M/S V.S.Lad And Sons vs State Of Karnataka on 19 November, 2010

government, in 0rder:'~~..to to)" its aforesaid
determination, has not '"n.i_n'ing_.'0d'i_spatch permits for
transport of Ervo'nv,oVi'e 0' Accordéngiy, Writ
petitions Lad & Sons v. State of
Karnataka)’“&- (Kariganuru Minerais v.

State ofirfiairnataka*0i&r«oth.e’rs):;’_.2S290 of 2010 (M/s. S.B.MineraIs

v. State or Karnata:kaW& others); 25288 of 2010 (Kumarswamy

hi/li:n«er_ai of Karnataka 8: others); 25268 of 2010

(Veerabha’d_ra__p’p,a”Sangappa and Co., v. State of Karnataka &

V . others); 0152010 (M/s.Deccan Mining Syndicate Pvt. Ltd.,

.–_State. of Karnataka & others); 24529 of 2010

‘(Mi/s.Lakshminarayana Mining Company v. State of Karnataka &

-others); 24493 of 2010 (M/s.Hothur Traders v. State of

” Karnataka & others);

24490–24-491 of 2010 (M/s. Mineral

Enterprises Ltd., v. State of Karnataka & others); 24485 of 2010

T

‘ 1. ka & othe rs);

39
(H.G.Rangangoud v. State of Karnataka 8: others); 24482 of
2010 (M/s.Shree Gavisiddeshwara Minerals v. State of._K»a:rr1ataka

& others); 24481 of 2010 (M/s.Bharath Mines

State of Karnataka 81 others); 24105 of Zeen’ath>4°–.._

Transport v. State of Karnataka others’);

(R.Praveen Chandra v. State of K_.arnata_l<"a 8: ot»h'ers:);: 2'{iO.62:of
2010 (M/s. Sesa Goa Limited vufstate ofikairnaytaltag & others);

22945 of 2010 (M/s.V.'S'_.'l'_'~M., |_td.;wv. State of
Karnataka 81 others); o.ri,,i2)()\i_Q»b._(Lakshmi Narayana
Mining Compan'y"Fivt.' l-td._., a"no:th.er.,.v,;.fAState of Karnataka 8:
others); Mines and Minerals Pvt.

Ltd., v.:,j%Vstet;¢1tjet aieithieivrs); 25640 of 2010 (M/s.
P.Ba|asuVb’ba State of Karnataka & others);

2582? of 20 (_:M,’s…’-MAS;.PLV.l”‘l._td., v. State of Karnataka & others);

“V””v2522.i”* of». 2010 (ivi/’s’;’s’uggaIamma Gudda Mining and Co., v.

25222 of 2010 (M/s.

Vibhtiitiguvdda’l:Miines Pvt. Ltd., v. State of Karnataka 8: others);

‘Wand ~~V2’e.223 of 2010 (M/s. Vibhutigudda Mines Pvt. Ltd., v.
A “:TState”of Karnataka & others) have been filed. During the course
of’; hearing, learned counsel for the rival parties, in all the

aforesaid writ petitions agreed, that Writ Petition No.24103 of

2010 should be treated as the main case. Accordingly, the

factual matrix of the controversy has mainly been recorded on

CS”

40

the basis of the pleadings contained in W.P.No.24103 of 2010,

additional facts were also recorded from some other_.pe,ti.tio»ns as

well, when learned counsel invited our attention some,”–fa:c’.t_ua,l

aspects therefrom.

Preface to the submissions advanced byathe iearried
the petitioners. V’ 4_ H V’ <

2. M/s. v.s. Lad & Sons, the,:p’etitioner,in’=i,Ii}.i.P.”i.ivoViV24103 dr

2010, claims to be engaged inthe m’i’n’ing”V4since 1956.

M/s. V.S. Lad and Sons, firm, asserts that
it hoids Mining Karnataka. In order
to substantiate;tifiiatiits”carried out in the most
professiioniai the petitioner firm was
conferre:d–wit.h awards for safety. In this behalf, it

is sought to””he”p.oVi’nted_» cut, that the Indian Bureau of Mines,

Mines,”‘Go-vernment of India has commended it for

V.”everail”-.__per’fo’rmance”, “Afforestation”, “Dust Suppression

Arra,n’g’ement’f, “Top Soil Management”, “Waste Dump

‘,lVianageme_nt”, “Drilling and Blasting”, “Environment Controi and
2’ ‘X_’Dusit”Separation” by conferring awards on the petitioner. A
‘ prestigious award i.e. CAPEXIL, was bestowed on the petitioner

by the Ministry of Commerce, Government of India, in

recognition of its outstanding performance in the activity of iron-

ore export during the year 2005-2006. It is also the case of the

41

petitioner firm, that one of its Managing Partner has received the
‘Rashtriya Ratan’ award in 2807, from the Global Economic

Council, New Delhi, and has also received the ‘Udyog Ratan’

award from the institute of Economic Studies, New Delhi”… It is

therefore the case of the petitioner firm, that it is all

its activities in the most scientific and transpa_re?nt.
which it has repeatedly won acclaims,’ Itis’accor~dingI’y_us,o’ugVht7to it.

be canvassed, that the petitioner Vfiyrrn. cannc;t:”be Vclubibie-d

together with others involved””i’e.i:tn’l» the activity of
exporting illegally mined, i’r’en~ore’.W ‘ -I’;

3. Having invitedthis courtfs attention Vtoi.g,’t’he reputation and

status olithe ‘petivtioihelrl fi’r’iin,”‘i*t is “also pointed out that the export

activities with which_the petitiéoner firm is engaged, is earning an

enornious’~amou’n-t._,of foreign exchange for the country. For the

period fr’orr:.;§p.ri| 2.003 to December 2008, the petitioner firm

ciairnsl to«af_nvavei.,;”earned foreign exchange from its business of

_ iron-Pare to the tune of u.s.$ 359,584,450.88. Besides
.V,,.earni.ng. enormous foreign exchange for the country, it is also
‘.j_A’a’:sVsert.fed, that the petitioner’s activities earn the Government
~»sui;)stantial revenue. The petitioner firm, for the same period,

V claims to have paid Rs.272,330,410/– towards geological permits

and forest way permits; Rs.988,174,27S/~ towards VAT, CST,

KTEG and service tax; Rs.2,188,581,229/— towards income tax

Cl”

43

has a direct bearing to the employment or un~employment of

approximately 3,000 persons. It is, therefore, soug,h~t,,_:’to be

asserted, that stalling the activities of the petitio_ri_e.r”‘fi«{fi:ri:
direct impact on approximately 15,000mpeople;or.’
that each employed individual by o_fA,a.ve4rage.’.’of ”

four other famiiy members beslides himséif llwifié,

chiidren and parents). Based lvoniitiiegp aforesaiidi statistics, it is
sought to be asserted, thfira:”t’:..;3’ngractionistoppingvthexactivities of
the petitioner firmwould…re’su,Itl.”V.iVn::gth’e~,:d’eVpVrivation of earnings
utilized for they ofiat Given the fact
that the many affected by the
impugned irorjitgjlre, it is submitted, that the
bearing, on the bread and butter

of :t0–_i5 lakhpeople; istherefore sought to be asserted, that

‘ ‘”‘extre-m’ei,care– and ca’u’ti’on deserves to be exercised before orders

of'”t_h_e’ Aw’!\:i|;i’l’,Cl”i are the subject matter of challenge at the

halndsi of vthleiipetitioners, are passed. Such orders, according to

l”~.«..”Vthe lea’~rne:id counsel for the petitioners, should not be passed

‘r_r.erel’y because unsubstantiated rumours have been spread in
l the public, or because a few questions have been raised on the

floor of the Legislative Assembly, that illegaliy mined iron-ore is

being exported from Karnataka.

3″”iiW”.€W*%i”

45

in mining activities in the Union Territory of Goa and in the State
of Orissa ( besides its mining related activities in the State of
Karnataka). M/s. Sesa Goa has been granted a lease over
116.15 hectares of land in (Madakeripura and other vigillages in

Holalkere and Chitradurga Taluks in Chitradu.r.ga_»V.’:District)

through Mining Lease No.2236, in the State ofV_i<'a~r,nata'i<va.'I 'Thel'
aforesaid lease, according to |earnedmMcouin_sel, 7

28.10.2012. The petitioner cornpanyV4h_a1s'.,_i.3een.:rec'oigniie4d'–~aVs~a

1000/o export-oriented unit in reisvipect of'–t,he».a'f_orés'aVi'd mining

lease. It is on 15.05.2009, the
petitioner Vuifiinistry of Commerce and
the enhancement of its
Droductioiri metric tones to 6.0 metric tones

per year. Ita"t's,_also'.'–thAe_ case of the petitioners, that the mines

under xM'i'iiinig' Lease No.2236 have been certified in

standards, i.e. ISO 9002, ISO 14001 and

Ol4iS23;S~1E.i0.0i1_…5'IVt is submitted, that the M/s. Sesa Goa limited is

'the l"irst7.._company in the country, to maintain such high
A ~f_stand«aArds. On the pointed issue of illegal mining, it is asserted
' that the company has invested in computerization of its

operations, by using the Enterprise Resources Planning (ERP)

package. Its mine planning activities, are carried out by using

another software package — SURPAC. SURPAC, according to the

46

learned counsel for the petitioner is considered as a world leader
in mine planning software. The movement of saleable ore is
monitored and tracked using RFIDS fixed to transport trucks. It
is the case of the learned counsel for the petitioner,V”th’a.t_ the

petitioner is also very Seriously engaged in enviro;n’rrientaIV5r;areM,

as well as, in social development and infrastructurefirri’p:if0vem’ent
activities. In this behalf it is pointedout,_that–_th4e’ ‘c_ompan\_.(__hi:as 7

been planting over one lakh trees every”–year,,V.a¥s.a part of its

afforestation activities. In additi’o.n_’,’ a bra’n.ch”coVf petitioner

company tit|e_di_:a’s:.1’§§iptegrate.d $io:;tech.n:ological Approach for
Mine Land an in–house programme in
collaboratioVn’_Ali Department of Bio-

Technology, and the University of LUND,

Sweden. Inkthe im.med.iat’e-f vicinity of its mining activities, the

. if”peytitioneir”i.co’mApany’s’,””i<arnataka Unit in Chitradurga District, is

».'4as.si's.ting aii the 1,709 families (from the five

surioundivng'villages) in improving their crop outputs and farm

'yields, " by faciiitating suitable commercial plantation in
'ic_o.|,lal5'oration with the State Agricuiturai University, Dharwad. it
isgiasserted, that the petitioner company has also invested more

than Rs.10O crore in Karnataka, and is committed to still further

investments (towards machinery, equipment and infrastructure

required) to support its mining activities. The petitioner

47

company’s activities in the State of Karnataka, it is submitted,
involve the direct and indirect engagement of 5,000 people, and
as such, impairment in the activities of the petitioner company
would directly affect the life and livelihood of more than-.,5,000

families, i.e., approximately 25,000 individuals.

mining activity of the petitioner company isV__co.nceirned,%
submitted, that its exports to the ex’tent'”of._8-<7"/ci' alre«.of_iron;oreb T.

"Fines", whereas, the remaining, 13°/oils "'Lumpy"V_gore». '~Insofar'as

iron-ore "Fines" are concerned, llexarrwed cou—nsewlfor the petitioner

asserts, that '~7,l;'}~.iY State of Karnataka
which can as such, contends that,
in the the option is between either
wasting iron-'ore"'.VEin,es.l'"o:r_:"exporting them to foreign countries

for earning vamablehforeignvexchange, the only option which any

' "reas'onal:~,i'-'.=. person 'would exercise is, to earn profits for the

0'covtiyntlrylf..;it~4"is,_:submitted, that in processing of the iron~ore

"Fir.e4sh", coykelijslan essential requirement, but India being deficit

'Kin coke, the only option for India (if it desires to process iron-ore
":0.""_l'i,ne's{') is to first earn foreign exchange (by sale of iron-ore
0 "Fines") and to purchase coke with the foreign exchange earned,

so as to be able to process iron-ore "Fines" within the country.

7. Through the factual position expressed above, it is sought

to be highlighted by the petitioners, that the impugned orders

._§Wa’~

48

dated 26.07.2010 and 28.07.2010 have far reaching implications

adversely affecting not only the petitioners, but also,_,vth_e~.._fc.reign

exchange earnings, as also, the revenue ea-:5ni’n’g§V:~-.,i:§’;r.v,_the
government and its agencies. The saidmadverse”e*§iects’iex–teno to
those whose employment is directlyV’»and._-iinclireectly. depenedyerate on ‘

mining related activities in the S_tate,2a_lso_, tc-I’th,eiF.,_i’es’pective.

families. It is also highlighted, muostaof iron ore being
exported is of a kind whic_ti’:’–:an’n0t:’,lbéj'{plrocessedliinliythe country,
and yet is being sold so_as,:l’to, the country. Ail
the petitioners?__’:a4l’sp:c!a.irn in social aswell as
environmental the country. All the
aforesaid, .l,a;’ridHconselguential progressive activities

have been adverseyly’ the impugned orders.

Preface to.t:he s’ub_rnissions advanced by the learned counsel for

…..

the same manner as the learned counsel for the

petitioners ‘i”r.ijf.Ii..*3ed our attention to certain introductory facts

‘.,depictiri.g:” cause and effect of the impugned orders dated
V’ “{_26i.07’«–…y2010 and 28.07.2010, similarly the learned counsel for
respondent Nos. 1 to 5 also prefaced his submissions by taking

through the foundational basis, which prompted the State

Government, to issue the impugned orders. In this behalf, it is

the assertion of the learned counsel for the respondents, that

T

49

there was a spurt of demand for iron–ore in the giobai market
from the year 2001 onwards. This came about as a c_ons’e_guence

of increase in the price of iron–ore, wherein ChinaHeirie-rgettlmas

the major global consumer of iron-ore, in theTo-o:tw~st’eps_of__the,

demand of iron~ore, emerged the illegal iactivity..of.’expioitatiiaVniAof

iron–ore in the State of i<arna.tai<a.V'7.V_l'X chart'%".Vdepicti:'ngvdthe

production of iron–ore in Karnata'i<a' {.which'w/valsi reproduced in
paragraph 3, of the statement? of.obj.ecti"ons filed on behalf of

respondent nos. 1_t_o 5) is'.._h.ei_ng e.:l<t:rac°ted'h.ere'under:

"Following is «'the sta.tem'erit showing.' the production of Iron one in

Karnataka & Expoi"ts.outsilde7;§§i'e, llmlfzis of India.

SliNo’.”i Dornes’t’lc Exports Total
* __Con$umption Quantity
1 _ ‘2oo5+o6 If V. ”10 MN?” 33 MNT 43 MN?”

W2. _ “2oo5~-V0.73 V ” 11 MNT 23 MNT 34 MNT
i..2oo7¥o8v– —– –« * 18 MNT 25 MNT 44 MNT
i.4M_;__”_«_ f;ci’c’1a»o9 22 MNT 23 MN?’ 45 MN?’

-;-W5′ ‘2og9.ii’10 31 MN?” 18 MN?’ 49 MNT

In do-rder_.to’_ct1rlb the activity of illegal mining of iron-ore, which

l.'””~.__V’wasg mai<.i_ng in»roads in Karnataka, the State government as far
it i"ti.a'cl<_ in the year 2003, through a notification dated
.?1'SiO3.2€)O3, de-reserved for private mining, an area of 11,620

sq.l<ms. The State government also notified the surrender of an

area of 6,832.48 hectares of prime iron-ore bearing lands. The

action of the Government for distribution of mining iicenses to a

" V ,illegal transportation

50

select few private individuals, without regard to their
professional, technical or business background was the

general public as a covert act so as to benefit only ‘a”sei’e.Tct-‘._f_é’N

individuals/organisations, whereas themmain ob]’ective’Vbeh–i,nd.,_de’~.
reservation was to encourage mining baseid ‘indust-riesfa_nd;:Vsto ‘

create more employment opport_unities,_’i’n vthev”‘ip,,i-ivayte_:’§seVcto:r.i.

Illegal mining, followed the p’rofi.t:abV’:ility} connected
therewith. The general-…_..’:pub~lfiifc alsoi was, that
transportation facilities we.re_ to carry out the
activity of illegally nsgzyfortation permits were
issued to from patta lands.

TranSpoarta’tio_n ironeore was allowed out of forest
areas onzfthe”basi’s_of:.fo.re’st_:’passes/transportation permits. Even

the Transporters As.sociatio:ns/Unions were aggrieved with the

o,fi.ov-e,r~loaVding'”of transport vehicles. It was alleged by

‘thevgixlssocfititins/’tgnions, that illegal gratification was sought by

the’ transvportlgaiuthorities from trucl<~owners for allowing over~«

'Vl,oading"iro:n–ore. But, it was pointed out, that overloading had

''«caused_. extensive damage to roads used E transporting iron~ore.

The cumulative effect of illegal mining of iron–ore, as also

of such iron–ore, led to an extensive
debate on the floor of both houses of the State Legislatures, in

Karnataka. During the course of aforesaid debates, it was

U"

u-…«–…..

51

alleged, that large scale lllegalities and irregularities hadresulted
in enormous revenue loss to the State exchequ_er,_:”~..be.sides

plundering of State’s mineral wealth. On

Department of Forest, Uttar Kannada, l<arwar,"'seig:ed"l:8,Q5,f§91,
metric tones of ironmore unauthorisedly :_tra.nsprort'ed'-aridfigllegaallly '

stored, without any legal or va:llc|__.documentVs. ilron-1

ore was intended to be exporteidoutsaide llllridiaat bgelekeri Port
area. Another similar Se-ifure tones of iron—
ore was made in the same day ie., on
30.03.2010. to :i'gi§§'t':–"rreem7 media reports, that
6,00,000 Vhad been clandestinely
Portpllalnd another, 65,409 metric
tones ofR'i'roVn"–oVre' lbeenrcjlandestinely removed from Karwar

Port_ :.The aC'hi_ef*.M'inister"':of Karnataka, accordingly made a

"s.taterrler1,t, that he'VwVo"u'ld ensure the highest level of fairness and

""prob:itya, :a's,,:also.,,:o;:der an impartial enquiry into the illegal mining

related avctivitiels in Karnataka.

ll would be relevant to mention, that the first of such

gV.’irive,stAlgations was sought to be carried–out in the State of

hliarnataka, by appointing a former Chief Justice (Hon’ble Mr.

Justice U.L.Bhat) of Madhya Pradesh, as a one~man Commission,

to probe into the allegations of wide spread and unabated illegal

mining and unauthorised transportation of iron–ore from

52

government revenue and forest lands. Thereafter two
Government orders dated 12.03.2007 and 09.09.2007, were

issued in exercise of powers conferred u/s.

Karnataka Lokayukta Act, 1984 (hereinafter referireditoy
Lokayukta Act) for investigation introluthe’afore+sta_ted,_Vmatters T.

and for submission of a report with spe.cifi<; FeCOiTi'l'ifléndaxt'E.tjl"iSv.'V'-It

was pointed out by the learnerlV:V"Advoca'teVGejrieraglilltlhat the
Karnataka Lokayukta, (H'on'ble.~riVl'r.'* N.Santosh Hegde), a

former Judge of the Supreme' bmitted his first

interim report The aforesaid
interim report"(ai_pVp_encl'ed.jto'i,'i_th:e'statement of objections fiied on
behalf S, Annexure-R-1) highlighted

various aspects of.the1'act'i*v_ilties' of iron–ore mining.

11. 0′ In the”‘interim report of the Karkataka Lokayukta, in so

jvjeeonomics of mining iron–ore in Karnataka is
C’QVnce_rned,”‘«’i.tV_was”:’sought to be concluded, that one metric tonne

_ of iro4n~ore’brings in a revenue of Rs.16/– to Rs.27/– to the State
Karn.a’tal<a (by way of royalty). The interim report, reveals
total cost of extraction of one tonne of ironvore works to
.a_r.ound Rs.300/-. As against the aforesaid, it was pointed out,

that during the peak years 2004 and 2006, the export price of

one metric tonne of iron–ore was in the range of Rs.6,000/– to

Rs.7,000/–. Even in lean periods, (as per the Karnataka

wawsw

0' . 'by "the iessees.

53

Lokayukta’s interim report) the export price of ironfore per

metric tonne was between Rs.1,S00/– to Rs.2,000/–._;~Kie~ep’ing in

mind the sale price of iron–ore per metric tonne it
was sought to be calculated, that the iron–ore’ commu_ni’ty.

in Karnataka earned approximately’ ‘c’rCres,;,i_iAon’

account of having mined aboUt’«.;20 vmililwion toinessviofmironaoreg
during the year 2007-2008. In as the domestic market is

concerned, the statemento’ otijectiorss_’fi,E’e’d _by respondents 1 to

5 shows, a profit of Rs.15,0.00/+iV._icrpresv.,0″itgis pointed out, that _

there is no trade0′:-‘er.’_l3ais’inessiixorrcornnaerice in the world which
can give such_a –h_uu;gVe

12. -‘.i’he.Vvinter.i:m ,,rep:ort. ofthe Karnataka Lokayukta dated

18.12.2008′-aisovyre’v_eals,= mining lease holders, besides

othersjgivhad be’en.V_,:carr!ying out illegai mining of iron~ore by
_v1e:ncroa.chments into lands beyond the mining area
Ae;ipressediiiinithievrespective lease deeds. This was sought to be

_ done; as_’:’p-effthe Karnataka Lokayukta’s interim report, by

;sh.ifting the notified leased area to different convenient locations

The instant iiiegality was sought to be

cornmitted by taking a wrong reference point, or by altering the

” original reference point, or sometimes even with the connivance

of the iocai staff. Such encroachments in a large number of

cases, also traversed into the adjoining forest areas and/or

54

government revenue lands. Encroachments beyond lease

boundaries, was aiso sought to be carried out by depositing iron~

ore beyond the pheriphery of the notified

Another mode of encroachment, which wa_s””~s:oug’ht’

highlighted in the interim report of l<g'arna'taka-;'Lo:i<aly'ukta'wasnyxbyl it 0

formation of roads to mining ,,|easeV"a_re'a_s located *vd'eep'\l'i~nVsid,e
forest/government revenue land's,,.V"'–,It was.po'iint'edxV"ou't," that the

aforesaid road formations. ha,d'""cau5e'd-_extens'ive7damage to

forest areas. Such and si.mil_a–r ki.nd_ of2'encroa'chments, made by
those engaged:in}1j,~itne.Vactivi'ty o'f"ii'iegal mining of iron~ore

required imrriediiate attenti'on_'o:f"'the Stalte government.

