{"id":161989,"date":"2006-12-11T00:00:00","date_gmt":"2006-12-10T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-indian-charge-chrome-ltd-anr-vs-union-of-india-ors-on-11-december-2006"},"modified":"2017-07-08T23:21:02","modified_gmt":"2017-07-08T17:51:02","slug":"ms-indian-charge-chrome-ltd-anr-vs-union-of-india-ors-on-11-december-2006","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-indian-charge-chrome-ltd-anr-vs-union-of-india-ors-on-11-december-2006","title":{"rendered":"M\/S Indian Charge Chrome Ltd. & Anr vs Union Of India & Ors on 11 December, 2006"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M\/S Indian Charge Chrome Ltd. & Anr vs Union Of India & Ors on 11 December, 2006<\/div>\n
Author: P Balasubramanyan<\/div>\n
Bench: Cji Y.K. Sabharwal, C.K. Thakker, P.K. Balasubramanyan<\/div>\n
           CASE NO.:\nAppeal (civil)  8501 of 2002\n\nPETITIONER:\nM\/S INDIAN CHARGE CHROME LTD. & ANR\n\nRESPONDENT:\nUNION OF INDIA & ORS\n\nDATE OF JUDGMENT: 11\/12\/2006\n\nBENCH:\nCJI Y.K. SABHARWAL,C.K. THAKKER & P.K. BALASUBRAMANYAN\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T
\nWITH<\/p>\n
CIVIL APPEAL NOS.8502\/2002, 6787\/2004, 6788\/2004,
\nTRANSFERRED CASE NOS.9\/2002, 21\/2005 AND
\nTRANSFER PETITION (c) NOs.928\/2005,
\n701\/2005, 932\/2005 and 446\/2005<\/p>\n
P.K. BALASUBRAMANYAN, J.\n<\/p>\n
1.\t\tM\/s Indian Charge Chrome Limited (hereinafter
\nreferred to as, “I.C.C.L.”) has challenged the decision of the
\nOrissa High Court in O.J.C. No. 1830 of 1999 in Civil Appeal
\nNos. 8501 and 8502 of 2002.  In Transferred Case (C) No. 9 of
\n2002, which was withdrawn to this Court from the High Court
\nof Delhi, the same Company had challenged by way of C.W.P.
\nNo. 4230 of 2001 the grant of approval for what it called an
\nout of turn lease to M\/s Nava Bharat Ferro Alloys Ltd.
\n(hereinafter referred to as, “Nava Bharat”), respondent No. 3 in
\nthe Civil Appeals.  Whereas, the Writ Petitions in the Orissa
\nHigh Court challenged the recommendation of the State
\nGovernment, the Writ Petition in the Delhi High Court
\nchallenged the grant of approval by the Central Government to
\nthe lease in favour Nava Bharat.\n<\/p>\n
2.\t\tM\/s GMR Technologies & Industries Limited
\n(hereinafter referred to as, “GMR”) filed O.J.C. No. 2236 of
\n2002 in the High Court of Orissa challenging the decision of
\nthe State Government to grant a lease of the extent of 436.295
\nhectares to the Orissa Mining Corporation Limited (hereinafter
\nreferred to as, “OMC”) against a recommendation to grant a
\nlease to it of an extent of 43.579 hectares out of it.  The said
\nWrit Petition was allowed by the High Court of Orissa and the
\nsaid decision is challenged by OMC in C.A. No. 6787 of 2004
\nand in C.A. No. 6788 of 2004.\n<\/p>\n
3.\t\tM\/s Jindal Strips Ltd. (hereinafter referred to as,
\n“JINDAL”) challenged in the High Court of Orissa by way of
\nWrit Petition No. 7575 of 2003 the decision of the State
\nGovernment to recommend the grant of the lease in favour of
\nOMC ignoring its own claim for a lease and the said Writ
\nPetition was got transferred to this Court and is numbered as
\nTransferred Case No. 21 of 2005.  This case also challenges
\nthe recommendation of the State Government for grant of a
\nlease to OMC of the remaining extent of 436.295 hectares.\n<\/p>\n
4.\t\tThe proposal of the State Government to grant a
\nlease to OMC was also challenged by I.C.C.L. before the Orissa
\nHigh Court in Writ Petition (C) No. 1326 of 2005 and that is
\nsought to be got transferred to this Court by way of Transfer
\nPetition No. 928 of 2005.  Similarly, M\/s Ferro Alloys
\nCorporation Limited (hereinafter referred to as, “FACOR”) also
\nchallenged the recommendation of the State Government for
\ngrant of lease to OMC by filing Writ Petition (C) No. 5960 of
\n2005 in the High Court of Orissa and the same is sought to be
\ngot transferred to this Court in Transfer Petition (Civil) No. 701
\nof 2005.  Nava Bharat, in its turn, challenged the proposal to
\ngrant a lease to the OMC, in Writ Petition (Civil) No. 6459 of
\n2005 in the High Court of Orissa and the same is sought to be
\ngot transferred to this Court by way of Transfer Petition (Civil)
\nNo. 932 of 2005.  Balasore Alloys Limited, formerly known as
\nIspat Alloys Limited (hereinafter referred to as, “ISPAT”) filed
\nWrit Petition (Civil) No. 3767 of 2005 in the High Court of
\nOrissa challenging the very same proposal to grant a lease to
\nOMC and that Writ Petition is sought to be got transferred to
\nthis Court in Transfer Petition (Civil) No. 446 of 2005.\n<\/p>\n
5.\t\tThus, the challenges in all these appeals,
\ntransferred cases and the cases covered by the transfer
\npetitions, are to the proposal for grant of a lease of an extent of
\n84.881 hectares to Nava Bharat, the denial of a lease to GMR
\nand the recommendation of the State Government to grant a
\nlease of the entire remaining extent of 436.295 hectares (which
\nincludes the extent of 84.881 hectares proposed to be leased
\nout to Nava Bharat) to OMC.   Considering that the questions
\nto be decided in the appeals and transferred cases by this
\nCourt are the same as the ones raised in the writ petitions in
\nthe High Court that are sought to be transferred to this Court,
\nthe transfer petitions are allowed and the cases withdrawn
\nthereby are also disposed of by this Judgment.  Arguments
\nhave been addressed in all the matters.\n<\/p>\n
6.\t\tThis litigation has had a chequered career.  It had
\ncome to this Court on three prior occasions.  The facts are
\ndetailed in those decisions in Indian Metals & Ferro Alloys
\nLtd. Vs. Union of India & Ors. [(1990) Supp. 2 S.C.R. 27],
\nTata Iron & Steel Company Ltd. Vs. Union of India & Anr.
