN = U26940MH2006PTC161339

Company & Directors' Information:- S D CEMENT PRIVATE LIMITED [Active] CIN = U74899DL1995PTC072298

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

Company & Directors' Information:- P B CEMENT PRIVATE LIMITED [Active] CIN = U36900WB2009PTC138825

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:- K G N CEMENT PRIVATE LIMITED [Active] CIN = U26942OR1991PTC002930

Company & Directors' Information:- A S K CEMENT PRIVATE LIMITED [Active] CIN = U26940RJ2012PTC040014

Company & Directors' Information:- SETH INDUSTRIES PRIVATE LIMITED [Active] CIN = U18101MH1961PTC012063

Company & Directors' Information:- V K CEMENT LTD [Active] CIN = U26942PB1994PLC014122

Company & Directors' Information:- J D CEMENT PVT LTD [Active] CIN = U26941CH1982PTC004960

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

Company & Directors' Information:- B S CEMENT PVT. LTD. [Active] CIN = U26942OR1986PTC001767

Company & Directors' Information:- P H P CEMENT INDUSTRIES PVT LTD [Strike Off] CIN = U26900MH1981PTC024812

Company & Directors' Information:- M P CEMENT PVT LTD [Strike Off] CIN = U26942CT1984PTC002333

Company & Directors' Information:- J K CEMENT PVT LTD [Strike Off] CIN = U26941GJ1981PTC004569

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:- J D CEMENT LIMITED [Strike Off] CIN = U26943DL1980PLC010512

Company & Directors' Information:- J S K CEMENT PRIVATE LIMITED [Active] CIN = U26940RJ2012PTC039836

Company & Directors' Information:- J G CEMENT PVT LTD [Strike Off] CIN = U14106PB1993PTC013626

Company & Directors' Information:- J.K. INDUSTRIES (INDIA) PRIVATE LIMITED [Active] CIN = U29210PB2013PTC037034

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

Company & Directors' Information:- PRASHANT (INDIA) PVT LTD [Strike Off] CIN = U70101WB1982PTC035012

Company & Directors' Information:- R. M. CEMENT COMPANY PRIVATE LIMITED [Active] CIN = U26941CT2009PTC021396

Company & Directors' Information:- VIKAS R & D INDIA PRIVATE LIMITED [Active] CIN = U73100DL2012PTC232875

Company & Directors' Information:- A R CEMENT CO PVT LTD [Strike Off] CIN = U02694MP1982PTC002042

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

Company & Directors' Information:- A T C (WESTERN INDIA ) PRIVATE LIMITED [Strike Off] CIN = U63090MH2000PTC126350

Company & Directors' Information:- K L CEMENT PRIVATE LIMITED [Strike Off] CIN = U26940WB2008PTC127270

Company & Directors' Information:- SETH AND COMPANY (INDIA) PRIVATE LTD. [Strike Off] CIN = U36939DL1987PTC028036

Company & Directors' Information:- WESTERN CEMENT PRIVATE LIMITED [Active] CIN = U26940GJ2011PTC068068

Company & Directors' Information:- M C A CEMENT PRIVATE LIMITED [Active] CIN = U26943RJ1994PTC008065

Company & Directors' Information:- R S CEMENT PRIVATE LIMITED. [Active] CIN = U74899DL1992PTC047484

Company & Directors' Information:- S. K. CEMENT PRIVATE LIMITED [Active] CIN = U26960WB2012PTC187806

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

Company & Directors' Information:- WESTERN INDIA INDUSTRIES LTD [Under Liquidation] CIN = L51909WB1951PLC019887

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

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:- D & D CEMENT PRIVATE LIMITED [Strike Off] CIN = U26941GJ2009PTC057912

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

Company & Directors' Information:- VIKAS PVT LTD [Strike Off] CIN = U99999MH1949PTC007334

Company & Directors' Information:- THE VIKAS LIMITED [Strike Off] CIN = U24231UP1934PLC000592

    Writ Petition No. 13674 of 2020 (GM-MM-S)

    Decided On, 08 February 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: D.L.N. Rao, Senior Advocate, Anirudh Anand, Advocate. For the Respondents: I. Taranath Poojary, AGA.



