Metals and Ferro Alloys Ltd. Vs. Union
of India & Ors  INSC 298 (21 September 1990)
S. Rangnathan, S. Fathima Beevi, M. (J)
1991 AIR 818 1990 SCR Supl. (2) 27 1992 SCC Supl. (1) 91 JT 1991 (5) 236 1990
and Minerals (Development and Regulation) Act, 1957--Sections 3(f), 5A, 10, 11,
17A & First and Second Schedules--'Minor Mineral'--Chrome ore--Grant of
mining lease--Reservation in favour of Public Sector Undertak- ings--Whether
obligatory--Consideration of applica- tions--Directions issued to
Government--Appropriate statuto- ry amendments suggested.
these matters, the petitioners viz., four companies in the private sector, two
public sector corporations owned substantially by a State Government, and a
private individu- al sought clarifications and directions in relation to the
orders passed by this Hon'ble
Court on 30.4.87 and
6.10.87 on the Writ Petition. All these petitions arose out of applications for
grant of right for the mining of chrome ore or chromite in the State of Orissa. Since chrome ore is one of the
minerals specified in the first and second schedules to, and not a 'minor
mineral' within the meaning of Section 3(f) of the Mines and Minerals
(Development and Regulation) Act, 1957, the right to grant the mining right in
respect of this mineral is vested in the State Government subject to the
control by Union of India, and as such they are respond- ents in these matters.
disposing of the matters, this Court referred the entire controversy to the
Secretary to Government of India in the Ministry of Mines, viz., Mr. Rao, for a
detailed consideration of the claims made by the parties.
Mr. Rao, the two public sector undertakings also put forward their claims that the
public sector units in the State were entitled to the grant of mining rights in
the State to the exclusion of all private parties in as much as there was a
reservation in their favour by an appropriate notification issued by the State
Government. The other parties raised objection on the ground that the claims
were made at a belated stage of the proceedings. On applications made by the
Public Sector Undertakings, this Court directed that their claims would also be
examined by Rao.
his report dated 1.2.1988 Rao accepted the claim of reservation made by the two
Public Sector Undertakings, viz., Orissa Mining Corporation (OMC) and
Industrial Devel- opment Corporation of Orissa Ltd. (IDCOL). He also partially
accepted the claims of the three private parties. viz., Indian Metals and
Ferro-Alloys Limited (IMFA); Ferro Alloys Corporation Limited (FACOR); and
Aikath and rejected the claims of the other two private parties viz., Orissa
Cements Ltd. (OCL) and Orissa Industries Ltd. (ORIND). Though he accepted the
claim of the two public sector undertakings, he recommended for them leases in
respect of only the balance of the lands left, after fulfilling the claim of
the others which he had accepted.
present petitions biter alia sought directions on the report of Rao. It was
contended that Rao was nothing more than a Commissioner appointed by this Court
to examine the various parties and hence this Court should pass appro- priate
orders on his report. Various contentions were ad- vanced by the petitioners as
well as respondents as regards the legal character of the Rao Report and of
giving effect to it either in toto or with modifications in certain re- spects.
Reservation in favour of Public Sector Undertakings was challenged by the
private parties. Plea of Promissory Estoppel was also raised on behalf of some
of the petition- ers.
of the matters, this Court,
1. The statute must lay down clearer guidelines and procedure. Having regard to
the new avenues for vast industrial development in the country, a more workable
procedure would be for the State Government to call for applications in respect
of specified blocks by a particular date and deal with them together, other
later entrants not being permitted in the field. Otherwise only confusion will
result, as here. There was a time when the State Government looked to private
enterprises for mineral development in its territory. Of late, however,
competition has crept in. The State Government has its own public sector
corporations and various enterpreneurs are interested in having mining leases
for their purposes. It is, therefore, vital that there should be a better and
detailed analysis, district-wise and area-wise and that a schedule for
consideration of applica- tions in respect of define areas should be drawn up
with a strict time frame so that the State is no longer constrained to deal
with sporadic applications or make a routine grant of leases in order of
priority of applications. These are aspects which call for careful
consideration and appropriate amendments to the Mines and Minerals (Development
and Regu- lation) Act, 1957 and the Rules made thereunder. [72D-G] 29
Chromite ore is an important major mineral and the importance of its
conservation and proper utilisation for our country's development cannot be
gainsaid. The State Government rightly decided upon a policy of reservation in
1967 and this was kept up till 1974. In February 1974 the State Government was
in favour of free issue of mining leases but gave up this policy in pursuance
of the Central Government's letter of 15.5.74. Reservation was, therefore,
clamped in 1977 again. Applications could still be consid- ered to see how far
a relaxation was permissible having regard to the nature of the applicant's
needs, the purpose for which the lease was asked for, the nature of the ore
sought to be exploited, the relative needs of the State, the availability of a
public undertaking to carry out the mining more efficiently and other relevant
considerations. There is no material on record to substantiate the plea that
the State Government has been acting arbitrarily or mala fide in its policy
formulations in this regard. [82C-E] Venkataraman v. Union,  2 SCR 202, referred to.
Rao's decision, that the leases that have been grant- ed already in favour of
IMFA, FACOR be confirmed, should be upheld. These should be treated as leases
legitimately granted to them in exercise of the powers of relaxation under rule
59(2). It is true that the orders granting the leases do not elaborately record
the reasons but they were passed in the context of this litigation and have to
be considered in the light of the affidavits and counter affi- davits filed
herein. Rao's decision regarding the grant of a lease to AIKATH (not yet
implemented) should also be upheld.
these three cases, the records disclose sufficiently the reasons on the basis
of which the leases have been decided upon and are adequate to justify the
mining leases actually granted. ]89B-D]
claims of OCL and ORIND have been rejected sum- marily by Rao without an
advertence to the various consider- ation urged by them. This part of Rao's
decision has to be set aside as being too cryptic and unsustainable. Pursuant
to this conclusion, it is directed that these claims be considered afresh by
the Central Government. It would be more expedient if the claims of OCL and
ORIND are restored, for detailed consideration in all their several aspects,
before the State Government, as the State Government has had no opportunity to
consider the various aspects pointed out and as this course will also provide
an opportunity to the claimants to approach the Central Government again, if
dissatisfied with the State Government's decision to consid- er whether,
despite the reservation, some relaxation can be made also in 30 Favour of these
two companies- The State Government has to take into account various factors
and aspects before grant- ing a mining lease to an individual concern carving
out an exception to its reservation policy. It has done this in respect of IMFA
and FACOR for certain special reasons re- corded by it. Whether it would do so
also in favour of OCL and ORIND is for the State to consider. It would be
noticed that the applications of these two companies have not been considered in
this light earlier- The applications of OCL and ORIND are restored for the
consideration of the State Government. [94B-G]
State Government has rejected ORIND's applica- tion, inter alia, on the ground
that, in view of the penden- cy of the Writ Petition before this Court, it
could not at that stage pass any order on the application. It would, therefore,
be open to ORIND to ask the State Government to reconsider the application in
the light of the present order. There is no necessity for insisting on such a
formal request and therefore, the State Government is directed to consider
ORIND's application afresh in the light of this judgment. [95A-B]
far as OMC and IDCOL are concerned, Rao has recomamended that the areas left
after the grants to IMFA and FACOR, be given on lease to OMC. There were huge
areas of mineral bearing lands which have been reserved for the public sector.
Its interests do not clash or come into conflict with those of private
applicants which can only claim a right to the extent the State Government is
willing to relax the rule of reservation. This Court does not think OMC or
IDCOL have any voice in requiring that the State Government should keep certain
extent of land reserved and should not grant any mining lease at all in favour
of any private party. The interests of these corporations are safe in the hands
of the State Government and the allocation of mining leases to these
organisations is a matter of discre- tion with the State Government strictly
speaking, therefore, no question of any application by them for mining lease
need arise at all. But, when made, their applications are consid- ered by the
State Government and, on revision by the Central Government as a matter of
form. To this extent, they have a statutory remedy. [95C-El
When the State Government agreed to lease out the areas to MFA and FACOR it was
pointed out that this could not be given effect to without the Central
Court thereupon directed that the State Government should seek such approval.
The direction to the Central Government is only that its approval should be
given within the particular time limit set out therein- It cannot be 31
construed, reasonably, as a direction compelling the Central Government to
grant approval whether it agreed with the State Government's decision or not.
Thus the grant of mining leases to IMFA and FACOR are to be treated as having
been made in exercise of the power of relaxation under Rule 59(2). Though there
is no specific recording of reasons by the State Government or Central
Government inasmuch as these leases came to be granted by way of compromise, it
is a fair inference that the compromise proposals were prompted by the, at
least partial, acceptance of the claim put forward by these parties. Since the
grant of leases to these parties can be attributed to the relaxation of the
reservation rule in particular cases, the finding of Rao that these leases may
be confirmed deserves acceptance. [90C-F]
AIKATH is admittedly an individual who discovered chromite ore in the State. He
had secured a lease as early as in 1952 though that lease was annulled by the
State when it took over. Again, as against a lease of 640 acres which he had
once obtained and started operating upon, the State Government has finally
approved of a lease in respect of only 140 acres. AIKATH had been actually
working some mines from 1.5.53. His original grant had been approved before the
areas was reserved on 3.7.62. If the State Government con- siders these to be
weighty considerations and entered into a compromise with him for a lease of
140 acres and this has also been recorded by the High Court, these are no
grounds to interfere with that decision of the State Government. [89D-F]
Though the State Government and AIKATH had entered into a compromise as early
as 4.12.1984, no lease has yet been granted in his favour perhaps as the
Central Government has had no occasion to consider the matter earlier. However,
no useful purpose would be served by remitting the matter and asking the State
Government to seek the formal approval of the Central Government therefore. The
decision of Rao itself can be taken as containing the approval of the Cen- tral
Government in this regard and is thus upheld. The State Government is' directed
to execute, at as early a date as possible, a mining lease in Favour of AIKATH
in respect of the 140 acres agreed to be leased to him under the compro- mise
dated 4.12.1984. [90G-H; 91A]
Although Rao has approved the grants made in favour of IMFA and FACOR by the
State Government (which, he re- marks, were perhaps based on the observations
made by this Court), he has clearly reached his conclusions on these
independently. In fact, he has set out a basis for justify- ing the grants of
IMFA and FACOR. It is also clear that 32 there were no Court orders that could
have influenced his decisions on the claims of the other parties. [87F-G]
In the context of the scheme of the Act and the importance of a lease being
granted to one or more of the better qualified candidates where there are a
number of them, it would not be correct to say that, as the State Government's
order of 29.10.1973 has been set aside, ORIND's application should be restored
for reconsideration on the basis of the situation that prevailed as on
29.10.1973 and that, therefore, it has to be straightaway granted as there was
no other application pending on that date before the State Government. In matters
,like this, subsequent applica- tions cannot be ignored and a rule of thumb
Though S. 11 tries to enunciate a simple general principle of "first come,
first served", in practice, prior- ity of an application in point of time
does not conclude the issue. In this case itself, for instance, during the
period ORIND's application of 1971 has been under consideration before various
authorities and in the writ petition filed in the High Court, several other
competitors have come into the picture. The statutory provision is not clear as
to which of the applications in respect of any particular area, are to be
considered together. If ORIND's application of 1971 were to be considered only
on the basis of the persons who had made applications at that time or a short
time before or after, one result would follow; if, on the other hand, all the
applications pending for disposal at the time ORIND's application is to be
granted or rejected are to be consid- ered, the result would be totally
different. Since the interest of the nation require that no lease for mining
rights should be granted without all applicants therefore at any point of time
being considered and the best among them chosen or the area distributed among
such of them as are most efficient and capable, the latter is the only reasona-
ble and practical procedure. That is why this Court, in its order dated
30.4.87, laid down that all applications pending for consideration as on
30.4.87 should be considered by Rao.
72A-B] Ferro Alloys Corporation of India v. Union, ILR 1977 Delhi 189 and Mysore Cements Ltd. v. Union, AIR 1972 Mysore 149, distinguished.
Previously, rule 58 did not enable the State Gov- ernment to reserve any area
in the State for exploitation in the public sector. The existence and validity
of such a power of reservation was upheld by this Court. Rule 58 has been
amended in 1980 to confer such a power on the State Government. It is also not
in dispute that a notification of reservation was made on 3.8.77. The State
Government, OMC and IDCOL are, 33 therefore, right in contending that, ex
facie, the areas in question are not available for grant to any person other
than the State Government or a public sector corporation unless the
availability for grant is renotified in accord- ance with law (rule 59(1)(e) or
the Central Government decides to relax the provisions of rule 59(1). [79D-F]
Amritlal Nathubhai Shah and Ors. v. Union
of India and Anr.  1 SCR 372, relied
Naidu v. State of A.P., AIR 1959 AP 185 and Amritlal
Nathubhai Shah v. Union, AIR 1973 Gujarat 117, referred to.
In the present matters, except for two or three instances. where leases have
been granted by the State Government on its own, the State Government has
generally and consistently adhered to its stand that the chromite bearing lands
are reserved for exploitation in the public sector. The rules permit the
Central Government to relax the rigid requirements of reservation in individual
cases after recording special reasons. Such exceptional and isolated instances
of lease are not sufficient to sustain the plea of the parties that the policy
of reservation is merely being raised as a formal defence and has never been
seriously implemented by the State Government. [81G-H; 82A-B]
The conclusion that the areas in question before this Court were all duly
reserved for public sector exploi- tation does not, however, mean that private
parties cannot be granted any lease at all in respect of these areas for, as
pointed out earlier, it is open to the Central Government to relax the
reservation for recorded reasons. Nor does this mean that the public sector
undertakings should get the leases asked for by them. This is so for two
reasons. In the first place, the reservation is of a general nature and does
not directly confer any rights on the Public Sector Under- takings. This
reservation is of two types. Under s. 17A(1), inserted in 1986, the Central
Government may after consult- ing the State Government just reserve any
area--not covered by a Private Lease or a Mining Lease-with a view to conserv-
ing any mineral. Apparently, the idea of such reservations is that the minerals
in this area will not be exploited at all, neither by private parties nor in
the public sector.
second type of reservation was provided for in rule 58 and such reservation
could have been made by the State Government (without any necessity for
approval by the Cen- tral Government) and was intended to reserve areas for
exploitation, broadly speaking, in the public sector. The notification itself
might specify the Government Corporation or Company that was to exploit the
areas or may be just general, on the 34 lines of the rule itself. Whether such
areas are to be leased out to OMC or IDCOL or some other public sector
corporation or a Government Company or are to be exploited by the government
itself is for the Government to determine de hors the statute and the rules.