\n[(1996) Supp. 3 S.C.R. 808] and Ferro Alloys Corporation
\nLtd. & Anr. Vs. Union of India & Ors. [(1999) 2 S.C.R. 49].
\nStill, a few facts may be reiterated.  Chromite ore is said to be
\na scarce metal ore in India.  It is mainly available in the State
\nof Orissa in the Sukinda Valley.  An extent of 1812.993
\nhectares of land was granted on mining lease to Tata Iron and
\nSteel Company (hereinafter referred to as, “TISCO”) on
\n22.10.1952.  The lease was for 20 years.  In the year 1972,
\nTISCO obtained a renewal of the lease, but the area was
\nreduced to 1261.476 hectares.  This renewal was again for 20
\nyears.  Before the expiry of the term, TISCO applied in the year
\n1991 for renewal of the lease for a further period of 20 years in
\nrespect of the entire extent of 1261.476 hectares.  The State
\nGovernment recommended the renewal and the Central
\nGovernment granted its approval under Section 8(3) of the
\nMines and Minerals (Regulation and Development) Act, 1957.
\nBut, at the instance of some interested persons, the Central
\nGovernment reviewed its decision and granted approval for
\nrenewal of the lease only in respect of 650 hectares, roughly
\nhalf of the original area.  TISCO challenged the said decision to
\nreduce the extent, by way of a writ petition in the High Court
\nof Orissa.  I.C.C.L., Indian Metals & Ferro Alloys (‘IMFA’, for
\nshort), JINDAL and ISPAT also filed writ petitions in the High
\nCourt of Orissa challenging the approval for renewal of the
\nlease to TISCO in respect of an extent of 650 hectares.  All
\nthese writ petitions raising a challenge to the decision of the
\nUnion Government dated 5.10.1993 were allowed by the High
\nCourt, which directed the Union Government to consider the
\nmatter afresh after hearing all those who had filed writ
\npetitions.  The decision of the Orissa High Court was
\nchallenged by TISCO in this Court.  This Court dismissed the
\nappeal filed by TISCO, thus confirming the decision of the
\nHigh Court and directed the Union Government to consider
\nthe matter afresh. But pending the proceedings in this Court,
\nsince there was no order of stay passed by this Court, the
\nUnion Government on 17.8.1995, granted sanction for renewal
\nof the mining lease in favour of TISCO in respect of 406
\nhectares.  The Union Government also directed that the
\nbalance area of 855.476 hectares be distributed by way of
\nleases among the other claimants in terms of a Committee
\nreport prepared as per the direction of this Court, in an earlier
\nproceeding.\n<\/p>\n
7.\t\tSubsequently, regarding 855.476 hectares
\nremaining for grant of leases to the applicants other than
\nTISCO, the State Government recommended to the Union
\nGovernment that one-half of the said area could be allotted to
\nthe other four pending applicants and the balance half of the
\narea of 855.476 hectares can be leased to others who also
\nrequired the mineral.  This proposal was implemented.  After
\nthese four grants, the balance extent left is said to be 436.295
\nhectares.\n<\/p>\n
8.\t\tMeanwhile, FACOR filed Writ Petition No. 12032 of
\n1997 in the High Court of Orissa challenging the assessment
\nof its need made by what came to be known as Sharma
\nCommittee constituted as directed by this Court.  That Writ
\nPetition was dismissed by the Orissa High Court on 31.8.1998.
\nMeanwhile, the State Government set up another Committee,
\nthe Dash Committee, for considering the distribution of the
\narea of 436.295 hectares, the area remaining out of 855.476
\nhectares, after the distribution among the four companies.
\nFACOR challenged the decision of the High Court of Orissa
\nbefore this Court.  While Dash Committee was considering the
\nclaims of the various applicants, a recommendation was made
\nby the State Government for grant of a lease to Nava Bharat of
\nan extent of 84.881 hectares out of the 436.295 hectares in
\nrespect of which claims were being considered by the Dash
\nCommittee.  This recommendation was challenged by I.C.C.L.
\nin the Orissa High Court in O.J.C. 1830 of 1999.  Meanwhile,
\non 22.3.1999, this Court in the FACOR’s appeal upheld the
\nrecommendations of Sharma Committee as also the
\nrecommendation of the State Government dated 29.6.1997
\nallotting 50% of 855.476 hectares to the four applicants then
\nclaiming and leaving out 436.295 hectares for distribution by
\nway of lease among other needy entities.  This Court directed
\nthat the remaining 436.295 hectares be allotted after the
\nreport of the Dash Committee.  It may be noted here that after
\nMr. Dash left the scene, the Committee came to be known
\nafter his successor, as the Chahar Committee.\n<\/p>\n
9.\t\tThe Orissa High Court, meanwhile, dismissed the
\nWrit Petition, O.J.C. No. 1830 of 1999 filed by I.C.C.L.