13. learned Advocate General, illegal
transportation ‘of m’iner,al»~w”a.s4another aspect, highlighted in the

interyimlyreport Vofntne l<Zarnataka Lokayukta. On the instant

o_fif".thevj'rn.atter, it was pointed out, that there was evidence
district alone 4,000 to 5,000 lorries, at

_ any"give__n' of time, were engaged in carrying mineral
and from, the mining head to various transportation
.._l'po:i'rits:'llike railway stations, sea~ports, etc. The interim report of
Karnataka Lokayukta also emphasized, that almost all lorries

" engaged in carrying minerals were over-loaded, far in excess of

the permissible limits. These over~loaded trucks carrying

mineral ore had, caused extensive damage to all roads used for

55

the transportation of iron~ore. Resultantly, roads including
nationai highways had practically been rendered ufimi§to’i=ab|e.

The interim report suggests, that in the transpo~E{tation[j–act’ivity

itself, there was a need to provideJcheck–p.o’sts—-.:with’=:suffic_ien’t.
number of weigh-bridges. It was also recor:nrne_nd’ed,’that l

of GPS equipment in lorries ciairryuing VironV’»ore,ti’shoaVl.dV

compulsory, so as to keep a che:c:k«.’o’ver thje”m:ov:emVent of these
vehicles. The interim rep.ort’allso theiintroduction of
a new transport permit the existing
system were pointed out, that
such bulk period of 30 days, were
being even incorporate the name
of mining Jlease “the quantity of material being

transported or’ e_:ven…the”.ve’hicle number. It was suggested, that

‘i it “buoil<"::2iermitswere misused for t:"an5l30rtir19 more than the

of mineral. Whereby, legally mined iron ore

was.__mixed.'w1iVth' the illegally mined iron-ore, and conveniently

7.«.,_”Vt,ranspo’*rtee:l to the desired destinations. The Karnataka
“:i;okaly’ukta suggested the idea of having one permit for one
vehicle for one trip, with a maximum transport duration of seven

days. The aforesaid permit according to the suggestion made by

the Karnataka Lokayukta, should have a hologram as also a

computer bar-code, wherein, the name of the transporter, the

56

number of vehicle, the quantity of ore to be transported,___as also,

the point from where the iron–ore was to be collecterfalndnn the

point to which it was to be delivered, shouid

was also suggested, that at the end, of th_e”‘tr”io,j,th’eV’Qrigin’al.

transport permit would have to be surre’nidere’d.,l so ‘that’iii_t “could i

not be re–used.

14. Based on the pleadingsA,coxntairied in’t”iie.j,oi,nt statement
of objections (filed on beha:ilf~..1nto 5), as also, the
action taken made by the
Karnataka -…fu:rth:e_r’subrnitted at the hands of
the learned., out of ‘153 mining lease
holders :V’eng.a’gedl”uinf:-..rninni4ng:’major minerals, cases of nearly 99

mining leas’e.4_hoiclers_ ‘iéviiadsbeeén taken up for scrutiny. Out of the

afores_§’ai”d,i*.it was found that nearly 81 mining lease holders were

t.he*i..r operations in forest land, and the remaining 18

rr.in’i’n_g. iea’_se_ ih’o’i’ders were carrying on their operations in

_ revenue v–i’andi”belonging to the State government. . It was also

:co..ntende’cl,. that it was found that 60 mining lease holders, had

.._e’n_croa’ched into forest land adjoining their permissible lease

area, and were carrying on mining activities on encroached

“forest land. It was submitted, that 56 forest offence cases had

been registered in the courts of jurisdictionai magistrate at

Beilary, Hospet and Sandur. It was pointed out that neariy 15

d %

5?

charge sheets had been filed before jurisdictional courts for

prosecuting different mining lease holders, for loss the

green cover, flora and fauna, running into s–ejvera’§..j’,’hund_r’ed
crores of rupees. It was also submitted, thata'”l-a:rge”‘nu’mber”of

show cause notices had been issuedi’-by

Geology, Karnataka, to erriwnggg mining Vlease for-
terminating their lease agreemieintsg V it it 1

15. It was emphasiZ”e*d,t.h:at’ instance the State of
Karnataka had ve_ntured,to”prevefit}:he..act§4v.iti’es of illegal mining
and transportat.i,on«:’::§f.:w1irota. the provisions of the
VTransport) Rules, 2008.

However, holders, aggrieved by the
aforesaidiiaméendedw. challenged the validity’ of the same

beforetlwies court pointed out, that some of the petitioners

also approached this Court, for the said purpose.

I had stayed the operation of the aforesaid

_ rules;— m_aki-ngiit impossible for the State government, to

K..4l”—-V,V,imp|em.e’n-ti. even the recommendations made by the Karnataka
kta.

It was also the vehement contention of the learned

V Advocate General, that the entire activity under reference being

in public interest, had been initiated by the State government to

58

prevent ioss on account of various unscrupulous activities at the

hands of individuals engaged in the activity of and

transport of iron-ore. It was pointed out,__-that” State
government had no other alternativehbcut to_-t’a’ke:s_te’r’i’1 vremediialc

measures. It was submitted, that?._the,”activity’ ofjillegal.._mii,r_i’ing

as also its transportation, whereby
exported out of the country, permitted, by
any legitimate governme-n_t:,” the assertion of
the learned Advocate General., orders dated
26.07.2010 an?§l41§:;:a:l07,Vi:–01i0 Aitoiibei-reissued, to enable the
State goverhmefihtgto”p1lt:?~’i.riV…:pi’alcei”§etfective measures to stop
illegal export of illegally mined
iron~ oref Jit the instant measures are only

temporary, much .as,”‘they wouid be continued for a period

‘JV'”of,a’p-piroximately sixvmonths, by which time, the final report of

“‘ti_he_:Kaxrna.tal{a~_:Lo.kayukta wouid be obtained, and the, State

gove.r’nme_nt'”woVuld have been in a position to adopt adequate

itneasuresito prevent the illegal activities.

Elhrough the factual position expressed by the learned
_/cérclvocate Generai it emerges, that the impugned orders were

{issued as a matter of compulsion, to prevent the illegal iron-ore

reiated activities in the State of Karnataka. It was pointed out,

that there was hue and cry in the pubiic, about large scale illegal

59

activities concerning ironwore mining in Karnataka. The matter

also came to be discussed on the floors of the Legisia’t~i.ve«_pHovuses

in Karnataka. The public perception having be_ei3
the interim report submitted by theMHKarnata’ka”‘-t.OkayLikta,.._v4th”eH

government commenced to impiementiithe’»re’coinme’n.giai;i’ons

made in the report, by first ir-‘tr@_ducing_necessary;vamenldments
in the Karnataka Mining (Regulationuaniyd Tra’i”.sp_o.’rt) VRUi€S, 2008.
And then, by putting ir.—._._pia_cei_i_ certa’in_’»physica| measures aiso.
The course acioptecl by the..S_tateV._qove’r’n,m’ent’could not progress
much on acco’u’nitij.is»i’of yijnteirim .o’rdie’rs”‘*–passed by this Court.
Accordingiy, as-i_a;_i«a:st_:’i~esio.rt._the impugned orders had to be
passed; it i

The Impuqne-dy orciér.”:§j:~.ii

18. ,,.i§’eVfore to the main controversy, pertaining to the
at the hands of the petitioners, to the orders
and 28.07.2010, it is imperative for us to

_ understatiid exact purport of the same. The aforesaid two

iyorders, ought to be extracted herein . The Engiish translation of

.._ith_e”first impugned order dated 26.07.2010 is accordingiy being

reproduced hereunder: –

” PROCEEDINGS OF GOVERNMENT OF KARNATAKA

Sub: Prohibition of exporting iron ores from the Ports in the
State — reg.

l

:6

62

following 1.0 minor Ports in the State, with immediate effect,
until further orders:

2. Belikeri Port

4. Honnavar Port

6. Kundapura Port

8. Hongaarakatta Pqr’t””–.. ” ;.

10. Padubidri Port ” ‘2

1. Karwar Port

3. Tadhadi Port

5. Batkal Port

7. Malpe Port

9. Old Mangalore Port

The Port Officers of the aforesaid ‘Ports ” are’ it

hereby instructed to initiate strict action to preueilt iron ore

exports from the Ports, as exporting ;:’ron”ores_ is prohib’iite(§l:1g3),

the Government.

of Karnatalga,

BY order and in “th’e..name of C30.’/é-.=*nd’F.

_ 5 sd/4 V.

(S.iThiofi2eS;wéi7iyg) l _
Under Secretaryito Govejrnrrien t,
Public Worl<s,.."Port_and Inland' Water
' fTransport.l:iepartrn_enVt (i-j"orts)"

The EHQIESF} _Atiravi.*z_-sEe_tV§’~on second impugned order dated

28.07.20’1′{)VV_ is eEso.Vjl:le-en»re-::n’e’oduced hereunder:-

. ., x ” A “~.r.:Q” mv.~,s4’Q” :F QQVflflMElVI QE gAgiyA”rAKg

Q} t;’ Prohibitindissuance of permits for exporting iron ores –

ieg.«_ ,

A Governnvent order l\io.l..oE.186:PSP 2010 dated 26.07.2010

of’ the Department of Public Works, Ports and Inland Water
‘ifransport.

2.’ Demi Official letter i\io.DMG/201041 dated 26.0?.2010 of

the Director, Department of Mines and Geology, Khanija
Bhavan, Bangalore.

Preamble:

On 20.03.2010 the Forest Department has seized
approximately 8, 05,991 metric tones illegal stock of iron ores
from Belikeri Port and approximately 1,155,399 metric ton iron
ore illegally stocked at Kanwar Port. Out of this, about 6. 00
lakh tones of iron ore at Belilceri Port and about 65,409 metric
tones of iron ore at Kerwar Port’ are illegally exported, in this

63

regard, Forest Department has filed cases before Honible
Court, which are pending consideration. Apart from __ this, it
has come to the knowledge of the Government aboutstorage
of iron ore at various Ports with an intention to trar:»sp’ort* and
export iron ore illegally. —

On considering the quantity of iron orefbeinghgiillega_liy 4_
produced in the State from past many yea-rs,__in_comparison,

with the quantity of its local use.and..its e’xport’quantity,. it”.is
learnt that, iron ore in excess of the qua_ntityl.permitted is;
being exported to foreign countries a:nd~’also=su’m totalthe

quantity of iron are exported and quantity of ,o’1fei’for”domestic’–
use are considerably higherthian the quantity ~of~a_uthorized., ‘

production of iron ore.

In the Government Order. _dated_ 12.03′.’20£17, the case
was handed over to, the I-lon.’bie’«..i_o_ka,vukta as per Section
7(2)A of Karnataka ‘ Lokayiiikta ‘A_ct, 1984 to conduct
investigation with regard to purported ‘.’llegal mining activities
in the State and theichargles against’.thersovernment for the
period frorri’C7;I.(?~1.2002g tof;?2;«O7′.2f1’J06 éhd thereafter the said
investigation period is extended ,upto””24.12.2008 and finally
extended upto”’ “1 9_,O7;-.2016′ .and “handed over the case to the
Hon’ble –s..Lol<a'yul<ta to "conduct fdetailed investigation with
regard ..to"j.expo:rt. ofores frorn–"the State in excess of the
quantity foraivhich transport_ permits were issued.

With a 't4iew._0jit'o0limpede illegal mining activities and illegal
transportation"and toicontrol re~use of the permits issued for
transporting .m;fne'rals;' Government has already initiated

_;_vari'o.us necessary actions.

VTo..,inip_ede illegal mining and transportation of iron ore,

ugu.idelines’s._ai.e being formulated with regard to the further

–..,action_”_to be taken by the Department and also for issuance of

permits’.—-_ T he Government has intended to gather information

,.,.._as “f0 the quantity of iron ore being produced in the State,

quantity out of the same being used for industrial
development and the quantity of ore being exported to foreign

0′ «countries and as to the Contractors supplying iron ores to the
iron ore exporting companies, and to re-examine thoroughly

and initiate necessary reformatory actions. With a view to
control illegal mining activities and export of iron ores without
permits and to seize the ores and also with a view to protect
natural resources, it is inevitable to provisionally withhold
issuing permits. Hence, the following order:

GOVERNMENT ORDER N0.CI.162 MMM 2010. BANGALORE
DATED 28. 07. 2010

..i’~4t”*

64

In view of the factors explained in the preambie, the
Government hereby prohibits issuance of mineral uispatch
permit for transportation iron ore for the purpose of.,expor_ting
the same from the State with immediate effect”. a’nd–_un.tii
further orders. ‘ u .

The Deputy Directors and Senior Geo_iogis,ts’–.o’f aii the
Districts are hereby instructed _to…s_trictiy compiy iwith. this V’
order and to initiate aii necessary effect atctionsimmediateiy
to preventi/legal mining: tran5POiT?L’ati{Jri… ” ” ”

By order and in ‘the name of Gov’ern,or,_,
of Ka.rna_tai<a, '

' __ '~{G./Ti.Ada_ci7att'.{)
Under"3ecretary{ to Government,
Department of ,Cornmerce_& Industries.

/1

The Leqai issue?’

The First ,__(;onte”I:t’i:o_h { qoverhment has no
iurisdiction toiiissue the i_nzougned orders):

19. The first .con’tenitio,hn’–»advanced by the iearned counsel for

the petitioners wasv,’vthAa–tsthe impugned orders dated 26.07.2010

not have been issued by the State

V,gov’ern,rrsen’t;,”a:s—-_it was not within the jurisdictionai authority

vested in ttié’j_S.tate government, to issue the same. In order to

‘rsubstantiiiatey the instant contention, reliance was first of an
“..fpiaceti_on’ Article 162 of the Constitution of India, for deiineating
the ‘limits of executive power vested in a State government.

“Article 162 aforementioned is being reproduced hereunder:

“1 62. Extent of executive power of State- Subject to
the provisions of this Constitution, the executive power of
a State shall extend to the matters with respect to which
the Legislature of the State has power to make laws:

we

65

Provided that in any matter with respect to which the
Legislature of a State and Parliament have power to make
laws, the executive power of the State shall be subject-to,
and limited by, the executive power expressly conferred
by this Constitution or by any law made by Parllam__ent”‘.,
upon the Union or authorities thereof”. ‘ V 0′ A

It is apparent from a perusal of Articie 3.62,.~thaf’~th”e::exAecuti–vefi”—_

power of a State is co~extensiveI_withyéthe-,9l’e.gi’slative power”—-

vested with the State Eegislattiresh. Itw_as’ accordeinigiléyi
by learned counsel for the petitio’n:e’rs,_that’ determine
whether or not the ‘SLt’ate hadxthe executive
authority to passythe 26.07.2010 and
28.07.2010,: Vilthlatvtgvvilll have to be carried out
would State legislatures had the
competenceto on the subject on which the

impugned, orders ‘d’a’ted” 2.6..0?.2010 and 28.07.2010 had been

. .'”issue’da.. ?”An<5't.her alternative mode for determining the instant

issue,Vaccerdingfia learned counsel, was to examine whether the

legislative.jurisdiction of the subject (on which the impugned

ii'"~..__"orders had been issued) was exciusively within the domain of the
V"-i5_airl_ia4ment. This iatter alternative, according to learned counsel,
if answered in the affirmative, would also lead to the same

ujfconclusion, namely, that the subject was beyond the scope of

legislative competence of the State, because in respect of

subjects on which the Parliament can legislate, the executive

°"%""'*.?""a£"

66

power vests with the Centre! government under Articie 73 of the
Constitution of India. As a matter of fact, iearnedrtsounsei
adopted both the aforesaid aiternatives to

contention.

20. Learned counsei for the petitioners i'”n_vit’ed._.:ou(r»ajttention

to Articies 245 and 246 of thesicuonstitution L’ Thceisarne

are reproduced hereunder:

“245. Extent of la ws ‘m’acie_._ by.vPar!iament and by the
Legislatures of States; ._— (1) ‘Su–f)jeCt..V(_i’O_ the provisions
of this Constitution,’Parliarnel:.t’;rnay’. make laws for the
whole or;a’n’y.. ,’uart*_ofg the territ_or..y_ of India, and the
Legislature, offja State may make laws for the whole or

any part of_the”State.”-Q.K

(2) No iaxwmaide =by”–the–.Parllarnent shall be deemed to be
invalid on’the_2groun.d*thatit would have extra–territorial
op’eration.i ‘ ‘ L . ~ ‘

246. *$_ubject–matter”.»sof laws made by Parliament
and by ‘ ‘=_LegisIatures of States.- (1)
uglvoiwithstaiiding anything in clauses (2) and (3),
‘Parliament has exclusive power to make laws with respect

« , ‘ to any of,_the matters enumerated in List I in the Seventh

-.Sc*h_eduie_ (in_ this Constitution referred to as the “Union

‘ ”

(2)(..iVotwlthstandl’ng anything in clause (3), Parliament
“and, subject to clause (1), the Legislature of any State
aiso,’:.have power to make laws with respect to any of the

. matters enumerated in List III in the Seventh Schedule
“( in this Constitution referred to as the “Concurrent List. “).

(3) Subject to clauses (1) and (2), the Legislature of any
State has exclusive power to make laws for such or any
part thereof with respect to any of the matters
enumerated in List II in the Seventh Schedule (in this
Constitution referred to as the ‘State List’).

(4) Parliament has power to make laws with respect to
any matter for any part of the territory of India not

67

included notwithstanding that such matter is a matter
enumerated in the State List. ”

Broadly speaking, according to learned counsel, it emerges from
the provisions extracted hereinabove, that Pari_ia~nfie.nt._v has

exclusive power to frame laws in respect of subjects’e’r1-iii’in§erate.d

in the Union List of the Seventh Schedule ofth’e=.Co,nstit’u,tio_n

India, and State legislatures have the exacijusAi’ve -po’»ve’r:’to “eriract

laws in respect of subjects’iV’e.n’umeratedV
contained in the Seventh SchedVuil’e.V’,Vofuthe”Consitnitutifon of India.
However, according to was essential to
alfiiilreciate, that ,._|69isia.ti\ié_}.silIl$efrio”rityV’I’:VV–l$~–“V”vested with the
Parliament, lehgjilhsiat-Evie authority vested in
State tvestied Iwith the Parliament. It

was inajthe aforesaid legal submission, that

iearne_éd’counsei” forthe: petitioner first invited our attention to

entry’ t,h’e.._VState List contained in the Seventh Schedule of

the”-I’CoAn”stitutEo.nV<'of India, and thereafter, to entry 54 of the

Union List 'c'c-ritained in the Seventh Schedule of the Constitution

,Vof..India."'-' "Entry 23 of the State List reads as under:~

.."23. Regulation of mines and mineral development
subject to the provisions of List I with respect to
regulation and development under the control' of the
Union." –

It Entry 54 of the Union List contained in the Seventh Schedule of

the Constitution of India, reads as under:~

f””a””~

68

“54.Regulation of mines and mineral development to the
extent to which such regulation and development under
the control of the Union is declared by Parliament byjlaw
to be expedient in the public interest” 2 r

It was the submission of the learned counsei f’or’.,’:t:i1eV.p:etitio,n’ers’,4_

based on entry 23 of the State:*iiLi»st,, .Vl§.{_–_;;«5latiyVes,

competence of a State Legisiature’i<,wo_ul'tl extend, to'vi_Tmatters
pertaining to regulation of mi.ne's.V_and"' minerals 't_le'x.*elo:pmer*:t,'

subject to one condition ie., tohiproyisigoins of List I

with respect to regulations the control of
the Union". it §»ia's.,,t:h.ere§§9re the authority of the
State 4..éLl@l:3,§3l'Vlent to any legislative
provisionjefnacted by Parliament under
entry Stiqot the to entry 54 of the Union

List, it waxsytheV'asse.rti'o.n of the learned counsel for the

~"'~._vpetit,'io7neEr_fs, that o"n«t.h.e.'entire subject matter contained in entry

List, it is open also to the Parliament to enact

legislation, é–sg:_bjiect to the condition, that the same was done in

',V"pubiic ,in"terest". Accordingly, it is sought to be asserted, that if
uuV'flfl§ari'iameVn"t enacts legislation on the subject of regulation of
rninesiiiand development of minerals in "public interest", the
"State Legislature would be denuded of the power vested with it

it under entry 23 of the State List, corresponding to the extent to

which the former had chosen to legislate. Since the assertion

"7

69

made above, has not been contested by the learned counsel
representing the respondents, we shall proceed further by

assuming, that the jurisdiction vested with the StatejLe.g–is’la,ture

flowing from entry 23 contained in the State Listfaf
Schedule, will be co~extensiveIy reduced_._to _-thelilea-it;en’t”o4_niVw*hVichi 1

the Parliament has enacted legislationfun’der=_ei:try:VS§,._,oi1.i.the 2

Union List of the Seventh oftthe India;

The primary reason for making ythwe-..efor_esaid was to
demonstrate, that enacted the Mines
and Minerals (fleveloiprnenit Act, 1957
(hereinafteri. Minerals Act’) for which
legislativelcoympeteynce entry 54 of the Union List
contained’in”the’Sev.eénltlj–~.:§ch’edule; the legislative competence

vestedin theu”Statei.Legislatures under entry 23 of the State List

‘st'”co,nta.i.ned’i~.in”the sex/’e’r1t’h Schedule of the Constitution of India,

reduced ie., to the extent of the area of

legislation. coixieried by the Mines and Minerals Act.