There is nothing in either of them which gives a right to OMC or IDCOL to
insist that the leases should be given only to them and to no one else in the
public sector. There are no competitive applica- tions from organisations in
the public sector controlled either by the State Government or the Central
Government, but even if there were, it would be open to the State Gov- ernment
to decide how far the lands or any portion of them should be exploited by each
of such Corporations or by the Central Government or State Government., Both
the Corpora- tions are admittedly instrumentalities of the State Govern- ment
and the decision of the State Government is binding on them. If the State Government
decides not to grant a lease in respect of the reserved area to an
instrumentality of the State Government, that instrumentality has no right to
insist that a Mining Lease should be granted to it. It is open to the State
Government to exercise at any time, a choice of the State or any one of the
instrumentalities specified in the rule. It is true that if, eventually, the
State Government decides to grant a lease to one or other of them in respect of
such land, the instrumentality whose application is rejected may be aggrieved
by the choice of another for the lease. The question whether OMC or IDCOL can
object to the grant to any of the private parties on the ground that a
reservation has been made in favour of the public sector, has to be answered in
the negative in view of the statutory provisions. For the State Government
could always denotify the reservation and make the areas available for grant to
private parties. Or, short of actually deserv- ing a notified area, persuade
the Central government to relax the restrictions of rule 59(1) in any
therefore, open to the State Government to grant private leases even in respect
of areas covered by a notifi- cation of the State Government and this cannot be
challenged by any instrumentality in the public sector. [82F-H; 83A-H; 84A-C]
these matters, no grounds have been made out which could support a plea of
promissory estoppel. The grant of a lease to ORIND had to be approved by the
Central Gov- ernment. The Central Government never approved of it. The mere
fact that the State Government, at one stage, recom- mended the grant cannot
stand in the way of their disposing of the application of ORIND in the light of
the Central Government's directives. [78E-F] Kanai Lal Sur v. Paramnidhi
Sadhukhan,  2 SCR 366; M/s 35 Motilal Padampat Sugar Mills Co. (P) Ltd.
v. State of Uttar Pradesh and Ors.,  2 SCR 641; Gujarat State Financial
Corporation v. M/s Lotus Hotels Pvt. Ltd.,  3 SCC 379;
Narain Yadav & Or,5. v. Bihar State Electricity Board
Philips India Ltd.,  Suppl. 3 SCR 123 and Mahabir Auto Stores & Ors. v.
Indian Oil Corporation Ors.,  JT I SC 363, referred to.
Court directed that it would be open to all the parties to place their claims,
or further claims, as the case may be, in regard to the areas applied for by
them on or before 30.4.1987, hacked by supporting reasons, before the State
Government in the form of representations within four weeks from the date of
this order; that the State Government would dispose of these applications
within the statutory period failing which the parties will have their remedy
under the statute by way of revision to the Central Government; that in
arriving at its decisions, it will be open to the State Government to take into
account the dis- cussions and findings of the Rao Report in the light of this
judgment; that the State Government should also keep in mind that no leases to
any of the parties (other than OMC and IDCOL) could be granted unless either
the areas so proposed to be leased out are deserved and thrown open to
appellants from the public or unless the Central Government, after considering
the recommendations of the State Government, for reasons to be recorded in
writing considers a relaxation in favour of any of the parties necessary and
justified. [96B- E] & CIVIL APPELLATE JURISDICTION: Civil Miscellaneous
Peti- tion Nos. 16435-37 of 1987.
Writ Petition No. 14116 of 1984.
Article 32 of the Constitution of India).
Leave Petition (C) Nos. 5163/88 with 8574 of 1989 read with I.A. No. 1/89.
Parsaran, Dr. L.M. Singhvi, G. Ramaswamy, V.C. Maha- jan, Harish N. Salve,
Rajan Mahapatra, Ms. Lira Goswami, S. Sukumaran, C. Mukhopadhyay, A. Subba Rao,
A.D.N. Rao, P.K. Mehta, Ms. Mona Mehta, Girish Chandra, S.C. Patel, T. Sriku-
mar, p. 36 Parmeshwaran, Bishamber Lal Khanna and M.C. Bhandare for the
Roy, Advocate General and A.K. Panda for the State of Orissa.
Judgment of the Court was delivered by RANGANATHAN, J. THE "DRAMATIS
PERSONAE" All these matters are in the nature of off shoots of a basic
controversy raised in W.P. No. 14116/84 which was "disposed of" by
the orders of this Court dated 30.4.87 and 6.10.87. The parties are now seeking
certain clarifications and directions in relation to the orders passed by this
Court in the above writ petition. There have been several subsequent
developments having an impact on the issue origi- nally brought to this Court
in the Writ Petition (W.P.) and, at present, the matter has become very
complicated and involves the interests of a large number of parties. To give a
cogent narration of the necessary facts, it is best to start with an
enumeration of the various parties with whom we are concerned in the matters
which are being disposed of by this judgment.
writ petition as well as the connected matters arise out of applications for
grant of rights for the mining of chrome ore or Chromite in the State of
Orissa. Chrome ore is one of the minerals specified in the First and Second
Sched- ules to, and not a "minor mineral" within the meaning of s.
3(f) of, the Mines and Minerals (Development and Regulation) Act, 1957. The
right to grant mining rights in respect of this mineral is vested in the State
Government, subject, as we shall see later, on control by the Union of India.
The State of Orissa (S.G.) and the Union of India (C.G.) are, therefore, the
primary respondents in this litigation. On the other side are ranged a number o[
applicants for the mining rights we have referred to above. These are:
Indian Metals and Ferro-Alloys Limited (IMFA);
Ferro Alloys Corporation Limited (FACOR);
Orissa Cements Limited (OCL);
Orissa Industries Limited (ORIND);
Orissa Mining Corporation (OMC);
Industrial Development Corporation of Orissa Ltd.
and (7) Shri Mantosh Aikath.
above, the first four are companies in the private sector, the next two are
public sector corporations owned substantially by the State of Orissa and the
last, a private individual.
principal question for decision before us is as to whether all or any of the
various parties referred to above are entitled to obtain leases for the mining
of chrome ore (hereinafter referred to as MLs) and, if so, to what extent.
particular, we are concerned with an area consisting of five blocks referred to
in para 8 of the W.P. to which reference will be made later. The controversy
primarily turns round applications made in respect of these blocks by IMFA,
FACOR, AIKAT and OCL. ORIND also lays claim to mining rights in respect of a
portion of these blocks. It has filed a special leave petition which is
separately numbered as S.L.P. No. 8574 of 1989 and is directed against an order
dated 7.4.89 passed by the Orissa Government rejecting an application made by
the company on 5th July, 1971. FACOR has also preferred S.L.P. No. 5163 of 1988
from an order of the High Court of Orissa dated 11.11.1987 dismissing a writ
petition filed against an order of rejection by the S.G. of an application made
by it on 18.7.1977 for grant of a ML which was confirmed by the C.G.
already mentioned, this Court 'disposed' of W.P. No. 14116/ 1984 by its order
of 30.4.87. We shall have to con- sider this and several other orders passed by
this Court in the course of the hearing more closely but a brief reference may
be made here to the resultant effect thereof. When this Court found that there
were a large number of applications for MLs over varying extents of land in the
areas in ques- tion, this Court decided that the respective merits of the
applications' could not be gone into by this Court but that they should be
considered by a responsible officer of the C.G. Accordingly, by the orders
above referred to, this Court referred the entire controversy to the Secretary
to the Government of India in the Ministry of Mines (Shri B.K. Rao,
"Rao", for short) for a detailed consideration of the claims of the
various parties. When the matter went to Rao, OMC and IDCOL also 38 put forward
claims that the public sector units in the State of Orissa were entitled to the
grant of mining rights in the State to the exclusion of all private parties
inasmuch as there was a reservation in their favour by an appropriate
notification issued by the State Government. The other parties objected to the
intervention of the OMC and IDCOL at, what they alleged was, a belated stage of
the proceed- ings. However, on applications made by OMC and IDCOL, this Court
directed that the claims of these two public sector undertakings would also be
examined by Rao. Eventually Rao, after considering the claims of all parties,
reduced his conclusions in the form of a report dated 1st February, 1988. in his report, Rao accepted the
claim of reservation made on behalf of the OMC and the IDCOL. Nevertheless it
appears that, bearing in mind certain interim orders passed by this Court in
the various applications made to it during the pendency of the writ petitions,
Rao came to the conclu- sion that only three of the parties other than the two
public sector undertakings should be granted leases to the extent mentioned by
him. Broadly speaking, Rao accepted partially the claims of IMFA, FACOR and
AIKATH. He rejected the claims made by ORIND and OCL. He accepted the claim of
the public sector undertakings but he recommended for them leases in respect of
only the balance of the lands left, after fulfilling the claims of the others
which he had accepted.
have now been filed before us which, inter alia, seek directions on Rao's
report. There has been a good deal of contest before us as to the precise legal
character of the report submitted by Rao. One suggestion is that Rao was
nothing more than a commissioner appointed by the Court to examine the claims
of the various parties and to submit a detailed report thereon. It is submitted
that this report having been received we should pass such orders thereon as we
may consider appropriate. A second approach suggested is that the Rao report
should be taken to be the decision of the Central Government, which it is now
for the State Gov- ernment to implement, leaving it open to any aggrieved party
to take such appropriate proceedings as may be available to them in law for
successfully challenging the findings reached by Rao. A third line of argument
which has been addressed before us, particularly by the State of Orissa, the
OMC and the IDCOL, is that Dr. Rao's report suffers from a fundamental defect
in that he has completely ignored the reservation made by the State Government
in favour of the public sector. According to them, Rao was not right in
suggesting the grant of leases to any of the other parties and should have
simply left it to the State to exploit the mines in public sector, including
inter alia, the OMC and IDCOL. A fourth 39 stance taken up by the State
Government may also be men- tioned here, The learned Advocate General for the
State made a statement before us that, without prejudice to a conten- tion that
the Rao report suffered from the fundamental defect referred to above, the
State Government was prepared to abide by the findings of Rao provided this
Court decides to accept the same in toto without any modifications. He
clarified that this is not because they think the Rao report is' correct. On
the other hand they have got several objec- tions to the validity and
correctness of Dr. Rao's report.
having regard to the interim orders passed by this Court and having regard to
the fact that what Rao has done is virtually to implement various orders passed
by this Court during the pendency of the writ petition, the State Government,
without prejudice to its contentions in relation to the Rao report, is prepared
to abide by it. However, the learned Advocate General said, the State
Government wish to make it clear that if, for some reason, this Court does not
accept the Rao Report in toto, then the State Government would like to put
forward their contentions against the report of Dr. Rao. In that event the
State Government should be given the liberty to attack Dr. Rao's report and
urge all contentions that are open to it in respect of the grant of mining
leases relating to chrome ore in the State of Orissa.
above stance understandably, is not acceptable to OCL and ORIND or, indeed,
even to OMC and IDCOL who have got nothing at the hands of Rao. IMFA and FACOR
are substantial- ly satisfied with the report given by Dr. Rao (except for
certain minor contentions which they are prepared to give up for the present,
with liberty to make representations to the State Government) but they also
wish to make it clear that, in case the Rao report is not to be accepted by
this Court, they would also like to put forward all their contentions so that
their case may not go by default. In that event, in particular, they would like
to attack the reservation plea urged by the S.G., OMC and IDCOL both as belated
as well as on merits. AIKATH's submission is that he is a small opera- tor who
discovered the mines and that Rao's recommendation for the grant of a ML in his
favour in respect of a small extent of land should not be disturbed by us. We
have only broadly set out here the attitudes of the various parties to the Rao
report and shall discuss their contentions later in detail. In the light of
these various contentions, we have to determine the legal character of the Rao
report and decide whether the findings of Rao are to be given effect to in toro
or are to be modified and, if so, in what respects.
dealing with these questions and even setting out the details of the claims of
the various parties and the material they placed 40 before Rao to substantiate
their claims, it will be useful to survey the relevant statutory provisions
relating to the grant of mineral concessions of the nature we are concerned
with here. This we shall at once proceed to do.
RELEVANT STATUTORY PROVISIONS (a) Constitution: Article 297 of the Constitution
of India unequivocally declares that 'all lands, minerals and other things of
value underlying the ocean ..... shall vest in the Union and be held for the
purposes of the Union'. Arti- cle 298 defines the extent of the executive power
of the Union and of each State thus:
Power to carry on trade, etc.--The executive power of the Union and of each
State shall extend to the carrying on of any trade or business and to the
acquisition, holding and disposal of property and the making of contracts for
that-- (a) the said executive power of the Union shall, in so far as such trade
or business or such purpose is not one with respect to which Parliament may
make laws, be subject in each State to legislation by the State; and (b) the
said executive power of each State shall, in so far as such trade or business
or such purpose is not one with respect to which the State Legislature may make
laws, be subject to legislation by Parliament." The Union and the States
have both been vested with powers to legislate in respect of mining rights
under the Seventh Schedule to the Constitution. The respective rights of the Union
and the States in this regard are contained in the following entries in the
1, Entry 54 Regulation of mines and mineral development to the extent to which
such regulation and development under the control of the Union is declared by
Parliament by law to be expedient in public interest.
List H, Entry 23 Regulation of mines and mineral development subject to the
provisions of List I with respect to regulation and develop- ment under the
control of the Union.
Act: In exercise of the above powers, the Union legisla- ture has enacted the
Mines and Minerals (Development & Regulation) Act, 1957 (hereinafter
referred to as 'the Act'). The Act has been substantially amended and several
drastic changes introduced in 1986 with a view, inter alia, to prevent
unscientific mining, remove bottle-necks and promote speedy development of
mineral based industries. We are concerned only with the provisions relating to
the grant of mining leases and we may proceed to consider the same.
of the Act contains the declaration referred to in Entry 54 referred to above.
Declaration as to expediency of Union control--It is hereby declared that it is
expedient in the public interest that the Union should take under its control
the regulation of mines and the development of minerals to the extent
hereinafter provided." With this declaration, the Act proceeds to
circumscribe the extent to which the regulation of mining rights in the States
should be subject to the control of the Union. We may now proceed to refer to
the relevant provisions of the Act in relation to minerals like "chrome
ore", which may be described, for convenience, as "major
of the Act provides as follows:- "No person shall undertake any
prospecting or mining opera- tion in any area except under and in accordance
with the terms and conditions of a prospecting licence or as the case may be, a
mining lease granted under this Act and the rules made thereunder.
prospecting licence or mining lease shall be granted otherwise than in
accordance with the provisions of this Act and the rules made thereunder."
Sections 10 and 11 outline the procedure for obtaining a prospecting 42 licence
(PL) or a mining lease (ML). They read thus:
Application for prospecting licences or mining leases:
application for a prospecting licence or a mining lease in respect of any land
in which the minerals vest in the Government shall be made to the State
Government con- cerned in the prescribed form and shall be accompanied by the
Where an application is received under sub-section 1 there shall be sent to
applicant an acknowledgement of its form.
receipt of an application under this section, the State Government may, having
regard to the provisions of this Act and any rules made thereunder, grant or
refuse to grant the licence or lease."
Preferential right of certain person: (1)Where a pros- pecting licence has been
granted in respect of any land, the licensee shall have a preferential right
for obtaining the mining lease in respect of the said land over any other per-
XXX XXX (2) Subject to the provisions of sub-section (1), where two or more
persons have applied for a prospecting licence or a mining lease in respect of
the same land, the applicant whose application was received earlier shall have
a prefer- ential right for the grant of the licence or lease as the case may be
over an applicant whose application was received later:
that where any such applications are received on the same day, the State
Government, after taking into consideration the matters specified in subsection
(3), may grant the prospecting licence or mining lease, as the case may be, to
such one of the applicants as it may deem fit.
The matters referred to in sub-section (2) are the following:
any special knowledge of, on experience in, prospecting operations or mining
operations as the case may be possessed by the applicant;
financial resources of the applicant;
nature and quality of the technical staff employed or to be employed by the
other matters as may be prescribed.
Notwithstanding anything contained in sub-section (2) but subject to the
provisions of sub-section (1), the State Government may for any special reasons
to be recorded and with the previous approval of the Central Government. grant
a prospecting licence or a mining lease to an applicant whose application was
received later in preference to an applicant whose application was received
earlier." We may next to refer to S. 17A which has been inserted in the
Act by the 1986 amendment. It reads thus:
17-A: Reservation of area for purposes of conservation --(1) The Central
Government, with a view to conserving any mineral and after consultation with
the State Government may reserve any area not already held under any
prospecting licence or mining lease and, where it proposes to do so, it shall,
by notification in the Official Gazette. specify the boundaries of such area
and the mineral or minerals in respect of which such area will be reserved.
