{"id":195220,"date":"2003-12-22T00:00:00","date_gmt":"2003-12-21T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/tamil-nadu-minerals-limited-vs-state-of-tamil-nadu-on-22-december-2003"},"modified":"2017-02-13T23:51:57","modified_gmt":"2017-02-13T18:21:57","slug":"tamil-nadu-minerals-limited-vs-state-of-tamil-nadu-on-22-december-2003","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/tamil-nadu-minerals-limited-vs-state-of-tamil-nadu-on-22-december-2003","title":{"rendered":"Tamil Nadu Minerals Limited vs State Of Tamil Nadu on 22 December, 2003"},"content":{"rendered":"
Madras High Court<\/div>\n
Tamil Nadu Minerals Limited vs State Of Tamil Nadu on 22 December, 2003<\/div>\n
       \n\n  \n\n  \n\n \n \n IN THE HIGH COURT OF JUDICATURE AT MADRAS\n\nDated: 22\/12\/2003\n\nCoram\n\nThe Honourable Mr. Justice V.S. SIRPURKAR\nand\nThe Honourable Mr. Justice N. KANNADASAN\n\nW.A. No.192 of 1999 and W.A.No. 193 of 1999\nand\nC.M.P. Nos.2130 and 2131 of 1999\n\n\nTamil Nadu Minerals Limited    ...                  Appellant\n\n-Vs-\n\n1.  State of Tamil Nadu,\n     rep. by its Secretary\n     Industrial Department\n     Chennai 600 009\n\n2.  District Collector\n    Tirunelveli District\n    Tirunelveli\n\n3.  S. Vaikuntarajan\n    Managing Partner\n    V.V. Minerals\n    Keeraikaranthattu\n    Radhapuram Taluk\n    Tirunelveli District                ...               Respondents\n\n        Appeals under Cl.15 of the Letters  Patent  against  the  order  dated\n13-1-1999 made in W.P.  Nos.13081 & 14116 of 1997\n\n!For Appellant  ::  Mr.  N.R.  Chandran,\n                Senior Counsel\n                for M\/s.  Muthumani Doraisamy\n\n^For Respondents ::  Mr.  A.L.  Somayaji, Senior Counsel\n                for Mr.  Peppin Fernando for R3\n                Mr.  D.  Krishnakumar, Spl.G.P.\n                Mr.  R.  Vijayakumar, G.A.  for R1 & R3\n\n:JUDGMENT\n<\/pre>\n
V.S.  SIRPURKAR, J.\n<\/p>\n
                These  two appeals are directed against the common judgment of
\nthe learned single Judge whereby, the writ petitions filed by  the  petitioner
\nwere allowed.  In the said judgment, the learned single Judge has directed the
\nfirst  respondent  Government  to  consider  the application of the petitioner
\nalone and pass the orders on merits thereupon.  Few facts will  highlight  the
\ncontroversy involved.\n<\/p>\n
                2.   Appellant,  Tamil  Nadu  Minerals  Limited   (hereinafter
\nreferred  to  as  ‘TAMIN’),  is  a  Public Sector Undertaking while, the third
\nrespondent herein is also a concern engaged in mining business.\n<\/p>\n
        2.1.   Third  respondent  applied  for a mining lease of mining garnet
\nsand over an extent of 8.96 hectares of land in  un-serveyed  costal  promboke
\nland  lying  in  S.Nos.563 to 573 and 566 to 956 in Kuttam village, Radhapuram
\ntaluk, Tirunelveli  Kattabomman  District.    This  application  was  made  on
\n21-1-1991  under  Rule 22 of the Mineral Concession Rules, 1960 (in short ‘the
\nRules’) and a challan for that was given by the 2nd respondent Collector.  The
\napplication was stated to be in the prescribed form  as  per  the  rules  and,
\naccording  to  the  petitioner,  the  application remained in cold storage for
\nabout six years.\n<\/p>\n
        2.2.  The first respondent sent a communication dated 17-3-1997, which
\ncommunication was in the nature of a notice, whereby, the third respondent was
\ndirected to  rectify the few deficiencies found in the application form.  This
\nwas under Rule 26(1) of the rules, the petitioner sent a reply  on  31-3-1997,
\nrequesting  the  1st  respondent  to  give an opportunity to the petitioner to
\nrepresent its case along with an advocate so that the petitioner  could  place
\nall the  relevant  facts.    It  was  also suggested in the reply that the 3rd
\nrespondent had complied with the said notice.\n<\/p>\n
        2.3.  Another letter was  sent  on  13-6-1997  again  reiterating  the
\nprayer  for  the  grant  of mining lease and by the letter dated 2-7-1997, the
\nthird respondent filed the necessary certificate as  directed  in  the  letter
\ndated 17-3-1997.    It  was pointed out in the said letter dated 2-7-1997 that
\nthere was no defect at all in the application.  All the letters  sent  by  the
\n3rd respondent were argumentative wherein, it was tried to be shown that there
\nwas  no  breach  on the part of the 3 rd respondent of any rules in respect of
\nthe said application for the grant of mining lease.\n<\/p>\n
        2.4.  It is then pointed out that the 1st  respondent  Government  did
\nnot  grant  the  mining  lease  to  the 3rd respondent but granted the same to
\nTAMIN, appellant herein, by G.O.  Ms.  No.197 dated 10-7-1997.  Not only this,
\nbut it subsequently  rejected  the  application  of  the  3rde  respondent  by
