Tiffins Barytes Asbestos And … vs Union Of India (Uoi) And Anr. on 7 January, 2008

Delhi High Court
Tiffins Barytes Asbestos And … vs Union Of India (Uoi) And Anr. on 7 January, 2008
Author: S R Bhat
Bench: S R Bhat


S. Ravindra Bhat, J.

1. These two writ petitions were heard together, as during earlier hearings, it had been submitted that similar questions of law had to be considered. The same company filed these petitions.

2. The facts in WP (c) 2018 of 1985 are as follows. The petitioners are a limited company under the Indian Companies Act and have their Head Office at Andhra Chamber Building, 127, Angappa Naick Street, Post Box No. 73, Madras. The Petitioner was established more than 50 years ago and is involved in mining and exporting minerals.

3. The Petitioner, in 1941, was granted a mining lease for Barytes in Vemula village, Pulivendala Taluk, Cuddappah District, Andhra Pradesh. The second Respondent (hereafter “the Government of Andhra Pradesh”), in 1961 renewed the license for a period of twenty years, up to 1981. In May 1980 the Petitioner applied for a second renewal. Since the State Government did not dispose of the Companys application within six months, the petitioner company filed a revision with the first Respondent (hereafter “the Central Government”), against the deemed rejection. The Central Government on 22nd January 1981 accepted the revision application and set aside the deemed rejection by the State Government and directed the State Government to pass final and speaking orders expeditiously on merits.

4. The State Government on 24th June 1981 rejected the second renewal application of the Petitioner on the ground that the Director of Mines & Geology had reported that the Petitioner had so far produced only 2903 MT for 40 years, which was incommensurate with the leased area. Further, it was also reasoned that Condition V to Para 2 of the letter of the Central Government dated 10th September 1980 was not complied with, and that the area applied for renewal was not contiguous and thus contrary to Section 6(i)(c) of the Mines & Minerals (Regulation & Development) Act, 1957 (hereafter “the Act”). It was also held that the Director of Mines & Geology had, recommended rejection of the second renewal application of the Petitioner.

5. Being aggrieved by this order, the Petitioner company filed a revision dated 21st September 1981with the Central Government, whereby it pleaded inter alia, that the production figure 2903 M.T. shown in the Petitioners application is the quantity of the mineral produced during the past three years only, since the production figures of the earlier period were unavailable; that the Petitioner has proved an ore reserve (which was uncovered 69 ft below the surface level) of 4000 MT by exploration and development by underground methods, by incurring substantial costs and that if the renewal was denied they would be unable to exploit this ore reserve which was developed by them at a huge cost and great effort. Further it also averred that all the plots of the leased area lie nearby though were not contiguous and being an old mining company they had the requisite technical personnel and machinery to operate the mines scientifically.

6. The Central Government stayed the granting of the area for mining pending the revision and called for the comments of the Government of Andhra Pradesh in relation to the revision application, in response to which the latter reiterated the grounds on which the renewal was rejected. Replying to the grounds taken by the Government of Andhra Pradesh, the Petitioner submitted that their total during the 40 years period was 34,624 MT and that the State Government had approved the development of the 400 MT mine below a depth of 60 ft from surface, by investing substantial financial resources. Therefore, the huge excavation made by them, they submitted, was itself a testimony of their interest and efforts for developing the mine by systematic way. Thus the allegation of the State Government that the company was seeking a monopoly is not true and even though the mines were not contiguous, they are within one kilometer of each other. The company also contended that the production obtained from their other leased area is not sufficient for feeding their mill as the deposits are vein type and the mines have gone very deep. Further, that the renewal of this lease is essential for exploiting the mineral already proved by them at a huge cost and to develop the mine further for feeding their mill.

7. The Central Government through its order dated 1st August 1982, set aside the order of the State Government and remanded the case to them for fresh orders on merits after finding out the authentic production figures for the first renewal period and judging, in consultation with the Indian Bureau of Mines, as to whether the production figure is commensurate with the leased area. Thereafter, the Petitioner represented to the Chief Minister of Andhra Pradesh that the mine was not investigated by any Central Govt. or State Govt. agencies to prove the reserves and that the Petitioner has gone to a depth of 150 feet from surface by trenching and petting in a systematic and scientific manner. Further, that the production had increased consequent to the development of the mine and that royalties due to the Government have been paid completely. They also submitted that they had negotiated with Russian firms for the export of White Barytes powder on large scale; in the past they have exported bulk quantity of barytes powder to foreign countries and got awards continuously for three years from the Central Government.