\nchallenging the decision recommending an out of turn lease to
\nNava Bharat.  I.C.C.L., as we have noticed in the beginning,
\nhas challenged that decision in the appeals.  Subsequently,
\nthe Orissa Government decided that the balance extent of
\n436.295 hectares be granted on lease to OMC and that
\ndecision also has been challenged in the High Court and the
\nHigh Court held the decision invalid.  That decision of the
\nHigh Court is also under challenge.  The position, therefore,
\nnow is that the correctness of the decision to grant a lease to
\nNava Bharat of 84.881 hectares and the validity of the
\nrecommendation of the State Government to grant a lease of
\nthe remaining area of 436.295 hectares to OMC, are both in
\nquestion before this Court.   The challenge to the grant in
\nfavour of Nava Bharat is on the basis that Nava Bharat was
\nnowhere in the picture when the four companies that were
\ndealt with in the earlier judgments were claiming the grant of
\nleases and in respect of whom directions were issued by this
\nCourt and there was no reason for ignoring the priority in their
\nfavour and granting a lease out of turn to Nava Bharat
\nespecially in the teeth of the report of Sharma Committee and
\nthe partial implementation of its recommendations by lease of
\n50% of the areas claimed by the four companies.  The decision
\nto grant the mining lease to OMC was struck down by the
\nHigh Court by taking the view that in the light of the earlier
\norders of this Court, it was not open to the State Government
\nto take such a decision.  The correctness of the same is also in
\nquestion.  Thus, we are concerned with the question whether
\nthe decision to grant a lease to Nava Bharat on the facts and
\nin the circumstances of the case was justified and whether the
\nproposal of the State Government to grant the balance area to
\nOMC could be justified.  Actually, if the claim of OMC were to
\nbe upheld in the sense that the recommendation of the State
\nGovernment for the grant of a lease to OMC in respect of the
\nbalance extent left, is found sustainable, there would be no
\nneed to consider specifically the challenge made by I.C.C.L.
\nand GMR to the grant of a lease to Nava Bharat.  But since the
\nrecommendation of the State Government to grant the lease to
\nOMC has to have prior approval of the Central Government
\nand the approval had not yet been granted, that aspect will
\nalso have to be decided on merits.  We, therefore, think that it
\nwill be appropriate to consider first, the question whether it
\nwas open to the State Government to make a recommendation
\nthat the balance extent of 436.295 hectares be leased to OMC
\nin preference to the other private parties who are making
\nclaims for the lease and thereafter consider the challenge
\nraised to the grant of lease to Nava Bharat.\n<\/p>\n
10.\t\tBased on the arguments raised before us, the two
\nimportant provisions of the Mines and Minerals (Regulation
\nand Development) Act, 1957 that fall for our consideration are
\nSections 11 and 17A.  The challenge to the grant of lease to
\nNava Bharat involves interpretation of Section 11 and the role
\nof the various sub-sections therein.  The challenge to the
\nrecommendation of the State Government to grant the balance
\nextent to OMC involves interpretation of Section 17A and the
\nnature of power conferred thereunder.  What is the effect of
\nthe prior proceedings in this Court will also arise.  In the
\nbackground facts of this case, Rule 59 of the Mineral
\nConcession Rules, 1960 has also relevance.  This is for the
\nreason that the area was previously held under lease by TISCO
\nand it would become available for grant only on compliance
\nwith Rule 59(1) or in terms of Rule 59 (2), whereunder a power
\nis vested with the Central Government to relax the provisions
\nof sub-Rule (1).\n<\/p>\n
11.\t\tSection 10 of the Act provides for applications for
\nprospecting licences or mining leases being made to the State
\nGovernment by a person interested.  Section 11 deals with the
\npreferential right amongst such applicants for the grant of a
\nlease.  Sub-section (1) of Section 11 confers a preferential right
\non a person, who had already been granted a reconnaissance
\npermit or prospecting licence.  We are not concerned with that
\nprovision in this case.  Sub-section (2) of Section 11 provides
\nthat in a case where the Government has not notified a
\nparticular area in the official gazette as being available, and
\ntwo or more persons have applied for a mining lease, the
\napplicant whose application was received earlier shall have a
\npreferential right to be considered for grant of a mining lease
\nover the applicant whose application was received later.
\nAccording to the proviso, in a case where the State
\nGovernment had invited applications, all applications received
\nduring the period specified for the making of such application
\nand applications which had been received prior to the
\npublication of the notification inviting applications and which
\nare pending, shall be deemed to have been received on the
\nsame day for the purpose of assigning priority under sub-
\nsection (2). In other words, all applications received until the
\ndead line fixed, had to be considered on the same footing.  The
\nfurther proviso indicates that where such applications are
\nreceived on the same day, the Government may take into
\nconsideration the matters specified in sub-section (3) and may
\ngrant the mining lease to such one of the applicants as it may
\ndeem fit.  Sub-section (3) sets out the matters to be
\nconsidered.  They include, the special knowledge or experience
\nof the applicant, financial resources of the applicant, the
\nnature and quality of the technical staff employed or to be
\nemployed by the applicant, the investment which the applicant
\nproposes to make and such other matters as may be
\nprescribed.  Sub-section (4) provides that subject to the
\npreferential right available to a reconnaissance permit holder
\nor a prospecting licensee, all applications received pursuant to
\na notification by the State Government during the period
\nspecified in the Notification shall be considered
\nsimultaneously as if they all had been received on the same
\nday and the Government had to take into consideration the
\nmatters specified in sub-section (3) and grant the lease to such
\none of the applicants as it deemed fit.  Sub-section (5) of
\nSection 11 has particular relevance in respect of the grant to
\nNava Bharat, since Nava Bharat entered the fray only after
\nthis Court had directed that the balance area of 855.476
\nhectares be allotted to the four applicants other than TISCO
\nthat were in the fray at that stage.  We think it appropriate to
\nset down here, sub-section (5) of Section 11 with the proviso
\nthereto:\n<\/p>\n
“11 (5). \tNotwithstanding anything
\ncontained in sub-section (2), but subject to
\nthe provisions of sub-section (1), the State
\nGovernment may, for any special reasons to
\nbe recorded, grant a reconnaissance permit,
\nprospecting licence or mining lease, as the
\ncase may be, to an applicant whose
\napplication was received later in preference to
\nan applicant whose application was received
\nearlier.\n<\/p>\n
\t\tProvided that in respect of
\nminerals specified in the First Schedule, prior
\napproval of the Central Government shall be
\nobtained before passing any order under this
\nsub-section.”\n<\/p>\n