_ Z inviting the courts attention to the Mines and Minerals
_..”‘:tCt.,’».iE.””VVaS the vehement contention of the learned counsel for
the petitioners, that the entire field of legislative competence,

{vested in the State Legislature under entry 23 of the State List,

must be deemed to have been taken~over by the Parliament in

terms of the mandate of Article 246(1) of the Constitution of

70

India, read with entry 23 of the State List, and entry 54 of the
Union List. The instant aspect of the matter is also not..d’isputed

at the hands of the Advocate General,

respondents E to 5. Having taken us throu.g,_h”vv.the::’a.foresai.d7..

contours of legal craftsmanship; |ea,rned”._

petitioners principally referred to thhei-,tw~o pr¢i.«’;ii,i¢’ns;
Mines and Minerals Act. Reiiahcaer was “placed on
Section 15, thereof whic’r’i’i’s,_ hereunder:~
.415. Powergof State jlmake rules in
respect .,

(1)The State. Goivernmjent’—n3ay,, by notification in the
Official Gazette,» rriakeg rul’e5.___forregulating the grant of
quarry’ leases, rriin+ing~leases orother mineral concessions
inlrespect of minor ‘minerals and for purposes connected
therewith.’ V ‘ ”

(IA) «particularAanhdyiilthout prejudice to the generality
of. the foregoing’power, such rules may provide for all or
.. ifanyiof the fo’llowing, matters, namely.’-

a._ theperson by whom and the manner in which,
“applications for quarry leases, mining leases or
V”‘o’ther’i.miheral concessions may be made and the

fees to” be paid therefor;

lathe time within which, and the form in which,

-,_a”cl<nowledgement of the receipt of any such
applications may be sent;

at the matters which may be considered where
applications in respect of the same land are
received within the same day,’

cf. the terms on which, and the conditions subject to
which and the authority by which quarry leases,
mining leases or other mineral concessions may
be granted or renewed,’

71

the procedure for obtaining quarry leases, mining
leases or other mineral concessions;

the facilities to be afforded by holders of quarry»-.44
leases, mining leases or other mineral concessions- — l
to persons deputed by the Government i_’or”‘the ” ;.
purpose of undertaking research or training in

matters relating to mining operations; _

the fixing and collection olj.ren’_t,’ ‘ royalti_v,– .l’ees,.
dead rent, fines or other cliargiés ~and4the_ firne.
within which and the manner in which these shell ‘

be payable;

the manner in which the “rights or”third parties
may be protected (whether–.by way of payment or
compensation or ‘”otherwise)” ~ln.case where any
such party is pre’judiciallyF e-fiected hby reason of
any prospecting or mining ogberations;.’v __

the men;”7er1’.’n which the reh’eb’iiitati§jn of flora and
other =vege’tatio~n,V such as trees, ‘shrubs and the
like des’tro’yez_l ebyjg’*—reasens7o:’..any quarrying or
mininVg”»o,t5eratir:ns shall be made in the same area

.~”o’rv ..in”j.any3i::,;oth”er”‘=area””selected by the State

Governimeni<i.(wh'ether by way of reimbursement

of the cosft-of rehabil_itat'ion or otherwise) by the

'person holdlrig theg1ia~rrying or mining lease;

theilmanner-.inA'which and the conditions subject to

V which, quarry lease, mining lease or other
;_..min_eral concessions may be transferred;

L fth-ei cgnstruC_tion, maintenance and use of roads,

pe'e«ert:: transmission "lines, tramways, railways,

.a.eri.js-lb ropeways, pipelines and the making of

passage for _water_for mining purposes or any land

" _ éemprised in '_a. quarry or mining lease or other
"'mirier'a_l. eoht:ess'ions," Z

' the'fgrnr"l bf re_'gisters'to be maintained under this

Art;

the reports and statements to be submitted by
holders -of quarry or mining leases or other
mineral concessions and the authority to which
such reports and statements shall be submitted;

‘U-In-mam-..

72

n. the period within which and the manner in which
and the authority to which applications for revision
of any order passed by any authority under these ” ,
rules may be made, the fees to be paid thereforce,
and the powers of the revisional authority; and_ ‘ . V *

0. any other matter which is to be, or mayxb.e” M
prescribed.

(2) Until rules are made under sub»se.cticn'(1),_ any ‘rules f
made by a State Government regulating the grantfiof._
quarry leases, mining leases or other mineral concessions ”
in respect of minor minerals which . are irj”-.foirce
immediately before the commencement of “this Act shall
continue in force. — ‘ ~ %

(3) The holder of a’-«.rn;Fnin’g lc-ase*–..ori any other mineral
concession granted uinder-‘. 7’any_ ‘rule ” –made under
subsection (1) shall payroyalty or dead’rer-rt,’ whichever is
more in respect._ of minor mineiiaisxremoved or consumed
by him or 2:’) y his agent, rnanager, ‘ernployee, contractor or
sub~les_see’~vat thVer’.rate’prescribed for the time being in the
rules friamedby the .St’afteA Government in respect of minor
mii7_’3f’3ls’;~.’.’ ;_ &_ E

Provided Government shall not enhance
the”>_ra’te_ of royalty ‘ore’.eai:_l_ rent in respect of any minor
mineral for more. ‘thanorice during any period of three
Vears”.>,_ 7 i V

“‘«–.Refe’rr’iing_..tto.,i,Section’*—-1–S’ of Mines and Minerais Act, it was the

learned counsei for the petitioners, that the

sarneiis to minor minerais. It is pointed out, that the

fterm ‘nz.in’o:r minerals has been defined in Section 3(e) of Mines
C_anVd;iM;neraEs Act, it is however the contention of the Eearned
‘ coonsel for the petitioners, that iron–ore does not fall within the

“”gHcVfefinition of the term “minor minerais” on account of the fact

that the same has not been declared as a minor minerai in terms

of the requirement of Section 3(e) of the Mines and Minerals Act.

73

Thus it is asserted, that reference to Section 15 of the Mines and
Minerals Act, in respect of the controversy raised in theinstant

petitions would be wholly misplaced. Since–«j”it:K_stands

acknowledged at the hands of the iearned

respondents, the iron ore is not sha’Ii»_

proceed on the assumption that Sections Minesiand

Minerais Act, would have no alpp-l.i.cabi’l’ltyV–Lo tl’ie”convt.ro\;9ersy-in

hand.

22. Reference was then.rnacie;to”‘–S’ection 23C of the Mines

and Minerals Act.*–The aforesaid”.p’rovis’io.n” being reproduced

hereund_e–r:–»+. M

“23C.: Povverf’-of -Government to make rules for
preventing illegal mining, transportation and storage of
minerals: V ” ” .- .

(1),”i”he State Government may, by notification in the Official

‘c3az.ette, mal<e– ….. rules for preventing illegal mining,

, transportation and storage of minerals and for the purposes
' " .. connected 'th erewith.

-_(2inviniparticular and without prejudice to the generality of the
foregoing power, such rules may provide for all or any of the
“following matters, nameiyh

an “establishment of checl<–posts for checking of minerals
"~ under transit,'

(b) establishment of weigh-bridges to measure the quantity
of mineral being transported;

(c) regulation of mineral being transported from the area
granted under a prospecting licence or a mining lease or a
quarrying licence or a permit, in whatever name the
permission to excavate minerals, has been given;

3%’

Cl”

75

exclusively been vested with the State government, wouid be
deemed to have been vested with the Centrai government.

Therefore, it was the submission of the learned cou.nse’If..for_ the

petitioners, that in issuing the impugned__A~’:orde’rsf~-.Tcia–t.eti

26.07.2010 and 28.07.2010, the…__$tat_eW'”ei%e:’ut»iv’e,V

transgressed into the jurisdiction 7.exc’l’us’iVve’l~,.r_ “ve’sted:”*—..in*igthe

Central government. Accordingto theuiearned: cojunselfor the

petitioners, the legislative comp_ete.n_ce._V_vincl.u’d..i.ng’§ reguiatory
controi in respect of the”su”b,j’ect impugned orders
have been issued,.ivests:wiit»h_ government. As such,
it is also rules framed in this
behalf empovv.erin’g’,.’tghe” to introduce regulatory
measures, _V Orders dated 26.07.2010 and

28.07.20’1°0__c”o,uld issued, for the alleged purpose

“cot iritrod..ucirrg, regullatory measures, by the State government.

»ivva:s”_:,sought to be concluded, that the impugned

orders were iiable to be deciared unconstitutionai and void, as

“the sarnvegare beyond the jurisdictional authority of the State
” ove rnm e nt.

23}. In order to substantiate the first contention advanced by

the learned counsel for the petitioner, reliance has first of ail

been placed on the judgment rendered in State of Orissa v. MA.

SW26″

83
us, of the stance of respondent No.6 ie., the Union of India.
Appearing for the Union of India, it was the categoric suilbrnission

of the learned Additionai Solicitor General, that;the’§i’m_pugned

orders dated 25.07.2010 and 28.07.2010, p1ass«.=.4¢ii~i..at-ftfhe ‘n3ar.ds’
of the State government, fail withing the,,4gexec_utiv’e–..,authorityi’of V

the State government, under.i’S4ection_”23C of.v–‘Vtl*ie’ lzviiniesiainda

Minerals Act. It was sought to””‘be:assertedV_ o’i’.-“V-thezstirength of
Section 23C aforementioned,jg’Vtlhiatcilswat’-..$tategovernment is
authorized to frame rules_inte,rV iiiegal mining,
illegal illegaglljj’storageigof minerals. And as
such, the be deemed to have the
jurisdictiolnligtol actions, as may. be called
for, within theVareaof».the,:_:aut’hority vested in it, under Section

23C of the I’/lliiues and Il\?iinerals Act. Referring to the impugned

‘V.”‘orders,’ it: is the alsvsértion of the learned Additional Solicitor

Q’Gerierafl”flrebidesenting respondent No.6, that the scope of

activity conlternlplated in the impugned orders falls squarely

‘within thvellambit of preventing illegal mining, transportation and
of minerals, and as such, the Central government was
fulfily satisfied, that the State of Karnataka was competent to

pass the impugned order.

25. Learned Additional Solicitor General, however expressed

one reservation in the matter, namely, that the subject of

Cl”

84

“export” falls exciusively within the domain of the authority

vested in Parliament and/or the Centrai govern’mVe~n_t,..,_and

therefore, to the extent of the impugned Edrated
26.07.2010 and 28.07.2010 ordered a ban Or:-«’»’é5:§iiiC:Jrt,’:’ of
ore, the same was unsustainabie. Itgwas. ”

of the learned Additionai Solicitor V’G.elnerai,,»’t’hVVat:’_the’;

government has neither any jurliisdiction “narfaniy authority, to
issue an order by which’if,e’>E.por.:tV’ lanythiing, including iron–ore,

can be banned. ‘V

26. In. ‘to;_.t’l’ie_fia.’stfcontention advanced at the
hands o_f..ithe'”*!.e’arne_d_ c.o’u.nse’l«–for_,the petitioners, the stance
adoptedlton –.b’ehal’F.of.:State._o1’..K’arrnatai<a was, that the Mines and

Minerals Acttcleariy' authoriifges the State government to pass the

impu,g_%;nedri.orders,and as such, the impugned orders were well

thveijgurisdictionai authority of the State government.

27, V""i3efore'iiclw'eV||ing into the submission advanced at the hands

fof the learned Advocate General, it wouid be necessary to point
V' '.j_'cuVt,ll"that the Advocate General in clear terms acknowledged,
"l«.-'thatl the submission advanced at the hands of the learned

counsei representing the petitioners, that legisiation made at the

hands of the Pariiament under entry 54 of the Union List

contained in the Seventh Scheduie of the Constitution of India,

_5_f'""6e"

85

would co–extensively reduce the legislative competence of the
State Legislature under entry 23 of the State List coritaliined in

the Seventh Schedule of the Constitution of ,.:f’u.l,ly

justified. In fact, during the course of hearing’,~–..the:’Advocatel
General went to the extent of assertingpthait'”h_aving_.: the 7,

Mines and Minerals Act, andhhaving-., Ir-ecorded,.a” deci.ar’ati’on,

therein (in Section 2 thereof), to”tihhel»effect,” that vvahsllexpedienlt
and in “public interest’.”i.’hat the luniogn”-should”‘ta’ke under its
control, the regulation of~i.”Vm’ihes%’V development of

~.t,h.atVj’ifor all intents and

minerals, it
purposes, the vested in the State
Le9islati1’re”‘uind}?.r.&e:i?itrv””ii13’-Viol”the°State list contained in the
SeventhV:”‘;Sched’ulVe’ofirhe.4V_:Co:n’stitution of India, had been taken

over by Pairliigarnent, iliviltepfns of express provision to the said

itI”effect.A:(im”i~.en’try 5éi’o’f”‘tVhe Union list contained in the Seventh

the.:C;Qnstitution of India). It was expressed at the

hahdsof Advocate General, that he would establish the

hl”~.«..”ivalidity’*of the impugned orders dated 26,07.2010 and

“i2_8,0″7’;_20 10, from the provisions of the Mines and Minerals Act.

The aforesaid assertion at the hands of the learned

Advocate General, to substantiate the validity of the impugned

orders dated 26.07.2010 and 28.07.2010, was based on Section

23C of the Mines and Minerals Act. It was his submission, that

uaaéayihwswqfi

86

under the Mines and Minerais Act, every State government has

been vested with the exciusive authority to frame..VVr~-dies for

preventing iilegal mining, iiiegal transportation oifmmiin_’e-ra’is.,.___”as
aiso, iilegai storage of minerai ore. It was*va»ssie~ri:ed,: t«hat_:ti’iep’V–_
State government can adopt various.,_reg-uiaftory “measures under 2′

Section 23C of the Mines and.»i’i’~3i_.r’1erai’;<3_v_.€'\'t:t, as»'io0r,i:i'nstaTnc€,

establish check posts for checi<'i'vng_t'ti1_e under transit,
under Sub–section 2(a)'th'e.reo.i,.""§V_f¢-Sifigéabglish bridges to
measure the quantity of under sub-

section 2(b) th_eref;1ii,’Vtoil-.reg:.u:i’ate”theV”tra.nsportation of minerai
ore in the to excavate the same has
been thereof: to inspect, check
and searc’h!’niinei’aVis’.iat._tr*ie’:i’pia.ce of excavation, during transport

or at the p|a’ce_of_storagVe’,”Vunder sub-section 2(d) thereof; to

‘ it”;3res’c.ribe,”ranyygother”regouiatoiny measure required for prevention

iéiiiegiai”..rjni~nin.g,_;.illegai transportation of minerais and iiiegal

storage of.’mir’erai ore, under sub-section 2(9) thereof. It is

i”~.«.._’*therefore ‘asserted, that the impugned orders dated 26.07.2010
28.07.2010 having been passed for the purposes referred to
in§Section 23C of the Mines and Minerais Act, the orders issued

by the State government were within its jurisdiction, competence

and authority.

leewwe

88

amongst various limbs of the Government working within their
respective spheres of allocation. The object of regulating the
recruitment and conditions of Service by statutory provisions is
to rule out arbitrariness, provide consistency and crystallige
the rights of employees concerned. The statutory prcvis-ion’s
which are unworkable and inoperative cannot a.ci:i.eve.*th’ese
objectives. Such provisions are non est till made opera-tion~;_al.,_

It is the operative statutory provisions which have ,*:he “effectof*

ousting executive power of the State from–…the same f,ield«..,
When in a peculiar situation, as””in..the’ prese–.t:t’ case, the ‘
statutory provisions could not beioperated there ‘w_as–no_ bar for
the State Government to act in exe-rci’se of its~.eXecutivei’po”vver.
The impugned notification to hold special selection’ ‘was1is”sued.

almost four years after the en_forcem.ent of theu.Ru.les. .xIt was’

done to remove stagnation a’nd”to afford garnopportunity to the
eligible persons to enter the service. Inour view the State
Government was jusfified ini’issuing “the impugned notification
in exercise of its executive-‘pow.er*<an.d 'the High Court fell into
error in guashing the same") A.

30. On the :issu:e’,’_-.as to llllhlethig-if~{9_ifnotiifthve State government
could have t;a_nning .’.7export” of iron ore, it is
sought to” Advocavte General, that there is no

provision”._under theV.’v’MiniesV’na_nd__’Minerals Act, which prevents the

V.”;’~3tat’¢:»..{‘go’vern.menti”f’rom passing any such orders. It is

GG’subrnitteiciyihthvat.Ithe impugned orders had been passed under

autiaorityvveisted with the State government to take preventive

‘action against illegal mining, illegal transportation of minerals, as
“‘ia_lao,’.il_iega| storage of minerals under Section 23C of the Mines
..__1″‘:an’d Minerals Act. it was also asserted, that it was open for the

upstate government to pass the impugned orders, whereby

“export” of illegally mined ore could be prevented, so long as the

same was for the objects and reasons emerging from clauses (a)

89

to (g) of sub–section (2) of Section 23C of the Mines and
Minerals Act. This action, according to the Advocatefiienerai,

wouid also fall within the purview of the regu|atory”m_’easures

entrusted to State governments under Section 23C

and Minerais Act.

General differed from the submissions
Additional Soiicitor Generai of A if if A if

31. We have given our thou-gh’tfu’|”consildlervationi to the first
contention advanced by for the petitioners.

Before recording4ourgconcluVs’io:n,.:’it..V}Nouv!’d’essentiai to notice
that the provisions;:.co’.ntai_ne_dLin and Minerais Act can
be dividpe.d_.,i_ni~of”‘tri.ree_’ ” part” is covered by
Sectionsgéi to in the first part deai with the

subject of “‘–f_’regui’ati’on”‘»–oiflmining, of minerais. The “second

‘by Sections 18 and i8A. The provision in the

the subiect of “deveiopment” of minerais.

_ The””thirvi;1: is covered by Sections 19 to 33. The provisions
the part deal with “misceiianeous” matters connected

3′ . with-dieveiopment and reguiation of mines and minerals.

327- From the “first part” which pertains to regulation of

mining of minerals, it is relevant to make a reference to Section

13 of the Mines and Minerals Act, which deals with framing of

To the aforesa_id.».e_x4ten:’,” learried”‘Aciivo€.§3t§. _

90

ruies for the grant of prospecting licences and mining ieases.

Section 13 aforesaid, has been extracted hereunder:

“13. Power of Central Government to makejV’riiiies*.,in
respect of minerals: v i” ‘ I

(1)The Central Government may, by notification. in the
Official Gazette, make rules for,[[regulatin”g” ~ the “grant ,0f”
[reconnaissance permits, prospe’cting’«lic’ence5_ and’ ‘–‘:ini’n’g
leases] in respect of minerals and ,for5pu’r,poses con-n_ect;e:l
therewith. ” » .

(2) In particular, and witho–u_t*prejudice to the VVg_en’era’lity of” l

the foregoing power, such rules may provide for all or any of
the following matters__namely;..–._ .

(a)the person by whom, ‘and ‘”the”‘»–imanner in which,
applications for Vfreconnaissiance..perrn’its;, prospecting licences
or mining leases] in respect ofland ‘inwhich the minerals vest
in the Government’ .r_r.’ay..be ~..made and the fees to be paid
therefor; . ;

rbjihéi’ “tithe itiigithih’~,fwhich,”””‘.§’nd the form in which,
acl<novvledgement,of'«th'e…_re–ceipt of any such application may
be sent,' ' '

(c)the’matters’ which be considered where applications in

respect of the’ same’-land are received on the same day;

– [d)(‘o.mi’tted by ‘céheai Act 37 of 1 986);

~u”a.ut”hority by which [reconnaissance permits,
” ._prospec_ting”iicences or mining leases] in respect of land in

it A V “which ‘the minerals vest in the Government may be granted;

r:)tl”l’e procedure for obtaining [a reconnaissance permit, a

prospecting licence or a mining lease] in respect of any land in

it ‘*..which the minerals vest in a person other than the

Government and the terms on which, and the conditions

it ‘subject to which, such [a permit, licence or lease] may be

granted or renewed;

(g)the terms on which, and the conditions subject to which,
any other [reconnaissance permit, prospecting licence or
mining lease] may be granted or renewed;

(h)the faci’liti’es to be afforded by holders of mining leases to
persons deputed by the Government for the purpose of

*'”a:°'”‘”1,.?*Wér”

91

undertaking research or training in matters relating to mining
operations;

(i)the fixing and collection of fees for [reconnaissance
permits, prospecting licences or mining leases], surface rent,
security deposit, fines, other fees or charges and the”-Vtime

within which and the manner in which the dead rent 9,-.;¢¢y,;it;«

shall be payable;

(j)the manner in which rights__.o.f.__third be]

protected ( whether by payment of “.compen;-zation’ or
otherwise) in cases where any such p:artyc’ma»y be prej’u”c’ici’aii’y

affected by reason of any [recon.nais_sance, _–prospectin’g~_o’r_

mining operations]; ..

(l<)the grouping of associated3.minerais' the purposes of
section 6,' _

(l)the mannerir} wh,ich,”a.n1d the’s.conditioris subject to which,
[a reconnaissance pierrr§lt,–~~’a prospecting licence or a mining
lease] may’..beg’;tiansferred,’ ‘

(m)the construction, =.m’a.intenAance and use of roads, power
transf’n;’ssAi’c-Ln lines, “‘-tra-mwa”ys,V– “railways, aerial ropeways,
pipelines ‘and the niiaking of passages for water for mining
purposes on ar.r’y..laiad co__rn’pri’sed in a mining lease;

(n )the” fortm_oti’registers”_.to be maintained under this Act;

,, ._@)(omitted by Central Act 37 of 1 986);

(‘p)the reports and statements to be submitted by holders of

“[re’connaissance permits or prospecting licences] or owners of

mines .andfth~e authority to which such reports and statements
“shall be ‘Submitted;

4’x(q)”‘rheV ‘period within which applications for revision of any

order passed by a State Government or other authority in

” I exercise of any power conferred by or under this Act, may be
made the fees to be paid therefor and the documents which
‘ ‘shall accompany such applications and the manner in which

such applications shall be disposed of;

(qq) the manner in which rehabilitation of flora and other
vegetation; such as trees, shrubs and the like destroyed by
reason of any prospecting or mining operations shall be made
in the same area or in any other area selected by the Central
government (whether by way of reimbursement of the cost of

Q

92

rehabilitation or otherwise) by the person holding the
prospecting licence or mining lease; and

(r) any other matter which is to be, or may be, prescribed
under this Act”. ..

A perusai of Section 13 reveals, that the

rules, relating to the grant of prospecting |_iC”en’ce’s.a’nd”.mEning_

leases is vested with the CentralV”g0vernjment.”~’
substance, it emerges that theh_’Ce_,ntral’gdvegrnhnvent’controls
field of the “regulatory” grant of
reconnaissance permits, and mining leases.

It is also essen’tiei,i:’o rriake refe’re.i1ce__to Section 17A of the
Mines and Miinera’irsRl\’ct,.wh’i,’Cii’a1soV’*f.aIis’ in the first part. Section
17A aforemenrtiened:7;/s’ extracted hereunder:
V””‘_1§’A. V . Vltésetmrafioiz of area for purposes of
conservation’ I é
_ ‘ V _ (1 Thefentral “Government, with a View to conserving
5a~ny..cmi’neral and~—a–ft’er consultation with the State Government
1 * .. _Vmayireserve any area not already held under any prospecting
V narfmiiinlng lease and, where it proposes to do so, it
g”‘shall,.”V5y vlnotification in the Official Gazette, specify the
E”bounda’ri’es of such area and the mineral or minerals in respect
g oi a~v.liich such area will be reserved.

V L’ _ (IA) The Central Government may, in consultation with
h h the State Government reserve any area not already held under
any prospecting licence or mining lease, for undertaking
prospecting or mining operations through a government

company or corporation owned or controlled by it, and where it
proposes to do so, it shall, by notification in the Official

.w—–

93

Gazette, specify the boundaries of such area and the mineral or
minerals in respect of which such area will be reserved.