Judgment Text

(Prayer: This Writ Petition is filed Under Articles 226 and 227 of the Constitution of India, praying to quash the order passed by the Respondent No.1 dated 10.06.2020 vide Annexure-A and etc.)

Abhay S. Oka, CJ.

1. Heard the learned Senior Counsel appearing for the petitioner and the learned Additional Government Advocate appearing for the respondents.

2. The main issue which arises for consideration is whether the application made by the petitioner for grant of prospecting licence on 16th June 2011 was rendered ineligible in view of sub-section(1) of Section 10-A of the Mines and Minerals(Development and Regulation) Act, 1957 (for short 'the said Act of 1957').

3. Few facts which are relevant need to be mentioned. As stated earlier, an application for grant of prospecting licence was made by the petitioner on 16th June 2011 in respect of an area of 2,400 acres, more particularly described in the petition in respect of lime stone. The application was in accordance with the provisions of Rule 9(1) of the Mineral Concession Rules, 1960 (for short, “the said Rules of 1960”). There were other applications made by other parties. There was overlapping of areas claimed by the petitioner and other applicants. The case made out in the petition is that on 9th January 2015, the Director of Mines and Geology vide his order (Annexure-H) allowed the application subject to obtaining relaxation from the State Government in exercise of the powers under the proviso to clause (c) of sub- section (1) of Section 6 of the said Act of 1957. While passing the said order, the Director observed that after deleting the overlapping area, the application of the petitioner can be considered in respect of an area of 2,114.04 acres. However, he further observed the area of 2,114.04 acres was not a contiguous block and therefore, an order of relaxation by the State Government was necessary. The petitioner is relying upon the letter dated 3rd February 2015 addressed by the Director of Mines and Geology Department to the Secretary to the State Government which records that the application was allowed.

4. On 21st March 2017, the petitioner wrote a letter seeking execution of the lease deed based on the order dated 9th January 2015. Subsequently, a notice was served upon the petitioner calling upon him to show cause why the application for prospecting licence should not be rejected for non- compliance of Clause (b) of sub-section (2) of Section 10-A of the said Act of 1957. After hearing the petitioner, the impugned order at Annexure-A was passed on 10th June 2020 holding that the application dated 16th June 2011 was not disposed of by an order dated 9th January 2015 and was thus pending on 12th January 2015 and therefore, it was rendered ineligible in view of sub-section (1) of Section 10-A of the said Act of 1957 which came into force with effect from 12th January 2015.

5. The learned Senior counsel appearing for the petitioner firstly pointed out the Notification dated 27th May 1995 (Annexure-J). He pointed out that by the said notification issued in exercise of the power under sub-section (2) of Section 26 of the said Act of 1957, the powers of the State Government to dispose of the applications for grant/renewal of prospecting licences was delegated to the Director of Mines and Geology (for short “the Director”) He pointed out that if the order dated 9th January 2015 is considered as a whole, it is clear that the Director has granted the application subject to the State Government granting relaxation under the provisions of proviso to clause (c) of sub-section (1) of Section 6 of the said Act of 1957. He submitted that it is clearly pointed out in the letter dated 3rd February 2015 at Annexure-K that the application was granted. He would, therefore, submit that the application made by the petitioner was not pending on 12th January 2015 and therefore the application was not rendered ineligible. He submitted that all that is now required to be done is the execution of a lease deed after the Government grants relaxation. He also invited our attention to the provisions of the Mineral Concession Rules, 1960 and in particular Rule 63A which fixes a time frame for deciding the application for grant of prospecting licence. He submitted that in terms of the said time frame, the application was disposed of on 9th January 2015 by allowing the same.