It is the case of Nava Bharat that though it had applied later,
\nits application was considered and the lease to it
\nrecommended and got approved in view of the exercise of
\npower by the State Government under sub-Section (5) of
\nSection 11 of the Act.  We shall consider this aspect at the
\nappropriate stage.\n<\/p>\n
12.\t\tSection 17A deals with reservation of area for
\npurposes of conservation.  Sub-Section (1) provides that the
\nCentral Government, with a view to conserving any mineral
\nand after consultation with the State Government, may reserve
\nany area not already held under any prospecting licence or
\nmining lease and notify in the official gazette such area by
\nspecifying the boundaries thereof and the mineral or minerals
\nin respect of which such area will be reserved.   Sub-section
\n(1A) of Section 17A enables the Central Government to reserve
\nany such area for undertaking mining operations through a
\nGovernment Company or corporation owned or controlled by
\nit.  Sub-section (2) of Section 17A enables the State
\nGovernment, with the approval of the Central Government, to
\nreserve any area not granted on lease for undertaking
\nprospecting or mining operations through a Government
\ncompany or corporation owned or controlled by it and its right
\nto notify the same.  Since, OMC relies heavily on this
\nprovision, we think it appropriate to set down sub-section (2)
\nof Section 17A hereunder.\n<\/p>\n
“17A(2).\tThe State Government may, with
\nthe approval of the Central Government,
\nreserve any area not already held under any
\nprospecting licence or mining lease, for
\nundertaking prospecting or mining operations
\nthrough a Government company or
\ncorporation owned or controlled by it and
\nwhere it proposes to do so, it shall, by
\nnotification in the Official Gazette, specify the
\nboundaries of such area and the mineral or
\nminerals in respect of which such areas will
\nbe reserved.”\n<\/p>\n
Sub-section (3) of Section 17A is not relevant for our present
\npurposes.\n<\/p>\n
13.\t\tIt is the case of Nava Bharat that the grant to it was
\njustified in terms of Section 11(5) of the Act and the State
\nGovernment was entitled to extend a preference to Nava
\nBharat and the decisions of this Court rendered earlier cannot
\nand did not stand in the way of such exercise of power by the
\nState Government. The case of those who oppose the grant to
\nNava Bharat is that the conditions of sub-Section (5) of
\nSection 11 have not been fulfilled in the case on hand and
\neven otherwise, at the present stage, it was not open to the
\nState Government to act under sub-Section (5) in the light of
\nthe directions contained in Indian Metals & Ferro Alloys Ltd.
\nVs. Union of India & Ors. (supra), Tata Iron & Steel
\nCompany Ltd. Vs. Union of India & Anr. (supra) and Ferro
\nAlloys Corporation Ltd. & Anr. Vs. Union of India & Ors.
\n(supra) decisions rendered by this Court.  Similarly, the case
\nof OMC is that the power under Section 17A was independent
\nof any other power, or the power under Section 11 and it was
\nalways open to the State Government, no doubt, with the
\napproval of the Central Government, to reserve any area that
\nmay be available for exploitation by a corporation owned or
\ncontrolled by the Government.  OMC was such a corporation
\nand the State Government having made that recommendation
\nto the Central Government, it was for the Central Government
\nto take a decision on the question of approval as contemplated
\nby sub-Section (2) of Section 17A of the Act and on the grant
\nof such approval it was perfectly open to the State Government
\nto grant a lease in respect of the balance 436.295 hectares to
\nOMC and there was nothing in the prior decisions of this
\nCourt which stood in the way or which could control the
\nexercise of power, the independent power, by the State
\nGovernment under Section 17A of the Act.  The case of those
\nwho oppose the stand of OMC is that in the light of the prior
\ndecisions of this Court and the binding directions issued
\ntherein, and the stand it had adopted earlier, the State
\nGovernment could not invoke its power or exercise its right
\nunder Section 17A(2) of the Act at this stage and the Orissa
\nHigh Court was right in taking up that position while striking
\ndown the recommendation of the State Government.\n<\/p>\n
14.\t\tAs a result of the prior directions of this Court, what
\nhas transpired is that out of the 1261.476 hectares earlier
\nleased to TISCO, a renewal has been granted to it in respect of
\n406 hectares.  Out of the balance extent of 855.476 hectares,
\nleases of varying extents have been granted to
\nI.C.C.L.\/I.M.F.A., JINDAL, ISPAT and FACOR and what is left
\nis said to be 436.295 hectares.  This Court directed in the last
\nof the decisions that this area had to be distributed in terms of
\nthe recommendations of the Dash Committee, that became
\nChahar Committee.  It is therefore the case of the applicants
\nother than OMC that the distribution of this area could only
\nbe in terms of the recommendations of the Chahar Committee.
\nThe Chahar Committee not having recommended the grant of
\nany extent to OMC, in fact it had rejected the claim of OMC
\naltogether, it was not open to the State Government to purport
\nto recommend the grant of a lease of that extent to OMC.  It is
\nthe further submission that while making the recommendation
\nto the Central Government, the State Government had not
\ndisclosed all the relevant facts and the material fact that OMC
\nwas inefficient, was not in a position to exploit the areas
\nalready held by it and that a number of mines under it were
\nremaining idle had not been brought to the notice of the
\nCentral Government.  The Orissa High Court did not go into
\nthe latter question or the scope of the power under Section
\n17A of the Act, but proceeded on the footing that in the light of
\nthe prior directions of this Court, it was not open to the State
\nGovernment to exercise its right or power under Section 17A of
\nthe Act.\n<\/p>\n
15.\t\tAs we see it, the power under Section 17A is an
\nindependent power.  It is not related to the power available
\nunder Section 11 of the Act.  It is open to the Central
\nGovernment to reserve an area in terms of Section 17A(1) if it
\nis thought expedient and it is in the interests of the nation or
\nthat it is necessary to conserve a particular metal or ore or the
\narea producing it.  It is also open to the Central Government to
\ndecide that such area should be exploited by a company or
\ncorporation owned or controlled by it.  Of course, that
\nsituation has not arisen in this case.  Under sub-section (2) of
\nSection 17A, with the approval of the Central Government, the
\nState Government may reserve any area not already held
\nunder any prospecting licence or mining lease for undertaking
\nthe exploitation through a Government company or
\ncorporation owned or controlled by it and on fulfilling the
\nconditions referred to in sub-section (2) and in an appropriate
\ncase, also the conditions of sub-section (3).  Again, the
\nexercise of power by the State Government under sub-section
\n(2) of Section 17A has no reference to the entertaining of
\napplications under Section 11 or the preferences available
\nthereunder.  The area in question was under a mining lease to
\nTISCO and after the mining lease expired, the area of 436.295
\nhectares had not been leased out to any other person.