(2) The State Government may, with the approval-,of the
Central Government reserve any area not already jheld–«.un,der

any prospecting licence or mining leasefw’undertaiiring

prospecting or mining operations through”-ax giovernmentbi

company or corporation owned by it,».a,nd iéi/herefit, ‘propojses._VtoV ‘

do so, it shall, by notification in the Official (§a2?e.tte, ‘spe-;_ify;tr}e

boundaries of such area and the m’lnera_l or min;erai’s”in ‘respect

of which such areas will belreslerved. __ V, _
(3) Where in exercise of.the.upowe’i*’s._conferred by sub-

section ( 1A ) or sub~sez:tion Central Government or the

State Goverr:ment,fi’as- fthe be, undertakes
prospecting €o,c)’erations-“in.any area in which the
mineralsv’est1″in3V’..a.Vpri*l{at’e,__p’erson,g_ it shall be liable to pay
provspecting”fee,__royalty,’surface rent or dead rent, as the case
may be, “r’rom to”ti_me at the same rate at which it would
have been pgayable act if such prospecting or mining
operations had beengfiundertaken by a private person under

prospecting. licence or mining lease. ”

.pe’rusa’lf oVfA..Section””«i7A extracted above reveals, that the

VAa.u’throrii’t:.,:.:”to”reserve any area for conserving any mineral also

vests_:wi_t,h~ Central government. Although the aforesaid

~’~___V’provision,clarifies, that the aforesaid regulatory measure has to

g”‘tte’v_,_c:a’rried out in consultation of the concerned State
government, the fact remains, that the ultimate and the final

control in the matter rests with the Central government.

ffnf”

no–may

«J3.ad£,i,.,L_,e\,

33.

subject of minerai development. Section 18 aforesaid “is being

94

From the “second part”, reference deserves to be made

to Section 18 of the Mines and Minerais Act, which covers the

extracted hereunder:

“18. Mineral Development

(1) It shall be the duty of the Central Government. to,:talEe~
such steps as may be necessary for the–~con.se.rvation and».

systematic development of mineraisin India ‘and Vfor’, the
protection of environment by preventing or ‘con.tro.!i’ing any
pollution which may be caused”-by¥__prospecting or rmining

operations and for such purposes’—- the Central. ,Goverhment”g
may, by notification in the Cjfficial Gazette, mal<<e'~su,ch* rules, '

as it thinks fit. V, .

(2) In particular, andgwithout prejudice to the generality of
the foregoing power,~–..such rules m”a.y*prov_ide for all or any of
the following matters, na;mely.;* ” .

a. ——– –..thé’~opeii:?ng_ ofnew mines and the regulation of mining
operatioinsjin any area;,’ .

b. the reg’u_lat.*on”~_,of._ the excavation or collection of
minerals from any ‘mine;

c. ‘the. measures ,.to”—be taken by owners of mines for the
purpose’~,of*beneficaiation of ores, including the provision of
suitable contrivances for such purpose;

V ‘ the de veiopment of mineral resources in any area;
, e. the notification of all new borings and shaft sinkings
and t=.’fie4.preservation of bore–hole records, and specimens of
V V . cores,of altnew bore~holes,’

” ” A “_th_egregulation of the arrangements for the storage of

mineraisiand the stocks thereof that may be kept by any

“”‘—-pers_;on;.

g… the submission of samples of minerals from any mine
byrthe owner thereof and the manner in which and the

» if authority to which such samples shall be submitted ; and the
* . _ talcing of samples of any minerals from any mine by the State

Government or any other authority specified by it in that
behalf;

h. the submission by owners of mines of such special or
periodical returns and reports as may be specified, and the
form in which and the authority to which such returns and
reports shall be submitted;

i. the regulation of prospecting operations;

j. the employment of qualified geologists or mining
engineers to supervise prospecting or mining operations;

‘-n—-

96

“23C. Power of State Government to make rules for
preventing illegal mining, transportation and storage of
minerals:

(1) The State Government may, by notification in the ~-.C,)’ir’fl_f_cial

Gazette, make rules for preventing illega.l’_».:niining,

transportation and storage of minerals and :’the._pL:rposes

connected therewith.

(2) In particular and without prejudice_”Lo’iVthe»generaiityioisogfitfie

foregoing power, such rules? may provide forgali. anyijofitthefl

following matters, namely:-

( a )establishment .or’..,_check-‘posts for checking “of minerals
under transit; ” ” p

(b) establishment of Aweigh-.bridg:es “to,mea:3tire the quantity of
mineral beingatranspgortedfyg ‘ ” ‘ ‘

(c)reguiat.’o.n_ ‘o.f.’;V–min.eral »..being=f transported from the area
granted under a prospecting..licence or a mining lease or a
qua.ITyingv.,;licence or _a “pa-_rmit.,3′ in whatever name the
permissionlto excavateggminerals,’ has been given;

(d)””insp.ection, search of minerals at the place of
excavation or”sto’ra’ge orgyduring transit;

g fe)5m’ain’tenanceVH’of «registers and forms for the purposes of
” -» _, tilt-,’se* .rul’es,’ __

within which and the authority to which

applications for revision of any order passed by any authority

,.,,,..pe preferred under any rule made under this section and the

fe.es’~_to be paid therefor and powers of such authority for

., disposing of such applications; and

_lg)any other matter which is required to be, or may be,

prescribed for the purpose of prevention of illegal mining,
transportation and storage of minerals.

(3) Notwithstanding anything contained in section 30, the
Central Government shall have no power to revise any order

passed by a State Government or any of its authorised

97

officers” or any authority under the rufes made under sub-
sections (1) and (2). ”

A perusal of Section 23C leaves no room for any doubt, that

under the ” third part ” the subject of “preventing” i|legaii~.,rni.ning,

iliegai transportation of minerals and illegai storagfe’oi§n2i:nier.ra’ls_,

has been vested with the concerned State goveir”‘nrn:e.nts:.:

35. On the basis of the inferen.ces’_”draw’n.in the:V’i5re§’o_i:ng

three paragraphs it would be rea’so.nablev~to conic.vlude,…t,ha3t if the

subject matter of the irnpugned:Vo’;=ci_er__ fa.l.|’s’–iuhAdejr% the ” first
part”, the State governrnentwé.ulci»’h.avev’n’o authority. Likewise,
if the subject matter of fall under the
“second part’7_. would have no

authority. But.,if::~ttien the impugned order would

fali unicleriisection. oi’ the Mines and Minerals Act under the ”

i.hiFd,vi”part;ii, in our view, the State government would have

gzioinfer and authority, to pass the required orders.

it sigma c:o’l’iec_tive perusai of Sections 13, 15, 1._?A, 1.8 and
V’ the Minesnand M’inera|’Ac:t, the scheme of controi over
dififerent fieicis, cnvered by the Mines and Minerals Act, becomes

clear. From the aforesaid, there can be no dnubt, that the

scheme of the Mines and Minerals Act vests the authority of

making rules for preventing iliegai mining, transportation and

“”‘”t”‘”‘”t_5_'”%(”

98

storage of minerals under Section 23C aforementioned, “with the
concerned State government. And thereby, also«.ve.._st~3_ the

concerned State government with the executive a.ti:t.horliVty’*—to-cleatl

with the subjects envisaged under Section 23€1″of:the”‘Mines__and,
Minerals Act. The question which airtisestifcfir lconsid-er’ati-o_n”from ‘

the impugned orders dated 26f(}?_,201vi}.,_andt2G’i'(5Z;2Qt10jlneyilther.

relates to “regulation” of mines alri’d_:mitnera’l’s in the first
part), nor to “developme–nzt,’~’ of–‘_Vrni;iels:’anclfmlnerailis ifalling in the
second part), but p_ointedl.y._rel-ates’, of “preventing”
illegal mining” third part) under
Section 23C€’their_e4_oif,”;”AS:::s’uCh:,”‘ ten be no doubt that the
State authority, and competence

to issue the i’inpu’g.ned]ordteirsi.

37. It needst–_.Vto kept in mind, that if the measures

introduced.,bvtl’the Central government, under the first two parts

ofitlhet,«MVi’r’ie’sv._ar’:~d”Minerals Act, are legitimately carried on, there

V _ would bev–..’:rto’difficulty. The difficulty would arise only on account

violation thereof. But then, if the “regulatory” and

” within the territories of different States?

g-_”d_ev’e–lopmental” measures are violated, would the Central

government he in an effective position to deal with the same

It must also be

understood, that the minerais found in the geographical area of

“”acWvEW~a’i

100

We, therefore, have no hesitation in concluding that the State

government was fully competent to issue the impugned ordgers.

38. It is also possibie to conciude, from a co_|_i;ect’iv,e–.’..re’a_ding

of Sections 23C and 30 of the Mines and Min_er-al.AsfAct,.::: thatthe
area of jurisdiction vested in theI_Sta.t.e’ jj.gove.r_nri§ent5,Heats? is *

covered under Section 23C of? the M’i”n_es– and,V.’Miivnerais’:’;Act,Ais»

exclusiveiy vested in the State g’ovei’nment;.. ‘,”‘S-ectioin 30 of the
Mines and Minerals Act, ‘i:s”bein_ge eVxtracteci~-hereunder:–

“30. Power of revision “of Centi’aI.–Gove3-nment:

The Central Government “iney, of itsxown motion or on
appiication~vn’i’a,dr? with me p’rescri’b.ed time by an aggrieved
party, rejvisve a[n”y._ioro’er m_ade_byf–a State Government or other
authority iri,_’exerc’ise o-f.j,’the’-,o__o’Wers conferred on it by or under
this Act,~.. (‘with rerspect-fto any fminerai other than minor

A perusaiof that the Central government has

the regvisiognal eauthoreity to examine and consider the veracity of

A’a’i:.Qvréier§.l:;’3afsse.d by State government, under the provisions

iiI,’i.in.erais Act. The jurisdiction vested in the Central

gove-rnmentunder Section 30 of the Mines and Minerais Act,

R””r__e’nowgeve.r,,_.tioes not extend to the fieid of jurisdiction covered
A j:.’L:,nder’,.’.–Section 23C of Mines and Minerals Act. in so far as the
hignstant aspect of the matter is concerned, reference may be

made to sub section (3) of Section 23C of the Mines and Minerais

Act, which expressiy exciudes the jurisdiction of the Centrai

government, from exercising revisionai jurisdiction, in respect of

‘XWM 33%”

191

the orders passed by the State government under the ruées
framed by the State government under Section 23C of the Mines
and Minerals Act. In the aforesaid View of the matter_§:’i’t,.needs

to be appreciated, that orders passed by the State.g’oyeirn’m’e.nt,

on the basis of rules framed by the State _9.Ql/’e,rnm’ent und_er”–w_._

Section 23C, are not revisable underf.;Sect’ion 730 ~:oflt_h’e_VVMVVi’nVes and A

Minerals Act. On the instant aspect of the matter’ reyferelnce

deserves to be made to Sectighj.,g3C(.2)”(f)”‘ot’.=th’ev’VMVines and

Minerals Act, which doubt, that the
F€Vl5l0na’ J’UFi’S&:|_iic’t’::,1on’_, assail’th-egorders passed by the
State of the Mines and Minerals
Act, also Accordingly we
hereby that of the State government under

Sectio,n_,23Ca”‘of_:Vthe Mines: and Minerals Act is absolute and

‘ V’ ‘=excl’u.s’i’veg,-Aand even ‘t’he’Central government cannot traverse into

the sa’me, .

v_T,.n’_r’s-cglfar as the contention advanced by the Additional

‘<Solicitor_G:enera| of India is concerned, namely, that the State
,,:i,go.vVer'nment has no authority to ban "export" of minerals from
State of Karnataka, in as much as, the jurisdiction to pass

such an order is with the Central government, We are of the

view, that the instant submission does not arise for

°~rW~.__'°%Wnli"

102

consideration, under the provisions of Mines and Minerais Act.
The veracity of the instant contention advanced by the Additional
Solicitor General of India, shall be taken into considera;tio_n~,.Vat a

later stage of the instant order, wherein we

dealt with the contention pertaining to the “export”.

raised at the hands of the learned counseiAfortheiipe’titi’ohie’rs.;,at

40. We also find no merit ‘:’n_v’thze contention’l,a’dv_a«n.cerfi by
learned counsel for the petitioners,’:A’th_a’t_,the.exe_rciAse_Vbf executive
authority at the hands in matters
specially defined under and Minerals
Act, would fie under the rules
framed. e::;_4w’«heth”er or not the rules have been

framed. hedetermination by the Apex Court, in State of Sikkim

|3hutia’s case (supra), relied on by the

V _ learned Adlvoclate General, leaves no room for any doubt on the

_in;:tant a’s’pect of the matter.

_ Having read and re–read the contents of the impugned
“orders dated 26.07.2010 and 28.07.2010, we have no doubt,

0. that the impugned orders have been passed keeping in view the

alleged activity of illegal mining, illegai transportation, as also,

$ Sévvxzafiv

103

iilegai storage of iron ore in the State of Karnataka. Thus
viewed, we are satisfied, that the impugned orders dated

26.07.2010 and 28.07.2010, were weii within the ..jurisdiction,

competence and authority of the State

Section 23C of the Mines and Min_er.ai_s Ac-ti””In;vView’_’..oi’;o’u’i»1

aforesaid conclusion, we are satisfied t_h’at”th’ie.re’~ is no.:”imé’r,it’ in 2

the first contention advanced’iV_b”,I_V. the’-ieameci”g:’co.un,sei ..3for
petitioners.

The Second Contention the State government in

the impugned orders .2.-beiiiq’-. f’prohi.bito1rv”‘ in nature. is
unacceptable inigzyylg. ‘ – ‘

42. The ;ne>§t–.co-rit’entiojn__Tadvaxncedby the iearned counsel for
the petitioners’Vyfixasatizat a.n’actior’i’vw.h’ich is “prohibitory” in nature

as the S’ir_npugne:d”:’j¢.f¢ie.f§’-a…d’ated 26.07.2010 and 20.07.2010,

cannofit ‘be.consixde.red to be “regu|atory” in nature. Referring to

the,provision’s’«contained in Mines and Minerais Act, it is the

c0nte_n«tion”_0.Vf__thjeiearned counsei for the petitioners, that iiberty

_ has “‘beeri:gra”nted to the State government to frame ruies for
;i”reguiati’r’u”g” certain activities connected with mining. It is

4:’«.’_A’siI_Vb’m–i.tted that aii kinds of “reguiatory” actions resuit in
promoting the activity under reference, whereas, ail

“v”prohibitory” actions, totaiiy put an end to the concerned

activity. It is submitted , that even if it is presumed for the sake

“”‘?:'”‘”‘=’i__'”Wai”‘

104

of arguments, that the State government, had the authority to
23¢,
pass certain orders under Sectiontfiit was open to the State

government to pass oniy such orders, which were…:a’§.me,d at

“reguiating” activities relating to mining and mi_rieraiAs’;-0C’]I–nv’v:–tir:–g
our attention to the language of the.p_rovis’ion’,’~it;.is’=asserte’ti_.u

that under Section 23C of the Mines=-_and”‘Mineii’ai|s~ ii.tii~.is”*oipen

to the State government oni’y–.__to “‘”-reigaiwiateiii
pertaining to mines and minerais:-‘..:I_t is, asserted,
that it is not open to to put an end
thereto, by issuing the nature of the
impugned 28.07.2010. It is
pointed out: dated 26.07.2010

and “cp,roh_ibitory” in nature, they were iegaliy

unsustainabie”L:,nder’.’–Sec.tio’n 23C of the Mines and Minerals Act

.– V. .,43_ :,,,”iF?iefe.renceévvasaiso made to paragraph 35 ofjudgment

intherviofiiligutomobiie Transport (Rajasthan) Ltd. Etc. V.

Sta”te4’Vof R.aja:s_.than and others, AIR 1962 sc 1406.

” _”5%5. …..Restrictions obstruct the freedom, whereas
regulations promote it. Police regulations, though they
may superficially appear to restrict the freedom of
movement, in fact provide the necessary conditions for the
free movement. Regulations such as provision for lighting,
speed, good conditions of vehicles, timings, rule of the
road and. similar others, really facilitate the freedom of
movement rather than retard it. So too, licensing system
with compensatory fees would not be restrictions but
regulatory provisions: for without it, the necessary lines of

CS” ‘ Swab

1189). Learned

105

communications, such as roads, watenways and air«ways
cannot effectively be maintained and the freedom declared
may in practice turn out to be an empty one. _So too,
regulations providing for necessary services to eriabie the
free movement of traffic, whether charged or _”r:ar”inot
also be described as restrictions impeding the”free(do__inL é

44. Learned counsel for the petitioners, in .o’rde–r:j’to”sup–por_t’4his
aforesaid contention, pieced reliance ._-‘also

rendered in State of Mysore7v…__ 1396.7

counsel _ ‘placed

reliance on the foiiowing –obser\lfatif.2n’s”:..:’._

(4) It was contended..on–,b’e.ha.lf obfvvthelfftate that the two
provisos were regu.{‘atory”.and”not._P”onibitory. It was urged
that every i’njunctiori,ir%the rif”‘a”‘prohibi’tion Cannot be
regarded as,a’-“restrict–ion*~.uponfthe’ right to transport, and
reliance was placed upon’ th’e”bforr;n of clauses (b), (j) and (1)
of~sub’-s.((;.2) oi?.;:’}. 3–7,.”*-What”‘is* decisive in each case, it was
submitted,” .:’5..,not, th.e’form [of the rule, but the substance
thére0f,_ and V that ‘then provisos sought merely to regulate

gjjtrarrsport of forest produce. Clause (b) of 5. 37(2) prohibits

– import,-. zexport,V”‘collection and movement of forest produce

without_Va~,pass. The prohibition is, it is common ground,

V , it reg’i.’.’latory__of the right to transport forest produce. Under
b” -..,clause”_~(;’)’;:ules may be made imposing prohibition against the
A closing i’op’bor obstruction of the channel, or banks of any river

” used for the transport of forest produce, and under clause (1)

ruies may be made prohibiting absolutely or subject to

, A’ conditions, the establishment of sawpits, or saw mills or any
* . _ other sawing contn’vance. But cls. (j) and (i) do not operate to

prohibit or restrict the transport of any forest produce.

(5) Power to impose restrictions of the nature contemplated
by the 6 two provisos to R. 2 is not to be found in any of the
clauses of subs. (2) of S. 37. By sub–sec. (1) the State
Government is invested with the power to regulate transport
of forest produce “in transit by land or water.” The power

specific

3′”~%**””°__3*”%'”

by? him, iearned counsei for the petitioners piaced reiiance on

Union of India and others v. Asian Food Industries (2006)13 SCC

106

which the State Government may exercise is however power
to regulate transport of forest produce, and not the power to
prohibit or restrict transport. Prima facie, a rule which.__totaiiy
prohibits the movement of forest produce during vtheperiod
between sun~set and sun»-rise is prohibitory or restr’-ict’ivevv,,of

the right to transport forest produce. A ru’le’~reg.uletin’g
transport in i’ts essence permits transport, suhjectiito”ce:’tai’n V __
conditions, devised to promote transport : _su’~.:h. :a..rule a.ims__at V. b

making transport orderly so thatiitihdoes. not harm’ “or endanger
other persons following a similar, voCa.ticrn at the- bub’l-i.c_._’, w3jr:i:l

enables transport to function for.__tne public. good. VI_tV.was_V
observed by one of us <(Subba Rao, ),=, iti:'.A.tIf0i§n0bli8VVi'

Transport (Rajasthan) Ltd, v;.,s,3St«ate of Rajasithan, 1953»: SCR
491 at p.549: (AIR 1962 sc1__fi0§_a=:_p.143a);v E

"Restrictions ob,st;"uct'._ ;the"=._"fre'e-riom, whereas
regulations promote it.' Po'iice'Vregui'a_tions, though they
may superficially,-iappearv =toa_restrict"-the freedom of
movemer;-t, in fact proviide'«the'.necess'ary conditions for
the free miovenierit. 'R_egu'iati'ons such as provision for
lighting,.."'spee'd, co.nditions* of vehicles, timings,
rule o~f,the'«:road and. sirnilar others, really facilitate the
:'iVfreedorn. of rnoveiiqeiit rather than retard it. So too,
',_licensing'"svstern withiv–co'.11pensa tory fees would not be
resti<ictions"b_ut_ regulatory provisions: for without it,

i 'V the necessary lines of communications, such as roads,
zgwater-ways'"=–an'd air»-ways cannot effectively be
inaintained and the freedom declared may in practice
"'turn.""oi_Jt"–..to be an empty one. So too, regulations
"provvidin'g'V for necessary services to enable the free
movement of traffic, whether charged or not cannot
"also be described as restrictions impeding the

" freedom. "

order to support the legai proposition being projected

“”%'”‘W&__5″”‘*<t"

107

542, wnerefrorn, our attention was invited to the following

observations.

“1 1. Before adverting to the questions raised in these’ ‘app_e’als,
we may notice the statutory pro visions operatinglii«thefield.

12. Parliament enacted the Customs Act, 1962._(‘fo.:~ short “the

1962 Act”) to consolidate and amend the-».laiw., relating to».

Customs. Section 11 of the 196-2″”ACf. ’empowersthe Central ‘
Government to prohibit importation and fexpoitation–of_egoods.
Section 16 provides for date for determination of rate of ‘duty
and tariff valuation of export goodsvin the following’ ta-rrr:.s:”w ‘
“16. Date for determination of rate of dtity”..;nd”ta’ri’ff
valuation of export goods.¥.-._ ” ” * ”

(1) The rate of duty ,landne_”tar’iff_ valuation,-‘V if any,
applicable to an’y_expoi.ft g,o.ods;._ as_h’all be the rate and
valuation in force, _

(a) in the case. ‘goo.ds..,eente.re’d–‘for export under
Sectiion 50, onyth.e”da–t_e onywhich the proper
%_’offi::er makesean order’perm.itting clearance and
“loading “of ._the goods for exportation under
‘ _ .$ecti’on=51’,”*-fa. —

——– the case of anynther goods, on the date of
1 ‘ ‘P.9K”7’5’.”” st ~’W~
V”{2 The _pro”visionsi’a..of this section shall not apply to
baggage and ‘good’s.._exp”orted by post.”

