GOA FOUNDATION Vs. UNION OF INDIA & ORS.
Supreme Court of India (Full Bench (FB)- Three Judge)
INTERLOCUTORY APPLICATION, .86 of 2014, Judgment Date: Oct 14, 2014
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
INTERLOCUTORY APPLICATION NO.86 OF 2014
IN
WRIT PETITION(C) NO. 435 OF 2012
Goa Foundation ….Petitioner
versus
Union of India and others ….Respondents
And in the matter of:
M/s Bandekar Brothers Private Limited ….Applicant
O R D E R
1. Through the instant interlocutory application, the applicant-M/s
Bandekar Brothers Private Limited has prayed for a direction to the
concerned authorities for restraining them from auctioning the mined
mineral ore produced by the applicant prior to 22.11.2007, through e-
auction. This prayer is premised on the foundation, that the applicant's
above stated mined mineral ore cannot be sold, under the orders passed by
this Court. In this behalf, it was the contention of the learned counsel
for the applicant, that the applicant had mined 67,285 metric tons of iron
ore (Grade 63.19% Fe approximately) prior to 22.11.2007, and therefore, the
applicant should be released the aforesaid iron ore, with the right to
dispose of the same. A similar submission was made by the applicant for
the disposal of 1,00,000 metric tons of old dump (grade 46.15% Fe
approximately).
2. According to the learned counsel for the applicant, the mineral ore
mined prior to 22.11.2007, cannot be treated as having been illegitimately
mined, and as such, the applicant as also all other similarly placed mining
lease holders, should be released the same with liberty to sell the same.
3. Mr. A.D.N. Rao, Advocate, learned amicus, vehemently opposes the
prayer made on behalf of the applicant. While doing so, he placed reliance
on the decision rendered by this Court in Goa Foundation versus Union of
India (2014) 5 SCALE 364. Our pointed attention was invited to the
following observations recorded therein:
“67. As we have held that the deemed mining leases of the lessees in Goa
expired on 22.11.1987 and the maximum period (20 years) of renewal of the
deemed mining leases in Goa has also expired on 22.11.2007, mining by the
lessees in Goa after 22.11.2007 was illegal. Hence, the order dated
10.09.2012 of the Government of Goa suspending mining operations in the
State of Goa and the order dated 14.09.2012 of the MoEF, Government of
India, suspending the environmental clearance granted to the mines in the
State of Goa, which have been impugned in the writ petitions in the Bombay
High Court, Goa Bench (transferred to this Court and registered as
transferred cases) cannot be quashed by this Court. The order dated
10.09.2012 of the Government of Goa and the order dated 14.09.2012 of the
MoEF will have to continue till decisions are taken by the State Government
to grant fresh leases and decisions are taken by the MoEF to grant fresh
environmental clearances for mining projects.
68. On 05.10.2012, this Court while issuing notice in Writ Petition (C)
No.435 of 2012 (Goa Foundation vs. Union of India & Others) also passed
orders that all mining operations in the leases identified in the report of
the Justice Shah Commission and transportation of iron ore and manganese
ore from those leases, whether lying at the mine-head or stockyards, shall
remain suspended. Thereafter on 11.11.2013, this Court passed an order
that the inventory of the excavated mineral ores lying in different mines
stockyards/jetties/ports in the State of Goa made by the Department of
Mines and Geology of the Government of Goa be verified and thereafter the
whole of the inventorised mineral ores be sold by e-auction and the sale
proceeds (less taxes and royalty) be retained in separate fixed deposits
(lease-wise) by the State of Goa till this Court delivers judgment in these
matters on the legality of the leases from which the mineral ores were
extracted. In our order passed on 11.11.2013, we had also directed that
this entire process of verification of the inventory e-auction and deposit
of sale proceeds be monitored by a Monitoring Committee appointed by the
Court. The Monitoring Committee comprising Dr. U.V. Singh (Additional
Principal Chief Conservator of Forests, Karnataka), Shri Shaikh Naimuddin
(former Member of Central Board of Direct Taxes) and Parimal Rai (Nominee
of Govt. of Goa) have in the meanwhile monitored the e-auction. We extract
hereinbelow the relevant portion of the interim report dated 12.03.2014 of
the Monitoring Committee :
“After the two e-auctions, the total ore auctioned is about 1.62 million MT
and the total value realized is 260.68 crores approximately. As directed
by this Hon'ble Court, the State Government has been requested to maintain
separate accounts, lease wise and keep the sale proceeds as fixed deposits
in Nationalzed Banks.
The process of transportation of ore for export has not yet been initiated
because of the storage charges being demanded from the successful bidder by
the Marmagoa Port Trust (MPT). As a result, the process of e-auction is
likely to slow down. The extent of storage charges demanded is as per
Annexure MC III.”