6. The learned Senior Counsel appearing for the petitioner also pointed out that the petitioner has set up a cement plant at a nearby place after investing crores of money. He pointed out that in fact a memorandum of understanding was entered into between the petitioner and the Government of Karnataka to enable the petitioner to set up a cement plant and the Government agreed to provide all permissions and approvals which are necessary. He pointed out that the consent of the farmers was obtained by the petitioner.

7. The learned Additional Government Advocate supported the impugned order by pointing out that clause (b) of sub-section (2) of Section 10A of the said Act of 1957 will not apply. He submitted that the application made by the petitioner became ineligible on 12th January 2015.

8. The learned Senior Counsel appearing for the petitioner places reliance on a decision of the Apex Court in the case of GUJARAT POTTERY WORKS .vs. B.P. SOOD, CONTROLLER OF MINING LEASES FOR INDIA (AIR 1967 SC 964). His submission is that there is a difference between an order granting lease and execution of the lease. He urged that once a decision is taken to grant prospecting licence, the application stands granted and what remains is only the procedural part of the execution of the lease. He has also relied upon the decisions of this Court dated 31st May 2019 in the case of SMT.MEENA LAKHOTIA .vs. STATE OF KARNATAKA AND ANOTHER in W.P.No.30202/2017 and dated 23rd July 2019 in the case of M/S.AANE MINES AND MINERALS .vs. STATE OF KARNATAKA AND ANOTHER in W.P.No.15824/2018.

9. We have given careful consideration to the submissions. The prayer is for quashing the order at Annexure-A which holds the application made by the petitioner as ineligible in view of sub-section (1) of Section 10A of the said Act of 1957. The first prayer is for setting aside the said order and the second prayer is for execution of the prospecting licence. The petitioner has not prayed that its case should be considered under any of the exceptions carved out by sub- section (2) of Section 10-A to sub section (1) of Section 10A. Therefore, the controversy is confined now only to the question whether the application made by the petitioner on 16th June 2011 for grant of prospecting licence was pending on 12th January 2015 when sub-section (1) of Section 10-A was brought into force thereby making ineligible all pending applications on that day. Therefore, it is necessary to consider the effect of the said order dated 9th January 2015. We have carefully perused the said order. In the preamble, it is mentioned that the area in respect of which the prospecting licence was sought by the petitioner was overlapping with five prior applications mentioned in the table incorporated in the preamble. Thereafter, the Director records that after deleting the overlapping area, the available area is 2,114.04 acres, which is a non-contiguous block and therefore, relaxation by the State Government in exercise of power under the proviso to clause (c) of sub-section (1) of Section 6 of the said Act of 1957 was necessary. It is, therefore, necessary to reproduce Section 6 of the said Act of 1957 which reads thus:

"6. Maximum area for which a prospecting licence or mining lease may be granted-

(1) No person shall acquire in respect of any mineral or prescribed group of associated minerals

(a) one or more prospecting licences covering a total area of more than twenty-five square kilometres; or

(aa) one or more reconnaissance permit covering a total area of ten thousand square kilometres:

Provided that the area granted under a single reconnaissance permit shall not exceed five thousand square kilometers; or

(b) one or more mining leases covering a total area of more than ten square kilometres:

Provided that if the Central Government is of the opinion that in the interest of the development of any mineral or industry, it is necessary so to do, it may, for reasons to be recorded in writing, increase the aforesaid area limits in respect of prospecting licence or mining lease, in so far as it pertains to any particular mineral, or to any specified category of deposits of such mineral, or to any particular mineral located in any particular area.

(c) any reconnaissance permit, mining lease or prospecting licence in respect of any area which is not compact or contiguous:

Provided that if the State Government is of opinion that in the interests of the development of any mineral, it is necessary so to do, it may, for reasons to be recorded in writing, permit any person to acquire a reconnaissance permit, prospecting licence or mining lease in relation to any area which is not compact or contiguous.

(2) For the purposes of this section, a person acquiring by, or in the name of, another person a [reconnaissance permit, prospecting licence or mining lease] which is intended for himself shall be deemed to be acquiring it himself.