1 3. xxx”xxx xxx ._

14.’ _Chapter VII of the 1962 Act inter alia provides for the
procedures’ —for clearance of export of goods, Section 50
postulatesei’-.ttiat the exporter of any goods shall make entry
. Vthereofejbyfipresenting to the proper officer in the case of goods
to tie exported in a vessel or aircraft, a shipping bill and, while

‘ presenting, shall at the foot thereof make and subscribe to a

declaration as to the truth of its contents. Section 51 provides

V ‘A : for clearance of goods for exportation in the following terms:

“51. Clearance of goods for exportation.—-Where the
proper officer is satisfied that any goods entered for export
are not prohibited goods and the exporter has paid the
duty, if any, assessed thereon and any charges payable
under this Act in respect of the same, the proper officer
may make an order permitting clearance and loading of the
goods for exportation.”

15. Parliament also enacted the 1992 Act to provide for the
development and regulation of foreign trade by facilitating

i7

109

44. We may, however, notice that this Court in State of U. P. v.
Hindustan Aluminium Corpn. stated the law thus: (SCC p. .3243,
para 34)

“34. It appears that a distinction between..”‘regulation’
and ‘restriction’ or ‘prohibition’ has always bee.n__ drawri, ever
since Municipal Corpn. of the City of Toronto”a?.f=.Vii*goZ3.

‘Regulation’ promotes the freedom or the”‘«f_aci.lit;r, whicniisv’
required to be regulated in the interesi**~o.f_:’a.ll ‘c,oncei’ned,g
whereas ‘prohibition’ obstructs”or*sl2ut;s ofif. or,denieL-3 it-to j

those to whom it is applied. Oxford, Efnglish_Dictiohvary..,does
not define ‘regulate’ to include. prohibition so. that ir’«it”hacl
been the intention i’O,’,Dl’Ohl’bli’A the supp–ijy, oistr}t’bu’t.’on;.
consumption or use of .energy, the legis.latu,re’~would not
have contended itself withgythe use of__the.woru’ ‘regulating’
without using the word ‘prohibiting’ or some such word, to
bring out that effect” ” ” ‘

46. In order to.i_repudviate.._the’secondvhcontettntion advanced by

the learned th~e:-..pTetitio_ne.rs,_it is the submission of the
learned .»~Ad~l6C+3te;’:::f:,Geneife1|, httiiatfthe action of the State
government’ considered as a total ban or

“prohibitiorl”‘,..ihr’lasmuci1_astno mining activity has been banned,

and ifon ore is be’i-ngV____mi.ned by those who hold mining leases, as

hithe_rto.,Vbefore’;-. __ Referring to the pleadings in the writ petitions

til~eed.-._by”‘th’e»–__petit.ioners to assail the validity of the impugned

-V orders dated “26.7.2010 and 28.7.2010, it is submitted that none
,oi’ the petitioners has expressed, that it has been stopped from
.’ carrying out mining activity under the mining leases granted to

“them. It is also submitted, that none of the petitioners have

actually stopped the activity of mining iron ore, as a

consequence of the directions contained in the impugned orders.

“WWW

110

It is, therefore, asserted that aii mining activity in the State of
Karnataka is continuing uninterrupted. Secondly, it is asserted,

that the transportation of iron ore for domestic ..u’3.e=.._§is’-Vvaiso

carrying on undeterred, and that, the impugnedjczrde’rs§’jhav’e_Tno
effect over any domestic activity. L_i_kew_ise, _~itV”is”c:ont’ended»t_h’at_

even if iron ore is to be used domestica:iI’y,.*t’in 1a._S’tate ot’i-*.er’7than 2

the State of Karnataka, minéng”<–§.ezase"'hoiciersViarenpermiitted-to
transport iron ore evens the State of
Karnataka. According|y,«._._it' is suggested that the
piea of total "prohibitionfT.Vpresse.d.V of the petitioners

is wholiy unjusti-t_iedVh.V t 'I

47. Ag.ain*– i’rivit’i’r.g*-.t:his,4″Co0rt’s”attention to the fact, that there

was extens’iv,eiiiiiegai iron’ ore mining, coupled with transportation

of iii,e_g’aViity mined ore, as aiso, iilegai storage thereof, the

go_fivern,me,nt vide orders dated 12.03.2007 and 09.09.2008

ir’efe’rred””th’e.V_matter pertaining to the aforestated iliegai mining

_ activities-..’:for:”‘investigation to the Karnataka Lokayukta, and
::sou,g_htzhi*s:. specific recommendations. It is contended, that the

.’_A’fi~r_ia’i~ report of the Lokayukta is expected in about six months.
then, it is in the interest of the State of Karnataka, as aiso in

the national interest, that iron ore be not exported. It is

asserted at the hands of the Advocate Generai, that restrictions

111

on the transportation of iron ore for export out of India, had
been imposed because it would be impossibie to recover iilegally
mined iron ore, if the same crosses over the bord.e_:rs_dof the

country. The aforesaid iimited ban, according

General, has been imposed to prevent any:’pevrm’anent’–,ios_s “of

revenue to the State of Karnataica, as,,,aiso.,1a’ny”pVe-rm’3;nent”‘*

consequentiai ioss of minerai.7re_sourc’es”of th.e”‘n;3.t.i_0n._:’§ Vitiiis

submitted, that once iron has exported, the

investigating agencies .. handicapped from
determining, w_he’ti,::er the exporte’d.,:Viror~.._ore was procured out of

iegitimate re»su’it of iiiegal operations .

48. -It .isia’iso’ithe.:con’tention of the learned Advocate

General, that ithveV”5Stat.eigoyernment had framed the Karnataka

Mineraiu(i?.egu|a”t;.Qfyof Transport) Ruies 2008 to prevent iilegal
mining oipierantioyns. It is submitted that some of the petitioners

Court by filing writ petitions, wherein this

Court hadstaiyed the operation of the aforesaid Ruies. Since

Jo;1er_.atio’h~’¢of the Ruies framed by the State government under
,._’SeVctio’n 23C of the Mines and Minerai Act has been stayed, the
.. -tate government was handicapped from taking any action

V against those engaged in the iliegai activity of mining iron ore.

It is submitted, that after the operation of the provisions of the

112

Karnataka Mineral (Regulation of Transport), Rules, were stayed,
the said rules could not be invoked to stop illegal mining activity
in the State. It is, therefore, that it became imperative for the
State government to issue the orders dated 26.07.2010 and

28.07.2010. it is acknowledged, that this Court.gonV:’2-4j;§.i.’2.010

passed an order in WS. Kumaraswamy Minerals ,Exp”o’rts’_”‘an”d,__

others vs. State of Karnataka and Zothe-rs, ‘4’e.§§8i3)f2000)j«

bringing back to life the provisions tli.eA’afores,aid.,V

submitted, that by the aforeVsa.igti”~.,orde.r dated (

which all the a’fo’i’es-agidgiivritih disposed of) certain
carried out in the
being in consonance with
the views State government, would not

obstruct thet”ec_tivit_y- oi*_tVh’e State government in implementing

‘”‘«theV-‘.._o”bjectiv*ie.s conta’i’rii’ed in Section 23C of the Mines and

“prevent iliegal mining, illegal transportation and

illegalt storage of iron ore, from within the State of Karnataka).

‘x__But the.nV”(i_t is pointed out), the Court order dated 24.9.2010 was
A ‘~.0fnotvl0aVailab|e when the impugned orders dated 26.7.2010 and
‘ 22.8.2010 were passed. It is the vehement contention of the

learned Advocate General, that the State government had no

other alternative, but to pass the said orders, specially during

113

the period when the operation of the Karnataka Mineral

(Regulation of Transport) Rules, 2008 had been stayed.

49. Continuing his submission further, it is asserted by the

learned Advocate General, that the State had to strearnline the

measures required for preventing recurrence of illeg,i~a_,i:”«inf1iining,

and in this regard, several steps like constitution 4o’f’f”–‘sfp-%.=..<;:ia,l

ceiis", constitution of "composite c_hec_k–pos'ts"','~–inst'ai|at,ion off

"closed circuit television" "cameras"',_ co'n°.p–uteri_zatVion'''of.__cr::i3ci<– .

posts, regulation of stockyard*|icences–,'-etc.V haiv'e..,jal.read3y
put in place. It is submitted, soon' entire process
of preventing the activitvoz" _i'i|egal:rn"i~–n_i'ng,~illegal transportation
and illegal storageof iron. f.inal;:sin–a"pe, the impugned

orders dated be withdrawn,

open 'to~—–t-he petitioners, to carry on with their

the basis of their contractuai undertakings, even

with"parties:'outside the territories of India. It is, therefore,

'v,reiterated*«that the action of the State government in issuing the
A .,:l§'n'lVp'u'g.ned orders, cannot be described as "prohibitory". In order
togsubstantiate the instant contention advanced on behaif of the

""v.,.'V-'.§3'l':'ate government, the Court's attention was invited to the

observations recorded in State of Madhya Pradesh and another

Wit"

\l

115

Legislature of the State has the power to legislate in regard to
the subject on which the executive order is issued”.

50. We have considered the submissions advanced by the
learned Counsel for the rival parties, in so far as thelsecond

contention is concerned. In our considered view,_t’he«.ea.u’it’iesi~in

respect of the controversy have to be determineritby’ itakinglb into
consideration the factual position depictedojjn”belia’lf.h:of.,t.i§,égtate

government, as have been noticed “h.e’reinab,ov.eiVb” 1 It*:is’~n’ot

possible for us to-.ignoi~e.~theifgint_eriim”.A.repo.iftisubmitteci by the
Kamataka C,§’:l-iii:the’irregularities in mining
including__mini’ngi:..frQ[T!V’V”firelaisbl.’ by the mining lease,
mining >i’n.t_o’-….f_ore.st areas and into government
revenue ‘la=nci.. not possible to ignore, illegal

transpgortationaof ore and the effect thereof on the biological

am Vlsncib}-eclonomic environment of the area, where mining

Aactivityll isfbeben”jca~rried out. It is also not possible to overlook,

misbuse o_f>b’,il.l< transport permits which are used for transporting

ll""-__V'i"l!eg,ally" mined iron ore. Or to ignore, even the irregularities in
A .grant and use of stock yard licenses mentioned in the interim
report of Karnataka Lokayukta. A balanced view has to be taken

:."by weighing the private individual interests of the petitioners

(who are engaged in the export of iron ore from the State of

Karnataka to countries beyond the territories of India), and the

3'°~r2r""*"'"f""i2"°

117

Advocate Generai, the operation of the impugned orders would

ordinarily not extend beyond the period of six monthsV.V(V_f.”-ohm the

date of their issue), as by then everything

the State government wouid have .i~i’Ti’p-!e:men~ted,V

recommendations made by the Ka’rnat_ai<a1' =¢_An

issue, which by its very natu-re is't'.',tempo::aryVf'.:4_cari_i;iotl be

considered to be "prohibitory". the lacti_Vo_nv5tal:<fen is, only
for introducing "regu|at.o"r:y'_' ail the
activities wouid stand restored-.,, of iron~ore,
it is difficult are "prohibitory"

in nature. whether the measures
adoptedaiare has to be deciphered
from thezpleadingsv,V’iri:_lthe”w:ri’tfpetitions. The pleadings in the writ

petitiogns, to a’ss,aiE~th~e ibnpufgned orders, are of no assistance to

‘l V’ “iead”lto’an”‘,I such in’fe’re’nce. The categoric stance of the Advocate

l”*{§eiierae!_.:’th.at”ith_e’i..impugned orders were issued so as to put in

place Vmeasuresffor preventing export of illegally mined iron ore,

also leads: to the same inference. For the reasons recorded
“aherei’n*above we find no merit in the second contention advanced

byllgthe iearned counsel for the petitioner.

_…..-no

we

Q

301jofe. the

121

relate to an activity , which was hitherto being carried out by the
petitioners, and which has now been prevented from due
execution. The impugned orders dated and

28.7.2010 have no such effect. Herein the si;;-ice”‘ge’y:e%riir.:;_eint

has banned certain activities, so as to enabieitve in piece,
regulatory measures, so as to preventiggiirlegaii_m-inin’g,__ iiiegai ‘

transportation and illegai stora.:je..of iro’n,_o’re, so’th’at:the iron ore.

reserves found in Karnataka are_no_t sto’i’en:b’y uliqscrupuious

persons. And so that, State is not lost
for ali times on account mining activities at
the hands of ihirdly, according to the
learned théiiiiffipugned orders are of a
temporary to be operative after the expiry

of a Period about months. It is difficult for us to

.0 0’ ”’appr0ec’iate. the relianc’e”at the hands of the petitioners, on Article

icéonstitution of India. Article 301, extracted above,

deaiswith ,i’ss1ue’s pertaining to trade, commerce and intercourse

iffwithin” territory of India”. The impugned orders dated
“e216,.0’7″*;_2010 and 28.07.2010 have no effect on trade, commerce
and intercourse “within the territory of India”, and as such

reiiance thereon at the hands of the petitioners, is whoiiy

misconceived. From the inferences drawn by us hereinabove, it

is not possible for us to accept, the instant contention advanced

iwww

122

on behalf of the petitioners. For the reasons recorded
hereinabove, we find no merit in the third contention advanced

on behalf of the learned Counsel for the petitioners.

The Fourth Contention (.., investigations carried the

Lokavukta cannot be a ieoitimate basis for Dassinci .th_e»_i.rri;if;Jtjiwed

orders):

55. The fourth contention advanced_ by th’e”‘learne’dcounsei.

for the petitioner was, that iri’i’pL3gned-.’o’rderss..__,datedl

26.07.2010 and 28.07.2010,<w'e_re passiedViriter{avi:i.aV,VHbecause»

certain investigations were carrieid".',out,_vby"iéarnataka State
Lokayukta, whereafter were made by
him. In this behalf, it learned counsel
for the petitionevr,flthiaVt the s_u"i§;ject.:njiatte–r'iAof controversy raised

in the present. v;i.rit_peVtitiorir'~.:,co:u"id' have been vested by the

"Vii-State,;"i3o,vern.rnent,V'with' the Karnataka State Lokayukta. It is

"i:o_:"be.,:'s–uggested that the State government was

delegating'gfuinttiions which it was bound to discharge on its own.

".E:earnedr'c;ounsel for the petitioner, also placed reliance on
A XSe,ction 7(2A) of the Karnataka Lokayukta Act, 1984, which is

' being extracted hereunder: —

“‘7. Matters which may be investigated by the
Lakayukta and an Upalokayukta.~ (1) Subject to the

provisions of this Act, the Lokayukta may investigate any

‘°'”c””°hj”W*%h

123

action which is taken by or with the general or specific

approval of

(i) the Chief Minister;

(ii) a Minister or a Secretary; A.

(iii) a member of the State Legislature,’ or ”

(iv) any other public servantbeing a pub.l_ic servant _

of a class notified by the State fiovernment in”
consultation with the Loikayulk ta in’ this beihalfg—.in’ir:1,a_’
any case where a Vcomplaintinvolving»a”grievance ‘
or an allegation is made inrespect ofsfucll 5-ct_iion.h

(2) Subject to the proxiisions’-. ‘ “the; Act, an
Upalokayukta may investiga.te”afi;lE5500 WhlC’»5″l5Trv3/<€i7 by 0!'
with the general or specific appro:'./all' ..a'ny_public servant not
being the Chief MinisAter,.,:hMinisteirb, the Legislature,
Secretary §g,*'«atti€F public.,'servahlt_j_Vrefereed to in sub–section
(1), in any"cas5eb,.w.hel"e: a compiairit involving a grievance or an
allegation, is:..rn'adeuifr of suchiaction or such action can
be 'ior"couldl'havefVbeen,.in theihopinlion of the Upalokayukta, the

subject or .a Vgflex/_ai7ce' "an ' allega tion.

. Notwithstanding anything contained in sub-

_.se'ctions {1} and (2), the Lokayukta or an Upalokayukta may
V-investigate any action taken by or with the general or specific

–.app.roval«,_o”f .a public servant, if it is referred to him by the

State’€gov’er.n*ment.

Where two or more Upalokayuktas are appointed
under this Act, the i_ol<ayul<ta may, by general or special

'harder, assign to each of them matters which may be

A ' 'investigated by them under this Act.

Provided that no investigation made by an
Upalokayukta under this Act, and no action taken or things
done by him in respect of such investigation shall be open to
question on the ground only that such investigation relates to

a matter which is not assigned to him by such order.

uafiaii/;»6uw_6«wwg?«

124

(4) Notwithstanding anything contained in sub–sections
(1) to (3), when an Upalokayukta is unable to discharge his
functions owing to absence, illness or any other
function may be discharged by the other Upa!okayukta,j’ _
and if there is no other Upaiokayukta by the Lotta-yui{ta’il” if S

It is the submission of the |earned:=,,_cou.nszel Sir’-or:4.t’he4pevt,i_’tiQnérs S’

based on Section 7(2A) of thei’l<._arnat'ak_a" Lokay'ui3:.ta_l.Act;, i;98:'4i,

(hereinafter referred to as the Act). irrespective of
the "interim" findings Lokayukta
(though no "final"finding'sH_ recorded by the
Lokayukta) no thereon. And no
action can of the report of the
Lokayuk_ta,WiV orlviliifiynal. According to learned
counse|,VVVt–al:<:ingVactio.nijV~oni«.tne'i:'b~asis of investigations carried out

by the Lokayuiitga, . w–asl"v_cie'aur|y unreasonable and arbitrary. It is

that firstwthe State government must verify the

'.of,:th-e investigation carried out by the Karnataka

Lok*ayukta.."VlIf_the same are found to be correct, it should apply

'xi__ts independent mind, to determine what remedial measures
A fshlot3ll'd., be adopted. It is submitted, that it appears that the
State government has abrogated its authority to the Karnataka

tokayukta. It is also contended, that the factuai position

expressed by the petitioners (noted under the heading » Preface

to the submissions advanced by the learned counsel for the

125

petitioners) wouid demonstrate, that the instant action against
the petitioners is totally uncaiied for, as the sanfaeV_i’~h:as_ far

reaching adverse consequences.

56. Keeping in view the fourth:’co’n’tention _adjya’r_-.ced.TatVl’the’ j

hands of the petitioners, we were«,_c’onstrained’~.to.

Advocate General ‘whether the’-i.,:C§e.yern.nient–,,m’acVh-in’ér*y”:in the

State of Karnataka had §3.,,iiec1′.7g7.i~*’~–‘..’\.lé\Wanted tovv~kno’w whether;

the Police Department, the and Geoiogy,

the Forest Department, the?’

Deiipa”rtment, as weii as,

the Revenue,Depairt.n;}ent.:_were i.ncompetent to discharge their

:=-ai~

duties? V,\Nee.d’e’sivre;’to_ be-.jsa_tisfied._wh§y the Revenue Department
could not, on its”‘ow.n4,ir;lét.ermine whether mining lease holders

were carryi”r.g_4 outxtheir’ acitiyities, within or beyond, the specific

Ii”

areaatipulated lease agreements? We also wished to
Department could not on its own protect
according to the impugned orders dated
_ 26.o”7—-.2o..1:c)-arena 28.07.2010 were being exploited by
.V,unscifupu’io.us persons engaged in iiiegai mining and

”.’_«transportation of iron ore? We also wished to find out, why the
Transport Department couid not ensure that lorries and trucks

“are not permitted to carry ion~ore beyond the permissible

capacity? As aiso, why transport permits issued to carry iron~ore

126

from the mine head, to the factory/port/railway head, were

being permitted to be misused?

57. In response to the averments mad-e::”in,it,he””4_

submission advanced by the learnedecou-n.sel ‘petitijoners,f it

as also the querries posed by us, the’.|Vearn”ed Advocate C?T’ene’ral,

invited our attention to the factua’l”..narratiQ_n ‘reco:rd’ed”‘under the

heading– “Preface to the,..submi,ssio,.ns ‘a»dAvance’d,..by;the learned
counsel for the respondent:s’_’,~ to”c:on:tend, that the action
taken by the StateV’g_over’n’m’e’nt, bona fide but was
also justified:_.l«r~. of the present case,
which involved’vdiesitiiuction’ oii’Ati.e:::eVm,§ironment and plundering of
the States He painstakingly, reiterated the

entirefi background, prompted the State government,

to pass the impugned orders. He concluded by submitting, that
the’._a’ction:_takan was bona fide and for a genuine and valid

c’0.nsi_de ratio.n_. ‘ v V

T_58. it .. ‘We have given our thoughtful consideration to the
it ‘.fi=ourti’:..,Acontention advanced by the learned counsel for the
‘«i«.–‘petit’ioners. In so far as the instant aspect of the matter is

concerned, it would be relevant to notice, that a spurt of demand

of iron ore in the global market commenced from the year 2001.

The aforesaid demand led to its deficiency and accordingly,

128

carrying out investigations into the ailegations was vested with

the Karnataka Lokayukta. It wouid be pertinent to m_entio_:n,.._that

Hon’bie Mr. Justice N.Santosh Hegde, a former.§’_,i.ud”ge’—iio.f1~,_t_he
Supreme Court of India was holding the office’
Lokayukta, at the reievant juncture. -iimagei-i,.__of.,1Vt.i1e S’

Karnataka Lokayukta in tiies’St_ate of”‘i<arnatai§a,__.injg

perception, being that of impeccabilie _integ'riti/if'andifihonesty, it
was felt that an hands, and the
implementation of__his recorrimendVat,ionsvV.'(i,4;ihic'h wouid be made
by him) and eievate the
government's V"S,in'ce under Section 7(2A) of
the xcfafnvflbe issued to the Karnataka
Lokavukta Out an investigation. An order

cameto bekpassed, A"ifecfu"iring the Karnataka Lokayukta to

' "'inve'sti{gaft-e and mai<e""n'ecessary recommendations on the issue

"of iron-ore in the State of Karnataka. In his

interim reportiiildated 18.12.2008, the Karnataka Lokayukta

'<affirmed,'t'hat iarge scaie iliegal mining and transportation of iron
"i.oreViin"«_the State of Karnataka were going on at the hands of the
S mining mafia. The interim report referred to above, found

aimost aii those engaged in mining of iron-ore, were either

facing prosecution, or had assailed (before one court, or the

§—-q

130

and when, the matter reaches the iegislatures in the State, it is
not easy for a Court to ignore the out~cry, that something is

seriousiy wrong. Even the Karnataka Lokayukta has”‘a’i:’fi:r’i<ried

the prevaience of mass scaie iiiega! mining-'.,a:ctiVvi,ty',:"'"in,'.'_"'his~.t

interim report dated 18.12.2OO8;""'~.A|t%iou,g"h.–VI,'4the-v4.'_jg.State'5ix'

government should have acted withia

seeds of the said illegai activity'–_c"o.rnme'ncedt tgoiiv-sp"rout,..yet it is

futiie to cry over spiiled milk. VIt——is:"neve,r too"ia.te,"tb act in the
interest of the State, so remains. It is
improper to igno_re,__thatwtheiiii the impugned
orders were Ea the interim report of
the have been taken into
consideraAtio_n-,A of huge quantities of iliegaiiy

mined ironvogre at"'–va'i"iotisdliorts in the State, readv for being

'JV'"e.xpoitt'ed:,.;-to 'foreig'n"c'o'untries, reveal a substantial truth in the

"mai;ter..:"-,As.4"a,n"emergent measure, the State government,

passed thegiriripulgned orders to put the mining activities in order.