\nAccording to us, nothing stands in the way of the State
\nGovernment seeking the approval of the Central Government
\nfor the exploitation of that area in respect of a precious metal
\nore by a Government company or a corporation owned or
\ncontrolled by it like OMC.  Therefore, it cannot be said that the
\nrecommendation made by the State Government is per se
\ninvalid or that it is one without authority.  On the scheme of
\nthe Act, the decision or recommendation under Section 17A
\ncan be taken or made until the area in question is actually
\nleased out to any applicant in terms of Section 11 of the Act.
\nHere, the area had not actually been leased at this relevant
\ntime though a decision has been taken to lease out 84.881
\nhectares out of it and the power of the State Government
\nsaved by Section 17A (2) of the Act is in no way fettered or
\ncurtailed.\n<\/p>\n
16.\t\tIn that perspective, the two relevant aspects to be
\nconsidered are whether the prior decisions of this Court have
\nin any way fettered the exercise of that power by the State
\nGovernment and whether the decision of the State
\nGovernment in that behalf is vitiated for any other reason.  On
\nthe first aspect, it is true that this Court accepted the report of
\nthe Sharma Committee and directed that the recommendation
\ntherein be considered for implementation.  At that stage, the
\nState Government allotted 50% of the area available, to the
\nfour entities based on their applications, in partial fulfilment of
\nthe recommendations of Sharma Committee. When the matter
\ncame up again before this Court, this Court ultimately
\ndirected that the balance 50% of the left out area, namely,
\n436.295 hectares be dealt with on the basis of the report of the
\nDash Committee.  When this Court made that direction, this
\nCourt was not dealing with any exercise of power by the State
\nGovernment under Section 17A(2) of the Act or was not
\ndealing with the question, in the context of exercise of any
\nsuch power.  Therefore, the direction to deal with 436.295
\nhectares on the basis of the recommendations of Dash
\nCommittee, succeeded by Chahar Committee, does not by
\nitself preclude the exercise of power by the State under Section
\n17A(2) of the Act to make a recommendation that the
\nexploitation be left to a corporation owned or controlled by it.
\nWe are therefore not in a position to accept the argument that
\nthe prior decisions precluded the State Government from
\ninvoking its right under Section 17A(2) of the Act.   Of course,
\nthe prior approval of the Central Government, that is
\nnecessary, is to be sought and obtained and in that context,
\nthe State Government has moved the Central Government for
\napproval.\n<\/p>\n
17.\t\tWhat is argued on behalf of GMR is that though the
\nsubmission that the power under Section 17A(2) of the Act
\ncould be exercised at any time could be considered sound and
\nlogical, the question in the present case has to be viewed in
\nthe background of events leading to the said decision and the
\ncontext in which that decision was taken so as to determine
\nwhether the alleged change of so-called policy is mala fide or
\narising out of colourable exercise of power with the sole
\npurpose of defeating the prior judgments of the court and
\nespecially the direction of the Orissa High Court in favour of
\nGMR.  It is true that on the prior occasions when the dispute
\nbefore the High Court and before this Court centered round
\nthe entitlement of various applicants for grant of fresh leases
\nafter the TISCO lease was not renewed in full, the stand of the
\nState Government was that it would abide by the
\nrecommendations of Dash Committee transformed into
\nChahar Committee.  But it is difficult to postulate that the
\nadoption of such a stand in the context of the disputes then
\narising, could estop the State from taking a decision under
\nSection 17A(2) of the Act to recommend to the Central
\nGovernment that the compact area left, which was the only
\nbalance area left, be granted on lease to the Government
\ncontrolled Corporation, OMC so as to ensure a fair and just
\ndistribution of the Ore, which was a scarce commodity in the
\ncountry.  There is no dispute that there were various entities
\nthat needed the ore in question and that some of them had
\nmade requests for grant of leases of varied extents of lands.  If
\nat that stage the Government, after considering what was
\ncontained in the Chahar Committee report itself and the
\nnoting of the concerned Minister, decided to reconsider the
\nquestion and take a decision to recommend the grant of the
\narea without it being fragmented on lease to OMC, it is difficult
\nto accept the contention that the same must be taken to be
\nmala fide.  The power under Section 17A(2) is a statutory
\npower and normally there could be no estoppel against the
\nexercise of statutory power.  That apart, though the claims
\nwere being considered as directed by this Court, the various
\nclaimants had not changed their positions or had made any
\ninvestments towards mining and in that context, the
\ncontention that the decision that was taken was one in
\ncolourable exercise of power, cannot be accepted.  The
\nconsiderations relating to environment, relating to
\nfragmentation and relating to even distribution of the ore to be
\nextracted for supplies to industries in the country as a whole
\nare all relevant considerations and it cannot be said that the
\ndecision of the Cabinet dated 27.8.2001 is vitiated by mala
\nfides or is borne of colourable exercise of power or that it is
\nirrational.\n<\/p>\n
18.\t\tIt is argued on behalf of the I.C.C.L. that the
\npurpose put forward by the State Government for exercise of
\npower under Section 17A (2) of the Act is not within the
\nprovince of that provision since extraction and equitable
\ndistribution of the mineral is not one of the aspects relevant
\nfor exercise of power under Section 17A of the Act.  Learned
\ncounsel pointed out that the heading of the Section is
\n“Reservation of area for purposes of conservation” and
\nexploitation and distribution is not conservation.  Moreover, it
\nwas submitted that the said power under sub-section (1) of
\nSection 17A of the Act rested with the Central Government
\nand not with the State Government.  There may be substance
\nin the submission of learned counsel, but what we are
\nconcerned with is the power of the State Government, of
\ncourse, with the approval of the Central Government, to
\nreserve an area for undertaking mining operations through a
\nGovernment company or corporation owned or controlled by it.
\nThis is exactly what is sought to be done by the State
\nGovernment in this case, of carrying on the mining operations
\nin the balance area through a corporation owned or controlled
\nby the State Government.  We are therefore of the view that
\nthe recommendation of the State Government for the approval
\nof the Central Government for leasing out the extent to OMC is
\nwell within the power of the State Government under Section
\n17A(2) of the Act.  The heading of the Section cannot control
\nthe natural effect of sub-section (2) of Section 17A of the Act or
\nthe power conferred by it. That provision deals specifically with
\nthe power of the State Government to carry on mining
\noperations through a corporation owned or controlled by it.