8. On 25th March 1983 the Government of Andhra Pradesh rejected the Petitioners request for the second renewal primarily on the basis of the recommendations given by the Indian Bureau of Mines (“IBM”). The Petitioner then filed a revision petition dated 6th June 1983 with the Central Government reiterating the earlier grounds and refuting the findings of the IBM, stating that the estimated reserves of the leased areas reported by the IBM are only presumptive figures and not based on any detailed investigation by putting more holes. In relation to the non-contiguous areas they submitted that Section 6(1)(c) of the Act applied to only fresh grants and not to renewals. Further, they submitted that the IBM never pointed out during the 40 lease years that the companys production was not commensurate with the leased areas through several officials visited the area several times. However, the Central Government by order dated 28th September 1984 rejected the revision application of the Petitioner on the basis of the recommendations of Indian Bureau of mines. It is this order of the Central Government that is challenged in the writ petition. WP (c) 2018 of 1985.

9. Mr. K.N. Kataria, learned senior counsel, urged that the impugned order of the Central Government, upholding the rejection by the State of Andhra Pradesh, was illegal and unjustified. It was urged that the petitioner was never afforded a proper opportunity to meet the contents of the so-called report of the Bureau of Mines, which were not made available to it. The decisions therefore, were opposed to principles of natural justice.

10. Counsel urged that in any case, the authorities below fell into error in overlooking the facts and figures supplied by the petitioners, which established that it had worked the mines optimally for the period of three years immediately preceding the application. In fact, for the forty-year period of the lease, a total of 34,624, MT had been mined and extracted by the petitioners, a figure which was wholly ignored at the time of consideration of its application. Equally, the substantial investment made by the petitioner, and the State Government and the revisional authority, wholly ignored its export commitments to Russian firms, at that time.

11. Learned Counsel submitted that the impugned orders are contrary to the law laid down by the Supreme Court in Madhya Pradesh Industries v. Union of India that Rule 55 of the Mineral Concession Rules, framed under the Mines and Minerals (Development and Regulation) Act, provides that no order shall be passed against any applicant unless he has been given an opportunity to make his representations against the comments, if any, received from the State Government or other authority. It was urged that the petitioner was denied effective hearing because it could not refute the contents of the report of the Bureau of Mines, which played such a prominent part in the impugned orders.

12. The counsel for respondents urged that the petition is unmerited. The petitioner is seeking to create a monopoly in barytes mining. It was urged that with the amendment to the Act, after 1960, one relevant factor that had to be considered by the authorities, at the time of granting mining leases, was whether the areas were contiguous. If they were non-contiguous, then by virtue of Section 6(1)(c) the lease could not have been renewed. It was also urged that the primary responsibility of establishing that the mineral had been exploited to the best interests of all concerned, lay with the petitioner, which did not discharge the onus. Thus, it could not complain of any irregularity or arbitrariness in regard to the refusal to renew the lease.

13. The Act was brought into force in 1957; by Section 2, the Parliamentary declaration of expedience, in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent provided under the Act has been made. Section 4 enacts that reconnaissance, prospecting or mining operations can be started only after obtaining a lease. Section 5 specifies the eligibility for grant of inter alia, mining leases, and the considerations that have to be kept in mind by the State authorities. Section 6 that is material for the present purpose (and was amended in 1960) reads as follows:

6. (1) No person shall acquire in respect of any mineral or prescribed group of associated minerals [in a State]-

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

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

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

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

Provided that if the Central Government is of opinion that in the interests of the development of any mineral, it is necessary so to do, it may, for reasons to be recorded by it, in writing, permit any person to acquire one or more prospecting licenses or mining leases covering an area in excess of the aforesaid total area;

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

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

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

(3) For the purposes of determining the total area referred to in Sub-section (1), the area held under a 4[reconnaissance permit, prospecting license or mining lease] by a person as a member of a co-operative society, company or other corporation or a Hindu undivided family or a partner of a firm, shall be deducted from the area referred to in Sub-section (1) so that the sum total of the area held by such person, under a [reconnaissance permit, prospecting license or mining lease], whether as such member or partner, or individually, may not, in any case, exceed the total area specified in Sub-section (1).