S2510 courtidcan come in the way of such a cause. The State
A 5fgover'n.ment acted on the basis of a long sequence of facts
"iincgiuding the interim report of the Karnataka Lokayukta. And

not, soieiy on the said report of the Lokayukta. Thus viewed, it

is difficult for us to accept the contention of the petitioners, that

the action taken by the State government was arbitrary, or that

':i;%ai~;J2~ f»v»«g{'~

131

it was mereiy based on the recommendation of the Karnataka
Lokayukta, in his interim report. For the aforesaid reasrsns, it is
not possibie to accept the submissions canvassed ori”‘aeh:aif of

the petitioners, even in the fourth contention.

The Fifth Contention (… the impugned.,.4,or:de–rs’,4_to4’th’e’Ve.x_t;n__t 7

“export” of iron ore has been bannedfiare withoutiu.risdictio_n’i–:g

60.. The fifth contention adva0’n.ce’d by the iyearneiidi counsei for
the petitioners was base4d’w~,_on,.”AVth_e”co!.|,ective effect of reading

Articies 245 and 246 of theV_Co_nstitVi.itio.n..:oiA-i1,_nd’i–a along with entry

41 of Union….,i_n Schedule of the
Constitution. relied upon by the iearned
counsel ifor under: –~

“41.« Tracievand foreign countries; import

and export across Customs frontiers; definition of customs
_g_Froritiers’i ”

“‘Ba«seo’ oni’uent’r?,r,_.41 ofxthe Union List, which reiates to the subject

of tr’ad’eg.._,;jn;I” commerce with foreign countries, as aiso, import

and export’ across custom frontiers, it was the submission of the

02″”-__V’i’eargnedzcounsei for the petitioner, that the impugned orders
,i’d.a’ted,?526.07.2010 and 28.07.2010 were pointedly aimed at
_3t,0§p|:>ing “export” of iron–ore from the State of Karnataka.

i’According to the iearned counsei for the petitioners, the

legislative authority on the subjects, contained in entry 41 of the

Union List, falls within the domain of the Parliament. The

1.

Ci

«um.-

“V Parliament.

132

jurisdiction to exercise executive authority, on the aforesaid

subject, therefore, would exclusively fall within the domain of

the Central government (under Article 73 of the Consti’tuj’t.i,on of

India). As such, it was asserted, that even without refevt’-erice’_’ito»

the provisions of the Constitution of~In’d–i–a, and leg’is.|ax’ti.vef

enactments (relied upon while advalncilng th_e–.ear|’ie’i*._,tour

submissions) the action of the-Sta_te executive’-,1 i”n_:”isswui:ng the

impugned orders dated 25,07.201$.and-».28.07″.20.1Q,,.are liable to

be set aside. Stated in other itlllwvasgithe contention of the

learned counsei: entered into
by the countries, cannot be
by the State government,
through execution authority. It was

submitted, the: State”. of Karnataka does not enjoy the

‘JV'”privi’i:g.ge:,.;t0 control’or”‘interfere with, any aspect of trade and

A’commerc’e._’withAforeign countries and import and/or “export”

across custyoinfrontiers.

:.6:. $ased on the subject of entry 41, it is the submission of
,dth,e*»!earned counsel for the petitioners, that import as well as

f,$e.xp0rt” across custom frontiers, falls within the domain of

It was asserted that the Parliament had
promulgated the Customs Act, 1962, and the Foreign Trade

(Development and Regulation) Act, 1992, which cover the field

“‘”a”*°'””””aQ’

133

of import and “export” across custom frontiers. It was pointed
out, that the executive power on the aforesaid subjects”-.vest in

the Centrai government, under Article 73 of the Cgoiistiflitigon, of

India. It was contended, that all matters withinfltheSatin-b’itt,,.and’»,_

scope of the subjects contained in the'”Union -iisistyofltijef Sieventh’; if

Schedule of the Constitution of Indiaiifwhetfherfforginont

has iegislated thereon), as a|sc3«,.__fa.I._|% matters in-.the'”Cor.’currer.t

List in respect whereof i.egisiationshes”-~..not been,,e,n§acted by a

State iegisiature, are only of the
Centrai governthent,:.”V ‘égitijwasiasserted, the subjects
faliing under?ent:ry%ii:””of must be deemed to be
out of at the hands of a State

government. ‘-

_ 62. V, was also cofntenfdedfi, that the Pariiament having enacted
%(“‘[“)eveIopment and Reguiation) Act, 1992
if to as ‘Foreign Trade Act’) for which the

_ juristi-ictiojn’ arkifthe authority of the Parliament flows out of Entry
the—:Union List contained in the Seventh Schedule of the
igficonstiiftution of India. Accordingly it was submitted, that the
Ceéntrai government aione can issue orders/directions on the

‘subject of “export”. In order to substantiate the instant

contention, teamed counsei for the petitioners, aiso placed

reliance on Article 162 of the Constitution of India, defining the

l”?

134

scope and extent of the executive power of a State. Based on
Article 162 of the Constitution of India, it was asserte.d.___at the

hands of the petitioners, that the power of the State ta-nf”eVx’t.end

to matters, with respect to which the legislature-iof

power to make laws. It was Submitted._t&hat

power to make laws in respect of”«eith_’e’r’l impoitngorl -‘fexb1oji~t”

across customs frontiers, and as-_,s”‘uch, the State ,of”i{_’a’vrnatjaka, ‘in’

exercise of its executive powVer.,x:’cou’ldg not”‘h.aveJ§issued the
impugned orders ‘dated E3’li(jV’>28.,.’G7.201O, whereby
the State governmenht, be-.nnied”the’ iron-ore.

63. Act is concerned, it was
submitted, thatvt’he”-sam’e’~was enacted for the development and

regulation of.__foreig’n_ t’i*adei”f.orfacilitating imports into India, and

for atigmenting’«exports from india, as also, for matters

(.’A0:r’,r.]§eVc.*.”e_v3icivA..therewith or incidental thereto. On the issue of

ifDirectwV.ljn'{/estment, learned counsel for the petitioners

subm’~ittevd,. that in the first instance, the limit of Foreign Direct

H ,:Iriv:e.stme*n.t came to be enhanced up to 51% and thereafter to

-_’1;(_V)VO%, whereupon, everybody engaged in mining was allowed to
~»e-xfport 100% of the mineral ore produced. For the definition of

A the term ‘import and export’ under Foreign Trade Act, learned

“t’°W”..?”””‘zf”

137

natural resources, and carrying on of foreign trade by a State,
can be ordered only by the Central government by way, of a

notification. In order to demonstrate, that the afo.resa’iti:’i;:o’wer

on earlier occasions was exclusively being exercised -the
Central government, learned counsel’ for .;the’W.peti*ti«oners T

presented for our consideration,v4K,a*._Notifie_ation= S-bearirig

No.18/2006 dated 04.07.2006 w’h:e”reby theCentrallfgovelrnment
had prohibited export of’§u_gar.tii’i’ e”r’.id_ of the’~fis’c:ai year. It

was, therefore, the subrniss_ion7of’ ithe’ii’l~efa.rned counsel for the

petitioners, that gov”ern’m:enVt”h.asl no authority to pass
o1’der(s) on the sjuilsject’of,:”e’x.;§o’:’trs, in,ci’uding the total prohibition
of export of ‘ii~..:vie_vv of.Section 11 of the Customs Act

referred to hereinab:ove’;–~._A_”‘~Besides the aforesaid provisions,

learneyriycounseyivy for th.e”‘petitioners also placed reliance on

1;-1H’-oef the ‘Customs Act, wherein clause (a) defines the

Sub–section (a) of Section 11H of the

Custorns Actltjiisibeing extracted hereunder:

“.3 Def:’nitians.~ In this Chapter, unless the context
., otherwise requires,-

a) “illegal export” means the export of any goods in

” — _ contravention of the provisions of this Act or any other law for
the time being in force. ”

In addition to the aforesaid, the learned counsel desired us to

examine the provisions, which had been brought to the notice of

this Court by him, along with Section 2(g) of the Foreign Trade

W

53″

141

26.07.2010 and 28.07.2010, whereby the State government

banned the export of iron–ore mined in Karnataka.

65. It was also the emphatic contention.–,A’of

counsel for the petitioners, that aliowing

action of the State government (in:”1«issi_i_’iin§j lathe’

26.07.2010 and 20.07.2010) w0.uid.,_havé’-the.effect¥of~destroying”

the federai structure en__visage:d_..__b:y.__thez Constitnutioii of India.
Insofar as the federal stru-eture’. the Constitution of
India is concerr3ied’,i,;i,.i:t’ was the learned counsel
for the o’f~.,3re’gjulation of “export” from
India either with the Parliament
or with lathe According to the learned

counsel,’ thei'”‘State_goverra~~:i0ent has breached the weil-defined

of theV’fv——-de’ral structure, based on the scheme of

powers, both iegislative and executive, under the

Corwsitiitutionof India.

it “In so far as the fifth submission advanced at the hands
‘ oifbthe petitioners is concerned, it wouid be pertinent to mention,

that the plea advanced at the hands of the petitioners was fully

supported by Additional Solicitor General of India, who entered

appearance on behaif of the Union of India ie., respondent No.6

143

we are of the view, that none of the provisions relied upon by
the iearned counsel for the petitioners are reievant””to the

present controversy. The reasons for arriving at _th_e.a’fo’res~aid

conclusion are being recorded by us in the jsu.ct;eeid_i_,ng”.__V

paragraphs.

68. Whiie examining the7pr.esent*eoVntrovie’rsy,,in o_rder to:

determine the purpose for orgciers dated
26.07.2010 and 28.07.20;ii:’0wAe–%ie necessary for us to
pose two questions, and to the same. The
first question.w;)u1idi::.:be_V: ” _ V V it
“Whether.the’State-I;;gov’ernn*i’er:t.,:isVV_a:§;grieved with the action of
the petitioners ?”

And the second, V V

“Whet%herii.the government is desirous of annuliing the

export conytracts procured by the petitioners for exporting iron-

d.re”eut o’r;i’%i,d:’a.1?

_ it istnot to answer either of the aforesaid questions, for
,s.imzpie:reason, that it is not the case of the petitioners either

pleadings, or during the course of hearing, that the State

-government was aggrieved by the action of the petitioners in

“V”exporting” iron~ore, or that, the State government was

interested in annuiiing/canceling the export contracts procured

144

by the petitioners for exporting iron ore. It is therefore
apparent, that the impugned orders had not been issued, with

reference to the activity of “export” of iron-ore,

petitioners are engaged. The impugned orders
been issued, on account of the fac’t”Athat_,_ iiargeig'”:ca:|e~.fi~tieg,a|ij’
mining activities were being car:r’«ieci~._/_on i»n_..,A’t’i1.ei,

Karnataka, and for curtailing the.._:sa,me, V. the –St’a,te’~-,g’ov’e’rnmentV

had passed the impuggnecl ord’e’i*s..”,_:’– wouidi,v–..therefore, be
reasonable to conciude that mind was not “export”

of iron~ore; but f’tnei’t,_” of;_iron’~’ore.,’

69. OnEt.he~:fi_sag_rne'”‘e’na’l’oigy,:,”‘as hasbeen considered by us in
the preceding may venture to pose two further

questions, asauinder’: i

“Whetheriii.t hasbeen the endeavour of the State government to
anyhoi’ the petitioners licenses for “export” of
,ntto

‘ _ Arad,”«.

action of the State government taken through the
riVi*1fiV[jL!€giAi;ied orders has resulted in the annulment of the “export
ff_|i_censes obtained by the petitioners”? .

V’ In our considered view, although the second question posed

herein above, would seem to fall in some grey area, yet the

—.–u

Mi

Q

146

passed with the primary object sfistopping illegal activities
connected with mining, transportation and storage of .i–ron~ore.

71. At the cost of repetition, it may be stat_ed”,~ so

far as the instant aspect of the matter is concerned, a*

spurt of demand of iron ore in theggllobal. nlarketli’comrn.e~nci.ngf

from the year 2901. The aforesaid

deficiency of the available iron t.he.__g’loVba.l: rna”r’i<»et:. This

resulted in the escalation of they-price and profitaibiuty from the

activity of iron ore licenses which
were earlier considered as an
outstanding lfiaccolrdingly, those who were
chosen were considered as
favoured'inVdi'vidu*alVs',.» at the hands of those who were

denied. mining leases. A*Sivn'*ce making a quick buck, came to be

"'associate_d. with the lactivvity of iron ore mining, the activity of iron

ore to be extended, beyond the area for which

mini__FI'§3 leasershlad been granted ie., miners started to transgress

'zinto government revenue land and forest areas. In order to sell
'fii!ega'i~l_y mined iron ore, it had to be transported to the relevant
' locations either for use in the domestic market, or to ports from

where it could be exported. This couid be done, only by illegal

transport of illegally mined ironwore. There were far reaching

social and environmental implications from the aforesaid illegal

14?

activities. Existing means of livelihood like agriculture, etc:.,

were given up in favour of iilegal mining of iron-ore. Individ_Vuais

owning private farm–lands were more interested in;'”é’xtr.fa–c:tion of
iron–ore, rather than carrying on their farming~wa»c.tiviti’es. ._’i’he’re.o
was extensive pubiic debate on the is_sue-offliIl4egalyl’y—-.rn*i.r’iediron~ ‘

ore in Karnataka. Public debateon the”iss’ue tooiclvexypressi’;notice’

of the ioss caused to the State mVliin:evra|_uweaithlg: as also, revenue
loss caused to the State’ gl’:’E_v’egvnt.ua||yythematter was
considered on theAV_i’|oors’y,C.>_f_V:”‘Lf5″~i.€é in the State.
Aliegations and icrossihaileigatioris by politicai parties.
Various enqL:if\r to examine the
allegatiognllolt :m}1i¢’ré. The Karnataka Lokayukta
in his endorsed the fact, that on

minim_al.yfinan”cEaVi’ inputs”, there was likelihood of huge profits, in

.w.”t.hQ..’:oa&tiy’ity’vi.Apf iron “”” ‘ore mining. According to Karnataka

L_.o”l’«_a’.yuikt’a.,:those”-engaged in the export of iron ore in Karnataka

itseifllearnedlii’profits of about Rs.60,000 crores during the year

“w2007–2{iv(u)%3. The interim report of the Karnataka Lokayukta also

‘7.revela”i~«ed, that illegai mining activity was being carried out in a
l way. From the pleadings contained in the joint statement of

objections filed on behalf of respondents 1 to 5, as also from the

interim report of the Karnataka Lokayukta, it emerges that out

of 153 mining lease holders engaged in mining of major

150

furtherance thereof, is a question of “law and order”, rather than

a question of “import and export”.

74. We may draw an analogy, to settle

hand, from a simple illustration. v~-it-mayf” it

presumed, that a jeweler is autho1riV2edlA’to

from the State of Karnataka, to -av,”‘Fo_reigAn” country, “‘:I:nv”est:igatior.’

carried out in the State of :,.l<arnatal§a .revealed, that the
diamonds sought to be jeweler, were
stolen. Whereupon, the vve_r'e..co«n'ti'scated by the State
government.:_. by the concerned
authorities.i.n_con'fisc;at,i_ng_jthieldiaimgiiids, be treated as an action
preventing Or alternatively, would it be

treated as aninherent' State government to prevent an

activiyt-y"'of. "thei"t.'f__,V"Vso as to maintain law and order? The

ivnewtxableiSan_sw.er has to be, that the action of confiscation of

unrelatabie to the activity of "export:". On

the same__"ana'logy, the only possible inference in the present
"that even though the State government has taken

i'act:i'on,..Ai'Awhereby it has banned the "export" of iron-ore, the said
is for the purpose of preventing illegal mining,

"transportation and storage of iron ore in the territorial

jurisdiction of Karnataka, and has no nexus with the "export" of

iron ore.

152

The Sixth contention i… the impugned orders violate the rights
vested in the petitioners under Article 300A of the Constitution of

India):

76. The sixth submission advanced by the iearn.ed*-counsel

for the petitioners was based on the rights ve§s’ted«l..’_witi.i:_.v_tize
petitioners under Article 300A of the

Article 300A of the Constitution of Ifftdgidajl is 7

hereurider:–

“30OA. Persons not to belvlvdefirivedlof save by

authority of law- No person___shaii be depri’veo’_ ofvhis property
save by authority of il_aw_”. ‘ ‘ ” ”

It was the submissiojin for the petitioners,
that profits petitioners from extracting
iron«ore,~”bas-ed’:;on;\;.g’i~id”‘rni-ninlgieases, issued by the State of
Karnataiéag. “The legitimately mined iron-ore,

either in theadiomelstic’inariiet, or by way of export to foreign

,_mari<etts, _constitu"tes__t__h_e. petitioner's property under Article 300A

ofyltiiegCo_nsti't.ut'io_n of India. It was therefore submitted, that the

hetgiitioner'ucennotlyv be deprived of the right to such property,

–V through “‘the”impugned executive orders dated 26.07.2010 and
it was submitted, that heavy iosses are being
.0 suffered by the petitioners, on account of the passing of the

“impugned orders, which have the effect of depriving the

petitioners the right to fuifiil their contractual obligations, which

they had executed with parties beyond the boundaries of the

‘liei/W@i__5″W~¥4

154

case of the petitioners, that the activity being carried out by the
petitioners has been taken over by the State government.

Fourthly, it is not the case of the petitioners, that the”co’nt,’ra’c.t4ual

obiigations executed by them with overseas pari;’ies,V.hVa’v”el b’eer.v.’

frustrated
contention advanced on behalf of the §:§.etition’ers

300A of the Constitution of

78. At the cost of r’ep.etiti_.o”n’,’ iris n’ecessary”‘to” notice, that

the action takelfby by issuing the
impugned 28.07.2010, is of a
temporary._nat’u.re,5*so,,_as_toI’VliAn’sta:,lViVVV_certain measures to prevent
illegal mining, and storage of iron–ore. Herein,

what has beenl sou’g.htiV,’toVb*e done is to temporarily prevent the

petityiciners from’ mined iron ore, with the object of
mined iron–ore is retained within the
of the country, so that, the same is not lost

_ for ail titfnesito come. The export of illegaliy mined iron ore
result in legitimizing the illegal activity, in as much as,
._é’af_Vte’i–‘ said iron~ore leaves the shores of the country, it would

-be; weli nigh impossible for the Governmental agencies either to

recover the aforesaid iron~ore or to prosecute those involved in

the illegal mining activity. We are, therefore, unable to agree

with the submissions advanced on behalf of the petitioners. The

Accordingly, we reaiiy~fin–d_no_ su4b’st,anc’e,_’_in ‘trhefi. ”

155

State government through the impugned orders cannot be
deemed to have deprived the petitioners, of any of

property vested in them. For the reasons record-ed”4abo.ve;_(‘4as

also in the preceding paragraph), we find no

contention advanced on behaif of thé;,Apetit4ioner_s.’:4_’ 4′

The Seventh contention (… therelbeinq no Vtr:..ith”i:n l’t:hev–.a.Ss3ertions’

made in the statement of obiectio_ns, the”i.mpiur:=neCi,’ orders are
bound to be set aside): 9

79. It is the case oi’ we are recording
as their seventh,_c0.ntention’,’ depicted in the
foregoing out to demonstrate,
that the_,av.errnent:s-:;rnaci.e’ 7, 8, 12 and 13 of the
joint staitementiviof.objecti’ons~-._filed on behalf of respondents 1 to
S, are on’ly~i:nten’d’ed uénirigecessariiy malign the iron–ore mining

commiunity, inc|”ud_ing the petitioners, whereas, there is no truth

matter. Learned counsei pointediy assailed
in depicted in paragraph 16 of the statement of

I obje’ction__s,’ -wherein, it was sought to be projected, that the
R.”4″-..ng’i’~JatVionai’v…i5iinera| Policy 2008, as also the Karnataka Mineral
it ri’..oii–cyf?2008, do not encourage export of minerais outside India,
instead suggest the establishment of industrial units within

the country for processing the same. Learned counsel for the

petitioners having invited the court’s attention to Annexures R9

and R10, contends that the National Mineral Poiicy, as aiso, the

Cl”

156

Karnataka Mineral poiicy encourages export of minerals to
foreign countries. On the express issue of illegal mining of iron-
ore, it was “the submission of the learned counsel’i’,_for the

petitioner, that an exhaustive report has been sul3:Vi’1″iittje.r,_i__;’iivfthe

Karnataka Lokayukta , wherein, even the of’tl-mg’
petitioners do not find mention. It iivasathe«re’fore’ athat T.

it is wholly unfair for the authorities to..irnpose aa,.”_b,|a’iii<et'=-ban"en

the movement and export of iro"rn;o.re, whicVh"'ih:asAlthemeffect of

unnecessarily harassing innocent, honest
entl'el3i"€|'i€Ul"S_V "i–V.itv-was also pointed out,
that the initiative of the State
gevernnéien–t,'_' stop the activity of iilegai
mining aforesaid process, it is wholly

unfairfor the'4"St:ate.government to have imposed a bianket ban

'"whiCi»,. igargeiis, innocent and honest individuais/business-

the petitioners . It was asserted, that the

acti~'3_¥1'ltat Vfhleijlihailnds of the State government, not oniy results in

'less of" revenue to the State government, it has far-reaching
'7con:see.uetz<:es even at the nationat ievel, as it deprives the
country of vaiuabie foreign exchange. It was submitted, that the

empioyment generated by the mining industry cannot be

everieoked, as a iot of peopie in the State of Karnataka are

dependent on the mining industry for their iivelihood. It was

?:""6&"

162

executive had the jurisdiction and authority to pass the
impugned orders dated 26.07.2010 and 28.07.20104…,:(»\l,,iVlh_ the

object of preventing illegal mining of ir0n~ore

Karnataka), the action taken at the hands of.State*_~g0’ver–nmen’t~,y
cannot be sustained under the doctrine ofoi/e4rabre.ath,”ah-d_ Uifidel’ 0′

the doctrine of proportionaiity..*In.__thisVbehalf,

that the State government has an approach, in
prohibiting export of i§h.Ain§:.g_V..v,,l’ir:.’Karnataka, without
reference to those who_..a_reV-.,geVn¢u:igne’lyV,h’ in bona fide
mining activities,”gs,’egg-gng€t__””tho’SeVwtio….;§re involved in iltegal
mining opera.tioni_<._"filth the action of the State
thellvllirnpugned orders, would not
affect the'ac'tivity It was asserted, that even

after the issuance of-the. impugned orders, illegal mining activity

.0 V' "has "noit bjeen'r-prevent'e'd,Vand is stilt continuing unabated. It was

pointed rvtéhatlwhat has been prevented is, the export of iron-

ore' ._mineVd,'ir1__ the State of Karnataka, at the hands of those

l'~.,'Vengaged_ih legal and legitimate mining activities. It was the
"st.-.b:rh'i'ssion of the learned counsel for the petitioners, that since
only export of iron-ore had been banned by the impugned orders

dated 26.07.2010 and 28.07.2010, itlegaily mined Eron~ore in the

State, is still available for domestic use, within the State. As a

matter of illustration, learned counsel for the petitioners posed

ET

173

wherein serious concerns were expressed about illegal mining of

iron ore in Karnataka. The aforesaid even led to, th.eVih,an_ding

over of investigation in the matter to the Karnatakéi’iaokaiyiurxta,_
The sole purpose of issuing theMimpug_ned–

26.07.2010, as is apparent from the,aforesiaiudlorderélitselfluwals,

to formulate guidelines, so as to,-initiate.V.necess,a’r’y;action;withfa,

view to curb unauthorised/illelgaill _tran’spo;rtatio.n,{export of
minerals from the Stat§;\’\,,,,i,n’ Vvifnsofar as the
subsequent impugned or’d.e_r:”‘d.ate.._dl is concerned, it
made referenceiltéolthe 83,05,991 metric
tones of from genkerg port,
and of illegal stock of iron-

ore fromV”‘i other ports, with the intention of export thereof. Having
taken into consideration, the quantity of iron~ore being illegally

produced in the State, in comparison to the quantity of iron ore

required for local use, as also for export, it was concluded by the

State government, that iron-ore in excess of the

:3″

174

permitted/authorized quantity, was being excavated. And a

large quantity of the said illegally mined iron–ore ggwaisggidhgeing

exported to foreign countries. it was also :.,the_
second impugned order dated 28.07d.,2i)10, that»
seriousness of the issue in hand, invlestigatiioérzi_in_the’~n’iatterof ”

illegai mining, transportation and-.storagie_ of ironr+ore,:came to be

vested with the Karnataka Loi<'vaiyciktaVV, was also
required to suggest measures aforesaid activity.
The latter impugned order._ai'soV that guidelines
for mining and being formulated
so as to a fool proof system of
transportatiioni t_h'i.'si'3ehalf, it was asserted, that
it was government to gather material

necessary for"irnpiernenting. reformatory actions, with a view to

. .'''contr-o:l' ii.l"ega-l._miningactivities and export of iron–ore, so that

t.h'V'esg_iSVtat:e:2'«..govvern"ment could be in an effective position, to seize

such' iilegaiiiyfn mined, transported and stored iron–ore.