\nproceedings dated  26-8-1997.  The rejection was on various grounds, including
\nthat the lease was already granted in favour of TAMIN.\n<\/p>\n
        2.5.  Two objections were, therefore, raised firstly, challenging  the
\ngrant  of  mining  lease in favour TAMIN and secondly, against the order dated
\n26-8-1997, rejecting the application of the 3rd respondent.  It was  suggested
\nin  the  writ  petition  that the grant of lease was against all the canons of
\nfair play as in fact, the application for the mining lease was made by the 3rd
\nrespondent as early as in the year 1991 and the respondent-Government  allowed
\nit  to  pend for six long years and ultimately, rejected the same on untenable
\ngrounds.  It was also urged that the Government had tilted in favour of  TAMIN
\ninasmuch  as  the  Government,  after  receipt  of  the application by the 3rd
\nrespondent, had toyed with the possibility as to whether TAMIN was  interested
\nin the said lease.  It was then pointed out, on the basis of the provisions of
\nthe  Mines  and  Minerals (Regulation and Development) Act, 1957 in short ‘the
\nAct’) and the Rules that the mining leases were granted on  ‘first  come-first
\nserved  basis  and  that  an application, which was received earlier had to be
\npreferentially decided.  In that view, it was pointed out that admittedly, the
\napplication of the 3rd respondent was earlier in point of time  and  yet,  the
\nlease  was  granted  to  the  subsequent applicant TAMIN that too, in complete
\nbreach of the rules.\n<\/p>\n
        2.6.  By way of defence, it was stated by the  Government  that  there
\nwas  no  question  of  any favouritism being shown to TAMIN as TAMIN is not an
\nindividual concern.  It was also pointed out that no rules were breached while
\nconsidering the application of TAMIN and also while rejecting the  application
\nof the  3rd  respondent.  It was further pointed out that TAMIN being a Public
\nSector Undertaking, was entitled to have a preferential  treatment.    It  was
\npointed  out  that  the  order  passed, rejecting the application for grant of
\nmining lease was correctly passed inasmuch as there was  no  valid  compliance
\nwith the applicable rules.\n<\/p>\n
        2.7.   Learned  single Judge has accepted the contention raised by the
\npetitioner that the State Government had shown favouritism to TAMIN in firstly
\nnot passing any orders on the application made the 3rd respondent,  which  was
\nmade as  back  as on 21-1-1991.  Learned Judge also found fault with the whole
\nprocedure and held that the action on the part of the Government to grant  the
\nlease in  favour TAMIN was inexplicable.  Learned Judge further found that the
\napplication made by the 3rd respondent was in keeping with the prevalent rules
\nand, therefore, by the principle of first come-first served, its’  application
\nwas  the  only  application in the field, which was liable to be considered in
\nits’ favour.\n<\/p>\n
        2.8.  In this view, the learned Judge allowed both the writ  petitions
\nholding  that the order, dated 26-8-1997, rejecting the application of the 3rd
\nrespondent was  unsustainable.    The  learned  Judge,  therefore,  gave   the
\ndirections  for  consideration  of  the  application  of  the 3 rd respondent,
\ntreating it to be the lone application for the grant  of  mining  lease.    In
\nshort, the learned Judge has directed the lease to be granted in favour of the
\n3rd respondent.\n<\/p>\n
        2.9.  Being aggrieved by this, the present appeals have been preferred
\nby TAMIN.\n<\/p>\n
        3.  Shri N.    R.   Chandran, learned Senior Counsel\/Advocate General,
\nappearing on behalf of TAMIN, has taken us through the relevant provisions  of
\nthe Act  and  the  Rules.    There is no doubt that garnet is a mineral and is
\ncovered under the provisions of the Act and the Rules.\n<\/p>\n
        3.1.  The first and the foremost argument of Shri  Chandran  was  that
\nthe  whole  approach  of  the  learned  single Judge was wrong inasmuch as the
\nlearned Judge has ignored the mandatory rules and thereby, an error has  crept
\nin even  in  the  findings of facts.  Learned counsel is at pains to point out
\nthat there was no question of any favouritism  in  the  whole  affair  by  the
\nGovernment  being shown to TAMIN as firstly TAMIN is not an individual concern
\nand is only a Public Sector Undertaking.  He further argues that  the  learned
\nJudge  has  ignored  the mandatory provisions of Rule 22 and more particularly
\nthe proviso thereunder.  He argues that it was an admitted position that along
\nwith the application the 3rd respondent had merely accompanied  the  affidavit
\nin  place  of  the mandatory mining No Due Certificate in the prescribed form.