(3) For the purposes of determining the total area referred to in sub-section (1), the area held under a [reconnaissance permit, prospecting licence or mining lease] by a person as a member of a co-operative society, company or other corporation or a Hindu undivided family or a partner of a firm,shall be deducted from the area referred to in sub-section (1) so that the sum total of the area held by such person, under a [reconnaissance permit, prospecting licence or mining lease], whether as such member or partner, or individually, may not, in any case, exceed the total area specified in sub-section (1)."

(underline supplied)

10. Thus, on a plain reading of clause (c) of sub-section (1) of Section 6 of the said Act of 1957, it is very clear that no person can be granted a prospecting licence in respect of any area which is not compact or contiguous. The proviso to clause (c) of sub-section (1) of Section 6 of the said Act of 1957 confers a power on the State Government to permit grant of a prospecting licence in respect of any area which is not compact or contiguous. For that purpose, the State Government has to record reasons in writing. Thus, in normal course, a prospecting licence cannot be issued in respect of an area which is not compact or contiguous.

11. In this case, the contention of the petitioner is that while passing the order on 9th January 2015, the Director of Mines and Geology, Government of Karnataka has exercised the delegated power under sub-section (2) of Section 26 of the said Act of 1957 under the notification dated 27th May 1995. We have carefully perused the notification at Annexure-J. Under clause (a) thereof, the power of the State Government to grant/renew a prospecting licence in any non-forest area of the State Government can be delegated to the Director. This delegated power is only in respect of the minerals other than specified minerals in the first schedule under the said Act of 1957. However, the power of the State Government under the proviso to clause (c) of sub-section (1) of Section 6 of the said Act of 1957 has not been delegated and therefore, the said power can be exercised only by the State Government.

12. At this stage, we may refer to Section 10-A of the said Act of 1957 which was brought on the statute book with effect from 12th January 2015. Section 10-A reads thus:

“10-A. Rights of existing concession holders and applicants—

(1) All applications received prior to the date of commencement of the Mines and Minerals (Development and Regulation) (Amendment) Act, 2015, shall become ineligible.

(2) Without prejudice to sub-section (1), the following shall remain eligible on and from the date of commencement of the Mines and Minerals (development and Regulation) (Amendment) Act, 2015--

(a) Applications received under Section 11-A of this Act;

(b) Where before the commencement of the Mines and Minerals (development and Regulation) (Amendment) Act, 2015, a reconnaissance permit or prospecting licence has been granted in respect of any land for any mineral, the permit holder or the licensee shall have a right for obtaining a prospecting licence followed by a mining lease, or a mining lease, as the case may be, in respect of that mineral in that land, if the State Government is satisfied that the permit holder or the licensee, as the case may be,--

(i) has undertaken reconnaissance operations or prospecting operations, as the case may be, to establish the existence of mineral contents in such land in accordance with such parameters as may be prescribed by the Central Government;

(ii) has not committed any breach of the terms and conditions of the reconnaissance permit or the prospecting licence;

(iii) has not become ineligible under the provisions of this Act; and

(iv) has not failed to apply for grant of prospecting licence or mining lease, as the case may be, within a period of three months after the expiry of reconnaissance permit or prospecting licence, as the case may be, or within such further period not exceeding six months as may be extended by the State Government.

(c) where the Central Government has communicated previous approval as required under sub-section (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 Minerals (development and Regulation) (Amendment) Act, 2015, the mining lease shall be granted subject to fulfillment of the conditions of the previous approval or of the letter of intent within a period of two years from the date of commencement of the said Act:

Provided that in respect of any mineral specified in the First Schedule, no prospecting licence or mining lease shall be granted under clause (b) of this sub-section except with the previous approval of the Central Government”.