T3"-v.__"~Accordi'ngii'1y, the State government prohibited the issuance of
'ii'_ihi_n'e'i7ai dispatch permits" for transportation of iron–ore, for the
piirpose of exporting the same from the State with immediate

effect.

175

85. In view of the factual position depicted in the impugned

orders dated 26.07.2010 and 28.07.2010, it is not for

us to concur with the learned counsei for the pet:it”i’ofi¢–r§_,” that
iliogicai or unreasonable considerations were».-.the”*~i3:asis
passing the impugned orders. it is alsonotIpossi’bie~~fo,r as to ‘

accept, that the action of’ -the Staite ‘.VVJa:’S*’

discriminatory in any manner, ‘V’Vo’i=_:’th_at, Vthe_VV:petiti’oners were
arbitrariiy singied out ad-if/Veris.ei” asviiagxainst those
engaged in miningand ore for domestic
use within ti’? Df3~E..nT:Aso far as the instant
aspect of we are satisfied, that the
ieairned Advocate General, that as
soon as “ore the territorial jurisdiction of the

country, it becomes. hi’-mpossibie to investigate, whether the same

. i”‘wa§-.,,aijta’ined._out ‘oVf”i’égitirnate mining activity, and as such, it

wouldiai:s’o,,_beco_me impossibie to prosecute those who may have

expoértedyironifoire, obtained out of iilegai mining activities.

“hit was attractive to hear iearned counsei for the
0 petitioners canvass, that the State government had used a

it “siedge-hammer when it couid have used a hammer, or that, the

State government had used a hammer when it couid have used

a f|y-fiapper or a fiy-swat. The submission, however, remained

177

been created by the impugned orders dated 26.07.2010 and

28.07.2010, inasmuch as, transportation of ironV~o.r:e.__ for

“domestic use” has been allowed to continue,’C.’_w.herea«s
transportation of iron-ore for “export” has beer*r*ba’:r:ne’d:. .It
submitted, that there is no material on the record.,of-.this-..caSe to 0

show, that illegal mining is onlyiibeing carried ouit”a1;Vithe hands of,

exporters of iron–ore. It was coln’teruded,V”t~;q.a:_Vt:tvhefllsuppliers of
iron-ore for domestic eVi:,ilu’a«i.l_y’..i,,l’beresponsible for the
alleged illegal mining. Itwais of the learned
counsel for the a’ny.jac.t’io.n.V:taken at the hands of
the State the activity of illegal
mining However, it is not
understandable’ of iron~ore, “for export” only,

is subject matter ofithe. prohibition envisaged in the impugned

0 i°orders«:’d5a’ted’i~.26.02.2U’10 and 28.07.2010. It was pointed out,

“‘t.h’a:l;..uby::”p,revewn:t’i_ng honest entrepreneurs, as the petitioners

herein, who ‘a_.re. engaged in honest mining only, from areas ear-

_’=marked fol: licenced mining, and are carrying on the aforesaid
within the parameters of the conditions prescribed, can
be arbitrarily barred from the process of transportation of iron-

ore, and thereby, prevented from honouring the export orders

executed by them. This action at the hands of the State

government, according to the petitioners, is clearly arbitrary and

3.80

legislator concerned holds or had held at the relevant time. The
principle for debarring a holder of office of profit under the
Government from being a Member of Parliament is, tlaatsuch
person cannot exercise his functions i’ndepende’ntly.g:’of’-the
executive of which he becomes a part by receiving ..’ip-ecurziary
gain”. Under Article 102(1)(a), of course, Parliament<has,'thev.

jurisdiction to declare an "office" as not to _disq'ualii";r.:'its_ lzolder ,(y
to be a Member of Parliament, and lil<ewise'=.i'.gnder_Article '
.I91(1)(a) the State Legislature has the ju'risdic–ti_on-_to declare *

an "office" as not to disqualify its7holcler..s:;o a~Meimber.«o'r?t'he
State Legislatures. Moreover, apart from the_~-office being an

"office of profit", it must also.__be an'.office urnvdervtljse State

Central Government. "

89. On the basis of the corit-e’ntiV_ons”-noticed’-hereiinabove, as
aiso, the declared proposition submitted that the
impugned orders dated are liabie to
be set aside? of”‘thVe’fac’tiV–that the same violate
the fundya.me_nVtai”‘ri;gh:t.s peitiitsioiriers enshrined under Articie
14 of ‘has aiso, on account of the fact

that the aft,craesaidx”a_ction iseidiscriminatory having no intelligibie

diffe,re:ntia~ whicVh”..distinguishes the petitioners (ie., those who

ha’v«e:be_en..prevented from the activity of transporting iron-ore)

as”agyainist’_;-v..__th.o’s’e who have been aliowed to continue the

V _ afore”said..’.actEvity.

The question whether the action of the State Government

— biissuing the impugned orders dated 26.07.2010 and

“28.07.2010 has any nexus to the object sought to be achieved,

cannot be treated to be a matter of very serious consideration in

View of the conciusions repeatedly drawn by us during the

Q”a..«fi«w;5iv

181

course of determination of various issues canvassed at the hands
of the iearned counsel for the petitioners. The obje_ct._so_ug_ht to

be achieved, was to stop activities related to.-§i:l.leg’a.i,j’h*—-.mihjng,

transportation and storage of iron–ore,,in Karnata*i<a'_.~i , it.h'as been

asserted at the hands of responde.nts;fl..jto"=5,-that'm,.eas;;resl"

necessary to be adopted for~'tne.h preav-ention
transportation and storage of are"b_e_in:g in place,
and rules are being su;-i.ta:bl_yensure a complete
check on all mining reiat.ed._:acti.vAit:iesi"'inV'likarhataka. In this
behaif, it is r;e'slpo.nd:ents'–~15to 5 that the State
Government is of "special ceiis",
check~posts", instaiiation of
''closed circuit' "cameras", "computerization" of

check_~-posts,uie.gu'lat*ion"-othstockyard licences, and other similar

. V."'mAea'isure,5~. _CanHit""b'esaid that the aforesaid activities, which

place by the State government, have no nexus.

to”t.he objecit-hgsiought to be achieved? We are afraid not. The

*..main reasion emerging out of the submissions advanced at the
of the iearned Advocate Genera! was, that it was possible
to} search, get to, and deai with theft of iron-ore, so iong as the

mined ore remains in the country. But if the ore is permitted to

leave the shores of India, it is impossible to identify, the

particuiar mine (or mining area) from which it had been drawn.

UI—“”””‘W

182

In the aforesaid situation, it becomes impossible to verify

whether, the ore being exported was obtained out ofi.lfeg_itiimate

operation, or out of illegal mining activity.
aforesaid, it was the pointed assertlonof theiieamevdiiicounsei for

the respondents, that there is no such iirft-he”_si::,c_:ase

of iron ore which is to be us’ei:3′–..,for Vp’ro’cess’ir:gv'”infi=d_om.esticalVly
located industry. Having consid_eréd:_th.e eitpiaiiiavt-ionyiyendered on
behalf of the responden«t..V:’:’5tAate we are satisfied,
that the choice ofimposing,’.theh”i.p,;ig’ ‘V”iron~ore meant for
export, cannot; bet.”unreasonable, or without
application ‘ ..,:s:ubmissi’on advanced by learned
counsel, that are still going on, is only
conjecturat in not based on any substantive

materla..i.,, That..apa~rt, tfhefprocess has been initiated only in July

. if°2016-,’:’it:,,,wiil”l*take sfoflmiefvtime to catch up with those engaged in

ii_.|l:eg.aVi”operations. The action cannot be termed as

arbit,rary,,. violation of the provision of Article 14 of the

f'”~«._”-Constitution of India. We are satisfied that there was a
7r_easo’rA_-able and legitimate purpose in limiting the ban only to
“export” of iron–ore. Therefore, it is not possible for us to

accept, that the action of the State government, was not object

oriented, or that, its action had no nexus to the object sought to

d w

183

be achieved. In view of the above, we find no merit in the

instant contention as well.

The Tenth contention (… the impuqned…_A4o’rders’ are”

sustainabie in law because the Statei*'<:;.Qver.nmen't~has net been;

abie to substantiate the source.» of th.e".ge'xha.ust.iv.e .,r3ower'—, ]

exercised by it):

91. The next contention.a’d.vance’d counsei
for the petitioners was, thatitiwte*n.impug”nedA orders dated
26.07.2010 and 28.O7.V2’OiAO..a’re’ e’><e£:"0t.i;e.e'erders- AN executive
orders, accordingito t|3e…pati:tiorie,fiS, must emerge
from to issue the same.

Referring “”” (under the Mines and
Minerals, Ac__t, the Foreign Trade Act and the
Customsiifikcté) to pointed attention was invited

duringthe courseyiofiihearintig, it was submitted that no power has

itvbeen” in the State executive under any of the statutes

suggest that the State government, had

been.__ves.tedi}with the authority to ban mining activity in the

i.”‘~’~.__v’State oifisjarnataka, or couid ban transportation of mined minerai
“”witih,in:”,.’the State of Karnataka, or could ban export of mineral
mined in the State of Karnataka. Having pointedly referred to

uifthe Mines and Minerais Act, as also to the Foreign Trade Act, it

was the assertion of the iearned counsel for the petitioners, that

no such power can be deemed to have been vested with the

j

189

dependent on the petitioners. It was submitted, that the
respondents are even now not aware of any u_,nia_cc_eptable

behaviour or activity of any of the petitioners§V_f.o’n”l5t,tf:ej’ -b_a_”si_s

whereof the impugned orders could have been”‘pa:s3e’di)_~_It_:was

asserted, that even in the joint stateme;-‘nt..pf’opj~ectio’r;s<.filedion

behalf of respondents Nos.

been leveled against any of the addition to the
aforesaid, it was the p’f.l”th.eLleiarned ‘counsel for the
petitioners, that before adverselyaffeéitivngiitthe civii rights of any
individual, it of natural justice, to
afford the is right to respond to the
allegations this behaif, it was pointed
out, that was ever afforded to the

petitioners, so as totenabie them to demonstrate that the action

flcontémp’iated~againstmthem was unjustified.

x’VI’n7_s-0 farvlas the factual position is concerned, in order to

.q den’ionst’rate,”.Vthat the action taken against the petitioners was

ff”‘A4″tiprica.i_ledf'”for, certain details were highlighted on behalf of the

_ peytfitioners. On the issue of transportation of iron~–ore, learned

“counsel for the petitioners invited the court’s attention to the

fact, that a hologram is affixed on the permit granted to each
and every truck carrying iron—ore. The transportation permit

issued for carrying the iron–ore, depicts the place of origin of the

191

orders should not have been issued, without affording an

opportunity of hearing to the petitioners.

96. The instant action, according to the _I.e.a,.ih»evdcounsel” for”1._

the petitioners, is akin to a black _|istj;o_rd’er,-:1wh’e,r’et;y,’:’an’.,,

entrepreneur is prevented frovrn_seel4<'in,g"'any 'cor.,t}a.:£ua,i
engagement. On the instant""'ii~ssue, learned i for the
petitioners submitted, that,_the«"dec|a'red:i"propositionyvof law, even
when the concerned authority.L_';piia_ck-list someone, or
some party vii-asvaiiid, itgwais i'nAi:tiiated.___t:hrough a notice to the
concerned of hearing . For the
instant washipiaced on State of Orissa v. Dr.
(Miss) sanapan; oéiand’~:§’t’r.§§’i’s_.'[A1R 1967 sc 1259}, wherein it is
observed aVs’e,ndverr::-‘V__

_ V. V _”1.?, It is t’rue.__that some preliminary enquiry was made by
Dr’»*.S. Mitra. But the report, of that enquiry officer was never
_ disclosed “to the first respondent. fhereafter the first
“res’ponden_t was required to show cause why April 16, 1907
should,’ net-tie accepted as the date of birth and without
. “vrecordingany evidence the order was passed. We think that
such~anf..~ enquiry and decision were contrary to the basic
“concept of justice and cannot have any value, It is true that
the ‘order is administrative in character, but even an
.. administrative order which involves civil consequences, as
“already stated, must be made consistently with the rules of
V . _ natural justice after informing the first respondent of the case
of the State, the evidence in support thereof and after giving
an opportunity to the first respondent of being heard and
meeting or explaining the evidence. No such steps were
admittedly taken, the High Court was, in our judgment, right

in setting aside the order of the State. ”

_§-~i”

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193

the petitioners are in possession of vaiid mining iicenses., on the

basis whereof, they in the first instance mine

thereafter, transport the same to foreign cou-,rit.’ries..:fg:

aforesaid purpose ,the petitioners—.hav_,e vaiidj

contractual agreements, with parties’.Vovers’ea’g’_~.
be no deniai of the fact, of the
petitioners in transporting ironjore'”,fro’m_.the ‘Sta.te,of Karnataka
to foreign countries, hafsfiffbee-n_vf’tovtai’Iy,:’curtailed by the State
government conseq__uent””o’n’ impugned orders
dated 26.o7;,25:,o 24$%,;.o’7..V,V2’o3,»{;;j;v.’5riiu§’veewed, it is apparent,
that themay have been adverseiy
affecteda_by_ (if they are prevented from
executingfutheirvfC–biigati4o:n–.s””within a specified time frame).

Accordingiy, thereffcfanvnbe no escape from accepting, that the

impu’gne”d:orde_rs, may have adverse civii consequences on the

Afpetit_i_one’rs’;~._it ifsbaiso not a matter of dispute, that no opportunity

was”‘gran__ted,At’oA the petitioners, so as to inform them of the basis

:’f0,r_thew.-contempiated action, and/or to afford them an
.,”o.p’portunity of hearing, so as to enabie them to project their
.,in.divédua| view points. In that sense, even though the civil

0’ rights of the petitioners may have been affected, the rules of

natural justice were not foliowed, before the impugned orders

dated 26.07.2010 and 28.07.2010 were issued.

200

Secondly, where a decision is of an interim nature, and the
original position would be restored after ascertaining the factual

position and/or the required particulars.

Thirdly, where the purpose would be defeated,

passed immediately. Or in other wo,r.ds,_ delay”‘w’–o.u:!dV”‘defeatvltlheh

purpose of the contemplated action.’-._
Fourthly, where public interest'<–.and/oi=.. they iriteiest._,of_.'3justir;e,

would not be safe~guarded, conteinpllated action is

delayed.

It is apparent cojn.cAl’us_icyn§.,;de.*ived from the judgments
rendered”l”byi..,:tEle lV’i’5’§ip’ex””.C;ourt,'””as'”:have been noticed in the
foregoing, parag_rapfh5,’i»,,:’t3a:’laV.nc’ing of public interest as also

interest ofjustiice,’ -__isI_a ‘vlery important consideration before a

.–‘i.,_Vlegi::I’iiaate’ ciaim c’an..__bevraised under the plea of natural justice.

In.Vsituat._iVo’ns’«where public interest would be adversely affected,

private inte’ij’esi:”of an individual wiii have to give way. In

j situaltioznfisa wherein the damage would be irretrievabie (if the
‘:jruies._.’of’natural justice were to be insisted upon), it would be
openllto the competent authority, so as to prevent the

“commission of such action, to by~pass the procedure envisaged

under the rules of natural justice. Even where the recovery of
the loss/harm would stand frustrated if the rules of natural

justice were followed, the legal proposition declared by the

_.?””~t”

……u_..,_,

\.l

201

Supreme Court, is in favour of preventing such harm and/or for
making such recovery, by taking recourse to the .,”ie_medial

measures, without following the rules of natural Vj,u_stic’e-.,:”»,.i’nall

the aforesaid situations, the rules of natural”-«,l__usticeV’i’can.w_4’ib’e.._V

avoided even though the action,,”wo’u«!dA ‘have_x’a’dverse llcivilf

CONSEQUENCES.

100. It is in the background aforesaiddietevrmlination at
the hands of the Apex vve._,shal’l–VVn’owV venture to
determine, whether, it wasappropriate«:_a’tlx.t’he[hands of the State
government to “:ha1\xe orders dated
26.07.2010 following the rules of
natural the factual position narrated

at the fiaynldys ofl’th”e.:St.ate,:government, as also, the factual

~”‘~._,posif;i’c}n Ee’xp,ressedvi..n…the impugned orders themselves, that

‘H,tnelre»wasylsuifficient material with the State government to arrive

at”th”econclusion, that extensive illegal mining of iron-»ore was

‘pbeingk r;a”i’ried’.V out in the State of Karnataka, specially after
‘2..j_min’ing’ iron ore had become an extremely profitable venture

-‘ the past few years). There was also adequate material,
aslhas also been expressed in the impugned orders, that illegally

A mined iron ore was also being exported beyond the territories of

Karnataka to foreign countries. The instant activity of export of

iron ore, would result in a permanent loss to the State, not only

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202

as a matter of loss of State revenues (which the State would
have earned through royaity therefrom), but also in terms of
permanent loss of minerai wealth of the State. Not o'”nl,y that,

after the illegally mined iron ore had traveled…__’beyorid:”4the

boundaries of India, it would be well nigh impos’s~i._bie;V’_ctoi’

the same, or to initiate criminal)’prosecution .a’gainst5’thosef’. it

engaged with the said illegal activityA,”.__”i1l’1_eA.choiceigwith £l{4e«i.§;’tate
government was, either to alVlow:V”‘t–he saidyhactivityfltiol’continue,
and simultaneously, put zinuxplace”‘niié_6:S’u”l*es to liprevenit the same.
Or in the alternative, to”asta’l’l -illegitimate activity
temporarily, (necessary to
prevent State government

chose thew-la,tte_r’ coi.z.rse-=_’.V -._In’ ou.r..v:Eonsidered view, the State

government was,_rful!yV’ justified in doing so, even without

V ‘rulves ofvmnaturai justice. For our instant conclusion,
we four inferences derived by us hereinabove,

S _ from-«..the,___iiega:’i’ position declared by the Apex Court. Even if one
them were to be applicabie, the rules of natural justice could
VA been avoided. In so far as the instant case is concerned,
each one of four situations carved out by us, is applicable to the

controversy in hand.

101. Adverse civil consequences to the petitioners would

emerge from a conclusion, that the petitioners have been

W4″

._.mn…y

U

203

deprived from fulfilling their contractual agreements, pertaining
to export of iron ore. None of the learned counsel appearing

before us, had drawn our attention to the breach of of

contract executed by the petitioners. It was “b,é_fore’_

us, in any case, on behalf of any one”of_the: Vpe4ti’tiO’neVis,f,th’a,tAVa’2.

time schedule in their contract car’.«nol:._’_Afnow’ff’be:i’
result of afflux of time. In thev._a’b.s_ence”
at the hands of the ;:>etiti_oners,:yitiwifsrviditficulttoiconclude that the
petitioners have suffered”-an–‘,/ -consequences, as a
result of the passilr;g__ of ’tilt is therefore not
even clear, of the cases before
us, thatthe compliance on the

rules ofixnatu ral Vjust»i_ce.,

view 0f”the…considerations recorded in the preceding

tv»!o”paAra_graph:’s,.._we are satisfied, that the action of the State

Gove’rnmeri–tT’,jinfnfot following the rules of natural justice, before

‘,Vissuing.the impugned orders dated 26.07.2010 and 28.07.2010,
“.jcair1’not held to be unjustified or illegal in any manner

— whatsoever. We therefore find no merit even in the eleventh

“contention advanced by the learned counsel for the petitioners.