\nRelying on the proviso, the learned counsel argues  that  the  3rd  respondent
\ncould undoubtedly make an application without filing the No Due Certificate as
\nalso  without  filing the affidavits of the individual partners (since the 3rd
\nrespondent partnership firm was an unregistered firm).  However,  the  failure
\non  the part of the 3rd respondent to file No Due Certificate would invalidate
\nthe application because of the specific language  of  the  rule  22  and  more
\nparticularly proviso  thereto.  Learned counsel, therefore, points out that if
\nthe application itself had become invalid, there was no question of its  being
\nconsidered  and, therefore, the learned Judge was in error in holding that the
\nGovernment or the Collector, as the case may be,  deliberately  kept  the  3rd
\nrespondent’s application pending and then sought the application from TAMIN.\n<\/p>\n
        3.2.  It is the contention of the learned senior counsel that when the
\noffer  was  made  to  TAMIN  and  when ultimately received the application for
\nmining on 7-4-1995, there was no valid application by any party in  the  field
\nand,  therefore,  in  fact the application of TAMIN was the only and the prior
\napplication.  He points out that a invalid application  could  not  have  been
\nworked  on by the Government and had to be disposed of under the provisions of
\nRule 26 but, it was not necessary that such a rejection  of  that  application
\nshould have  preceded the grant of mining lease in favour of TAMIN.  He points
\nout that admittedly, there was a breach of Rule 22 on  the  part  of  the  3rd
\nrespondent  and, therefore, the Government was perfectly justified in granting
\nthe lease in favour of TAMIN.\n<\/p>\n
        3.3.  Learned counsel also urges by way of his second contention  that
\nthe  learned  Judge should have not taken the exercise to compare the inter se
\ncapabilities of the 3rd respondent and TAMIN and should  not  have  given  the
\nfinding  that  the  3rd respondent was a better suited person for the grant of
\nmining lease.\n<\/p>\n
        4.  As against this, Shri  A.L.    Somayaji,  learned  senior  counsel
\nappearing on behalf of the 3rd respondent, urged that the learned single Judge
\nhad  correctly  allowed  the writ petitions as there was clinching evidence on
\nrecord to suggest the favouritism shown by the Govenment in favour  of  TAMIN.
\nLearned  counsel  argues  that  if  the  application of the 3rd respondent had
\nbecome invalid, there was no necessity for the Government to ultimately reject
\nthe same by passing an order dated 26-8-1997, which fact was even posterior to
\nthe grant of lease in favour of TAMIN.  Learned counsel points  out  that  the
\nauthorities  were  merely  making  a show of complying with the provisions and
\nthat the lease was rightly ordered to be  granted  by  the  learned  Judge  in
\nfavour of the 3rd respondent.\n<\/p>\n
        5.   On  this  backdrop,  it  will  be for us to see as to whether the
\nlearned Judge  was  right  in  allowing  the  writ  petitions.    For   better
\nunderstanding  the  controversy,  few provisions of the Act and the Rules will
\nhave to be looked into.\n<\/p>\n
        6.  Sec.11 of the Act creates a preferential right  for  mining  lease
\nwhere a person obtains the prospecting licence provided, of course, that hehas
\nactually  undertaken  the  prospecting  operations  and  has not committed any
\nbreach of the terms and conditions of the prospecting operations.   Subsection
\n(2) is as under:\n<\/p>\n
“Subject  to  the provisions of sub-section (1) where two or more persons have
\napplied for a prospecting licence or a mining lease in  respect  of  the  same
\nland,  the  applicant  whose  application  was  received  earlier shall have a
\npreferential right for the grant of the licence or lease, as the case may  be,
\nover an applicant whose application was received later”
\nThe  proviso  to  this  section  and  sub-section (3) are not relevant for the
\npresent controversy.    However,  sub-section  (4)  provides   notwithstanding
\nanything  contained  in  sub-section  (2)  but  subject  to  the provisions of
\nsub-section (1), State Government may have, for reasons  to  be  recorded  and
\nwith  the  previous  approval  of  the Central Government, grant a prospecting
\nlicence or a mining lease to an  applicant,  whose  application  was  received
\nlater in preference to an applicant whose application was received earlier.\n<\/p>\n
        7.   In  the  beginning, learned senior counsel Shri Chandran tried to
\ntake recourse under Sec.4 by suggesting that even if  it  was  held  that  the
\napplication  of  the 3rd respondent was received earlier to the application of
\nthe appellant, the State Government could still, by  giving  special  reasons,
\nchoose  to  grant  the  lease  to  the  appellant  in  preference  to  the 3rd
\nrespondent.\n<\/p>\n
        8.  The argument is clearly incorrect as for that purpose, a  previous