The State Government may, with the approval of the Central Government, reserve
any area not already held under any prospecting licence or mining lease, for
undertaking prospecting or mining operations through a Government compa- ny or
corporation owned or controlled by it or by the Cen- tral Government and where
it proposes to do so, it shall by notification in the Official Gazette, specify
the boundaries of such area and the mineral or minerals in respect of which
such areas will be reserved.
Where in exercise of the powers conferred by subsection (2) the State
Government undertakes prospecting 44 or mining operations in any area in which
the minerals vest in a private person, it shall be liable to pay prospecting
fee, royalty, surface rent or dead rent, as the case may be, from time to time
at the same rate at which it would have been payable under this Act if such
prospecting or mining operations had been undertaken by a private person under
prospecting licence or mining lease.
of the Act declares that any prospecting licence or mining lease granted,
renewed or acquired in contravention of the provisions of this Act or any rules
or orders made thereunder shall be void and of no effect. S. 30 confers
revisional powers on the C.G. It reads:
Central Government may, of its own motion or on appli- cation made within the
prescribed time by an aggrieved party, revise any order made by the State
Government or other authority in exercise of the powers conferred on it by or
under this Act." These are the provisions of the Act relevant for our pur-
Rules: Turning now to the rules framed under the Act which also have a material
bearing on the present issues, they are contained in Chapter IV of the Mineral
Concessions Rules, 1960 which deals with the grant of mining leases in respect
of land the minerals in which vest the Government.
22 outlines the procedure in respect of applications for MLs. It requires the
application to be made in a pre- scribed form and accompanied by a fee of
Rs.500 and certain documents and particulars. Rules 24 and 26' prescribe the
procedure for disposal of such applications. Sub-rules (1) and (3) of rule 24
are relevant for our present purposes and are extracted below:
Disposal of application for mining lease:-(1) An appli- cation for the grant of
a mining lease shall be disposed within twelve months from the date of its
XXX XXX (3) If any application is not disposed of within the period specified
in sub-rule (1), it shall be deemed to have been refused.
XXX XXX 45 Under rule 26, the S.G. may, after giving an opportunity of being
heard and for reasons to be recorded in writing and communicated to the
applicant, refuse to grant or renew a mining lease over the whole or part of
the area applied for.
31 prescribes that where an order for grant of a lease is made, a lease deed
has to be executed within a period of six months of the order or such further
period as the S.G. may allow in this behalf. Failure to do this, if
attributable to any default on the part of the appellant, could entail the
revocation of the lease. The lease shall commence from the date of the lease
next turn to rule 54 which deals with applications for revision to the C.G. It
reads, in so far as is relevant for our purposes:
Application for revision:-(1) Any person aggrieved by any order made by the
State Government or other authority in exercise of the powers conferred on it
by the Act or these rules may, within three months of the date of communication
of the order to him, apply to the Central Government in triplicate in Form N,
for revision of the order. The appli- cation should be accompanied by a
treasury receipt showing that a fee or' Rs.500 has been paid into a Government
treas- ury or in any branch of the State Bank of India doing the treasury
business to the credit of Central Government under the head of account
'128-Mines and Minerals-Mines Depart- ment-Minerals Concession Fees and
that any such application may be entertained after the said period of three
months, if the applicant satisfies the Central Government that he had
sufficient cause for not making the application within time.
xxx xxx (4) On receipt of the application and the copies thereof, the Central
Government shall send a copy of the application to each of the parties
impleaded under sub-rule (2), speci- fying a date on or before' which he may
make his representa- tions, if any, against the revision application.
the purposes of this rule, where a State 46 Government has failed to dispose of
an application for the grant of renewal of a prospecting licence or a mining
lease within the period specified in respect thereof in these rules, the State
Government shall be deemed to have made an order refusing the grant or renewal
of such licence or lease on the date on which such period expires.
55 provides that the C.G., after getting the comments of the S.G. and other
parties on the application and after giving each of them an opportunity to put
forward their comments on the stand taken by the others, "may confirm,
modify or set aside the order (of the S.G.) or pass such other order in
relation thereto" as it "may deem just and proper". Three more
rules need to be set out which deal with the topic of reservation. Rules 58, 59
and 60, before 1980, were in the following terms:
Availability of areas for regrant to be notified--(1) No area which was
previously held or which is being held under prospecting licence or a mining
lease so the case may be or in respect of which the order granting licence or
lease has been revoked under sub-rule (1) of the rule 15 or sub-rule (1) of
rule 31, shall be available for grant un- less- (a) an entry to the effect is
made in the register referred to in sub-rule (2) of rule 21 or sub-rule (2) of
rule 40, as the case may be, in ink; and (b) the date from which the area shall
be available for grant is notified in the Official Gazette at least thirty days
The Central Government may, for reasons to be recorded in writing, relax the
provision of sub-rule (1) in any special case.
Availability of certain areas for grant to be notified--In the case of any land
which is otherwise avail- able for the grant of a prospecting licencor a mining
lease but in respect of which the State Government has refused to grant a
prospecting licence or a mining lease on the ground that the land should be
reserved for any purpose, the State Government, shall, as soon as such land
becomes again avail- able for the grant of prospecting licence or mining lease,
grant the licence or lease after following the procedure laid down in rule 58.
Premature applications--Applications for the grant of a prospecting licence or
a mining lease in respect of the areas in which-- (a) no notification has been
issued under rule58 or rule59;
if any such notification has been issued the period specified in the
notification has not expired. Shall be deemed to be premature and shall not be
entertained and the fee, if any, paid in respect of any such application shall
be refunded." G.S.R. 146 dated 16th January, 1980 substantially amended
these rules. After this amendment, Rule 58 reads:
Reservation of areas for exploitation in the public sector, etc.: The State
Government may, by notification in the Official Gazette, reserve any area for
exploitation by the Government, a Corporation established by any Central, State
or Provincial Act or a Government company within the meaning of Section 6 17 of
the Companies Act, 1956 ( 1 of 1956)".
59 is relevant only in part. It reads:
Availability of area for regrant to be notified: (1) No area-- XXX XXX XXX (e)
which has been [reserved by the State Government] Sub- stituted for the words
"reserved by the Government" by G.S.R. 86(E) w.e.f. 10.2.87 under
Rule 58, [or u/s 17A) These words were inserted by G.S.R. 146(E) dated 16.1.80
w.e.f. 2.2.80 shall be available for grant unless-- (i) an entry to the effect
that the area is available for grant is made in the register referred to in
sub-rule (2) of Rule 21 or sub-rule (2) of Rule 40 as the case may be, in ink;
and (ii) the availability of the area for grant is notified in the Official
Gazette and specifying a date (being a date not 48 earlier than thirty days
from the date of the publication of such notification in the Official Gazette)
from which such area shall be available for grant:
XXX XXX (2) The Central Government may, for reasons to be recorded in writing
relax the provisions of sub-rule (1) in any special case.
60 deals with "premature applications". It reads:
Premature applications: Applications for the grant of a prospecting licence or
mining lease in respect of areas whose availability for grant is required to be
notified under Rule 59 shall if,- (a) no notification has been issued under
that rule: or (b) where any such notification has been issued, the period
specified in the notification has not expired, shall be deemed to be premature
and shall not be entertained, and the application fee thereon, if any paid,
shall be refunded.
above are the relevant rules governing application for, and grant of, leases,
revision petitions and reservation of areas in the light of which the issues in
the present case have to be considered. We shall now proceed to give the
details of the various applications for MLs preferred by the parties before us.
APPLICATIONS OF THE PARTIES Though it was the IMFA which came to this Court
with a writ petition, there were a number of other applications for grant of
MLs pending before the State Government. The broad details of these
applications are set out below:
IMFA (a) Previous Histor),: IMFA made five applications for grant of mining
lease in respect of five blocks of land as per the following details (which are
hereinafter referred to as items 1 to 5 respectively):
Area Date of Area Village & District No. Applica- applied for tion
1.7.1981 634.359 Ghotarangia and other villages 8.7.1981 hects. (Dhankanal
23.6.1981 142.000 Ostapal Village, SukhindaTehsil hects. (Cuttack Distt. )
6.7.1981 108.860 Kamarada and padar villages hects. (Cuttack Distt. )
9.9.1981 37.008 Ostapal and Gurjang villages, Sukhinda 10.9.1981 hects. Tehsil
24.11. 1981 147.693 Ostapal and Gurjang villages, Sukhinda hects. Tehsil (Cuttack Distt. )
S.G. did not dispose of these applications within the prescribed period of
twelve months. They were, there- fore, deemed to have been rejected under rule
24(3). IMFA applied to the C.G. for the revision of these deemed rejec- tion
orders of the S.G. The C.G. set aside the deemed rejec- tion orders and
directed the S.G. to dispose of the matter on merits within a period of 200
days. However, the S.G. did not take any action on the applications of the IMFA
within the period of 200 days. IMFA made a representation to the Central
Government but the Central Government gave no relief on the ground that it had
become functus officio and had no jurisdiction to issue further directions to
the State Gov- ernment. Thereupon IMFA filed Writ Petition No.14116 of 1984 in
this Court. IMFA alleged, that while its applications were kept pending, the
S.G. had granted leases in favour of FACOR and thus discriminated against IMFA.
It prayed for the issue of a writ of mandamus to the S.G. to grant leases to
Subsequent developments: This Court, on 27.9.84 passed an order (extracted
later) directing the S.G. to consider IMFA's applications by 23.10.84 and restraining
it from granting MLS to any one else in the meanwhile. FACOR moved for a recall
of this order. The Court passed an inter- im order on 18.10.84 holding over the
implementation of the earlier order in regard to grant of lease to IMFA and
call- ing for the records. However, it appears, on 21.11.84, the S.G. had
agreed to grant a ML in favour of AIKATH in respect of 140 acres out of 147.69
hectares covered by item No. 5 above. On 26.12.84, the S.G. filed a counter
affidavit pointing out: (a) that there was a reservation of the 50 areas for
the public sector and (b) that except item 1, the areas covered by the other
applications overlapped areas covered by earlier applications of OMC IDCOL and
it was stated, on due consideration in the light of the observations of this
Court, the S.G. had tenta- tively decided to grant a ML to IMFA in respect of
634.359 hectares in item 1. On 27.11.84, IMFA stated that it was not interested
in item 1 which, according to it contained only low grade ore and was not
commercially viable unless IMFA was given, at the same time, areas bearing high
quality ore which could be blended with the low grade ore. It stated that it
was willing to accept M.L. in respect of items 2, 3 and either item 4 or half
of item 5. On 2.1.85. the S.G.
formal orders rejecting IMFA's application in respect of items 2 to 5 of the
list. This was on the ground, so far as item 2 was concerned, that the area
fell within the reserved areas, that there were prior applications of OMC &
FACOR in respect of the areas and that the S.G. had already agreed to lease out
item 1 to IMFA. On 15.2.85, the S.G. informed IMFA that, on reconsideration it
had recommended grant of MLs to it in respect of 139.37 hectares (out of 142
hectares of item 2) and the entire area of item 3. On 18.2.85, the S.G.
submitted in court that it had already agreed to grant 140 acres in item 5 to
AIKATH and the rest to FACOR as per compromises in the writ proceedings pending
in the Orissa High Court. The compromise with AIKATH had been placed before. and
accepted by the Orissa High Court on 4.12.84 but the final terms and conditions
were proposed on 18.2.85 and, accepted on 19.2.85. In respect of FACOR also,
the compromise agreeing to lease to it 596 acres (out of which 180 acres were
covered by item 5 of IMFA's applica- tion) had been filed in the Orissa High
Court only on 18.2.85. The validity of these allotments was challenged by IMFA
before this Court. Without going into the merits or' this controversy, this Court
on 28.2.85. passed an order directing the S.G. to grant a lease to IMFA in
respect of item 3 in full and 26.62 hectares in item 4. (This order was
objected to by FACOR and on 8.5.85 the Court passed an order directing the
grant of a lease to FACOR over 180 acres in item 5). IMFA says that it has not
been given physical possession of the areas granted to it except to an extent
of a small area of 2 hectares. The net result is that out of the five items
applied for by IMFA:
1 has been given but surrendered,
the S.G. is agreeable to give 139.37 acres out of 142 acres of item 2;
Court has directed the grant to IMFA of item 3;
item 4, this Court has directed the grant to IMFA of 26.62 out of 37.008
hectares of item 4: and
item 5, the S.G. has agreed to lease our 140 acres to AIKATH and 180 acres to
FACOR (a)Earlier History: FACOR'S applications for mining leases for chrome ore
were made on various dates between 1974 and 1978. Relevant particulars in respect
of the said applications are set out in the following table:
Sl. Village Extent Date of Date of final Particulars No. appli- final
order of of the pro- cation disposal of ceedings in revision app- High Court
Ostapal 142,000 8.7.74 29/76-12.3.76 OJC 67 of 79 Distt. hects. 315/78- 3.7.78
12.1.79 Cuttack or 359 acres
Chingudi- 749.32 8.7.74 21/76-21.4.76 OJC 66 of 79 pal Distt. hects.
Samole 248.447 6.8.74 182/77-29.8.77 OJC 72 of 79 Distt. hects. 15.1.79
Dhankanal (618 acres)
Bangur 40.47 22.6.77 432/78-17.8.78 OJC 1309 of Distt. hects. 80 21.1.80
Keonjhar (100 acres)
Ostapal & 312.42 7.6.78 528/79-21.9.79 OJC 2036 of Gurjang hects. 579/80-26.9.80
Kamarda 108 6.10.78 17/80- 1.1.80 OJC 1028 of Distt. hects. 513/82-29.10.82
11.5.83 All the six applications made by FACOR were rejected by the S.G.
Against the revision orders of the C.G. affirming the orders of the S.G.. FACOR
filed writ petitions in the High Court of Orissa and these writ petitions are
pending dispos- al there [except the one re: item 4 which was dismissed by the
High Court on 11.11.87 and is the subject matter of S.L.P. (C) 5163 of 1988
before us. In this sense, the appli- cations of FACOR were alive and awaiting
disposal when IMFA filed W. P. 14 116 of 1984 in this Court.
Subsequent developments: As we shall mention later. FACOR had obtained leases
over 486 acres at Barua in Keonjhar district and 280 acres at Kathpal over
Dhankanal district in 1971-72. The above applications were rejected and the
writ petitions filed against the rejections were pending in the Orissa High
Court when the writ petition was filed. It has been stated that the S.G. had
entered into a compromise with FACOR on 18.2.85 agreeing to grant a mining
lease in its favour in respect of 596 acres out of 772 acres applied under item
no. 5 above on condition that FACOR gave up its claim in respect of the balance
of the area of 702 acres as well as the claim made in the other five applica-
tions. It may be added that on 18.5.85 this Court passed an interim order
directing that FACOR be given a lease in respect of 180 acres out of the 596
acres covered by the compromise dated 18.2.85. A lease was accordingly executed
by the S.G. in favour of FACOR on 16.8.85 after obtaining the approval of the
C.G. to the lease under s. 5(2) of the Act (before its amendment in 1986) as
well as to the relaxa- tion under rule 59(1) of the Rules. The net result,
there- fore. is that, though FACOR made six applications, it had agreed to give
up all of them in lieu of a ML for 596 acres out of item 5 out of which a lease
in respect of 180 acres has already been obtained and is being exploited by
MANTOSH AIKATH (a) Previous History: This gentleman had obtained a lease from
the Raja Sri Pitamber Bhupati Harichandan Mohapa- tra, the proprietor of
Sukhinda Estate on 17.10.52 (regis- tered on 28.10.52) for a period of 20 years
in respect of 640 acres situated in village Gurjang in Cuttack District.