(underline supplied)

The stand taken in the written submissions (Annexure-P) filed by the petitioner before the Director is that sub-section (1) of Section 10-A of the said Act of 1957 will have no application in view of the fact that by the order dated 9th January 2015, the application made by the petitioner for grant of prospecting licence was disposed of and that the same was not pending on 12th January 2015 when Section 10-A was brought into force. Under sub-section (1) of Section 10-A of the said Act of 1957, all applications for grant of concessions which will include even prospecting licence, pending on 12th January 2015, became automatically ineligible. The exceptions to sub-section (1) of Section 10-A of the said Act of 1957 have been carved out in sub-section (2) of Section 10-A. In this case, sub-section (2) of Section 10-A of the said Act of 1957 need not be considered as the question of the consideration of the said provision will arise only if the contention of the petitioner is that sub-section (1) of Section 10-A of the said Act of 1957 is applicable to its application.

13. As observed earlier, the entire issue revolves upon the question whether the application made by the petitioner for grant of prospecting licence was disposed of prior to 12th January, 2015. The contention of the petitioner is that by the order dated 9th January 2015, the application was disposed of in respect of an area of 2,114.04 acres subject to the State Government granting relaxation as provided in proviso to clause (c) of sub-section (1) of Section 6 of the said Act of 1957.

14. The argument on behalf of the petitioner is three- fold. Firstly, the order dated 9th January 2015 itself records that the application of the petitioner was granted; secondly, reliance is placed on the letter dated 3rd February 2015 at Annexure-K addressed by the Director to the Secretary to the Government. Thirdly, reliance is placed on Rule 63-A of the said Rules of 1960 under which time lines have been fixed. Clause (b) of 63A of the said Rules of 1960 provides that an application for prospecting licence must be disposed of within nine months from the date of receipt of the application.

15. The further limb of the argument is based on the decisions which are relied upon by the learned senior counsel for the petitioner. The first decision is in the case of Gujarat Pottery Works (supra). The said judgment holds that once an order is made for grant of lease, the execution of the deed of lease is merely a procedural formality. We have perused the said decision of the Apex Court. In this case, a mining lease was executed on 3rd November, 1951. In the facts of the case, it was argued that it was not an existing lease though it was also pointed out that an agreement for lease was executed on 2nd December 1939. The question before the Apex Court was whether the lease can be said to have been granted in the year 1939 or 1951. In paragraph 7 of the judgment, the Apex Court held thus:

”7. The granting of a lease is different from the formal execution of the lease deed. The Mineral Concession Rules, 1949, made under Section 5 of the 1948 Act and hereinafter referred to as “the 1949 Rules”, deal with the procedure for the grant of mining leases in respect of land in which the minerals belong to the Government, under Chapter IV. Rule 27 deals with applications for mining leases. Rule 28-A provides that when a mining lease is granted the formal lease shall be executed within six months of the order sanctioning the lease and if no such lease is executed within the aforesaid period, the order sanctioning the lease shall be deemed to have been revoked. It is really the sanctioning of the lease which amounts to the granting of the lease. Execution of the formal lease is only compliance with the legal requirements to make the grant legally enforceable.”

(underline supplied)

In paragraph 9, it was observed that execution of the agreement lease amounts to granting lease and only a proper formal lease was to be executed later. Therefore, this decision will not help the petitioner.

16. The second decision relied upon is in the case of Smt.Meena Lakhotia (supra). In this case, on 10th June, 2011 a notification was issued by the Director of Mines and Geology specifically sanctioning grant of mining lease in favour of the petitioner. The issue was considered in the context of applicability of Section 10-A of the said Act of 1957 as amended by the Amendment Act of 2015. The Division Bench of this Court relied on a decision of Madhya Pradesh High Court in the case of SAVITA RAWAT .v. STATE OF M.P. AND OTHERS ((2016) SCC Online MP 542). This Court also relied upon the case of Gujarat Pottery Works (supra). The Division Bench ultimately held that the mining lease was granted to the petitioner in the light of the notification issued under sub-section (1) of Section 5 read with Section 8 of the said Act of 1957 prior to 12th January 2015 and therefore, clause (c) of sub-section (2) of Section 10-A of the said Act of 1957 had no application. Thus, this is a case where a specific notification was issued prior to 12th January 2015 according sanction to execute lease.