\napproval  would be required by the Central Government and, admittedly, no such
\nprevious approval has been there.  Learned single Judge has also affirmed that
\nposition and, in our opinion, correctly.\n<\/p>\n
        9.  Alternatively, learned senior counsel Shri Chandran relied on Rule
\n22 under Chapter V.  The rules contained in Chapter V are concerning the grant
\nof lease in  respect  of  land  in  which  the  minerals  vest  in  the  State
\nGovernment.   There  is  no  difficulty to hold that the minerals concerned in
\nthis case do vest in the Government.  That position has not been questioned by
\nanybody.  Learned senior counsel pointed out that Rule 22 envisages that every
\napplication for the mining lease of such minerals has to be made in Form I and
\nwith few accompaniments such as a valid clearance  certificate,  in  the  form
\nprescribed  by  the  State  Government,  on  payment  of mining dues, such as,
\nroyalty or dead rent and surface rent payable under the Act or the rules  made
\nthereunder from that Government or any officer or authority authorised by that
\nGovernment in  this behalf.  Proviso to clause (d) to rule 22 provides that in
\ncase the applicant is a partnership firm or a private  limited  company,  such
\ncertificate  shall  be by all partners of the partnership firm or, as the case
\nmay be, all members of the private limited company.  The other documents which
\nare the necessary accompaniments are given in clauses (e) to  (h),  which  are
\nnot relevant  for  the present controversy.  Our attention, however, was drawn
\nto the fourth proviso to Rule 22, which is as under:\n<\/p>\n
Provided that a properly sworn affidavit stating that no dues are outstanding
\nshall suffice subject to the conditions that the certificate required as above
\nshall  be  furnished  within  ninety  days  of the date of application and the
\napplication shall become invalid if the party fails to  file  the  certificate<\/p>\n
within the said ninety days. ( emphasis supplied)
\nThe  rest  of  the  provisos  to  rule  22  are  not  relevant for the present
\ncontroversy.\n<\/p>\n
        10.  Shri Chandran also points out Rule 23 wherein it is provided that
\nevery application for grant or renewal of mining lease has to be  acknowledged
\nin Form D within three days and the receipt therefor has to be given.  Rule 26
\ndeals  with  the refusal of the application for the grant or renewal of mining
\nlease.  Since we are dealing with the  order  dated  26-8-1997,  refusing  the
\napplication of the 3rd respondent for grant of mining lease that rule would be
\nnecessary to be seen.  Rule 26 reads as under:\n<\/p>\n
“26.  Refusal of application for grant and renewal of mining lease.-  (1)  The
\nState  Government  may,  after  giving  an  opportunity of being heard and for
\nreasons to be recorded in writing and communicated to the applicant, refuse to
\ngrant or renew a mining lease over the whole or part of the area applied for.\n<\/p>\n
        (2) An application for the grant or renewal of  a  mining  lease  made
\nunder  rule  22  or rule 24-A, as the case may be, shall not be refused by the
\nState Government only on the ground that Form I or Form J, as the case may be,
\nis not complete in all mat  l  particulars,  or  is  not  accompanied  by  the
\ndocuments  referred  to in sub-clauses (d), (e), (f), (g) and (h) of Cl.(i) of
\nsub-rule (3) of rule 22.\n<\/p>\n
        (3) Where it appears that the  application  is  not  complete  in  all
\nmaterial  particulars  or  is  not  accompanied by the required documents, the
\nState Government shall,  by  notice,  require  the  applicant  to  supply  the
\nomission  or,  as the case may be, furnish the documents, without delay and in
\nany case not later than sixty days from the date of receipt of said notice  by
\nthe applicant.”\n<\/p>\n
        11.   The  contention raised before us is that even if the application
\nby the 3rd respondent was prior in point of time, the same was not accompanied
\nwith by the necessary documents in terms of rule 22(d), which we  have  quoted
\nabove.  He points out that initially though this application was valid, it was
\nrendered  invalid  as  within  ninety  days  of  the  date of application, the
\ncertificate as required by rule 22(d) regarding the payment  of  minding  dues
\nwas  not filed by the 3rd respondent within timeframe of ninety days of filing
\nof the application.   Learned  senior  counsel,  therefore,  argues  that  the
\napplication  dated  21-1-1991, though remained a valid application till ninety
\ndays, because of the default committed by the 3rd respondent in not submitting
\nthe valid clearance certificate as required under clause (d) of rule  22,  the
\napplication became  invalid.    Learned counsel, therefore, urges that such an
\ninvalid application cannot create a preferential right under Sec.11(2) of  the
\nAct, which  we  have  quoted  above  and, in our opinion rightly.  In order to
\nreceive a preferential treatment, the application would have to be  in  order.