12.1.53 the State Government (in whom the estate of the former Zamindar had
come to vest w.e.f. 27.11.52 under the Orissa Estates Abolition Act) issued a
notice terminating the lease. Mr. AIKATH made representations against the
termination. It is said that, ultimately, a compromise was reached between him
and the S.G. whereunder it was agreed that a lease in respect of half of the
area covered by the original lease deed on the southern side could be retained
by him. Thereupon, it is said, he filed a formal application on 25.5.54 for a
mining lease in respect of 320 acres. But this was rejected on the ground that
the S.G. preferred to exploit the area in public sector. A revision petition to
the C.G. was rejected on 9.2.72. Mr. AIKATH filed a writ petition in the High
Court of Orissa impleading the C.G. and the S.G. as parties. The Orissa High
Court on 18.4.1984 set aside the order of the C.G. and directed the C.G. to
dispose of Mr. 53 AIKATH'S application afresh. The C.G., in turn, set aside the
order of the S.G. on 3.8.78 and directed the S.G. to decide the application of
the party afresh, after taking into account the plea of the party that the area
could not be reserved for exploitation in the public sector. However, no orders
were passed by the S.G. The petitioner, therefore.
filed a revision application before the C.G. which passed orders on 12.12.79
directing the State Government to pass a speaking order and dispose of the
application on merits. The S.G. by an order dated 17.1.80, rejected the
application. Mr. AIKATH filed a writ petition in the High Court and this was
pending when W.P. 14116/84 was filed here by IMFA.
Subsequent Development: On 21.11.84, AIKATH and 'the S.G. entered into a
compromise under which the former was to be granted a lease in respect of 140
acres situated on the eastern side of the 320 acres referred to earlier. This
compromise was accepted by the High Court of Orissa on 4.12.84. Thereafter the
S.G. offered a lease of 140 acres on certain terms and conditions and these
were accepted by AIKATH on 19.2.85. This was reported by the S.G. to this Court
but no orders were passed by this Court, and no ML has been executed, in favour
of AIKATH. It may be mentioned that one of the areas applied for by IMFA on
24.11.81 covered the area which. according to AIKATH, had been in his
possession all along.
ORISSA INDUSTRIES LIMITED (ORIND) (a) Previous History.' ORIND made an
application for mining lease on 5.7.71. It applied for mining leases over an
area of 1129.25 hectares in the villages of Telangi, Patna.
and Gurjang in District Cuttack. This application was rejected by
the S.G. on 23.10.73 on the ground that the area was reserved for exploitation
in the public sector. It is stated that subsequently on a representation made
by ORIND on 15.12.73, the S.G. recommended to the C.G. that a lease in favour
of ORIND may be granted in respect of 749.82 out of 1129.25 hectares applied
for. However. this recommen- dation was withdrawn (as will be discussed later).
The C.G., by an order dated 23.2.77, directed the S.G. to pass a speaking order
on the application but the S.G. did not comply with this direction. The
company, therefore, filed writ petition. O.J.C. 1585/198 1 in the High Court of
Oris- sa. This writ petition was pending when W.P. 14116/84 was filed here.
be here mentioned that one of the contentions of ORIND 54 before us is that it
had also applied on 5.7.71 lot a lease of mining rights in respect of 446.38
hectares in village Sukrangi in Distt. Cuttack. That had been rejected but a revision petition had been filed before
the C.G. against the said rejection. The S.G.. it is said. while Lending its
comments on 26.2.74 to the C.G. on the ORIND's revision petition. had
reiterated that their revision petition may be rejected as S.G. had already
decided to grant ORIND a lease of 749.82 out of the area of 1129.25 hectares
applied for by it.
Subsequent developments: It is stated that the S.G. has subsequently withdrawn
its recommendations for the area of hectares. The S.G. rejected ORIND's
application for 1129.25 hectares by an order dated 7.4.89. The contents of the
order are discussed later It concludes:
view of the above facts and pendency of Writ Petition No. 14116 of 1984 before
the Hon'ble Supreme Court of India. it is
not possible for the S.G. at this stage to pass any order on the mining lease
application dated 5.7. 1971 of ORIND and. accordingly the said application is
has preferred S.L.P. No. 8574/89 from this order of the S.G. So far as the
other application of ORIND is con- cerned. no information has been given to us
as to what orders. if any. the C.G. has passed on ORIND'S revision or as to
what steps the applicant has taken subsequently.
ORISSA CEMENT LIMITED (OCL) (a) Previous History:
company's grievance is that it has been filing applications for mining rights
in respect of chrome ore right from the year 1961 but none of the applications
have been considered by the State Government on the plea that the areas applied
for had been reserved for exploitation in the public sector. Further
applications were made by OCL in respect of following areas:- 55 SI. Date Area
Date of Orders Orders Remarks No. of and Revis- passed passed Appeal Village sion of by the by the appli- State Central cation, Govt. Govt., if
any. if any.
3. 4. 5. 6. 7.
11.5.70 354,505 3.5.71 5.2.71 3.6.72 This area Hectare, The area was free,
Gurjang is reser- previously & Telan- ved by held by gi, P.S. the State
Aikath for Sukinda Govt. for 320 Acrs.
exploita- The State Cuttack tion in Govt. has public now gran- sector. ted i.e.
in the year 1985 as per compromise petition filed be- fore High Court Ori- ssa.
M/s. Aikath-140 Acs. Factor -180 Acs.
application filed again
8.5.74 354,505 Deemed 23,277 Rejected Although Hectares Rejec- M/s.Facor's
Gurjang tion application & on 7.6.78 Ostapal was much Distt. after our Cuttack application they were granted M/L
by S.G.vide No.6844 dated 24.5.85 In fairness S/G should have given us this
deci- sion taken by them earlier, 50% of the area should be released to us
keep- 56 ing in view the principles of natural justice, as recommended by State
in their letter No17410 dated 26.2.74, to centre for 142 Acrs. to Orissa
15.5.70 226.22 1.5.72 10.2.71 1.6.72 Although Ferro Hecta- on the Alloys Corpo-
res same ration have no Boula plea, unit in Orissa & Soso reser- but have a
Distt. ved manufacturing Keonjher for state unitin Andhra exploita- the Central
tion Govt. passed orders as un- der in 1971-72 over an area of 187.03 hects. against
strong opposi- tion by State Govt.:
the Central Govt.
exercise of the powers conferred by Rule 58(2) of the N.C. Rules 1960 relaxed
the provision of rule 58(1) as a special case for the reason that the appli-
cants having establis 57 hed a big fac- tory for manu- facturing Fer- ro Chrome
ore, provision has to be made for procurement of raw materials for the proper
running of the factory".
on the said decision a fresh revi- sion petition was filed on 6.4.73 but the
C.G. it rejec- ted on30.11.74 although the S.G.recommen- ded:
letter No.17410-NG dated26.2.1974 for approval for grant of 142 Acrs. to O.C.L.
application filed again
10.4.74 226.22 No 6.6.75 29.8.75 The Please see re- Hectares Orders Central
marks in Sl(3) Boula were Govt. set 142 Ac. could Keonjhar passed aside the
have been gra- as re- the deemed nted. This quired rejection application by
sta- and reman- was filed pur- tute. ded the suant to the matter back Notification
to the S.G. issued by the for consi- S.G. throwing deration. open for re- grant
58 The State -vide No.38/73 Govt. on dated 5.3.74.
The State Govt rejected latter changed the appln. their decision on the plea
for working in that the public sector, area over- contrary to laps other the
decision lease area. pronounced by Our earlier Supreme Court appln. dt. as
referred to 15.3.70 in AIR. 1976 was rejec- Delhi.
but was granted to Keeping in some other view principle party i.e. of justice, FerroAlloys
50% of this Corporation area should be for a redu- released to ced area. Orissa
11.5.70 388.498 22.10.70 23.10.70 7.4.72 C.G. rejected Hectares as above the
applica- Shrhranqi tion on the & plea they did Tailangi, not like to P.S. interfere
with Sukinda. the decision District taken by the Cuttack. S.G. for keep- ing the area reserved for exploitation in
application filed again
8.5.74 388.498 Deemed 23.2.77 3.6.77 The M/s Sirajudin Hectares rej- delay was
was holding Sukrangi ection explained the area of & but rejec- 100 Ac.
under Tailangi ted becau- M.L. for 20 Distt. se of delay years from cuttack. 8.8.85 which expired in 1975.
Renewal has been refused, Sirajudin being a trader (However M/s Sirajudin &
Co., has gone in writ to Orissa High Court, which is still pen- ding) OMC has
been granted lease over 382.709 Hects.
8.5.74 7 Sq. Deemed 6.6.75 8.6.76 The This could miles rejec- Central Govt.have
been Kala- tion set aside granted to us ran- the deemed but M/s.OMS is gista
rejection working which & Ka- and reman- can be taken liapani ded to S.G.
out from them Distt. The S.G. to grant the Cuttack. rejected our property to us appln. but OMC was just granted a
permitted to free area work on ad hoc of 3 sq.km. basis. to OMC, who are
holding a lease from more than 70 sq Kms. approx. and hardly working 15/20 sq.
Kms. in different ML areas granted to M/s. OMC.
23.10.82 20.072 Dee- 14.11.83 The C.G. set hec- med aside the tares re- order
of area jec- tion 60 Bangura deemed rejec- etc. tion on Distt. 23.12.83. No
Keonjhar final order has been passed by the S.G.
23.10.82 549,1098 Dee- 14.11.83 29.12.83 as This has
Hectares med above been gran- Kalia- rej- ted to M/s. pani & ec- OMC. Gurjang
23.10.82 365.467 Dee- 14.11.82 19.12.83 This area Hecta- med as above pertains
res re- to Sl.1&2 Ostopal jec- therefore & Gur- tion the jang, remarks
etc. stated Distt. therein Cuttack. stand.
23.10.82 16.087 Dee- 14.11.83 19.12.83 As The S.G.
Hecta- med above. rejected res rej- it on Bangu- ec- 27-6-1985 ra, tion. on the
P.S. ground Soso that the Distt. area over- Keonjhar laps in full with the area
previously held by Sirajudin & Co. Re- newal was refused by StateGovt.
21.1.83 29.477 Deemed 28.3.84 Against Hectares rejec- The C.G. this rejec of
72.64 tion remanded tion we Acs. the mat- filed re- Sajana- ter back vision on
garh P.S. to 2.9.85 before C.G 61 Nilgiri S.G. Therefore it Distt. is free. It
Balascre. No should be orders granted to us have On similar been grounds the
passed. S.G. has granted.
28.6.85 558.74 No orders acres or passed by 226.14 S.G. des- hectares- pite
C.G.'s Asurbandha orders on Distt. revision kanal
27.1.86 356.70 No orders hectares passed by in Namla- S.G. Revi- bhanga sion
peti- in Karma- tion filed khya nagar before C.G. Distt. on 18.3.87 Dhankanal
The previous history as well as the latter developments are indicated in the
above columns. It will be seen, there from that the first seven and the
eleventh applications of OCL were duly disposed of before the present
litigation started and the party's grievance is that, in respect of some of
them, leases have been granted to others like IMFA, FACOR, AIKATH & OMC.
The others are pending before the S.G. after a remand by the C.G. or, in
revision, before the C.G.
thirteenth and fourteenth applications are pending before the S.G. and C.G.
ORISSA MINING CORPORATION LIMITED (OMC) OMC is a State Government undertaking.
It submitted an application for an area of 725.21 hectares in village Chin-
gripal on 30.6.82.
Though this area was within the area of 1460 sq. kms. re- served for
exploitation of chromium ore in public sector as per the State Government
notification dated 3.8.77, its application remained un-disposed of and was
deemed to be rejected on the expiry of the statutory period of one year.
C.G., by an order dated 10.10.83, on a revision filed by OMC, directed the S.G.
to dispose of the application within 200 days. The S.G., however, did not grant
OMC any lease but, instead, granted ML to IMFA on 14.3.85 in respect of 26.62
hectares which was well within the area applied for by OMC. OMC has also made
an application for mining rights regarding 108.86 hectares in
Kamrarda--Balipada villages and 220.15 hectares in Gurjang village which has
not been grant- ed. In the result, the OMC has not been granted by mining lease
despite its claim that the area in question has been reserved for exploitation
in public sector though IMFA has been given ML in respect of 26.62 acres out of
the area covered by these applications.
from the details given earlier pertaining to OCL, it will be seen that OMC has
been permitted to exploit about 382.709 Hectares in one area on an ad hoc basis
and has leases over about 70 sq. Kms. and 3 sq. Kms. in other areas.
INDUSTRIAL DEVELOPMENT CORPORATION OF ORISSA LIMITED (IDCOL) This company
submitted two applications on 11.1.83 before the S.G. for grant of mining
leases for chromium ore over an area of 740.67 hectares in village
Patna-Chingiripal and 171.73 hectares in village Gurjang. The applications were
not disposed of by the S.G. within the specified time.
C.G. set aside the deemed refusal and directed the application to be disposed
of but no decision has been taken by the S.G., apparently on the ground that
the entire dis- pute regarding grant of mining rights for chromium ore is
pending in this Court in W.P. 14116/84.
PASSED BY THIS COURT It is now necessary to refer to the various interim orders
passed by this Court in this matter because some of the parties have made a
grievance that, though their claims for leases were pending at various levels,
IMFA and FACOR have been able to obtain from this Court orders directing the
grant of leases to them and that this procedure was wholly unjustified. To
start with, it must be mentioned, the C.G., the S.G. and certain officers of
the C.G. and S.G. were impleaded as respondents 1 to 6 in the Writ Petition
with FACOR as the 7th respon- 63 dent. In the writ petition IMFA referred to
its applications in respect of five blocks of land detailed in para 8 of the
writ petition and alleged that, while the petitioner's application for a lease
in respect of the five blocks re- ferred to earlier remained pending for more
than a year for consideration in pursuance of the C.G. 's directions for its
disposal, the S.G. had granted mining leases for chrome ore in favour of FACOR
which, according to the petitioner, was similarly placed. In view of this
allegation, this Court passed a detailed and stiff interim order on 27.9.84 in
the following words after hearing the counsel for the petition- ers and the
standing counsel to the S.G.:
R.K. Mehta, learned counsel appears on behalf of Respondents Nos. 4 to 6
pursuant to the notice served upon him as Standing Counsel for those
respondents, and he asks for time in order to enable him to obtain instructions
from those respondents and to file a counter affidavit for these respondents.
We would, therefore, adjourn the Writ Petition to 30.10.84. But in the
meanwhile we would direct respondents Nos. 4 to 6 not to grant to anyone else
other than the petitioners mining lease for chromite ore in re- spect of the
areas applied for by the petitioners and form- ing the subject matter of applications
made by them as set out in paragraph 8 of the Writ Petition. Since the project
which is being set up by the petitioners is a very important export-oriented
project for which the necessary permission has already been granted by the
Govt. of India and the Consortium of Foreign Banks has already agreed to
finance the Project and it is a project which will earn considerable foreign
exchange for the country and provide employment to a large number of workmen,
we would direct the 4th respondent to consider and decide the application of
the petitioners set out in paragraph 8 of the Writ Petition on or before 23.
giving an opportunity to the petitioners of being heard in the matter. We have
no doubt that the 4th respondent will keep in view the nature and importance of
the project and its foreign exchange earning capacity, as also its potential
for providing job employment to a large number of workmen in the State of Orissa while considering and deciding the
applications of the petitioners. The 4th respondent will also take into account
the fact that similar mining leases have been given to the 7th respondent and
prima facie there does not appear to be any reason for denying the same
facility to the petitioners, for 64 otherwise the action of the 4th respondent
may be liable to be condemned as discriminatory and arbitrary and moreover the
4th respondent cannot over-look the fact that if mining lease as applied for
are not granted, the petitioners will have to import chromite and that will be
a drain on the foreign exchange resources of the country. There are matters
where national interest alone must count. It is indeed surprising that though
the Central Govt. directed the 4th respondent to dispose of the application of
the petitioners more than a year ago, the 4th respondent has not yet chosen to
dispose of the applications. We would direct the 4th respondent to carry out
the direction given by us and dis- pose of the applications of I.the.,petitioners
in the light of the observations contained in this order on or before 23.10.84.