17. In the case of M/s AANE MINES AND MINERALS .v. STATE OF KARNATAKA AND ANOTHER (2019 (6) K.L.J. 646) decided by this Court on 23rd July 2019, reliance is placed on what is held in paragraph 8 of the said decision which reads thus:

”8. .. Wherever, the applications are already decided and the State Government has taken a decision to grant mining leases prior to 12th January 2015, obviously sub-section (1) of Section 10-A of the said Act of 1957 will have no application . Sub-section (1) of Section 10-A does not make any application ineligible which is already decided. Where the application is already decided prior to 12th January 2015, there will not be any occasion for invoking the provisions in sub-section (2) of Section 10-A of the said Act of 1957. In the present case, the application made under Rule 22(1) of the said Rules of 1960 was already disposed of by the order dated 19th June 2010 by the State Government by passing an order of the grant of the mining lease.”

However, as observed in the aforesaid decision, the application made under sub-section (1) of Section 22 of the said Rules of 1960 for grant of lease was already disposed of by a specific order dated 19th June 2010 by the State Government by taking a decision of granting lease.

18. Now, we come to Rule 63A of the said Rules of 1960 which reads thus:

“63A. The State Government shall dispose of the application for grant of reconnaissance permit, prospecting license or mining lease in the following period—

(a) Reconnaissance Permit – within six months from the date of receipt of the application for reconnaissance permit under rule 4-A.

(b) Prospecting License – within nine months from the date of receipt of the application for prospecting license under rule 10.

(c) Mining Lease – within twelve months from the date of receipt of the application for mining lease under Rule 22.”

Provided that the aforesaid periods shall be applicable only if the application for reconnaissance permit, prospecting license or mining lease, as the case may be, is complete in all respects:

Provided further that the disposal by the State Government in case of minerals listed in the First Schedule to the Act shall mean either recommendation to the Central Government for grant of the mineral concession, or refusal to grant the mineral concession by the State Government under rule 5 for reconnaissance permit, rule 12 for prospecting license and rule 26 for mining lease, and in all other cases, disposal shall mean either intimation regarding grant of precise area, or refusal to grant the mineral concession under rule 5 for reconnaissance permit, rule 12 for prospecting license and rule 26 for mining lease:

Provided also that in case the State Government is not able to dispose of the application for grant of reconnaissance permit, prospecting license or mining lease within the period as specified above, the reasons for the delay shall be given in writing."

Clause (b) provides that an application for grant of prospecting licence has to be dealt with within nine months from the date of receipt of the application for grant of prospecting lease. None of the provisos including the second proviso incorporate a deeming fiction that if the application is not decided within the time line provided under Rule 63A, the same shall be deemed to have been granted. The reliance placed on the second proviso will not help as all that it provides is in respect of minerals not specified in the first schedule to the said Act of 1957, intimation regarding grant of prospecting licence will amount to disposal of the application. Thus, the issue again is whether the order dated 9th January 2015 amounts to intimation of grant as provided in the second proviso.

19. Now we come back to the order dated 9th January 2015, the operative portion of which reads thus:

"ORDER

DMG/MLS/43APL2011/2014-15 DATED 09.01.2015

I, S.Shankaranarayana, IAS, Director, Department of Mines and Geology in exercise of the power conferred under Government Notification No.CI 03 MMM 1995 dated 27-05-1995 do hereby consider the application filed by M/s J.K.Cement (Western) Ltd., on 16.06.2011 for prospecting licence for Limestone in Margool village, Chittapur taluk, Gulbarga district to an extent of 2114.04 acres after deleting the overlap area subject to obtaining relaxation under Section 6(1)(c) of MMDR Act.

This order is passed on 09.01.2015.”