\nStretching   the  argument  further,  learned  senior  counsel  submits  that,
\ntherefore, if the application of TAMIN was made on 7-4-1995, that was the only
\nvalid application lying  with  the  Government  and  as  such,  there  was  no
\nnecessity  of considering the application of the 3rd respondent or giving it a
\npreference under Sec.11(2) of the Act.\n<\/p>\n
        12.  There could be no doubt that an application under  Sec.10  for  a
\nmining  lease would have to be in order because the language of Sec.1 0 itself
\nsuggests that such application for mining lease has to be made  to  the  State
\nGovernment  concerned  in  the prescribed form and shall be accompanied by the
\nprescribed fee.  On this backdrop, when we see the language of Rule 22(1),  it
\nis as under:\n<\/p>\n
“22.  Application for grant of mining lease.- (1) An application for the grant
\nof  a  mining  lease  in  respect  of  land  in  which the mineral vest in the
\nGovernment shall be made to the State  Government  in  Form  I,  through  such
\nofficer or authority as the State Government may specify in this behalf.
\nWe  have already pointed out that under subsection (3) etc., every application
\nhas to be accompanied by the fee of Rs.500\/- and the documents such  as  valid
\nclearance certificate,  etc.   It is undoubtedly an admitted position that the
\napplication made by the 3rd respondent, though was in the prescribed form, did
\nnot have with it the certificate regarding the payment of  mining  dues.    It
\nalso  did not have the affidavits of all the partners, which is required under
\nproviso to rule 22 (e).  It  is  an  admitted  position  again  that  the  3rd
\nrespondent is an unregistered firm.  Therefore, for making a valid application
\nunder  Rule  22,  along  with  the  application  in  the  prescribed form, the
\ndocuments suggested in Rule 22(3) were bound to be there.  It  is  again  true
\nthat  the  3rd  respondent  could  still  file  an  application  without those
\ndocuments provided that an affidavit is filed in terms of the  fourth  proviso
\nto Rule  22, which we have quoted above.  It is also an admitted position that
\nin spite of ninety days period, no such No Due Certificate either  in  respect
\nof the firm and also in respect of the partners individually were filed by the
\n3rd respondent.    Therefore,  there  could be no dispute that the application
\nitself became invalid.\n<\/p>\n
        13.  We must take into consideration, the prevalent competition in the
\nfiled of  mining  of  minerals.    With  the  preferential  right  given under
\nSec.11(2), it cannot be countenanced that a party, who makes an application in
\nany form other than the prescribed form and should not comply with the  clause
\n(3)  of  Rule  22  and  yet, should get the preferential right as envisaged in
\nSec.11(2).  In our opinion,  learned  senior  counsel  for  the  appellant  is
\nabsolutely  right  in arguing that Secs.10 and 11 and Rule 22 would have to be
\nread together and  such  a  conjoint  reading  would  suggest  that  where  an
\napplication  is  to  be  preferred  within  the  meaning  of  Sec.11(2),  such
\napplication has to be a valid application.  As  rightly  pointed  out  by  the
\nlearned  counsel, otherwise, devastating results would ensue in the sense, any
\nperson would reserve an area for mining by making an defective application and
\nin that case, the mere fact of making the application would have to be held as
\nsufficient for getting the preferential right.  That does not appear to be the
\nlogic behind the provisions.  The rule has shown some elasticity in the matter
\nalso in the sense  that  such  defective  application  could  remain  a  valid
\napplication for a period of ninety days but where the necessary documents like
\nValid Clearance  Certificate,  etc.    are  not  filed within the ninety days’
\ntime-limit, the law itself provides for the invalidation of the said defective
\napplication.  In our view, if the application so becomes invalid  due  to  the
\noperation of the aforementioned proviso then, there will be no question of its
\ngetting any  preference.   Once this position is clear then, it knocks out the
\nvery basis of the 3rd respondent’s claim because the preferential treatment is
\nthe only basis of the 3rd respondent’s application for grant of lease.\n<\/p>\n
        14.  Learned single Judge has found fault with the application of  the
\n3rd  respondent being allowed to pend for six long years and, in the meantime,
\nconsidering the possibilities of the lease being granted to TAMIN.  It  sounds
\nfrom  the  judgment of the learned single Judge that the learned Judge did not
\napprove of this favouritism shown in favour of TAMIN while studiously ignoring
\nthe preferential claim of the 3rd respondent.  In fact, the whole judgment  is