The decision taken by the State Govt. on the application shall contain the
reasons and will be communi- cated to the petitioners and also placed before
this Court along with the Counter affidavit. The previous order made by us in
regard to the production of files will stand and the files shall be produced at
the next hearing of the Writ Petition.
Writ Petition stands adjourned to 30/10/84.
coming to know of this order, FACOR had the matter men- tioned and, after hearing
the arguments of its counsel, the Court passed an order on 18.10.84, the
material portion of which reads as under:
the application of Mr. Kapil Sibbal, learned counsel appearing on behalf of the
7th respondent, we direct that no decision shall be taken on the applications
of the petitioner until 30.10.84 unless a decision has already been taken. In
the event the decision has already been taken it shall not be implemented until
then. The files relating to the applications of the petitioner and the 7th
respondent for mining leases in respect of chromite ore shall be sent to the
Registry of this Court forthwith in a sealed cover along with a responsible
officer of the State Government so as to reach the Registry of this Court by 2
p.m. on Satur- day, 20th October, 1984." A little later, Mr. Aikath was
impleaded as respondent no. 8 and, pending the filing of a counter affidavit by
him, the Court passed the following order on 28.2. 1985:
" ..... We would direct the State Government to give to the petitioners
within 15 days from today the leases in respect of the areas of item No. 3 and
26.62 hectares area out of item no. 4 set out in para 8 of the writ petition
...... so far as the remaining controversy is concerned, we shall dispose it of
on 2.4.85 after hearing the parties." The State Government will make an
application to the Union of India within 5 days from today for the approval of
the leases and the Union of India shall grant approval to them within 10
next date of hearing viz. 8/5/85, ORIND
entered into the fray and was ordered to be made respondent no. 9 in the writ
petition. Pending further affidavits by the parties, the Court gave another
direction in the following terms:
........ the State Government will give to respondent no. 7 within 3 weeks from
today lease in respect of 180 acres in item no. 5set out in paragraph 8 of the
writ peti- tion excluding the area which the State Government propose to give
to respondent no. 8. This order... is without preju- dice to the rights and
contentions of the parties ............ The State will make an application to
the Union of India within a week from today for the approval of the lease and
the Union of India will grant its approval within a period of 2 weeks from that
the order dated 30.4.87 by which the writ peti- tion was disposed of. It needs
to be set out in full:
hearing counsel appearing for the parties we consider that the proper order to
be passed is to direct the parties who have applied for grant of mining leases
to file representations before the Secretary Ministry of Mines and Steel,
Department of Mines, Government of India within ten days from today setting out
their claims in respect of the areas covered by their respective applications.
We direct that the Secretary; Department of Mines shall consider the claims of
the various parties in respect of the areas cov- ered by their application in
the light of the observations contained in the orders already passed by the
Order dated 27th September, 1984 and 66 8th May 1985 after duly taking into
consideration the re- quirements of the manufacturing industries concerned and
decide about the question of grant of mining leases after giving an opportunity
of being heard to the parties con- cerned. Final orders in the matters should
be passed by the Secretary within a period of six weeks from today. It is made
clear that the memoranda of compromise said to have been filed in the
High.Court of Orissa will be treated as not binding either on the parties or on
the State Government and the whole question will be treated as being fully open
for fresh consideration and determination by the Secretary Department of Mines,
Government of India. The status quo as obtaining at present with regard to the
carting out of the mining operations over the areas will continue until the
representations are disposed of by the Secretary pursuant to this order within
six weeks from today. As already indicated the entire matter will be fully open
for consideration by the Secretary and the orders passed by this Court should
not be treated as final in regard to the allocation of the areas to the
different claimants. The fact that certain writ petitions are pending before
the High Court of Orissa will not in any way hamper the effective carrying out
of this order. It is needless to add that the disposal of the matter by the
Secretary should be by a reasoned order. The writ petition is disposed of on
the above terms." Sometime later, IMFA moved an application for clarification
of the Court's order dated 30.4.87. On this the following order was passed on
are several claimants for the grant of mining leases in different parts of
Orissa. This question has come up from time to time before this Court. The
first relevant order was the one dated the 28th February, 1985.
a bench consisting of P.N. Bhagwati, J. (as he then was) and V. Balakrishna
Eradi, J. directed the State Govern- ment to give to the petitioners M/S Indian
Metal & Ferro Alloys Ltd. within 15 days from today the leases in respect
of the full areas of Item No. 3 and 26.62 hectares area out or' Item No. 4 as
set out in paragraph 8 of the Writ Peti- tion. This Court further directed so
far as the remaining controversy was concerned that the same shall be disposed
of later on 67 by giving certain other consequential directions as the
petitioners might seek which it is not necessary to refer' here. It was
directed that the State Government was to make an application to the Union of
India within 5 days from the date of the order for the approval of the leases
by the Union of India and which should grant approval within ten days there from.
it appears that on 8.5.85 another order was passed by the same bench of this
Court wherein it was di- rected that the Orissa Industries Ltd. should be
joined as respondent No. 9 in the Writ Petition and respondent No. 9 would file
counter affidavit and directions were also given for filing rejoinder, if any.
It was directed that "pending hearing and final disposal of the writ
petition the State Government would give to the respondent No. 7 within three
weeks from today, lease in respect of 180 acres in Item No. 5, set out in
paragraph 8 of the writ petition the State excluding the area which the State
Government proposed to give to respondent No. 8." It was stated that this
order was made without prejudice to the rights and contentions of the parties
directions were given for hearing of the writ peti- tions.
the order with which we are directly concerned with is the order dated the 30th
April, 1987 which was passed by a bench consisting of Hon'ble V. Balakrishna
Eradi, J. and one of us G.L. Oza, J. The said order is set out in paragraph 2
of the C.M.P. Nos. 16435-37/87. It is not necessary to set out in detail the
order. It may be noted that the Court directed that the proper order to be
passed was to direct the parties who had applied for grant of mining |eases to
file representations before the Secretary, Ministry of Mines and Steel, Department
of Mines; Government of India within ten days from that date setting out their
claims in respect of the areas covered by their respective applications. This
Court directed the Secretary Department of Mines to consider the claim of the
various parties in respect of the areas covered by their applications in the
light of the observations contained in the orders already passed by this Court,
namely, the orders dated the 22nd September, 1984 and the 8th May, 1985 after
duly taking into consideration the requirements of the manufacturing Indus-
tries concer- 68 ned and decide about the question of grant of Mining Leases
after giving an opportunity of being heard to the parties concerned.
Thereafter, the present applications have been made by different claimants
seeking for directions for being added for consideration by the Secretary
subject to their existing rights under the existing leases and grant of future
leases. Mr. Kapil Sibbal, counsel appearing for the respondent No. 7 and Dr.
Gauri Shankar counsel appearing for the applicant submitted that there are
existing leases in their favour which cannot be entertained (sic) by any order
passed by the Secretary and they are entitled to work out their full rights. On
the other hand the Orissa Mining Corporation as well as Industrial Development
Corporation Orissa are also claiming for grant of Mining leases includ- ing
respondent No. 8 who is alleged to have found out the mines. In our opinion the
proper order would be to pass order in terms of the order passed by this Court
claims of the.different claimants including Mr. Sibal's clients as well as Dr.
Gauri Shankar's should be considered in accordance with law by the Secretary in
making his con- siderations. The Secretary should bear in mind the previous
orders made in their favour and the previous leases and the rights, if any,
granted therefrom and their consequences.
the public benefit and public interest involved and proper exploitation of the
mines should be borne in mind. Bearing these facts it is directed that the
Secretary should arrive at a just, equitable and objective decision and send a
report to this Court within three months on receipt of the copy of the order
within a fortnight from today. The Secretary should only consider the
applications of those who had existing leases applications at the time when the
order of 30.4.87 was made and not of those who had no existing leases
applications on 30.4.87. The copy of the report to be made shall be supplied to
the parties." It is in pursuance of this order Rao has heard the parties
and submitted the report which has now been placed before us for further
PENDING APPLICATIONS It is necessary, to clear the ground, to refer to a number
of applications made by the various parties subse- quent to the order of this
Court dated 30.5.87:
By C.M.P. No. 13347/87, FACOR pointed out that a lease in respect of 180 acres
(being part of item 5) had been granted to it by the S.G. on 13.8.85 in
pursuance of this Court's order dated 8/5/85. It claimed that it had made
substantial investments, engaged a huge labour force and started mining in this
area. It was disturbed by the fact that OMC and IDCOL had suddenly entered into
the picture and claimed before Rao that they were entitled to leases on the
basis of reservations. According to the applicant, only the parties to the writ
petition could be heard by Rao and OMC and IDCOL should not be permitted to
join the proceedings before Rao and allowed to disturb the leases directed to
the given to it and IMFA by the orders dated 28.2.85 and 8.5.85.
second point taken in the application was this:
That it is submitted that the order dated 30.4.87 does not make it clear as to
under what statutory authority the Secretary to the,Government of India shall
dispose of the representations made by the various parties to the writ
petition. This matter requires to be clarified by this Hon'ble Court".
application was opposed by the OMC and the IDCOL. The Court, by its order dated
6.10.87, rejected the first re- quest and allowed OMC and IDCOL to participate
in the pro- ceedings before Rao; it was directed that the claims of all parties
whose applications for lease were subsisting on 30.4.87 should be heard by Rao.
It was, however, clarified that in arriving at his conclusions, the Secretary
should bear in mind the previous orders made in favour of IMFA and FACOR, the
previous leases and rights granted to them and their consequences. The second
aspect to which the applica- tion referred was, however, not clarified.
second application of FACOR (C.M.P. 22588/77) was directed primarily at the
IMFA. It was submitted here that the order dated 28/2/85 needed to be recalled
and FACOR allowed to put forward claims in respect of the areas di- rected to
be leased out to IMFA as IMFA had not at all been operating its export-oriented
unit (EOU) since 1984 and was attempting to divert the ore to its domestic
units whereas FACOR was the one that was operating an EOU and needed all the
ore it could get. No notice was issued on this applica- tion apparently as all
the claims had already been referred to Rao.
In August 1987, IMFA moved C.M.P. 21578/1987. This was in the nature of a
counter to C.M.P. 13347/87 moved by FACOR. This 70 application also prayed that
the consideration before the Rao Committee should be confined to the parties to
the writ petition. IMFA also took this occasion to request that the area of 180
hectares leased out to FACOR by the order dated 3/5/85 should be treated as provisional and taken into account in
the allotment to be decided on by Rao. FACOR tiled a reply. No orders have,
however, been passed on the petition. again. apparently since all the claims
were before Rao.
9284/88 was filed by OCL to quash the "order" of 1.2.88 passed by Rao
which has totally rejected the claims of OCL. No orders on this petition have
been passed so far but this will now have to be disposed of in the light of the
conclusions we may reach in regard to OCL's claims on the merits and no
separate orders need to be passed thereon.
I.A. 1/89 was filed by ORIND challenging the cor- rectness of Rao's findings
and praying that, pending dispos- al of W.P. 14116/84 which according to it
stands undisposed of despite the orders dated 30/4/87 and 6/10/87--the S.G.,
OMC, Tisco. Sirajuddin & Co. and Mysore Minerals (the re- spondents to the
application) should be directed to supply to ORIND 3000 M/T of chrome ore per
month. No orders have been passed on this application so far but, since the
writ petition itself is now being disposed of, no interim orders as prayed for
in this application are at all called for.
INADEQUACIES 1) Delay and Ineffectiveness: Now the first thing that strikes one
on perusing the course of the proceedings in the case is the extremely
unsatisfactory and impractical proce- dure followed under the Act in regard to
the grant of mining leases for important minerals like chrome ore. The statute
envisages that the application should be made to the S.G.
of by it within a prescribed period. But the course of events in the case and
other reported cases show that this time limit is observed more in breach than
in observance. Anticipating this possibility, the rules provide that, if an
application is not disposed of within the statu- tory period, it shall be
deemed to have been refused. So far so good, as at least, the applicant can, on
the expiry of the period, have recourse to a higher authority. The remedy
provided to the aggrieved applicant is to file a revision application before
the C.G. under S. 30 of the Act for revision of the order within three months
thereafter. Rule 55 enables the C.G., after hearing all necessary parties, to
"confirm, modify or set aside the order or pass such other order in
relation to 71 thereto as the Central Government may deem just and
under rule 55 also says that "during the pendency of a revision
application the State Government should not take any action in respect of the
area, which is the subject matter of the revision petition as the matter
becomes sub judice". Having regard to the wide powers thus conferred.
would except the C.G. to dispose of the application on merits, either granting
the lease in whole or in part or rejecting it. But, curiously, in most of the
cases which come up before Courts as also in this case, the C.G. seems
reluctant to pass any order except to set aside the "deemed refusal"
and direct the S.G. to dispose of the application afresh within a specified
period. That was the order passed, for example, in IMFA's case the time given
being 200 days.
the S.G. does not seem to pay any heed to this direction and no order is passed
within a reasonable period. Well, one would think a second approach to the C.G.
may be helpful.
tried it but got back a reply to say that the C.G. was helpless in the matter.
The original order in revision has stated: "should the State Government
fail to pass order on the petitioner's application he may seek redress in an
appropriate Court of Law, if so advised" and the subsequent application
was rejected by the C.G. on the ground that the C.G. becomes functus officio
when it passes the order in revision and has no jurisdiction to revise it. So
all that the applicant can do is to wait for some time and then file a writ
petition. Even if the writ petition were to be heard quickly all that the Court
can do is to direct the S.G. to dispose of the application expeditiously. This
is an ex- tremely cumbrous and ineffective procedure in which several years
pass but the application stands still. Thus, for e.g., ORIND made an
application in 1971 and is yet to know what the fate of its application would
be. It puzzles 'us why the C.S., even in the first instance, could not dispose
of the application on merits in the light of the report received from the S.G.
and after hearing concerned parties.
Proliferation of applications: Another problem created by the passage of time
is the entry of new parties in the fray. We shall later point out that, though
S. 11 tries to enunciate a simple general principle of "first come; first
served" in practice, priority of an application in point of time does not
conclude the issue. In this case itself. for instance: during the period
ORIND's application of 1971 has been under consideration before various
authorities and in the writ petition filed in Orissa High Court, several other
competitors have come into the picture. The statutory provi- sion is not clear
as to which of the applications in respect of any particular area, are to be
considered together. If ORIND's application of 1971 for example: were to be 72
considered only on the basis of the persons who had made applications at that
time or a short time before or after, one result would follow; if, on the other
hand: if all the applications pending for disposal at the time ORIND's appli-
cation is to be granted or rejected are to be considered.
result would be totally different. Since the interests of the nation require
that no lease for mining rights should be granted without all applications
therefore at any point of time being considered and the best among them chosen
or the areas distributed among such of them as are most effi- cient and
capable; the latter is the only reasonable and practical procedure. That is why
this Court, in its order dated 30.4.87: laid down--we think rightly--that all
appli- cations pending for consideration as on 30.4.87 should be considered by
Procedure for consideration of applications: A further confusion created in
this case is due to the fact that leases of different areas in different
villages and dis- tricts have been applied for. No attempt has been made to
locate, with reference to any compact block of land; who exactly are the
competitors and whether there are areas in respect of which there is no
competition at all. It will be seen later how this has caused difficulty in the
present case. But what we wish to point out here is that the statute must lay
down clearer guidelines and procedure. Having regard to the new avenues for
vast industrial development in the country, the more workable procedure would
be for the S.G. to call for applications in respect of specified blocks by a
particular date and deal with them together: other later entrants not being
permitted in the field. Otherwise only confusion will result, as here. There
was a time when the S.G. looked to private enterprises for mineral develop-
ment in its territory. Even now, it has been stated that 87% of the State
territory containing chromite is under lease to one industrial house. Of late,
however, competition has crept in. The S.G. has its own public sector
corporations and various entrepreneurs are interested in having mining leases
for their purposes. It is, therefore: vital that there should be a better and
detailed analysis, district- wise and area-wise and that a schedule for
consideration of applications in respect of definite areas should be drawn up
with a strict time frame so that the State is no longer constrained to deal
with sporadic applications or make a routine grant of leases in order of
priority of applica- tions. These are aspects which call for careful considera-
tion and appropriate statutory amendments.