\nThe said argument cannot also be accepted to invalidate the
\ndecision of the State Government to seek the approval of the
\nCentral Government for grant of lease to OMC of the balance
\narea left, in a bloc.\n<\/p>\n
19.\t\tWe also do not find any substance in the contention
\nthat the decision to grant a lease of the remaining extent to
\nOMC is irrational in the context of the performance of OMC
\nand the other attendant circumstances of the case and in the
\ncontext of the National Mining Policy.  The argument that on
\nprinciple the necessity of industries established in Orissa for
\ncaptive mining had also been approved and the said aspect
\ncould not be lost sight of while taking such a decision cannot
\nbe the controlling factor.  What we find is that the area
\navailable for chromite ore mining has already been divided
\namong TISCO, the four companies and AIKITH and what is left
\nis the extent of 436.295 hectares.  It is clear that a number of
\ncompanies have applied for leases of varying extents from that
\nremaining extent and if the State Government took a decision
\nthat further fragmentation of the area would not be in the
\ninterests of scientific mining and to ensure even distribution
\namong the consumers in the country, it is necessary to leave
\nthe mining to a corporation controlled by the Government, it is
\ndifficult to say that the decision is irrational.  In a sense, it is a
\npolicy decision and though in a given case this Court could
\ninterfere with a policy decision of the Government, we cannot
\nsay that the present case is one where the decision is so
\nirrational, unreasonable or patently illegal as to justify
\ninterference by this Court.  All industries outside the State of
\nOrissa also require the precious ore and it is the duty of the
\nGovernment to ensure a just distribution at a fair price.  In the
\ncircumstances, it is difficult to say that the decision taken to
\nretain the area in a compact bloc for mining by a Government
\ncontrolled Corporation is irrational.  We therefore reject this
\ncontention.\n<\/p>\n
20.\t\tThe contention on behalf of the Companies, that the
\nCentral Government must be taken to have rejected the
\napproval sought by the State Government under Section
\n17A(2) of the Act, cannot be accepted.  It is seen that the
\nCentral Government took the stand that as the matter was
\npending in this Court, it would not be appropriate for it to take
\na decision.  The application or request of the State
\nGovernment is seen to have been returned.  Of course, the
\nCentral Government is also entitled to seek further
\nclarifications or additional facts so as to make up its mind on
\nthe question of approval.  As matters stand at this stage, the
\nCentral Government has refused to take a decision one way or
\nthe other on the request of the State Government.  It is
\ntherefore not possible to proceed on the basis that the Central
\nGovernment has already rejected the request of the State
\nGovernment for reserving the area for exploitation by OMC.\n<\/p>\n
21.\t\tThen the question is whether there is anything in
\nthe process of decision making by the State Government that
\nmakes the decision itself vitiated.  What is contended is that
\nthe Chahar Committee had recommended that the distribution
\nbe made among the various applicants and that OMC was not
\neligible for getting a lease of any extent.  It was when that
\nrecommendation was put up that the concerned Minister
\nmade a noting indicating a sudden turn around,
\nrecommending consideration of the question whether the
\nlands or the area available with the State, should also be
\ndivided among the private operators and whether it would not
\nbe in the interests of a just and equitable distribution of the
\nore and the protection of the environment, to have the area in
\na bloc for being exploited by OMC.  It is true that the earlier
\nstand of the Government was that leases could be granted to
\nprivate players including industries established in the State
\nfor captive mining.  But, when the recommendation of the
\nChahar Committee was put up before him for his final view, it
\nwas open to the Minister concerned to go through the report
\nand record his views thereon.  In fact, Chahar Committee
\nreport itself had indicated some of these aspects, though it
\nhad overridden them and made recommendations for grant of
\nleases to the various applicants in the light of the directions of
\nthis Court and the High Court.  If a Minister, on going through
\nthe report, feels that the aspects highlighted in the report
\nthemselves would justify the retaining of the resources with
\nthe State so as to ensure a just distribution of the mineral
\namong the needy and for protection of the environment, in the
\nabsence of any other material, it could not be said that the
\nrecommendation of the Minister was not bona fide or that it
\nwas tainted in any manner by mala fides.  It is interesting to
\nnote that Mr. Chahar himself as Secretary of the Ministry
\nconcerned thereafter highlighted the aspects pointed out by
\nthe Minister and recommended in his capacity as Secretary of
\nthe concerned Ministry that it would be appropriate to retain
\nthe area for being exploited by the Government controlled
\ncorporation.  The file shows that this noting of the Minister in
\nthe light of the recommendation of the Secretary to the
\nMinistry was considered by the Cabinet and the Cabinet
\napproved the noting of the Minister or the course
\nrecommended therein to exploit the mineral through OMC and
\nnot to divide the balance area left with the Government among
\nvarious private entrepreneurs.  The decision was reiterated by
\nthe Cabinet and a request was made by the State Government
\nto the Central Government for approval of this proposal.
\nThere is nothing to show that the noting of the Minister was
\ntainted in any manner or that the subsequent cabinet decision
\nwas vitiated for any reason that could be gone into by the
\nCourt. In a sense, counsel for OMC and the State of Orissa are
\nright in submitting that it was really a policy decision and the
\nrole of this Court in respect of such a policy decision and its
\nscrutiny was limited and within the scope of that limited
\nscrutiny, there was no justification in interfering with the
\ndecision of the Government.  Of course, as we have indicated
\nearlier, it is for the Central Government to give its approval or
\nnot to give its approval to the proposal of the State
\nGovernment.  The Central Government is yet to take a
\ndecision. Since, we have not reached that stage, we are also
\nnot called upon to pronounce on it at this stage.\n<\/p>\n
22.\t\tIt is urged that it was a volte-face by the Minister
\nconcerned and what changed in three days between the stand
\ntill then adopted and the note made has not been explained.