\nbased on this circumstance of the prior application made by the 3rd respondent
\nand the  Government’s  apathy towards that application for six long years.  In
\nour opinion, learned senior counsel for the appellants is undoubtedly right in
\ncontending that the Government could not have acted on the application of  the
\n3rd  respondent  once  it  is  found  that the mandatory accompaniments to the
\napplication were not there and were also not made available  in  ninety  days’
\ntime.   The  application  had  clearly  become  invalid  so  that there was no
\nquestion of its consideration at all.  At any rate, even if  such  application
\nremained pending on record as an invalid application, the 3rd respondent could
\nnot have claimed a preferential treatment on the basis of the same.\n<\/p>\n
        15.   Shri  Somayaji,  learned  senior counsel for the 3rd respondent,
\nurged that the State Government or, as the case may be,  TAMIN  did  not  take
\nthis  stand  and  Rule  22(d)  and the proviso was not pressed into service by
\neither of them and, therefore, we should not allow the appellant to urge  this
\npoint before us.\n<\/p>\n
        16.  We  simply fail to follow the logic behind this argument.  It was
\nnot for any party to take a particular stand because the invalidation  of  the
\napplication is  the  natural  fall  out of the proviso.  Whether the stand was
\ntaken or not, the fact remains that the  application  of  the  3rd  respondent
\nbecomes  invalid  by the force of the language of the proviso if the necessary
\ndocuments are not filed within ninety days.  Indeed, we do  not  see  anything
\nunreasonable also in this rule and the proviso.  A person, who has to take the
\nmining  lease,  if  he is already in the mining operation, must approach for a
\nnew mining lease without dues.  That is a perfectly reasonable  provision  and
\nthe  mandatory  nature of this provision is highlighted because of the proviso
\nto Rule 22(d).  When we see the judgment of the learned single  Judge,  it  is
\napparent  that proviso to Rule 22(d) is not even distantly referred to in that
\njudgment and the learned Judge proceeded on the basis that a valid application
\nwas all the while pending for six long years and the Government was  apathetic
\nto  it  and  instead  the  Government showed favour to TAMIN by firstly making
\nenquiries with TAMIN regarding their  readiness  to  mine  garnets  and  other
\nby-products.\n<\/p>\n
        17.  The keenness of the Government on this question can be understood
\nbecause  of  the fact that precious minerals are to be found in the beach sand
\nbesides Garnet.  They being Ilminite, Rutile, Leucoxene, Zirkon,  Sciliminite,
\nMonazite.   Barring Garnet and Sciliminite, other minerals named above are the
\n‘prescribed substance’ under Atomic Energy Act, 1962 and under the  said  Act,
\nit  is  mandatory to obtain licence from the designated competent authority in
\nthe Department of Atomic Energy for work of any mines and minerals from  which
\nprescribed substances can be obtained.  Such licence is necessary even for the
\nacquisition,  production,  possession, use, disposal, export or import of such
\nprescribed substances.  Between 1991-98, it was the natural  policy  that  the
\nmining  and  protection  of  prescribed  substances  would be reserved for the
\nPublic Sector Undertakings though that policy has been given a go-by  in  late
\n1998.   Undoubtedly  even  then a selective entry of the private entrepreneurs
\nwas permitted.  However, considering the growing demand  for  these  minerals,
\nwhich  were  extremely  precious  and  covered under the Atomic Energy Act, it
\ncannot be treated to be unusual  that  the  State  Government  would  vie  the
\npossibility  of  someone  taking  up  the  mining of these minerals along with
\nGarnet and Sciliminite.  If the application of the 3rd respondent was lying as
\nan invalid application, nothing was wrong if the Government,  which  was  keen
\nfor  the  precious  minerals, tried the possibility of such a mining operation
\nfrom TAMIN, which is a Public Sector Undertaking.\n<\/p>\n
        18.  Learned senior  counsel  for  TAMIN  has  taken  us  through  the
\nstatement  of  Industrial  Policy pertaining to Public Sector Undertakings and
\nalso pointed out that the public enterprises were given a pride place  in  the
\nformation and  promulgation  of  that  policy.  Paragraph 32 of the Industrial
\nPolicy dated 24-7-1991 was read  out  to  us  so  also  the  resolution  dated
\n6-10-1998 published  in  Gazette  of  India vide No.8\/1(1)\/97-PSU\/1422.  It is
\nfrom this that the  learned  senior  counsel  pointed  out  that  it  was  not
\nunnatural on the p art of the State Government to vie the possibilities of the
\nmining   operation   through  Public  Sector  Undertakings  like  TAMIN,  etc.