14. In this case undoubtedly the State was satisfied that the petitioners claim merited consideration, initially. It, therefore, granted the lease in 1941. That was also renewed in 1961. The question therefore, is whether the State was bound to renew/ re-grant the license for another twenty-year period.

15. The background to the Act is that it was enacted pursuant to the legislative entry in the Union List, i.e Entry 54, to the Seventh Schedule to the Constitution of India; it was with the objective of regulating all mining activity in the country. This was further to anxiety that an unscientific and unregulated exploitation of the mineral wealth would cause incalculable public injury. While considering applications for mining activities, all relevant factors are to be taken into account, including the area or areas, the existence of mining, the potential, the scientific basis adopted or revealed by the applicant and also other considerations outlined in the rules, i.e. equitable distribution of opportunities. In case the applicant has been the recipient of a previous largesse, in the form of a lease or prospecting license, etc, the track record of the concerned party would also be an important element in the decision making process.

16. No doubt, the petitioners initial application was not granted; the revisional authority remanded the matter for reconsideration, by the State. The latter, by its second order, rejected the application; this was upheld in revision. The authorities below were considerably influenced by the report of the Indian Bureau of Mines, which had stated that according to the figures, the petitioner had mined only 2903 MT during its forty-year lease period. The petitioner had initially stated that this figure pertained only to the three years preceding the application and that it did not possess figures for the previous years. Yet, later, without any explanation or justification, it urged that the production figures for the entire 40-year period were 34,624. It sought to discount the report of the Indian Bureau of Mines. The state contested this; it also urged that the two blocks for which leases were sought were non-contiguous and contrary to Section 6(1)(c); besides allowing the petitioners request would amount to conferring a monopoly upon it.

17. It is now well established that judicial review against administrative or quasi-judicial orders are available if the decision or order discloses illegality, irregularity in procedure, unfairness, or lack of bona fides. Rarely, if ever do the courts enter upon the merits of the decision, unless it is proved that the decision was such that no reasonable man placed in such a circumstance could have taken it. In the case of quasi-judicial orders, the courts powers are more circumscribed. The scope of interference was outlined in a judgment of the Supreme Court, Supreme Court held, in Surya Dev Rai v. Ram Chander Rai as follows:

…(5) Be it a writ of certiorari or the exercise of supervisory jurisdiction, none is available to correct mere errors of fact or of law unless the following requirements are satisfied: (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (ii) a grave injustice or gross failure of justice has occasioned thereby.

(6) A patent error is an error which is self-evident i.e. which can be perceived or demonstrated without involving into any lengthy or complicated argument or a long-drawn process of reasoning. Where two inferences are reasonably possible and the subordinate court has chosen to take one view, the error cannot be called gross or patent.

(7) The power to issue a writ of certiorari and the supervisory jurisdiction are to be exercised sparingly and only in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice should occasion. Care, caution and circumspection need to be exercised, when any of the above said two jurisdictions is sought to be invoked during the pendency of any suit or proceedings in a subordinate court and the error though calling for correction is yet capable of being corrected at the conclusion of the proceedings in an appeal or revision preferred thereagainst and entertaining a petition invoking certiorari or supervisory jurisdiction of the High Court would obstruct the smooth flow and/or early disposal of the suit or proceedings. The High Court may feel inclined to intervene where the error is such, as, if not corrected at that very moment, may become incapable of correction at a later stage and refusal to intervene would result in travesty of justice or where such refusal itself would result in prolonging of the lis.

(8) The High Court in exercise of certiorari or supervisory jurisdiction will not convert itself into a court of appeal and indulge in re-appreciation or evaluation of evidence or correct errors in drawing inferences or correct errors of mere formal or technical character.

18. The facts show that the petitioner had enjoyed the benefit of a lease, which was further renewed for 20 years; the period ended in 1981. The authorities principally were guided by the Indian Bureau of Mines report that the mines were under exploited; they also felt that awarding a lease for another period would only confer a monopoly upon the petitioner. The petitioner does not dispute that in its application, the figure of 2903 MT was shown; yet its later explanation is that this was for the three year period preceding the request, as previous figures were unavailable. In another apparent inconsistency, it later averred that the mines were exploited and an amount of 34, 624 MT had been extracted. The authenticity of these claims were gone into, on remand by the State and more importantly, by the Central Government, in revision. Therefore, this court, in the absence of any manifest irregularity with the approach of the revisional authoritys order, cannot re-appreciate facts. Certainly these were relevant considerations that had to be taken into account, while examining the request for extension and re-grant of lease. As regards the complaint that the report of the Indian Bureau of Mines was not made available, that cannot be a determinative factor, because this was precisely the scope of remand; the petitioner got the opportunity to contest its contents, and produce whatever figures it wished to rely upon.