69. As we have held that renewal of all the deemed mining leases in the
State of Goa had expired on 22.11.2007, the mining lessees will not be
entitled to the sale value of the ores sold in caution but they will be
entitled to the approximate cost (not actual cost) of the extraction of the
ores.....”
(emphasis is ours)
Based on the aforesaid observations, it was the vehement assertion of the
learned amicus, that an inventory of all the mined mineral ores lying in
different mines/stockyards/jetties/ports in the State of Goa was ordered to
be prepared by the Monitoring Committee (appointed by this Court). It was
further directed, that the entire mined mineral ores (of which the
inventory was prepared) was to be sold by way of e-auction. It was pointed
out, that this Court had clearly expressed, that the holders of the mining
leases were not to be entitled to the proceeds thereof. In other words,
the mining lease holders could not claim the sale value of the mined
mineral ores sold by way of e-auction. This Court in its directions had
explicitly held that they would be entitled only to the approximate cost
(not actual cost) incurred by them during the extraction of the mined
mineral ores. In view of the above directions of this Court, learned amicus
submitted, that the prayers made in the application were clearly
unacceptable.
4. In addition to the aforesaid submission, it was also the contention
of the learned amicus, that the prayer made by the applicant was wholly
unjustified in view of the provisions of the Mineral Concession Rules, 1960
(hereinafter referred to as the 'Mineral Rules'). Insofar as the instant
aspect of the matter is concerned, reliance was first placed on Rule
27(2)(la) of the Mineral Rules. The same is extracted hereunder:
“27. Conditions – (1) Every mining lease shall be subject to the following
conditions:
(a) to (u) xxx xxx xxx
(2) A mining lease may contain such other conditions as the State
Government may deem necessary in regard to the following, namely, :-
(a) to (l) xxx xxx xxx
(la) the time limit for removal of mineral, ore, plant, machinery and other
properties from the leasehold area after expiration, or sooner
determination or surrender or abandonment of the mining lease.”
(m) to (o) xxx xxx xxx”
A perusal of the above Rule leaves no room for any doubt, that the State,
while granting a mining lease, had the discretion to fix the time limit for
removal of the mined mineral ore etc. from the lease hold area. In order
to demonstrate that such a period was provided for, our attention was drawn
to Rule 31 of the Mineral Rules. Rule 31 is being extracted hereunder:
“31. Lease to be executed within six months.- (1) Where, on an application
for the grant of a mining lease, an order has been made for the grant of
such lease, a lease deed in Form K or in a form as near thereto as
circumstances of each case may require, shall be executed within six months
of the order or within such further period as the State Government may
allow in this behalf, and if no such lease deed is executed within the said
period due to any default on the part of the applicant, the State
Government may revoke the order granting the lease and in that event the
application fee shall be forfeited to the State Government.
(2) The date of the commencement of the period for which a mining lease
is granted shall be the date on which a duly executed deed under sub-rule
(1) is registered.”
A perusal of the aforesaid Rule reveals, that a lease deed in Form K is
mandatorily required to be executed within six months of the order of
grant of such lease (or within such further period as the State Government
may allow). Our attention was then invited to Form K (mining lease deed),
and more particularly, to paragraphs 5 and 6 of Part IX thereof. The
aforesaid paragraphs are being extracted hereunder:
5. the lessee/lessees having first paid discharged rents, rates, and
royalties payable by virtue of these presents may at the expiration or
sooner determination of the said term or within six calendar months
thereafter (unless the lease shall be determined under clauses 1 and 2 of
this part and in that case at any time not less than three calender months
nor ore than six calendar months after such determination) take down and
remove for his/their own benefits all or any ore mineral excavated during
the currency of lease engines, machinery, plant, buildings, structures,
tramways, railways and other works, erections and conveniences which may
have been erected, set up or placed by the lessee/lessees in or upon the
said lands and which the lessee/lessees is/are not bound to deliver to the
State Government under clause 20 of Part VII of the Schedule and which the
State Government shall not desire to purchase.
6. If at the end of six calendar months after the expiration or sooner
determination of the said terms under the provisions contained in clause 4
of Part VIII of this Schedule become effective there shall remain in or
upon the said land any ore or engines, machinery, plant, buildings,
structures, tramways, railways and other works, erections and conveniences
or other property which are not required by the lessee/lessees in
connection with operations in any other lands held by him by them under
prospecting licence or mining lease, the same shall if not be removed by
the lessee/lessees within one calender month after notice in writing
requiring their removal has been given to lessee/lessees by the State
Government be deemed to become the property of the State Government and may
be sold or disposed of in such manner as the State Government shall deem
fit without liability to pay any compensation or to account to the
lessee/lessees in the respect thereof.”