\nparticularly because of the vast coastal area and the sea-beach.  The judgment
\nof the learned single Judge is silent on this point.  We have referred to this
\nfact only to suggest that it was not  unnatural  on  the  part  of  the  State
\nGovernment  to  try  the  Public Sector Undertakings like TAMIN for mining the
\nprecious minerals which were of national importance owing to their utilisation
\nin the Atomic Research Stations, etc.  We, therefore, do not see  any  oblique
\nmotive  on  the  part of the Government when they tried the possibility of the
\nmining vide their letter dated 11-11-1994  sent  to  TAMIN  enquiring  whether
\nTAMIN was  interested in mining of Garnets and other by-products.  It is to be
\nseen that this offer  was  replied  in  the  affirmative  by  TAMIN  by  their
\ncommunica  tion  dated 8-12-1994 and the application for the mining came to be
\nfiled on 7-4-1995.  On the backdrop of  the  facts  and  law,  which  we  have
\npointed above, we do not see anything wrong if the State Government considered
\nthe said application of TAMIN and granted them the lease on 10-7-1997.\n<\/p>\n
        19.   Shri  Somayaji  tried to get out of this situation by suggesting
\nthat the  application  made  by  TAMIN  was  also  defective  as  it  was  not
\naccompanied with the Income Tax certificates as required under Rule 2 2(3)(f).
\nWe have mentioned this argument only to be rejected because, the non-filing of
\nsuch  income-tax  particulars  is  not  covered  by the aforementioned proviso
\nregarding the certificates relating to the payment of mining  dues.    It  was
\ntried to  be shown by Mr.  Somayaji that the Government in fact considered all
\nthe three application, i.e.  one by the 3rd respondent,  other  by  TAMIN  and
\nstill  third  by  some  other  party and chose to grant the lease in favour of
\nTAMIN though 3rd respondent was a better suited party  for  mining.    Learned
\nsenior  counsel  tried to suggest that they were having vast experience in the
\nmining operation as they were already in this field  and  in  past  TAMIN  had
\ndeclined to take up the lease for mining Garnet, etc.<\/p>\n
        20.   We  find  that  in  the  impugned  judgment  also, there is some
\nreference to the inter se merits between the 3rd respondent and TAMIN.  We  do
\nnot  think  that  it  will  be  for  this Court to compare the inter se merits
\nbetween the contesting parties  and  indeed,  there  is  no  question  of  the
\ncomparative  merit  in  this case because, on the relevant date, TAMIN was the
\nonly party, whose application was pending.  Again, it will  be  only  for  the
\nGovernment and the experts in the mining field to opine regarding the inter se
\nmerits of  the  parties.   We, therefore, desist from giving any such finding,
\nnor do we agree with the finding of the learned  single  Judge  that  the  3rd
\nrespondent was a better suited person for the mining lease.\n<\/p>\n
        21.   This  takes  us  to  the last question, which was argued by Shri
\nSomayaji that while the leave in favour of TAMIN was granted on 10-7-1 997, it
\nwas only later on the application of the 3rd respondent came to be rejected by
\norder dated 26-8-1997, which order was also impugned  in  the  writ  petitions
\nfiled by  the  3rd  respondent.   The contention raised was that the order was
\npassed only by way of completing the formality of rejecting  the  application.
\nLearned  senior  counsel  also  urged  that  that  would  go  to show that the
\nGovernment never treated the 3rd respondent’s application to  be  invalid  and
\notherwise, there would not have been an exercise on the part of the Government
\nto pass an order refusing the application.  To answer this argument, one needs
\nonly to look to Rule 26, which we have quoted above.\n<\/p>\n
        22.   Under  Rule 26(1), before refusing an application made for grant
\nand renewal of mining lease, an opportunity  is  to  be  given  by  the  State
\nGovernment  of being heard as also the reasons are required to be recorded for
\nrefusing to grant or renew the mining lease.  Sub-rule (2)  provides  that  an
\napplication  for  grant  of  a  mining  lease is not to be refused only on the
\nground that Form I or Form J, as the case may be, is not complete in  all  the
\nmaterial  particulars or the application is not accompanied with the documents
\nreferred to in sub-clauses (d) to (h) of Rule 22(3).  From this learned senior
\ncounsel  argues  that  the  State  Government  could  not  have  refused   the
\napplication merely  because  the documents like No Due Certificate, etc.  were
\nnot furnished or were not made available  by  the  3rd  respondent.    Learned
\ncounsel  also argues that under sub-rule (3) an opportunity has to be given to
\ncomplete all the material particulars and  once  such  notice  is  given,  the
\ndocuments  should  be  furnished within sixty days from the date of receipt of
\nthe said notice.  He points out, therefore, that the  application,  which  was
\nprior  in  time,  made by the 3rd respondent could not just be allowed to pend
\nand then refused that too, after the lease was already granted  to  TAMIN  and
\nfurther such refusal could not be depended upon the fact that the lease having
\nalready been granted in favour of TAMIN.\n<\/p>\n
        23.  The  argument  is clearly incorrect.  There is a clear difference
\nin the application becoming invalid on account of the noncompliance  in  terms
\nof  the  proviso  to  Rule 22(d) and the ultimate refusal of that application.