\nWhat is put forward is that the Chahar Committee report itself
\njustified such a change in perspective and if the taking of such
\na decision of this nature is not precluded by the prior
\nproceedings, the recommendation of the Minister was a
\nrational one and the Cabinet was justified in approving it.  We
\nhave already held that the orders earlier made by this Court
\ndid not preclude such a decision being taken.  There is
\nnothing to show that the noting was not made bona fide or
\nthat any extraneous consideration influenced it.  When the
\noccasion arose, the Minister made the noting.  It put forward a
\nrelevant point of view.  There is no merit in the contention that
\nit was a hurried turn around on the part of the Minister.\n<\/p>\n
23.\t\tWe are therefore satisfied that the decision of the
\nState Government to seek the approval of the Central
\nGovernment for grant of a lease to OMC, a corporation
\ncontrolled by it, could not be held to be invalid.\n<\/p>\n
24.\t\tIn this context, it was contended that the State
\nGovernment had not disclosed the full facts to the Central
\nGovernment.  Learned Senior Counsel for I.C.C.L. was at pains
\nto point out that OMC was inefficient; that it had failed to
\nexploit the area earlier granted to it on lease; that many of its
\nmines remain unexploited and that it would be imprudent to
\nentrust this area also to OMC for mining of chromite ore.
\nLearned counsel also contended that OMC did not have even
\nqualified persons at his helm and elsewhere and in that
\nsituation, the recommendation of the State Government must
\nbe found to be imprudent and ineffective.  Learned counsel for
\nthe OMC and the State of Orissa sought to controvert these
\nsubmissions with reference to certain materials to show that
\nthere was no merit in these charges against OMC.   We do not
\nthink that we are called upon to go into this question here.  It
\nis for the Central Government to consider whether all these
\naspects are relevant.  It has to consider all the relevant facts
\nwhile applying its mind to the question of grant of permission
\nsought for by the State Government in terms of Section 17A(2)
\nof the Act.  It would, therefore, be premature for us to
\npronounce on the merits or demerits of the arguments sought
\nto be raised regarding the efficiency and the competency of
\nOMC to exploit minerals.  But certainly these arguments —
\nwhether they are relevant or not in the context of Section
\n17A(2) of the Act, the Central Government will have to decide –\n<\/p>\n
— should alert the State Government to ensure that
\ncompetent, honest and qualified persons are put in charge of
\nOMC and the requisite expertise obtained for the purpose of
\nmaking its working more efficient.   This is independent of the
\nquestion of approval involved in this case.\n<\/p>\n
25.\t\tWe find some merit in the contention of learned
\ncounsel for the State and OMC that the fact that the ore is
\nrequired by many industries in the country other than the
\napplicants for leases for captive mining and if the whole area is
\ndivided and given for private exploitation, there may be
\ndifficulty in ensuring equitable distribution of the ore was a
\nrelevant consideration for the State Government in making the
\nrecommendation under Section 17A (2) of the Act.  We cannot
\ncertainly say that this aspect is not a relevant circumstance.
\nAnyway, as we have indicated, it is not for us to pronounce on
\nit at this stage and that would also be one of the aspects to be
\nconsidered by the Central Government when it considers the
\nrequest of the State Government for approval under Section
\n17A(2) of the Act.\n<\/p>\n
26.\t\tIn our view, the High Court was not right in holding
\nthat what had transpired thus far, or the directions of this
\nCourt earlier made, precluded the State Government from
\nexercising the power and seeking approval in terms of Section
\n17A(2) of the Act.  As we have held, the State Government
\ncould exercise that power until a grant is actually made since
\nit is an overriding power.  The taking up of a particular stand
\nearlier, cannot also preclude the exercise of that power.
\nWhether it has laid itself open to claims for damages by its
\nprior actions is a different question and that cannot control
\nthe exercise of the power under Section 17A of the Act.\n<\/p>\n
27.\t\tNow, we come to the lease proposed to be granted to
\nNava Bharat.  In view of our upholding the decision of the
\nState Government subject to approval by the Central
\nGovernment, the lease proposed has to be found to be still
\nborn; or that the decision no more survives.  But it is
\nnecessary to consider the contentions put forward, since the
\nquestion would become relevant if for any reason, the Central
\nGovernment chooses not to approve the request or decision of
\nthe State Government to lease the balance extent of 436.295
\nhectares to OMC.\n<\/p>\n
28.\t\tAs regards the allotment to Nava Bharat, we see
\nconsiderable force in the submission on behalf of the I.C.C.L.
\nthat the decision to grant lease to Nava Bharat in preference to
\nthe other applicants who were before the Government was
\nincorrect and calls for interference.  On the materials, it is not
\nestablished that the State Government exercised its power
\nunder sub-section (5) of Section 11 of the Act.  Nava Bharat
\nwas a subsequent entrant into the fray and had claimed the
\ngrant even while the claims of various applicants were being
\nconsidered by Dash Committee.  Even without sending the
\nrequest of Nava Bharat to Dash Committee for consideration
\nand recommendation, the State Government proceeded to
\nrecommend the grant of a lease to Nava Bharat from out of the
\nextent available with it.  This was a case to which the rule of
\npreference under Section 11 of the Act as modified by the
\nearlier orders of this Court applied and there was a preference
\navailable to those who had applied for leases earlier.  Of
\ncourse, the position had been explained in the first decision in
\nIndian Metals & Ferro Alloys Ltd. Vs. Union of India & Ors.