(underline supplied)

20. We have already held that in view of clause (c) of sub- section (1) of Section 6 of the said Act of 1957, no person is entitled to prospecting licence in respect of any area which is not compact or contiguous. As observed earlier, the power under the proviso to clause (c) of sub-section (1) of Section 6 has not been delegated to the Director. Therefore, the Director had no jurisdiction to grant prospecting licence in respect of an area which is not compact or contiguous. In fact, he has merely stated that the application of the petitioner can be considered subject to obtaining relaxation from the State Government under the proviso to clause (c) of sub-section (1) of Section 6 of the said Act of 1957.

21. In this petition, it is not the case made out by the petitioner that the area of 2,114.04 acres is contiguous. In fact, there is no challenge in this petition to the finding recorded in the order dated 9th January, 2015 that the area of 2,114.04 acres is in a non-contiguous block. Though in some of the earlier letters, the said contention was tried to be raised (for example, the letter dated 27th April 2017 at Annexure-M), the same was never subsequently raised in this petition. If the order dated 9th January 2015 which we have quoted above is read, it cannot be said to be an order granting the application made by the petitioner for grant of prospecting licence. It is also not an intimation of grant of such a licence. In fact, that is crystal clear from the subsequent communication issued by the Director on 3rd February 2015. In the relevant portion at page 78 (Annexure-K), the Director has observed thus:

“This order is made on 12-01-2015 before making an ordinance under MMDR Act, 1957.

The said area is coming under the Non- contiguous block area so prior permission of State Government is necessary under Section 6(1)(c) of MMDR Act, 1957 for notification of granting PL.”

(underline supplied)

22. Hence, even the Director was very clear that as the area is a non-contiguous block, for issuing a notification granting prospecting licence, prior permission of the State Government was necessary. In fact, by the said letter, a request is made to the State Go

Please Login To View The Full Judgment!

vernment to exercise powers under the proviso to clause (c) of sub-section (1) of Section 6 of the said Act of 1957. The said letter fortifies the view which we have taken that the order dated 9th January 2015 does not amount to disposal of the application made by the petitioner for grant of prospecting licence inasmuch as on a plain reading of the said order, the Director has not allowed the application directing issuance of a notification to grant prospecting licence. Secondly, the order itself records that for issue of a notification for grant of prospecting licence in this case, the order of the State Government under the proviso to clause (c) of sub- section (1) of Section 6 of the said Act of 1957 will be necessary. 23. Admittedly, the State Government did not exercise the power under the proviso to clause (c) of sub-section (1) of Section 6 of the said Act of 1957 on or before 12th January 2015. Thus, the application made by the petitioner for grant of prospecting licence was pending on 12th January 2015 which will attract sub-section (1) of Section 10-A of the said Act of 1957 and the application will have to be held as ineligible. 24. In the case before the Apex Court in Gujarat Pottery Works (supra), in the year 1939, there was already an agreement of lease executed and what remained to be executed was only a formal lease. In the case of Smt.Meena Lakhotia (supra), there was a specific notification issued on 10th June 2011 by the Director of Mines and Geology in exercise of the powers under Section 5 read with Section 8 of the said Act of 1957 of grant of mining lease. Even in the case of M/s Aane Mines and Minerals (supra), on 19th June 2010, the State Government had passed an order granting a mining lease to the petitioner therein and as on 12th January 2015, what remained to be done was only the execution of a formal lease. Therefore, none of these decisions will help the case of the petitioner. 25. The other argument canvassed by the learned senior counsel for the petitioner regarding development works carried out by the petitioner by setting up a cement plant is irrelevant inasmuch as that will not affect the legal position provided in sub-section (1) of Section 10-A of the said Act of 1957. 26. As held earlier, this is a case where the application made by the petitioner for grant of prospecting licence became ineligible by virtue of the fact that the application made by the petitioner was pending on 12th January 2015. In this petition, we are not called upon the decide whether any of the exceptions carved out by sub-section (2) of Section 10-A of the said Act of 1957 are applicable to the facts of the case, as the entire petition proceeds on the footing that sub-section (1) of Section 10-A is not applicable to the case of the petitioner. 27. Hence, we find no merit in the petition and the same is accordingly rejected. There will be no order as to costs.
O R