11(2) CONCLUSIVE? Now, to turn to the contentions urged before us: Dr. Singhvi,
who 73 appeared for ORIND, vehemently contended that the rejection of the
application of ORIND for a mining lease was contrary to the statutory mandate
in S. 11 (2); that, subject only to the provision contained in S. 11(1) which
had no application here, the earliest applicant was entitled to have a prefer-
ential right for the grant of a lease; and that a considera- tion of the
comparative merits of other applicants can arise only in a case where
applications have been received on the same day. It is no doubt true that S.
11(2) of the Act read in isolation gives such an impression which, in reality,
is a misleading one. We think that the sooner such an impres- sion is corrected
by a statutory amendment the better it would be for all concerned. On a reading
of S. 11 as a whole one will realise that the provisions of sub-section(4)
completely override those of sub-section (2). This sub- section preserves to
the S.G. a right to grant a lease to an applicant out of turn subject to two
conditions: (a) record- ing of special reasons and (b) previous approval of the
It is manifest,
therefore, that the S.G. is not bound to dispose of applications only on a
"first come, first served" basis. It will be easily appreciated that
this should indeed be so for the interests of national mineral development
clearly require in the case of major minerals. that the mining lease should be
given to that applicant who can exploit it most efficiently. A grant of ML in
order of time- will not achieve this result.
context of his submission pleading for priority on the basis of the time
sequence- Dr. Singhvi referred to certain observations in the decisions
reported as Ferro Alloys Corporation of India v. Union, I.L.R. 1977 Delhi 189
at p. 196 and as Mysore Cements Ltd. v. Union, A.I.R. 1972 Mysore 149 at p. 15
1. we do not think these decisions help him. In the former case; an application
by FACOR for a lease was rejected on the ground that an earlier application was
being accepted. FACOR contended this was wrong- that the S.G. could not have
refused to look into its application merely because another applicant had a
preferential right under S. 11(2) and that its application as well as that of
the earlier applicant should have been considered together.
in the situation that the Court observed that rule 11 primarily embodies the
general principle of "fist come- first served" and an out-ofturn
consideration under S.
was an exception for which a strong case had to be made out. The petitioner
could not have a grievance if the general principle was followed. So also, in
the latter case an earlier application having been accepted and a lease
granted, the consideration of a later application was held to be uncalled for.
These decisions cannot be treated as authorities for the proposition that the
S.G. is bound to grant an earlier application as soon as it is received 74 and
cannot wait for other applications and consider them all together and grant a
later one 'if the circumstances set out in rule 11(4) are fulfilled. That apart
it has to be remem- bered that the S.G. did reject ORIND's application by an
order dated 23.10. 1973. This order was set aside in the C.G. on 20.2. 1977 and
the S.G. directed to consider it afresh. The S.G. did not comply with this
order and so a writ petition was filed by ORIND which was pending when this
writ petition was" filed. Subsequently the High Court on 9.2.89 directed
the S.G. to consider and ,dispose of ORIND's application on merits. The S.G.
on' 7.4.89 dismissed ORIND's application on the ground that the issue is before
us and hence the S.L.P. against the order of rejection of the S.G.
assuming that we accept the S.L.P. filed by ORIND that will only entitle ORIND
to have its application reconsidered for grant along with such other applications
as may be pending as on the date of such reconsideration. In the context of the
scheme of the Act and the importance of a lease being granted to one or more of
the better qualified candidates where there are a number of them it would not
be correct to say that as the S.G.'s order of 29.10.1973 has been set aside
ORIND's application should be restored for reconsideration on the basis of the
situation that prevailed as on 29.10. 1973 and that therefore it has to be
straight- away granted as there was no other application pending on that date
before the S.G. In matters like this subsequent applications cannot be ignored
and a rule of thumb applied.
unable to accept the submission of Dr. Singhvi that the application of ORIND
being the earliest in point of time should have been accepted and that we
should direct accord- ingly. As to how far the requirements of S. 11(4) are
ful- filled in the present case that is an aspect which will be considered
will be convenient here also to deal with another argument raised by Dr.
Singhvi based on grounds of promisso- ry estoppel. Dr. Singhvi points out that
when ORIND applied to the C.G. for revision of the order of rejection of its
application on 23.10.73 the S.G. on 26.2.74 wrote to the C.G. as follows:
Orissa Industries Limited made 'representation to the State Government on'
15.12. 1973 for reconsidering grant of lease to serve the captive requirements
of their refractory plant. They also brought to the notice of the State
Government an export order of refractories of sizeable value of about Rs.2
crores received from National 75 Iranian Steel Mills. Teheran Chromite, being
essential raw material for manufacture of refractories they pressed for grant
of Mining Lease. After careful consideration of the representation, the State
Government have revised the policy of reserving the chromite area only for
exploitation in public sector and have decided for grant of chromite to serve
the captive requirements of industry within the State should be given first
priority. Accordingly, it is proposed to grant the mining lease for chromite
over the available areas subject to revision of the previous order of the State
Government by Government of India u/s 30 of the Mines & Minerals (Regulation
& Development) Act, 1957 and u/s 5(2) of the said Act. Steps are being
separately taken to exclude this area from the operation of reservation
notification for exploitation of chromite in the public sector.
the interest of the local industries. the State Govt. do not intend to throw
open the area after releasing from reservation. Approval of Government of India
would also be necessary for not throwing open the area in the relaxa- tion of
the rule 58 of the Mineral Concession Rules 1960.
of 1129.25 hectares applied for, an area of 379.93 hectares is covered by
overlapping of applied leases or applications including an area of 142
hectares- which is being separately recommended to Government of India for
grant of Mining lease in favour of M/s Orissa Cement Limit- ed. As such the net
area available for grant of mining lease is therefore. 749.32 hectares.
State Government having rejected the application of the party in Government
Proceeding No. 1043 dated 23.10.
are got obtain to revise their own order by granting Mineral Concession as
instructed in your department letter No. MV-I(445)/61 dated 5.1.72. The case is
therefore. recom- mended to Government of India for grant of Mining Lease over
an area of 749.32 hects. in favour of M/s Orissa Industries Limited revising
the above order of the State Government u/s 30 of the Mines and Minerals
(Regulation and Development) Act, 1957. As chromite ore is specified mineral
under the first schedule of the Act- approval of Government of India is also
requested u/s 5(2) of the Act.
would therefore, request you to kindly obtain and communicate orders of
Government of India on revision u/s 30 of Mines & Minerals (Regulation
& Development) Act, 1957 and approval u/s 5(2) of the said Act and in
relaxation of Rule 58 of the Mineral Concession Rules. 1960 for grant of Mining
Lease for chromite over an area of 749.32 hectares in Cuttack District in
favour of Orissa Industries Limited." Simultaneously, it is pointed out,
the S.G., while sending its comments to the C.G. on the contents of another
revision application filed by ORIND against the rejection of its application
(also dated 5.7.71) for a lease of 446.38 hec- tares in village Sukrangi of
Cuttack District, had this to say:
in State Government letter No. 1747MG dated 26.2.74 chromite bearing area to
the extent of 749.32 hectares in Cuttack district has been recommended to
Govern- ment of India for grant in favour of M/s Orissa Industries Ltd. The
need of M/s Orissa Industries Ltd. will be met from this. It is the
responsibility of the party to obtain raw materials for its factory and the
State Government cannot take such responsibility as contended by the
petitioner. The party is at liberty to purchase the chrome ore from Orissa
XXX XXX The State Government have already recommended an area in favour of M/s
Orissa Industries Ltd. to the Govt. of India to meet the requirements of their
industry. The State Government have already decided to grant the area applied
for by M/s Orissa Industries Ltd. in their M.L. application under revision to
M/s Orissa Mining Corporation Ltd. who are now working the area as an agent of
the State Government.
the question of granting this area to M/s Orissa Industries Ltd. does not
arise." Also, on 5.3.74 the S.G. published a notification dereserv- ing
the said 749.32 hectares (said to have been earlier reserved for exploitation
in the public sector by a notifi- cation of 3.7. 1962). Dr. Singhvi submitted
on the strength of this correspondence and notification that the S.G. having
sought to justify its rejection of ORIND's application for 77 446.38 acres on
the ground that the company's application for 749.32 hectares was being
recommended after dereserva- tion, it was not open to the S.G. now to take up a
different stand and that ORIND's application for 1229.25 hectares now under
consideration should have been granted at least to the extent of 744.32
hectares the dereservation and lease in favour of ORIND, of which had been
recommended by the S.G.
as early as 1974. In support of this contention, learned counsel relied on the
observations made in a series of decisions of this Court: Kanai Lal Sur v.
Paramnidhi Sadhukhan,  2 SCR 366; M/s Motilal Padampat Sugar Mills Co.
(P) Ltd. v. State of Uttar Pradesh and Ors.,  2 SCR 641; Gujarat State
Financial Corporation v. M/s Lotus Hotels Pvt. Ltd.,  3 SCC 379; Surya
Narain Yadav & Ors. v. Bihar State Electricity Board & Ors.,
 Suppl. 1 S.C.R. 605; Union of India
& Ors. v. Godfrey Phi- lips India Ltd.,  Suppl. 3 SCR 123 and Mahabir
Auto Stores & Ors. v. Indian Oil Corporation & Ors.,  J.T. 1 S.C.
argument is interesting but overlooks certain very important relevant
circumstances. As mentioned earlier, ORIND's revision petition was disposed of
by the C.G. on 23.2. 1977. This order contains no reference to the S.G.'s
letter of 26.2.74; on the contrary, it proceeds on the footing that no comments
had been received from the S.G.
this is because the letter of 26.2.74 was not in the form of comments on the
ORIND's revision application but was in the form of the S.G.'s recommendations
on ORIND's representation to it dated 15.12.73, although it does sug- gest that
the C.G. could set aside the order of 23.10.73 and direct the grant of a lease
to ORIND in respect of 749.32 hectares. Be that as it may, the C.G. did not
accept the recommendation of the S.G. Indeed, we find on record that, having
regard to a letter of the C.G. dated 15.5.74, the S.G. sent a letter dated
17.7.74 withdrawing the earlier recommendation made by it on 26.2.74 for the
allotment of 749.32 acres to ORIND. In view of this letter, the C.G. simply set
aside the order of 23.10.73 on the ground that it was not a speaking order and
directed the S.G. to dispose of ORIND's application within 100 days in the
light of the letter of the C.G. dated 15.5.74. Interestingly, this letter had
been written in reply to a proposal from the S.G. that the exploitation of
chromite had to be entrusted to the public sector. Accepting this suggestion,
the letter pro- ceeded to lay down certain broad priorities on the basis of
which leases could be granted and certain other directions in respect of
research and development. The position, there- fore, is that the C.G. did not
accept the S.G.'s recommenda- tions regarding the grant of a lease to ORIND in
respect of 749.32 hectares out of the 1129.25 78 hectares applied for. There
was, however, delay in the disposal of the application by the S.G. When the
S.G. took up consideration of the matter once again it took note of three
circumstances to reject the application of ORIND.
One of the directions in the C.G.'s letter of 15.5.74 was that "no lease
of lumpy ore for metallurgical and re- fractory grade be granted to private
sector unless mining undertakings of the State or Central Government are not
interested in the exploitation of ore in these leaseholds" and the
requirement of ORIND was for lumpy chromite ore;
Two notifications had been issued on 28.4.77 and 3.8.77 reserving certain areas
for exploitation by the public sector. The former dealt specifically with the
749.32 hec- tares which had been proposed for allocation to ORIND in the letter
of the S.G. dated 26.2.74. The latter covered a huge area of 1460 sq. km. in
various districts of the State;
The claims of all applicants had been considered by Rao and Rao had come to the
conclusion that no mining leases need be given to ORIND.
shall consider later the claim of ORIND on merits. But, for the present, we
only wish to point out that no grounds have been made out which could support a
plea of promissory estoppel. The grant of a lease to ORIND had to be approved
by the C.G. The C.G. never approved of it. The mere fact that the S.G., at one
stage, recommended the grant cannot stand in the way of their disposing of the
application of ORIND in the light of the C.G.'s directives. Perhaps, the
highest that ORIND can claim is that, since this lease of 749.32 acres has not
come through, the SG's order rejecting its application in respect of 446.38
hectares deserves to be considered. But that area is not the subject matter of
the present S.L.P. by ORIND. Moreover, ORIND has not placed before us any
information as to what happened to the revi- sion petition filed by it against
the rejection of the application in respect of 446.38 hectares of the further
proceedings, if any, in relation thereto. We express no opinion as to ORIND's
entitlement to a lease on that appli- cation in case it does not succeed in its
claim here in respect of 749.32 hectares. It will be open to ORIND to pursue
such remedies in respect thereof as it may be advised and as may be available
to it in law.
RESERVATION POLICY The principal obstacle in the way of ORIND as well as the
other private parties getting any leases was put up by the S.G., OMC and IDCOL.
They claimed that none of the private applications could at all be considered
because the entire area in all the districts under consideration is reserved
for exploitation in the public sector by the noti- fication dated 3.8.77
earlier referred to. All the private parties have therefore joined hands to
fight the case of reservation claimed by the S.G., OMC and IDCOL. We have
indicated earlier that the S.G. expressed its preparedness to accept the Rao
report and to this extent waive the claim of reservation. Interestingly, the
OMC and IDCOL have en- tered caveat here and claimed that as public sector
corpora- tions they could claim, independently of the S.G.'s stand, that the
leases should be given only to them and that the Rao report recommending leases
to IMFA, FACOR and AIKATH should not be accepted by us.
relevant provisions of the Act and the rules have been extracted by us earlier.
Previously, rule 58 did not enable the S.G. to reserve any area in the State
for exploi- tation in the public sector. The existence and validity of such a
power of reservation was upheld in Kotiah Naidu v. State of A.P., A.I.R. 1959 A.P. 185 and Amritlal Nathubhai Shah v.
Union, A.I.R. 1973 Guj. 117, the latter
of which was approved by this Court in  1 S.C.R. 372. (As pointed out
earlier, rule 58 has been amended in 1980 to confer such a power on the S.G.).