(emphasis is ours)
A perusal of the terms and conditions expressed in the lease required to be
executed by a mining lease holders, leaves no room for any doubt, that the
mineral ore extracted by the lessee, has to be removed within six calendar
months from the date of expiration of the mining lease. And further more,
if at the end of the above six calendar months, the excavated mineral ore
is not removed, then within one calender month after a notice in writing is
issued to the lessee/lessees, the extracted mineral ore is deemed to become
the property of the State Government. Accordingly, relying on the afore-
stated statutory provisions, it was the submission of the learned amicus,
that the ore which had remained unremoved after the expiration of the above
period of six months, would be deemed to have vested in the State
Government.
5. In support of the above submission, learned amicus again invited our
attention to Goa Foundation's case (supra), wherein this Court had
permitted, that the entire stock of extracted mineral ores would vest in
the State Government. In this behalf, our attention was drawn to the
following observations:
“70. The entire sale value of the stock of mineral ores sold by e-auction
less the average cost of excavation, 50% of the wages and allowances and
50% of the storage charges to be paid to MPT is thus due to State
Government which is the owner of the mineral ores which have been sold by e-
auction. The State Government will set-aside 10% of this balance amount
for the Goan Iron Ore Permanent Fund for the purpose of sustainable
development and inter-generational equity. This entire exercise of
calculating the average cost of extraction of ores to be paid to the mining
lessees, 50% of the basic wages and dearness allowance to be paid to the
workers, 10% of the balance amount towards the Goan Iron Ore Permanent Fund
and the balance amount to be appropriated by the State Government will be
done by the Director of Mines and Geology, Government of Goa, under the
supervision of the Monitoring Committee. Till this exercise is over and
the report of the Monitoring Committee will continue and their members will
be paid their remuneration allowances as directed in the order dated
11.11.2013.”
(emphasis is ours)
6. Learned counsel for the applicant, could not invite our attention to
any favourable observations made by this Court in Goa Foundation's case
(supra), nor could learned counsel for the applicant invite our attention
to any statutory provisions from the Mineral Rules, which would counter the
submissions advanced at the hands of the learned amicus. The submissions
advanced on behalf of the applicant were premised merely on the assertion,
that the mineral ore which the applicant was claiming a right over, had
been legitimately mined before 22.11.2007, and therefore, the applicant had
an absolute and legitimate ownership over the same. We may note, that the
above position was emphasised, stressed and persistently reiterated to make
the stand absolutely crystal clear.
7. Based on the directions issued by this Court in Goa Foundation's case
(supra), as also, the provisions of the Mineral Rules, it is not possible
for us to accept the prayers made by the learned counsel for the applicant.
We are of the firm view, that this Court clearly and categorically
directed the preparation of an inventory of all the existing extracted
mineral ore available as on 11.11.2013. Accordingly, the Monitoring
Committee prepared an inventory of all the extracted mineral ore. The
inventory included the ore, whether lying at the mine-head or stockyards or
jetties or ports in the State of Goa. This Court further directed the sale
of the entire extracted ore included in the above inventory was to be made
by way of e-auction. It was further directed, that the mining lease holders
would not be entitled to the proceeds of the e-auction, but only to an
approximate cost (not actual cost) of extraction of the mined mineral ores,
and nothing more. As such, the prayer made in the instant application,
that the State Government be restrained from selling the extracted mineral
ore, and further that, the applicant be permitted to dispose of the same by
itself, cannot be accepted.
8. Additionally, the provisions of the Mineral Rules mandate that the
excavated mineral ore is liable to be removed by the lessee within a period
of six months, failing which, after the issuance of a notice, the same
would stand forfeited to the State Government. On the issue of forfeiture,
this Court clearly directed in Goa Foundation's case (supra), that all the
extracted mineral ore contained in the inventory prepared by the Monitoring
Committee, would vest in the State Government. The directions of this
Court, satisfy the vesting of the extracted mineral ore with the State
Government, thus negating the requirement of the issuance of any formal
notice to the mining lease holders. It is, therefore, difficult for us to
accept, the prayers made by the applicant, either for the release of the
extracted mineral ore to the applicant, or the liberty to sell the same at
its own.
9. In recording our above conclusion, we have also taken note of
consideration of an unequivocal determination by this Court, that without
renewal of the mining leases, all the leases would be deemed to have
expired on 22.11.2007. The State of Goa passed an order dated 10.09.2012
suspending mining operations in the State of Goa. By another order dated
14.09.2012, the Ministry of Environment and Forests, Government of India,
suspended the environmental clearances granted to mines in the State of
Goa. It is, therefore, apparent that no mining activity was being carried
out in the State of Goa after 10/14.09.2012. In the above view of the
matter, the instant application filed on 12.08.2014 is wholly misconceived,
and merits outright rejection.
10. For the reasons recorded hereinabove, we find no merit in the prayers
made in interlocutory application No. 86 of 2014 in Writ Petition(C) No.
435 of 2012. The same is accordingly dismissed.
….......................J.
[JAGDISH SINGH KHEHAR]
…........................J.
[J. CHELAMESWAR]
NEW DELHI; …........................J.
OCTOBER 14, 2014. [A.K. SIKRI]
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