\nEven if the joint reading of Rule 22(d) proviso  and  Rule  26  would  clearly
\nbring  out a position that where the application becomes invalid, it shall not
\nbe refused merely on that ground and an opportunity should  be  given  to  the
\nparty to  complete  the  formalities  of filing the necessary documents.  Here
\nthat opportunity has been given when  the  notice  dated  17-3-1997  has  been
\nserved on  the  3rd  respondent.    It  is  an  accepted position that the 3rd
\nrespondent did not comply with the notice for sixty days because the necessary
\ndocuments regarding the no mining dues, etc.  came to  be  available  only  on
\n2-7-1997, which  was  much  beyond  sixty  days’  time.    Even if it is to be
\nconsidered that the notice dated 17-3-1997 was complied with, in our  opinion,
\nthe  application was refused for good reasons and the grant of lease in favour
\nof TAMIN regarding the same site would certainly  be  a  good  and  sufficient
\nreason  for refusing the application of a rival party like the 3rd respondent.
\nWe are of the opinion that TAMIN being a Public Sector Undertaking  and  there
\nbeing  a possibility of the prescribed substances being found in the mining of
\nGarnet, the State Government was quite justified in preferring a Public Sector
\nUndertaking for the mining operation in keeping with the policy though we must
\nhasten to add that there  was  no  question  of  any  preference  being  given
\nparticularly when such a preference is not possible to be read from the rules.
\nHowever,  one  cannot  be  unmindful to the fact that when the lease was being
\nconsidered, the application of the 3rd respondent had already become  invalid.
\nIt  was  only in pursuance of Rule 26 that the same came to be refused and, in
\nour opinion, the subsequent refusal of that application would  not  by  itself
\ninvalidate  the  order of refusal nor would it have the effect of rejuvenating
\nthe invalid application of the 3rd respondent.  This aspect has also not  been
\nconsidered  by  the learned single Judge who has concentrated on the fact that
\nthe 3rd respondent’s application was rejected only after the lease was granted
\nin favour of TAMIN only to complete the formalities.  There  are  clearly  two
\nstages which emerge out from the rules.  The first being the application being
\nrendered invalid and the second being its’ refusal under Rule 26.  There could
\nbe  number  of  other  reasons  besides  the non-compliance with the necessary
\nconditions under Rule 22 for refusing the application and  that  is  precisely
\nwhat  has  been  done  by  the State Government in refusing the application by
\ngiving other reasons like grant of lease in favour of TAMIN and TAMIN being  a
\nPublic Sector  Undertaking.   We, therefore, do not find anything wrong in the
\naction of the State Government.\n<\/p>\n
        24.  In short, we are not in a position to  agree  with  the  impugned
\njudgment and  would  choose to set it aside.  We are also of the clear opinion
\nthat the writ petitions filed by the 3rd respondent herein did not deserve  to
\nbe entertained  and  are  liable  to  be  dismissed.  We accordingly order the
\ndismissal of the writ petitions.  The writ appeals are  allowed.    Under  the
\ncircumstances, however, we pass no orders as to the costs.  Connected CMPs are
\nclosed.\n<\/p>\n
Index:Yes
\nWebsite:Yes<\/p>\n
Jai<\/p>\n","protected":false},"excerpt":{"rendered":"
Madras High Court Tamil Nadu Minerals Limited vs State Of Tamil Nadu on 22 December, 2003 IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 22\/12\/2003 Coram The Honourable Mr. Justice V.S. SIRPURKAR and The Honourable Mr. Justice N. KANNADASAN W.A. No.192 of 1999 and W.A.No. 193 of 1999 and C.M.P. Nos.2130 and 2131 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":[8,13],"tags":[],"class_list":["post-195220","post","type-post","status-publish","format-standard","hentry","category-high-court","category-madras-high-court"],"yoast_head":"\nTamil Nadu Minerals Limited vs State Of Tamil Nadu on 22 December, 2003 - 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\/tamil-nadu-minerals-limited-vs-state-of-tamil-nadu-on-22-december-2003\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tamil Nadu Minerals Limited vs State Of Tamil Nadu on 22 December, 2003 - 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