\n(supra).  What is the reason that led to overriding the claims of
\nothers is not disclosed.  On the materials, it cannot be said
\nthat the conditions of sub-Section (5) of Section 11 are fulfilled
\nin this case.  No special reasons are recorded justifying such
\nan out of turn grant.\n<\/p>\n
29.\t\tIf it was a case of consideration of the claims under
\nSection 11 of the Act, we feel that the State Government was
\nbound by the directions of this Court issued ultimately in
\nFerro Alloys Corporation Ltd. & Anr. Vs. Union of India &
\nOrs. (supra).  The State Government had to proceed on the
\nbasis of the directions contained therein and make allotments
\nas recommended by the Dash Committee or the successor
\nChahar Committee.  Of course, the State Government might
\nhave been in a position to forward the application of Nava
\nBharat also to the said Committe for consideration and
\nrecommendation and might have thereafter acted on the basis
\nof recommendations of the Chahar Committee.  But that was
\nnot done and the decision to lease to Nava Bharat was straight
\naway taken.  We see some force in the submission on behalf of
\nI.C.C.L and GMR that no proper reasons are given for
\noverriding the preferences of others especially in the light of
\nthe directions of this Court while deciding to grant a lease in
\nfavour of Nava Bharat.  Notwithstanding the valiant effort in
\nthat behalf made by learned Senior Counsel for Nava Bharat to
\nsalvage the grant made to it, we are of the view that on the
\nfacts and in the circumstances of the case, the decision to
\ngrant a lease to Nava Bharat out of turn was not justified, legal
\nor proper.\n<\/p>\n
30.\t\tWhen the State Government made the
\nrecommendation for grant of a lease to Nava Bharat, the
\ninfirmities in that recommendation were pointed out by the
\nCentral Government, in its letter dated 27.6.2001.  The
\nviolation of Rule 59 was also pointed out.  Instead of placing
\nthe letter before the Chief Minister or the Cabinet and
\nobtaining directions thereon, the Steel and Mines Department
\non its own chose to send a letter dated 30.6.2001 purporting
\nto conform to the requirements.  When the matter reached the
\nChief Minister and the Cabinet, the decision taken was to
\nwithdraw the earlier request for grant of approval of lease to
\nNava Bharat.  On the materials, it is clear that the letter dated
\n30.6.2001 sent by the Secretary of the Steel and Mines
\nDepartment was not one consistent with the Rules of Business
\nframed under Article 166 of the Constitution of India.  The
\nletter also lost its efficacy in view of the decision taken by the
\nCabinet to withdraw the recommendation itself.  The position
\nthat emerges is that there was no valid  recommendation by
\nthe State Government for the grant of a lease to Nava Bharat
\nand there was hence no valid approval of the Central
\nGovernment.  Non-compliance with Rule 59 of the Rules also
\nvitiated the proposal to lease to Nava Bharat <\/p>\n
31.\t\tIn view of our conclusion that the State Government
\nwas entitled to seek the approval of the Central Government in
\nrespect of the balance extent of 436.295 hectares, in which
\nwas included the proposed Nava Bharat grant, for exploitation
\nby OMC and since, we are satisfied that the grant to Nava
\nBharat cannot be sustained, the proposed grant or grant to it
\nhas to be set aside.  We do so.  If it is a question of
\nreconsideration of the applications of various entities for grant
\nof leases in respect of 436.295 hectares, it would be a case
\nwhere the claim of Nava Bharat would also have to be
\nconsidered along with the claim of others in the light of the
\ndirections earlier issued by this Court.  This contingency may
\narise only if the Central Government does not grant approval
\nto the request of the State Government under Section 17A(2) of
\nthe Act.  To that extent, we allow the appeals of I.C.C.L.\n<\/p>\n
32.\t\tTaking note of the circumstances, it is for the State
\nGovernment to make a fresh request to the Central
\nGovernment in terms of Section 17A(2) of the Act setting out
\nall the relevant details for consideration of the Central
\nGovernment.  Thereupon the Central Government will have to
\ntake a decision in terms of Section 17A(2) of the Act and in the
\ncontext of Section 17A of the Act and all relevant attendant
\ncircumstances.  We make it clear that the prior directions of
\nthis Court or that of the High Court cannot and do not stand
\nin the way of the Central Government in applying its mind to
\nthe request made by the State Government under Section
\n17A(2) of the Act and in taking an independent decision
\nthereon.  All that is necessary at the moment is to hold that
\nthe recommendation of the State Government cannot be
\nrejected by the Central Government on the ground that it has
\nno freedom or right to take a decision on the request, in view
\nof the prior orders of this Court or on the ground that
\nadequate details are not forthcoming.   In the latter
\ncontingency, it is for the Central Government to seek such
\nfurther details from the State Government as it deems fit and
\nthereafter to come to a decision.\n<\/p>\n
33.\t\tThe decisions of the High Court of Orissa are thus
\nset aside.  The appeals are allowed in the manner indicated
\nabove.  The State Government is directed to make a proper
\nrequest in terms of Section 17A(2) of the Act and the Central
\nGovernment is directed to take a decision thereon bearing in
\nmind all the aspects as indicated hereinbefore.  What is to
\nhappen thereafter will depend upon the decision the Central
\nGovernment takes and the consequences that flow therefrom.
\nThose are aspects that will have to be tackled at the
\nappropriate time, if the need or occasion for it arises.\n<\/p>\n
34.\t\tSince, this matter has been pending for years and
\nwhat is involved is exploitation of a precious mineral, we direct
\nthe State Government and the Central Government to comply
\nwith the directions we have made expeditiously.  The State
\nGovernment should send its request within a period of four
\nmonths from today with all relevant details and the Central
\nGovernment should take its decision on the recommendation
\nwithin a period of four months from the date of receipt of the
\nrecommendation, if necessary, after calling for any further
\ndetail that it may consider relevant.\n<\/p>\n
35.\t\tThus, the appeals of the State of Orissa and OMC
\nare allowed, that of I.C.C.L. and GMR are allowed to the extent
\nof setting aside the grant of lease to Nava Bharat and the
\nTransferred Cases are disposed of in the light of the above
\ndecision.  The parties are directed to bear their costs in this
\nCourt.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M\/S Indian Charge Chrome Ltd. & Anr vs Union Of India & Ors on 11 December, 2006 Author: P Balasubramanyan Bench: Cji Y.K. Sabharwal, C.K. Thakker, P.K. Balasubramanyan CASE NO.: Appeal (civil) 8501 of 2002 PETITIONER: M\/S INDIAN CHARGE CHROME LTD. & ANR RESPONDENT: UNION OF INDIA & ORS DATE OF […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-161989","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM\/S Indian Charge Chrome Ltd. & Anr vs Union Of India & Ors on 11 December, 2006 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-indian-charge-chrome-ltd-anr-vs-union-of-india-ors-on-11-december-2006\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S Indian Charge Chrome Ltd. & Anr vs Union Of India & Ors on 11 December, 2006 - 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