19. In view of the above findings, this Court finds that the petition is unmerited.

20. The facts in WP (C) 2356 of 1990 are that the Petitioner was granted a mining lease for Barytes originally in 1934 for 20 years. This was renewed for a further period of 20 years in 1961. The Petitioner applied for the second renewal through an application dated 20th March 1978. Since the Government of Andhra Pradesh did not pass the orders within the stipulated period and the petitioners preferred a revision to the Central Government against deemed rejection. The Central Government through an order dated 1st November 1980 directed the State Government to pass final and speaking orders on the merits within 200 days. The State Government through an order dated 29th April 1983 granted second renewal to the petitioner of only 12.43 acres out of the 55.51 acres in Vemula village, on the ground that the Indian Bureau of Mines found that the Petitioner had not worked the mines to the full capacity and their performance in the field of exploration and exploitation was unsatisfactory.

21. The Petitioner, thereafter, preferred a revision before the Central Government, where, it submitted that the allegation of the IBM that the Petitioner has not worked the mines to the full capacity is false and that they have invested money and resources to develop the mine. They averred that the IBM during its earlier visits never pointed the under utilization to them. Further, the finding of the IBM is completely presumptuous and misleading since they never carried out any exploration and investigation to substantiate its findings of under utilization. They also alleged that they were not given a hearing when the area for mining was reduced to one fourth the original size. Further, they submitted that they have a pulverizing plant at Cuddappah and the reduced lease is not sufficient for feeding the above factory. They have invested huge sums on exploration and development of the remaining portion of the lease area under question, and requested grant of the renewal of the entire area of 55.51 acres.

22. The respondent No. 1, by its Final Order No. 487/84 dated 03.08.1984 conveyed through letter No. 1/516/83- MIV dated 14.8.84 rejected the revision application of the petitioner mainly on the basis of the report of Indian Bureau of Mines. The petitioners allege that they thereafter started working the mines but found that keeping in view the capacity of the pulverizing plant it was not economical at all. They represented and were given the assurance that their representations would be considered sympathetically and favorably. The representations were made 2/3 times every year and the last such representation was made about two months back.

23. It is alleged that the State Government has only been giving assurances as stated above, but has not given any concrete answer. Because of the conditions it is thus imperative that the second lease should be for the whole area of 55.51 acres and not for the reduced area of 12.43 acres. Being aggrieved by the aforesaid final Order No. 487/84 dated 03.08.84, the petitioner has filed the present petition, for a direction that the lease should be for the whole area of 55.51 acres, and not the reduced area of 12.43 acres.

24. In this case too, as in WP (c) 2018 of 1985, the authorities were persuaded to issue orders on the basis of the report of the Indian Bureau of Mines. Here, the petitioner had been granted the initial lease in 1934. Its request for renewal of the entire area was initially rejected in 1980; thereafter the request was acceded to partially in 1983, to an extent of 12.43 hectares. It felt aggrieved about the refusal of grant for the balance area and preferred a revision petition, which was rejected as far back as on 3-8-1984. The petitioner chose not to challenge it, but worked the mines and approached the court in 1990. The averments disclose that the petitioner was not essentially aggrieved by the terms of the order, as it started to work the mining lease. It feels aggrieved by the reduced extent of the grant. In the decision reported as S.S. Rathore v. State of Madhya Pradesh , it was held that petitions under Article 226 of the Constitution, or claims, in respect of statutory or official orders, which are final in nature, cannot be stretched to extend limitation by referring to repeated unsuccessful representations not provided by law. Thus, plainly the petition is hit by the doctrine of laches. Besides, the petitioner has acquiesced to the order, to the extent of the grant and even started mining operations.

25. Even on the merits, the petition does not disclose any illegality, irregularity or lack of bona fides by the authorities below. The considerations which weighed with the State in refusing the lease, for the entire area, and upheld in revision, were germane and relevant; they cannot be declared as illegal or manifestly unreasonable, on an application of judicial review parameters. Consequently, this petition too, is without merits.

26. In view of the above findings, both petitions, i.e. WP(C) 2018 of 1985 and WP (C) 2356 of 1990 have to fail; they are dismissed. Rule discharged. No costs.

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