It is also not in dispute that a notification of reservation was made on
3.8.77. The S.G., OMC and IDCOL are, therefore, right in contending that, ex
facie, the areas in question are not available for grant to any person other
than the S.G. or a public sector corpora- tion [rule 59(1), proviso] unless the
availability for grant is renotified in accordance with law [rule 59(1)(e)] or
the C.G. decides to relax the provisions of rule 59(1) [rule 59(2) ]. None of
those contingencies have occurred since except as is indicated later in this
judgment. There is, therefore, no answer to the plea of reservation put forward
by the S.G., OMC and IDCOL.
private applicants seek to get over this difficulty in several ways. In the
first place, they all vociferously urge that this plea has been taken by the
S.G. belatedly, that the OMC and IDCOL have come into the picture very late and
that this plea should not be allowed to be raised at this stage. The learned
Advocate General for the State of Orissa has pointed out, we think rightly, that there is no substance 80 this
grievance. The objection regarding reservation was raised by the S.G. at the
very first opportunity it had, in a preliminary counter affidavit filed by it
in the writ petition dated 29.10.1984. The counteraffidavit mentioned about the
reservation in no uncertain terms and a copy of the relevant page of the Orissa
Gazette dated 12.8.77 which contained the reservation notification dated 3.8.77
was also annexed to the counter affidavit. Reference was also made to the
statutory provisions and judicial decisions. The claim was reiterated, when
ORIND joined the proceedings, in a reply filed by the State to the counter
affidavit filed by ORIND on 22.8.85; this reply affidavit refers to the letter
of the C.G. dated 15.5.74 and the notification of reserva- tion dated 28.4.77
pertaining to the 749.32 acres in respect of which ORIND had made an
application. In a further coun- ter-affidavit dated 24.11.89 filed "in
reply to the addi- tional submissions dated 17.10.89 filed on behalf of
ORIND", the notification of 3.8. 1977 has also been referred to. OMC and
IDCOL had submitted their applications for lease but no orders had been passed
thereon. When they came to know that the applications of IMFA and FACOR were
considered by this Court and certain interim orders passed, they approached Rao
to consider their applications as well. This request was opposed by the other
parties whereon OMC and IDCOL sought and obtained the directions of this Court
that their appli- cations should also be considered by Rao. Before Rao, they supported
the S.G. plea of reservation. In the circumstances Set out above, it is
difficult to accept the contention of the various private applicants that the
plea as to reserva- tion should not be entertained at all on the ground of
delay and 1aches.
then argued that though the S.G. may have formally notified a reservation, it
has not been very serious about this and has always been willing to consider
private appli- cations for leases. In support of this contention, reliance is
placed on the following circumstances:
26.2.74, the S.G. has clearly expressed its willingness to dereserve the area
of 749.32 acres and, indeed, followed it up on 5.3.74 with a notification of
Though the S.G. claims that reservation is neces- sary to meet the S.G.'s
requirements because 81% of chromite ore rich lands already stand leased out to
a private party (TISCO), the S.G. proceeded to renew the grant in favour of
The S.G. has been willing enough to lease out lands to private parties: (i) The
S.G. has granted leases to FACOR on 81 9.2.72, 7.10.72 and 12.11.76 in respect
of 157.05 hects..
hects. and 72.84 hects. respectively in Bokhla, Kathpal and Ostapal villages.
(ii) it has entered into an agreement with AIKATH to grant a lease in respect
of a part of the land applied for by him in item 8; (iii) it has agreed to
lease out item 3 and 26.62 hectares out of item 4 in favour of IMFA; (iv) it
agreed to lease out 180 acres in item 5 in favour of I-FACOR.
Even at this final stage of hearing of the writ petition. the Advocate General
of the State has conceded that the S.G. is prepared to abide by the Rao report
i.e. the S.G. is willing to grant leases to IMFA, FACOR and AIKATH but not to
OCC or ORIND. This is patently discrimina- tory.
not, however, think that these circumstances establish that the State is not
serious about its plea of reservation. So far as item (a) is concerned. we have
al- ready pointed out that this was the initial attitude of the Government but
this policy was changed in pursuance of the C.G.'s letter dated 15.5.74 and its
order on ORIND's revi- sion application. The S.G. itself had, in fact,
withdrawn the recommendations made on 26.2.74 by its letter of 17.7.74. The
thought of dereservation had therefore been given up by the S.G. in July'74
itself though the notifica- tion of dereservation was superseded only in 1977.
In regard to items (b) & (c), the position is that the lease of 1976 was
after the dereservation of 5.3.74. The leases to FACOR in 1972 (the details of
which are not available before us) are stated to have been granted after
obtaining C.G.'s order for relaxation. The full circumstances in which the
lease in favour of TISCO was renewed are not before us but perhaps such renewal
was dictated by the nature of the industry run by TISCO and its importance for
the economy of the State and the country. These apart, the Court approved of
the grant of leases to IMFA and FACOR. So far as (d) is concerned, the learned
Advocate General of Orissa has made it clear that the S.G. does not accept the
Rao report in so far as it ignores its claim of reservation. The concession
made only is that since the Rao Committee, in recommending grant of leases to
IMFA and FACOR is only giving effect to a fait accompli in pursuance of the
interim directions of this Court, they are willing to abide by it. It will
therefore be clear that, except for two or three instances, where leases have
been granted by the S.G. on its own, the S.G. has generally and consistently
adhered to its stand that the chromite bearing lands are reserved for
exploitation in the public sector. The rules permit the C.G. to relax the rigid
requirements of reservation in individual cases after re- cording special
reasons. We are 82 not here called upon to decide whether the relaxations made
in the above eases were in accordance with the rules or not.
sufficient to say here that these exceptional and isolated instances of lease
are not sufficient to sustain the plea of the parties before us that the policy
of reser- vation is merely being raised as a formal defence and has never been
seriously implemented by the S.G.
Singhvi also raised a plea of arbitrariness and mala fide to challenge the
reservation policy. He urges on the first count that it was not open to the
S.G. to go on shift- ing its reservation policy from time to time without ade-
quate reasons, Such conduct was also vitiated, he said, as amounting to malice
in law and referred in this context to the observations of this Court in
Venkataraman v. Union,  2 SCR 202. We do not think this contention has
any substance. Chromite ore is an important major mineral and the importance of
its conservation and proper utilisation for our country's development cannot be
gainsaid. The S.G. rightly decided upon a policy of reservation in 1967 and
this was kept up till 1974. In February 1974 the S.G. was in favour of freer
issue of mining leases but gave up this policy in pursuance of the C.G.'s
letter of 15.5.74. Reser- vation was, therefore, clamped in 1977 again.
Applications could still be considered to see how far a relaxation was
permissible having regard to the nature of the applicant's needs, the purpose
for which the lease was asked for, the nature of the ore sought to be exploited,
the relative needs of the State, the availability of a public sector undertak-
ings to carry out the mining more efficiently and other relevant
considerations. There is no material on record to substantiate a plea that the
S.G. has been acting arbitrari- ly or mala fide in its policy formulations in
conclusion that the areas in question before us were all duly reserved for
public sector exploitation does not, however, mean that private parties cannot
be granted any lease at all in respect of these areas for, as pointed out
earlier, it is open to the C.G. to relax the reservation for recorded reasons.
Nor does this mean, as contended for by OMC and IDCOL, that they should get the
leases asked for by them. This is so for two reasons. In the first place, the
reservation is of a general nature and does not directly confer any rights on
OMC or IDCOL. This reservation is of two types. Under S. 17A(1), inserted in
1986, the C.G. may after consulting the S.G. just reserve any area-not covered
by a PL or a ML--with a view to conserving any mineral.
the idea of such reservation is that the miner- als in this area will not be
exploited at all, neither by private parties nor in the public sector. It is
not neces- sary to consider whether any area so 83 reserved can be exploited in
the public sector as we are not here concerned with the scope of such
reservation, there having been no notification under S. 17A(1) after 1986 and
after consultation with the S.G. The second type of reserva- tion was provided
for in rule 58 of the rules which have already been extracted earlier in this
judgment. This reser- vation could have been made by the S.G. (without any
neces- sity for approval by the C.G. ) and was intended to reserve areas for
exploitation, broadly speaking, in the public sector. The notification itself
might specify the Govern- ment, Corporation or Company that was to exploit the
areas or may be just general, on the lines of the rule itself.
rule 59(1), once a notification under rule 58 is made, the area so reserved
shall not be available for grant unless the two requirements of sub-rule (e)
are satisfied: viz. an entry in a register and a Gazette notification that the
area is available for grant. It is not quite clear whether the notification of
5.3.74 complied with these requirements but it is perhaps unnecessary to go
into this question because the reservation of the areas was again notified in
notifications are general. They only say that the areas are reserved for
exploitation in the public sector.
such areas are to be leased out to OMC or IDCOL or some other public sector
corporation or a Government Company or are to be exploited by the Government
itself is for the Government to determine de hors the statute and the rules.
is nothing in either of them which gives a right to OMC or IDCOL to insist that
the leases should be given only to them and to no one else in the public
sector. If, there- fore the claim of reservation in 1977 in favour of the public
sector is upheld absolutely, and if we do not agree with the findings of Rao
that neither OMC nor IDCOL deserve any grant, all that we can do is to leave it
to the S.G. to consider whether any portion of the land thus reserved should be
given by it to these two corporations. Here; of course, there are no
competitive applications from organisa- tions in the public sector controlled
either by the S.G. or the C.G., but even if there were, it would be open to the
S.G. to decide how far the lands or any portion of them should be exploited by
each of such Corporations or by the C.G. or S.G. Both the Corporations are
admittedly instrumen- talities of the S.G. and the decision of the S.G. is
binding on them. We are of the view that, if the S.G. decides not to grant a
lease in respect of the reserved area to an instru- mentality of the S.G., that
instrumentality has no right to insist that a ML should be granted to it. It is
open to the S.G. to exercise at any time, a choice of the State or any one of
the instrumentalities specified in the rule. It is true that if, eventually,
the S.G. decides to grant a lease to one or other of them in respect of such
land, the instru- mentality whose application is rejected may be aggrieved .by
the 84 choice of another for the lease. In particular, where there is
competition between an instrumentality of the C.G. and one of the S.G. or
between instrumentalities of the C.G.
se or between the instrumentalities of the S.G. inter se, a question may well
arise how far an unsuccessful in- strumentality can challenge the choice made
by the S.G. But we need not enter into these controversies here. The ques- tion
we are concerned with here is whether OMC or IDCOL car, object to the grant to
any of the private parties on the ground that a reservation has been made in
favour of the public sector. We think the answer must be in the negative in
view of the statutory provisions. For the S.G. could always denotify the
reservation and make the area available for grant to private parties. Or, short
of actually dere- serving a notified area, persuade the C.G. to relax the
restrictions of rule 59(1) in any particular case. It is.
open to the S.G. to grant private leases even in respect of areas covered by a
notification of the S.G. and this cannot be challenged by any instrumentality
in the public sector.
leaving this point, we may only refer to the position after 1986. Central Act
37 of 1986 inserted sub- section (2) which empowers the State Government to
reserve ureas for exploitation in the public sector. This provision differs
from that in rule 5,', in some important respects-- (i) the reservation
requires the approval of the C.G.;
reservation can only be of areas not actually held under a PL or ML;
reservation can only be for exploitation by a Government company or a public
sector corporation (owned or controlled by the S.G. or C.G. ) but not for
exploitation by the Government as such.
S. 17A(2) and rules 58 could not stand together as S. 17A empowers the S.G. to
reserve only with the approv- al of the C.G. while rule 58 contained no such
was also a slight difference in their wording. Perhaps because of this rule 58
has been omitted by an amendment of 1988 (G.S.R. 449E of 1988) made effective
from 13.4.88. Rule 59, however, contemplates a relaxation of the reservation
only by the C.G. By an amendment of 1987 effective on 10.2. 1987, (G.S.R. 86-E
of 87) the words "reserved by the State Government" were substituted-for
the words "reserved by the 85 Government" in rule 59(1(e). Later,
rule 59(1) has been amended the insertion of the words "or under section
17-A of the Act" after the words "under rule 58" in clause (e)
as well as in the second proviso.
result appears to be this' (i) After 13.4.88, certainly, the S.G. cannot notify
any reservations without the approval of the C.G., as rule 58 has been deleted.
Presumably, the position is the same even before this date and as soon as Act
37 of 1986 came into force.
However, it is open to the S.G. to denotify a reservation made by it under rule
58 or S. 17A. Presumably, dereservation of an area reserved by the S.G. after
the 1986 amendment can be done only with the approval of ,the C.G. for it would
be anomalous to hold that a reservation by the S.G. needs the C.G.'s approval
but not the dereservation.
it is clear that relaxation in respect of reserved areas can be permitted only
by the C.G.
It is only the C.G. that can make a reservation with a view to conserve
minerals generally but this has to be done with the concurrence of the S.G.
concerned in this case with reservations made by the S.G. under rule 58 before
1986 which, there is no reason to doubt, continue in force even after the
introduction of S. 17A. These, as pointed out above, can be dereserved by th
S.G. but a relaxation can be done by the C.G. only. We shall consider later
whether this power of the C.G. can be or has been or should be exercised in
this case. It is sufficient to observe here that the reservations notified in
1977 do not necessarily vitiate the grant of leases to private parties.
OF RAO REPORT
come to the question regarding the status of, and the weight to be attached to,
the Rao report. The writ petition and other proceedings before us were directed
against the S.G.'s failure to pass favourable orders on the applications of
various parties. Normally, in such a case, this Court would either have
directed the S.G. to consider the applications afresh and pass appropriate
orders or left it to the parties to file revision petitions before the C.G.
the S.G.'s orders. Here, as described earlier, the various parties came up
before 86 this Court one after the other and some of them had their writ
petitions pending in the Orissa High Court. This Court, therefore, decided that
the best course would be to consoli- date all the applications that were
pending on 30.4.87 for the consideration of the C.G. so that a satisfactory
deci- sion could be arrived at after an examination of the rela- tive merits of
the various applicants. This Court did not specify the statutory provision
under which this was to be done but it is apparent that it was intended to be
an exer- cise of the power of the C.G. under S. 30, though this aspect was not
clarified when FACOR draw attention to it in C.M.P. 13347/87. We have no
difficulty in construing the Rao report as a decision on the claims of the
various parties before it, though, having regard to the terms of the order of
this Court dated 6.10.87, it has been styled as a report.
objections to this conclusion are three-fold and they are dealt with below:
it is pointed out that revisions to the C.G. under S. 30 can be validly dealt
with only by a "tribunal" and not by a single officer. We find that
the procedure indicated is not dictated by the statute or the rules. It is only
a forum outlined in an office order more as a matter of internal regulation
than as a rigid rule of procedure. We have seen one of these orders dated 10.7.
1987. It consti- tutes three Single Bench Tribunals each consisting of a
designated Joint Secretary in the Department of Mines and three Divisional
Bench Tribunals each comprising of a desig- nated Joint Secretary in the
Department of Mines and a designated Joint Secretary in the Department of Legal
Af- fairs in the Ministry of Law and Justice. The instructions are:
the extent possible, cases in which parties have not asked for personal hearing
should be disposed of by Single Bench Tribunals unless the member feels that
some complicated legal issue is involved requiring advice of the member from
the Law Ministry.
cases where personal hearing has been requested by parties, the Single Member
Tribunals will decide whether to dispose of the cases after grant of hearing by
himself or whether the hearing should be held by Division Bench Tribu-
nal." It will thus be seen that even regular revision petitions under S.