The Twelfth contention (… the impudned orders cannot be
sustained, because the State government cannot affect the
rights of others, for its own faults}:

We

Cl”

103.

ie., Union of India. Paragraph IX is_i3~e.in_g ex_trac’t’ettv

204

In the twelfth contention advanced on behalf of the
petitioners, the Court’s attention was invited to parajg’riaf;>h”*IX of

the statement of objections filed on behalf of

“IX. In light of the increasing in’ciden’ce’iVoffllgegai’n’iira:iVng,”‘t.h:e

Ministry of Mines had under takenV”the’*follov§iing nweaszjgres to?’

curb the menace of illegal m’i’nin’g:

(i) State Gover.-‘im_ents,i’have.:been._askedyvto “frame Rules
under Section 23C of _( Development and
Regulation) Act, to ‘V._enbabiev,’Vtherri” to provide for
inspection, checf.'<ing:_ an:d.T.searchvi".of,,miifierals at the place of
excavation, 'd.urir_ig iftransitil The Rules would also
provide fori:.establishment ol"checi<¥post and weigh~bridges at
importantiii-centres; 'So;"far th'é"State Governments of Andhra
Pradesh, Bihvar;tfiliattisgarh, Goa, Gujarat, Haryana, Himachal
Pradesh, ,Jharl§hand,i';la'm:hu & Kashmir, Karnataka, Madhya
A S S Rajasthan,

Pradesh;.. "Maharashtra, Nagaland, Orissa,

,.._§l:lttai*l<hand, 'atlttar Rradesh and West Bengal have framed

V" Rules under this 'Section.

‘ («i’i}e’:i*h,e Suite Governments have been advised to constitute

R ‘ _’w”i”asl{ .F”orces/flying Squads at both State and district levels for

u’tal<ing.Veffective action against illegal mining.
_ Forces/Flying Squads are assigned the job of collecting
'inforrnation of the cases of illegal mining, taking action to curb

'such illegal activities and ensuring co–ordination among

The Task

various agencies so that effective action is ensured against
illegal mining. The Task Force at the State level would be
headed by the Secretary, Department of Mining & Geology of
the State Governments and includes State Police Department,
State Transport Department, State Forest Department, Indian

m…—u

x)

_,,a—-

205

Bureau of Mines and State Pollution Control Board. ___At the
District Level the Task Force would be headed by the. _D’is_trict

Collector and comprises of Superintendent of

Collector (Revenue 8: Mining), District Mini’ng_.’O:ffice,r,’
Forest Officer and officials from concerned –di.stricts[:of State.. 9

Pollution Control Board and Transport ‘Department; a_So’l’ar the
States of Andhra Pradesh, Assam, ibiihar, lCha’ttisgarh,*–,Golo,

Gujarat, Haryana, Himachal._Pradesh,”.7harl<l7anc{.V'_Jam;rnul

Kashmir, Karnataka, Madhya'vs.Pradesh, i'laharashtra,HlVlanipur,
Mizoram, Nagaland,Orissa,y..Punjab;–._,Rajasti7~an, Tfamil Nadu,
Uttarkhand, Uttar Pradesh -and _B"engal have constituted

Task Forces.

(iii) Regular”«m’_onitc=ring Government of
instances of 5:.ili.’_§_gal..:_mining,” action taken by the State
Governrnenit Vagainsit activitiesband other steps taken by
curb illegal mining with the Secretaries
oft._5ta~te vGoVeingments,,_:in the review meeting held for the
purpose. . In the State Governments have been

asked to furn.islf: quarterly returns in the prescribed proforma

.»’.§on instances»of___illegal mining and action taken by State
Golvemrrients thereof to Indian Bureau of Mines, which are

” re b_ the Central Government.

A.__r(iv)V.Th’e’1_.’ll/linistry of Mines with a view to facilitate
V development of a holistic action plan at the State level using
.. modern technology to curb illegal mining, has requested all
C’ x_’.”t’.’7e State Governments to prepare an Action Plan on the

‘following points:

a. Use of Satellite Imagery sourced from State Remote

Sensing Organisations to curb illegal mining,

b. Developing reliable mechanism in the State Government

for collecting and monitoring of data regarding prices of

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206

various minerals, wherein the price trend could indicate

possible chances of illegal mining in certain minerals,

c. Developing a mechanism for integrated§rnonltoring;_of,_

information on movement of trucks/vehicles,’ frorn lmining

areas to ports/markets/manufacturing units, ‘which_ use
mineral ores, and correlating the same with..the productloiw

data capture any spurt in miningactlvity, A

d. Maintaining and collecting information ‘form ports,
custom authorities, Ministry”s’of’Commercve.. on export of

ores out of the country; g_’ V ”

e. Bar–coding, use’~of’ Holograms for’ transport permits,
royalty, pernéits; etc, means of tracing

una uthorized ‘ trans-p0rf’*or ‘sale; of_ores,’

re’gistration”ofV all the end~users and issue

‘;_of –.d:’recti’v’e£A4tiog ‘”–end’–user industries to mandatorily

cl?ecl-{payment o”f.___roy’alty before purchase of ores for

various * manufactu.-r’ing processes, with penalties for

V violations,.._, A V

, g;A.D,ev–elopment of reporting mechanism for the traders of

‘ vvminera’l-ores and end–use industries to report receipt of ore

for ‘vkiyich royalty payments have not been made;

” hg; Constltuting and empowering Joint teams of officials

from various Departments of the State Government
including, Police, Forest, Revenue department to conduct

checks and file cases,

i, Coordinating and concentrating efforts of both State
Government and Indian Bureau of Mines through combined

inspection in specific areas in which illegal mining is

CT

_fWc”

purposes.

20?

suspected and to ensure safety and effective cessation of

illegal mining.

j. Creation of a Special Cell in Police force _

mining.

So far, States Government Oi’: Andhra”‘.Pradesh,_xGujaratf,
Jharkhand, Karnataka, Maharashtra OrissVa,–. ,vi'{aja_:sthan,_

Tamilnadu, Uttar Pradesh: and Uttarl<hand'v"have_V_Hprepared

Action Plan in terms of the advice» of the"Cen'tra-l Government.

(v) Advising Statesgto ._set_ucommitteeshhhtovv coordinate
action in relation to hactiivitiesvliiiagflutling illegal mining,
transportation, inclu’u’ing:= assogciatihg;jépresentatives of
Railways

(vi) iieloi:idisgcussionsiivith’Ministry.of Railways, as a result of
which,” *thgei:.Railii£’a;rs”‘have initiateid action in Orissa to ensure
proper ‘accouii’tsA:”for'”transported ore, and the same can be

replica ted all the” –coiiiritry.

;{‘v’EE)_ Held-. iiisscussimg with the Ministry of Shipping which

‘-‘:,.:’iFia_§’~.e,AlSSUed an””a~clvisory to all the Port Authorities in the
_country,_t’o, adopt measures similar to those introduced by

– Paradip’ Po}-‘t.v’i’rust authorities to streamline the movements of

” ._”’Vconsigiin;eht by road and rail upto the port for export

The measures include providing list of mineral

exporters to the State Government and m/o railways verifying

vihieceipt of minerals against valid permit/challan, and

‘restricting unauthorized movement of minerals within the

Port, etc.

(viii) Held discussions with the Customs authorities who have
informed that instructions have been issued to customs offices
for sharing the details of minerals exported through the ports

with the concerned State Governments on a regular basis as

W

…_……..

Mme

208

agreed for Goa.

with whom exact modalities of information/dataexchange

Identification of nodal officer of the State

would need to be worked out by Customs
consultation with the concerned State Governn}ents”‘»~ia’s :ti’r–e

key issue from the point of view of customs: .– ._ if. C’

(ix) The steps taken by the State;_-Goi?erie2men’t- foriicurié-:ir.g
illegal mining in coordination withthevariousi’_authorities”has*

been discussed in Central’gmpoweredjcum’:rjoomination’i

Committee meetings held o}+,24.t,V7.2009,i_y_22.12;2oo9 and
18.6.2010 with theSta.te c;o’§i”ei4ni%§aj’er§gts._g The it/Vlinistry of Mines
had been issuing various giiidelinesieiVanvd”»suggestions on the
issue and rnonitors ptrogress. Vthrough this Central
Committee. ‘tfngigthe last me’etin.gi”ue’ted__1:f8.5.2010, States were
advised -.nodal:_officer who will liaise with
Railways,’ ltortand tcustoinst atuthorities to collect information
on”ttillegaliifmlnlfig’ ongicontinualvtbasis. As per information
received, » ‘Governments of Andhra Pradesh,
Chhtattisgarh,’-. V Goa, Haryana, Karnataka,

Maharashtra, .Orissa_, ltajasthan and West Bengal have set up
Coordinationecurnnifmpowered Committee. Other States
been requested to ensure setting up of similar

_ it Cornmitteesat the earliest”.

In addition the aforesaid, ieamed counsei for the petitioners

3″‘”~.__v’a|so invited our attention to the statement of objections fiied on
of respondent No.6, wherein in paragraph 5 of the
statement of objections “regarding paragraphs 24 to 27” of the

writ petition, it was asserted as under:~

“Reg. Para 24: It is submitted that the State Governments
have been sufficiently empowered under MMDR Act to take

steps to prevent and curb illegal mining, transportation and

209

storage of minerals. imposition of a ban on issuing of Mineral
De-spatch Permits for transportation of iron ore for exportis may
not be the ideal measure to curb illegal mlningi )The’ae.State

Governments had been advised to closely monitor 4ai7.d:”control.»
the issue of Mineral Despatch Permits t_hrough_ Vcoordinated

checking mechanisms using theiservices and_;date._ma’intained T

with various State Departments i–nvol_ved. The’ state also

been advised vide ministry.of¢_Mines’ letter da_tee*.re.i1.::obs to ,

co~relate the production in–.t.g:.n2lines hwith transportation
permits issued and the ore finlally e2{portediin_ order to detect

illegally mined materials.

Para 25 & 25,; The l\ia.tion_al rviiiveiral-“i>elic1y,; 27008, lays down the
policy fra:ne’vvo’r’k gde~velopniei*7«t___o3′ mineral sector and
specifies” in.) pate ” that” mineral development will be
prioritized :’terrn’s_ofuimpnrtlsutistitution, value addition and
the».:s’ame._’tirne the Policy (in pra 7.2) also
ste§.tes’– that Vconj’serva4tionVV”of minerals shall be construed not in
the ‘regstrictive abstinence from consumption or

preservat.ion for=us’e_ in” distant future but as a positive concept

~ ‘-leading to augmventation of reserve base through improvement

A in :in’iningt__methods, beneficiation and utilization of low grade
V _ iianohrejects and recovery of associated minerals. The policy (in
‘rpara 8}. also recognizes that minerals continue to be an

“‘<«..imp_ortan't source of foreign exchange earnings, and the policy

of _ export shall keep in view the dynamics of mineral

it inventories as well as the short, medium and long term needs

-of the country. The Policy (in para 8) also recognizes that

exports shall be made in value added form as possible. There
are no restrictions in the MMDR Act, on the use of ore, unless
the State Government has specifically imposed any such
conditions in any particular Mining lease under Rule 27(3) of
Mineral Concession Rules, 1960 (MGR), after obtaining the
approval of Central Government. I t may therefore be observed

3″°~%W5MW~t””

210

that the Policy and the legislation do not at present provide for
any restrictions on export of ore on any particular mineral as a
class, but the legislation does provide for Mimpositi’on’-. of

restrictions under Rule 27(3) of MCR in an iridividua:i:’*~rnii”:ing,

lease. It is further submitted that the State…G_orver.’ir?1e_nts are

the owners of minerals and controhl”Vthe._qrant .of_ic’cr_rcessions’;in T

terms of the regulations set out in”the “MMD_R

legislated by the Parliament, While the legislation regulatesg

the entire system of gravn:t.V””i0’* COl}f.fE?VS£I.lC):lf!S,a”:Vlt’VVWIS State
Government mineral policy _(_inf’l.ineri_,vvith.’ti’7e_lVational Mineral
Policy) that determines f_the_ ,hma._rin_er_in the State
Government controls VA its Rmineral:R”-Concession dispensation

regime, and _the__ mineral’ Litiliz_at’ion_ VregimeL’

Para l”t.._isA:sul;mitted’ that-“in’:t’errrrs of Section 23C of MMDR
Act, the..,5tate.;_, frame Rules to control illegal
mining,”transpoi?tation».ai;d storage of minerals. Any step taken
bykthe State”f3o.vernme:nt in” this regard under the said Rules
would._he. in rvtérnjs Act. However, it is not clear

whether’ the.,..’-impugnsed orders dated 26.07.2010 and

v_~’5.28. 07.2010 ‘are__lini<.ed to the said Rules. For this reason, the
Cehtralvu 'Government cannot comment on whether the
V '_ " i'mpugrrve"d,_orders are in terms of MMDR Act. The contention of

0. “–.the’Vp’etitio.ner that the local steel industries would control the
“‘««..pricfe’of:”iron ore is hypothetical, since the MMDR Act or the

National Mineral Policy does not restrict the movement of ore

it ._within the country. However, the contention of the petitioner

0’ ‘ — that the natural resources would not be protected through ban

on issue of transportation permits for export of iron ore has a
point since efficient governance and controls at the field level
by the State Government cannot be substituted by any order”.

It is therefore submitted, that the action sought to be taken by

the State of Karnataka, through the impugned orders dated

lo

211

26.07.2010 and 28.07.2010 is wholly impermissible in law, as it

is an abuse of the executive authority vested inj”‘th’e.V.”State

government. It is the pointed contention of thepetitiion’e’rs,i”‘that
the State government failed to takeaction,.”when’.fVit iwaisscaylgleidc,

for, and now, it has passed blanket:”:ordfers, to’~cov[ei’ ‘up’ll”its7own 0′

faults, without any legal or va|Vi_ci’–~j.ustilicatio.n_.
prayed that the impugned order$..4.iSuljouid,_,be lsetiasldei

104. We have giveinlgouirc~tho’ug:httu_»l.:.’consideration to the
aforesaid twelfth.Fgnteinitiiolniiiadvafifiegdvh latlviithe hands of the
learned counsel’V,_foiri”-the.:pé_f;;ti§g.p,e»’;é§,::,_:bIn,_our considered view, it is
a futile ‘t~)i~Vlr’i0′ the. executive, to blame another.
Whether-~–_Qr”n_ot,v could have been adopted so as

to preventiVV”il.|gV§dgal’minding».:a’::tivities in Karnataka, by the State

A government, is m.aVtt_er of the past, and as such, constitutes an

irre’|evant’«.co,nsideration. The issue of relevance is, that

unscru’puVlou”_s._elements in Karnataka are engaged in plundering

-V the mineral wealth, by illegal means. They have to be
” Whether they ought to have been stopped earlier, is
.0 p°r.es’e’ntly of no consequence. Whether some innocent parties

would be affected, is also of no reievance. The only

consideration relevant at the present juncture is, that illegal
mining activities in the State have to come to an end. The

nation’s mineral wealth, should not be permitted to be drained,

3″

CT

213

dated 26.07.2010 and 28.07.20£G, has unwittingly been placed
by the State government, on an interim order passed-___by this

Court. It was the submission of the learned counse:if”,:’foif.,,the

petitioners, that the State government wishes”

responsibility of its own wrong actirons, inctuvdhircigy fra,rning_, or.

unacceptable rules, on to the shouidersigiloiiv

this behaif, Eearned counseil.fo’i<.__the"petitioners"'invi'ted our

attention to the averments madAe..iVn'~pa'ragraph's–1%}, and 36(e)

and (h) of the statementof» .ob_ie'ct,i'o_n's,'v_joint'iy fiied on behalf of
re5pondent5._1§-._ ..4'iThe_:"aforesaid"paragraphs are being
extracted heVreunde_:r:– lb ' V

"_14._ recommendations and findings given
bythe Hon the Respondent — State has initiated
several.__4 dunaothori.zed:_"..'* transportation of iron ore. The
Respondent,' E? '1Sta'te has also formulated Rules called as

V-':,.j.""K.sirnatal<a l\ilin'ei'c'aiV(Regulation & Transport) Rules, 2008" by
__way'«of«p0blication of a Notification in the Official Gazette of
g léarriaté-xa.i'a.t"No. CI 12 MMM 200? dated 20.03.2008 in exercise
' ' the powers conferred by Section 21 r/w Section 23 (c) of the

and Minerals (Development and Regulation ) Act, 195 7 for
thewpurpose of prevention of illegal mining and transportation of
,_ iminerals. A copy of the same is sought to be produced as
' "iiiNNEXURE–R2. Being aggrieved by the formulation of such
Rules, several mining lease holders challenged the same before
this Hon'ble Court in W. P.No.6985 of 2008 C/W W.P.No.16529 of
2007, W.P.No.18793 of 200?, W.P.l\io.18907 of 2007 and
obtained interim orders of stay which is still continuing. A copy

of the interim order is sought to be produced as ANNEXURE~R3.

3%"

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215

which has resulted in illegal mining and transportation of such
illegally mined minerals. To prevent all such activities of
illegally mined minerals and its transportation, the State
Government has now taken a decision not to issue for
the purpose of exports. The said decision is in acco’i’dé’nce,, with

the provisions of M. M. D.R. Act, 1957.

36(h). It is no doubt true that iron ore is;a”m.ajor”rriin-eral: and
Mineral Concession Rules, 1960 Izapplyétor the -i’matterur_ela’ting« to

mines and minerals. At the same time,
itself has entrusted the task_ on “the Starelifiovernilnent to

prevent illegal mining and illegall’transportation-; Itis in exercise

of that power, the Rules in questi’o’n”‘ha’veg,”been framed. As the
Rules have law’ been sta;réd,”<th'e–:fState,f Government has issued
the Govei'nmer-it it C)r.:j_er._ to 'prevent illegal mining and

transpor**tatio.*i.ff.gg

106. 1′-it wasVthe-._»subm.ission -of the learned counsel for the
petitionersgthiat if the government had actually framed

rulesgunder the”‘M_in’es and Minerals Act, in consonance with law,

Ttize frame work of the provisions of Mines and

Aii\1i_ne_rals’~Vv’A:t, also, the Constitution of India, the State

gove«rnm.ent.,lAs’hould have assailed the interim order passed by

:’this_Court’, whereby the operation of the Karnataka Mineral
,..”(–.FV{e-guiation and Transport) Rules, 2008, had been stayed by the
Court. It was, sought to be contended by the learned

it counsel for the petitioners, that the State government is itself

violating legal norms, so as to harass genuine and bona~ fide

exporters of iron–ore without any justification or cause, specially

l7

benalfyi’ ..t:5ft..i.v”th’e.,:_1~~petitioners withers away.

218

juncture, it is a futiie exercise to biame the State government,
for not having moved an appropriate application for modification
or for recalling of the interim directions issued by this.,’co,urt, as

also, for not having sought a final decision in the_,m_’atte*t,’~V,.o’r« for

not having availed of its appellate remedy. N’o,netiV1eiVe:§”s,

not possibie to loose sight of th,e’mfa’ct,,_ r:e’guiaitoryf.

measures introduced by the State go__ve–rnmentby..frarn:ir~sgi”‘thVe
aforesaid rules, which had be ‘.er.:ii’psed_, b’y:th’e’V’interim

directions issued by this .court,i-“now-sta,nd revi’viedv,’:with a few

modification? mind, that the basis
depicted M9,,’ .p,e’t;.e:i,f:’v_o’i to support the instant
submission,_ ofjthe many considerations which
had weighed iNith’i..the,”;’ita’te”‘government to pass the impugned

orders.’ ” all V-thattwali. taken into consideration is examined

“‘co.iiective’I’y, “‘t~h_e potentiaiity of the submission advanced on

it becomes

inconseq_uenti’all. In that sense, no fault can be found with the

l.'””~.__V’State government for having taken into consideration the interim
if ,u”d,’i:’ecti1ons passed by this court. It is not as if, the interim orders
Hpa5ssed by the High Court constituted the sole basis for passing

the impugned orders. As a matter of fact, the interim orders

passed by the High Court was just one of the facts in a series of

facts taken into consideration. In that sense, the emphasis on

‘;x:m,m’eVsw,ev

” ‘ “cl is rni.s:sei_d.

219

the interim orders, as the sole basis for passing the impugned
orders is not only misconceived, but is also fallacious. For the
reasons recorded herein above, we are not impressed even with
the last contention advanced by the learned the

petitioners.

Conclusions and observations :

C

108. Despite our having’ considered a

submissions (thirteen in all) aVdv_a’r’iced at hands of the

learned have been noticed
individually found no infirmity in the
raised before us. We,
therefore;yiereby,V_:’u:.phiold,:_:”the orders dated 26.07.2010 and

28.07_.?._010.fl” _fl”l”.~us- viewed, all the writ petitions are hereby

be the fact, that we have found no merit in the

writ.._petitVi.ons’,.V. we are of the view, that for maintaining law and

“order a”ll_n’ecessary measures should be permitted to be adopted
any interference. But while doing so, rights of the
inréocent parties should not be infringed, as far as it is

practically possible. While examining the submissions advanced

at the hands of the learned counsel for the petitioners, we were

satisfied, that the impugned orders were passed, for the sole aim

,___5″”~tQ”

CT

220

and object of eradicating iliegal activities related to mining,
transportation and storage of iron-ore. Even though the
dominant purpose expressed by the State governriiient is

laudable, yet the time taken to introduce regula.tor.yV».mi’e.asu..res

cannot be endless. Nor can the rights of _in_n’o’centA_:’peop’le5

affected for an unlimited length -I’ tl.jeteV’VVVgisV”«ani.__

unreasonable extension thereof,_ by de.layi_ng
of the measures, for which”‘«ri’i:.:t4,:Xl:e im|5Lit3fieii.= dated
26.07.2010 and 28.07.,2’G.ft0 tiiesame may have
the effect of transgressing.”Vintvoi’una’cceptab__ie terrain. By a
blanket order, wrong doers from
those who government cannot

adversely “effect; thef:.;civi’i’rightsi’ofwaivél those who are engaged in

the export ‘oi’ iron’~oi’e.hforh”a_n”‘unlimited period of time. For, law

flvstlippiortsi’-“l’only.g legitimate causes, and not, an abuse of the

Kprocgess it may well be, legitimate for the State

gove.r_nm_ent:,lA,j’..to take about six months, to put in place the

T.”-‘««___V’contem’plated measures, for regulating activities connected with
of iron ore, in the State of Karnataka. if the aforesaid
pgrrpose is achieved, within the time expressed by the iearried

Advocate General, during the course of hearing, we are of the

view that the exercise carried out by the State government, may

well be reasonable and legitimate. We, therefore, hope and

222

all the connected writ petitions are disposed of.

Sch” ,
Chiei §1E’f{“‘€?’~>§*’39

;Sfif§§ \

Index: Yes/No
Snb/Ru

‘W ju§§§ fI-