30 can be validly disposed of solely by a Joint Secretary in the Department of
Mines unless he considers it necessary, either because a personal hearing is
asked for or because some complicated legal issue is involved, to 87 invoke the
aid of a Joint Secretary in the Law Ministry.
there is no regular revision petition except perhaps in one case; the disposal
is by the Secretary to the Depart- ment of Mines; he has been specially
authorised to deal with the matter by this Court; and no legal issued at all
are involved. We, therefore, see nO irregularity or defect in the procedure
forged by this Court for a speedy and effec- tive disposal of the claims before
it is said that though the order of 30.4.1987 directs the secretary to dispose
of the representations by a reasoned final order, the subsequent order of
6.10.87 asks him to sent a report to this Court. We do not think there is any
inconsistency between the two orders. Even the order of 6.10.87 requires the
Secretary to arrive at a just, equita- ble and objective decision. He has been
asked to send a report of his decision to the Court, with copies to the
parties, only in order that, if any of the parties are aggrieved by his
decision, their grievances may be consid- ered by this Court in this W.P.
itself, instead of driving the parties to a fresh course of litigation.
it is submitted that Rao's hands were more or less tied by the various
observations and directions of this Court thus preventing him from coming to
independant conclu- sions of his own. This criticism is unfounded and also
belied by the contents of the report. This Court had made it clear that Rao
should not consider himself bound by the memoranda of compromise filed in the
High Court of Orissa- (with AIKATH and FACOR) or the orders passed by this
Court in regard to the allocation of areas (to IMFA and FACOR) though
necessarily he had to "bear in mind the previous orders made in their
[IMFA and FACOR] favour and the previ- ous leases and the rights, if any,
granted therefrom and their consequences". He was also asked to bear in
mind the public benefit and public interest involved and also the need for the
proper exploitation of the mines. In fact also we find that although Rao has
approved the grants made in favour of IMFA and FACOR by the S.G. (which, he
remarks, were perhaps based on the observations made by this Court).
clearly reached his conclusions on these independent- ly. In fact, he has set
out a basis for justifying the grants to IMFA and FACOR. It is also clear that
there were no Court orders that could have influenced his decisions on the
claims of the other parties. This objection is, there- fore, not at all
IDCOL, OCL and ORIND complain, indeed, that Rao has been completely overwhelmed
by the weight of the observa- tions and the leases granted by the S.G. pursuant
to interim orders of this 88 Court. They have gone to the length of
criticising, and, indeed, challenging, the validity of these interim orders
which had been passed without notice to any of them. They have invoked, in
support, several passages from the decision of this Court in Antulay v. Nayak,
 2 SCC 602. We think these criticisms are unfounded. This Court had only
directed the grant of two leases pending disposal of the writ petition. At the
time these directions were made, only IMFA, FACOR and AIKATH were before the
Court. IMFA had pointed out that FACOR had been given certain leases al- though
its earlier applications were pending before the C.G.
S.G. submitted to the Court that a lease in respect of item 1 had been granted
to FACOR, that item 5 had already been agreed to be leased in favour of AIKATH
and FACOR and that it was willing to grant a ML in respect of item 3 and 26.62
acres out of item 4 to IMFA. It was in view of this that the Court passed the
order. Similarly, the ML directed to be granted to FACOR was also in
consequence of the S.G.
acquiescence therein. It is, therefore, incorrect to characterise these orders
as erroneous or unjustified. They were fully within the scope of the writ
petition and were passed after hearing the parties before the Court. No doubt,
OCC, ORIND, OMC and IDCOL were not there then. After they put in their
appearance, this Court made it clear that while the earlier orders, the
observations therein and the leases granted in pursuance thereof should be kept
in mind, Rao would not be bound by them but would be free to arrive at his
conclusion. We, therefore, do not see any grounds for the criticisms put
forward by these parties in regard to the interim orders passed by the Court.
the above reasons, we are of opinion that, though styled a report, the findings
given by Rao are in the nature of a decision of the C.G. on the claims of the
various parties. We, therefore, proceed to consider the Rao report on its
OF THE RAO REPORT This takes us then to the merits of the various claims put
forward before Rao and his decision thereon. For our present purposes, we think
we can consider the Rao report in two parts:
endorsement of the S.G.'s decision to grant ML to IMFA, FACOR and AIKATH:
the rejection by him of the claims put forward by the above three parties for
leases in respect or areas over the above what 89 has been allotted to them as
well as the rejection of the claims of the other parties.
as the first aspect is concerned, we think that Rao's decision, that the leases
that have been granted already in favour of IMFA, FACOR be confirmed, should be
upheld. In our view, these should be treated as leases legitimately granted to
them in exercise of the powers of relaxation under rule 59(2). It is true that
the orders granting the leases do not elaborately record the reasons but they
were passed in the context of this litigation and have to be considered in the
light of the affidavits and counter affidavits filed herein. We are also of
opinion that the Rao's decision regarding the grant of a lease to AIKATH (not
yet implemented) should also be upheld. In these three cases, we think, the
records disclose sufficiently the reasons on the basis of which the leases have
been decided upon and are adequate to justify the MLs actually granted.
shall just summarise these reasons which have also been taken note of by Rao.
to AIKATH, IMFA, FACOR
AIKATH is admittedly an individual who discovered chromite ore in the State. He
had secured a lease as early as in 1952 though that lease was annulled by the
State when it took over. Again, as against a lease of 640 acres which he had
once obtained and started operating upon, the S.G.
finally approved of a lease in respect of only 140 acres. AIKATH had been
actually working some mines from 1.5.53. His original grant had been approved
before the area was reserved on 3.7.62. If the S.G. considers these to be
weighty considerations and entered into a compromise with him for a lease of
140 acres and this has also been recorded by the Orissa High Court, there are
no grounds to interfere with the decision of the S.G.
far as FACOR is concerned, the requirements for their plant in Andhra Pradesh
were met by the ML granted to them in 1971-72 at Kathpal and Boula, thus
recognising their claim for a ML to meet part of their requirements of ore.
present needs were in connection with their plant at Randia in Balasore
District which required about 1,20,000 tons per annum of ore. The compromise
entered into with FACOR agreeing to grant a ML for an area 72.84 hectares
having a potential of about 2.4 million tons would cater to 50% of its needs on
a 20 year time-frame making allowances for wastage in recovery.
IMFA needs 50,000 tons per annum for their plant at Therbauli and 120,000 tons
in respect of a plant at Chandwar run by a subsidiary. While the reserve
potential of 26.62 hectares allotted to IMFA out of item 4 is roughly 0.8
million tons the reserve potentials of 108.86 acres given out of area 3 and of
another 17.02 hectares in Balasor District given for the plant of the
subsidiary were yet to be assessed. Nevertheless. it was expected that they
would cater to the needs of IMFA more or less to the same extent that the ML in
favour of FACOR catered to its needs.
true that a relaxation under rule 59(2) has to be made by the C.G. The orders
of grant do recite the approval of the C.G. in this regard. An objection has
been taken that the C.G. granted the approval not after applying its mind to
the matter but merely because this Court had directed it to do so. We do not
think this contention can be accepted.
when the S.G. agreed to lease out the areas to IMFA and FACOR it was pointed
out that this could not be given effect to without the C.G.'s approval. This
Court thereupon directed that the S.G. should seek such approval.
direction to the C.G. is only that its approval should be given within the
particular time limit set out therein.
cannot be construed, reasonably, as a direction compel- ling the C.G. to grant
approval whether it agreed with the S.G .'s decision or not. We would. therefore,
reject this contention and treat the grants to IMFA anti FACOR as made in
exercise of the power of relaxation u/s 59(2 ).
again, we would like to observe that, though there is no specific recording of
reasons by the S.G. or C.G.
In as much
as these leases came to be granted by way of com- promise, it is a fair
inference that the compromise propos- als were prompted by the, at least
partial, acceptance of the claims put forward by these parties. Since the grant
of leases to these three parties can be attributed to the relaxation of the
reservation rule in particular cases, the finding of Rao that these leases may
be confirmed deserves acceptance.
have to add a few words in respect of AIKATH. Though the S.G. and AIKATH had
entered into a compromise as early as 4.12. 1984, no lease has yet been granted
in his favour perhaps as the C.G. has had no occasion to consider the matter
earlier. We do not think that any useful purpose will be served by remitting
the matter and asking the S.G. to seek the formal approval of the C.G.
therefore. The decision of Rao itself can be taken as containing the approval
of the C.G. in this regard. We would, therefore, uphold Rao's decision 91 and
direct the S.G. to execute, at as early as possible,a ML in favour of AIKATH in
respect of the 140 acs. agreed to be leased to him under the compromise dated
OTHER CLAIMS It is asserted on behalf of OCL and ORIND that, if there are
factors justifying the relaxation of reservation in favour of IMFA and FACOR
there are equally valid factors justifying a like relaxation in favour of these
two compa- nies as well. The operative part of the Rao report in regard to the
claims of these two parties reads thus:
the requirement of the other parties viz. M/s Orissa Industries Ltd., M/s
Orissa Cements Ltd., manufactur- ing refractories, their requirements of chrome
ore are relatively less and that too, consisting mostly of hard lumpy ore. The
potential for hard lumpy ore in the areas under consideration is relatively
less, since most of it is located in the areas which have already been leased
out to TISCO who are also one of the larger producers of hard lumpy ore and are
capable of meeting the needs of other industries also.
occurrence of chrome ore is such. that hard lumpy ore, lumpy friable ore and
fine ore occur together and in varying proportion. The refractory manufacturers
require- ments are such that if they want to get hard lumpy ore from the areas
under consideration, they will have to necessarily become traders of the other
grades which will be in higher proportion. They have been carrying on their
business for the past several years without any captive mines. Hence. it is
felt that their requirements can be adequately met by the other producers of
chrome ore, including hard lumpy ore.
lumpy ore will be available from other producers of chrome ore to meet their requirements,
including the Orissa Mining Corporation and no captive mining leases need be
given to them, in the areas under consideration." XXX XXX XXX The
Refractory industries viz. the Orissa Industries Ltd. and M/s Orissa Cements
Ltd. for their level of production 92 and their need for hard lumpy ore,
captive mines in the areas under consideration do not optimally meet their re-
quirements and there is enough lumpy ore in the State from other sources."
Rao's line of reasoning is criticised by OCL and ORIND.
Bhandare, on behalf of OCL, urges, inter alia:
The company's refractory plant is in need of at least 35,000 to 40,000 MT of
ore per annum (not 15000 MT as worked out by Rao) and for securing a regular
uninterrupted supply, it needs a captive mine badly; instead it is thrown at
the mercy of traders like TISCO or Sirajuddin & Co. or the OMC who are
unable to supply the quantities of ore needed by OCL.
The company which has a vital mineral-based industry has not been granted even
a single ML for which it had been applying from 1961 to 1986 whereas traders
like Mohanty and Sirajuddin have been granted leases.
Besides supply of refractories for domestic consumption OCL has also a vast
export market and has earned huge foreign exchange by exports to countries like
Pakistan, Bangladesh, Korea, Kenya, etc.
The company has also employed about 3000 workers who are adivasis or who belong
to the Scheduled Castes and Scheduled Tribes.
The industrial licence granted to OCL by the C.G.
that the OCL should secure PL and ML from the S.G.
its needs of ore.
The S.G. had made on 25.1.72 a grant of a ML to OCL over an area of 187.02
hectares with the approval of the C.G. The S.G. had indeed recommended the
grant of ML to OCL.
is also stated that in certain informal meet- ings held recently, the S.G. has
expressed itself in favour of granting ML in favour of the OCL.
on behalf of ORIND, it has been urged that Rao has erred in thinking that the
need of the company was of lumpy ore which 93 could be adequately met by
procuring the ore from private parties and that it would not be necessary to
grant a mining lease for meeting its requirements. It is submitted, in
particular, that-- (i) ORIND's requirements are not small as suggested by the
SG but come to a minimum of 25,000 MT per annum and would indeed go up to
65,000 MT with the setting up of a ferroalloys plant for which steps are being
the reasoning that ORIND has been functioning without a captive source all
along and hence could continue to do so is bad logic and also a misleading
argument which overlooks that ORIND has been put to great difficulty in
obtaining even 8,000 to 10,000 MT (about one half of its needs) in driblets
from various sources being at their mercy in regard to quantity, price and
other vagaries. Even OMC has been capricious in its supplies of ore in that it
has agreed to supply 25,000 MT to OCL against their needs of 15,000 MT only
whereas it is willing to supply only 9,000 MT only to ORIND against its present
requirements of 20,000 MT.
assumption that ORIND needs only lumpy ore is not correct. Actually more than
60 to 65% of the ore used by ORIND is friable ore.
ORIND also/deserves grant of ML on other grounds of national and public
significance. It supplies basic refrac- tories not only to core and strategic
domestic industries but also exports them outside India and the exports made by it, being
value added and involving proportionately less consumption of ore, earn much
more foreign exchange than the exports of IMFA & FACOR. The want of a
captive source of supply has gravely prejudiced the commissioning of ORIND's
first benefaction plant for refractories. It also employs a strong labour force
and thus provides opportunities for large scale employment.
MLs can be granted to AIKATH, IMFA, FACOR, ORIND also deserves one. OMC has
been allotted huge areas which remain idle and unexploited and a predominant
portion of its ore is supplied to the metallurgical industry not leaving much
for the refractory industry.
the area marked as Area No. 7 in the plan filed 94 by ORIND should be allotted
have briefly summarised the claims of ORIND & OCL. It is unnecessary to
discuss these contentions at length as we cannot but help feeling that the
claims of OCL and ORIND have been rejected summarily by Rao without an
advertence to the various considerations urged by them. In our opinion, this
part of Rao's decision has to be set aside as being too cryptic and
unsustainable. Pursuant to this conclusion, it is open to us to direct these
claims to be considered afresh by the C.G. We, however, think it more expedient
that the claims of the OCL and ORIND should be restored, for detailed
consideration in all their several aspects, before the S.G., as the 'S.G. has
had no opportunity to consider the various aspects pointed out and as this
course will also provide one opportunity to the claimants to approach the C.G.
again, if dissatisfied with the S.G.'s decision to consider whether, despite
the reservation, some relaxation can be made also in favour of these two
companies. The learned Advocate General for Orissa criticised the conclusion of
Rao conceding the right of industries set up in the State, even of FACOR and
IMFA, to captive mines for meeting their requirements. We are inclined to think
he is right in saying that merely because an industry is allowed to be set-up
in the State by grant of an industrial licence and/or certain other conces-
sions, it does not follow that it becomes entitled to a captive mine to cater
to its needs. We, however, express no concluded opinion on this issue' which
does not arise for our consideration. The SG has to take into account various
factors and aspects (some of which have also been referred to in the interim
order of this Court dated 27.9.84) before granting a ML to an individual
concern carving out an excep- tion to its reservation policy. This it has done
in respect of IMFA and FACOR for certain special reasons which have been
elaborated upon earlier. Whether it would do so also in favour of OCL and ORIND
is for the State to consider. We express no opinion on these claims and leave
it for the consideration of the SG and C.G. It would have been noticed that the
applications of these two companies have not been considered in this light
earlier. We, therefore, restore the applications of OCL and ORIND for the
consideration of the S.G.
learned Advocate General of Orissa also submitted that Special Leave Petition
No. 8574/89 filed by ORIND from the order of the S.G. is not maintainable. He
urged that the S.G., in disposing of applications for ML, is not function- ing
as "tribunal" and he cited the decisions in Shivji v. Union,  2 SCR 775 and Indo-China Steam Navigation
Co. v. Jasjit Singh,  6 SCR 594 in support. We do not 95 consider it
necessary to go into this issue. The S.G. has, by the impugned order, rejected
ORIND's application, inter alia, on the ground that, in view of the pendency of
W.P. 14116/84 before this Court, it could not at that stage pass any order on
the application. It would, therefore, be open to ORIND to ask the S.G. to
reconsider the application in the light of our present order. We see no
necessity f6r insisting on such a formal request and would, therefore, direct
the S.G. to consider ORIND's application afresh in the light of this judgment.
as OMC & IDCOL are concerned, Rao has "recommend- ed" that the
areas of items I & 2, left after the grants to IMFA and FACOR. be given on
lease to OMC. We have seen that there are huge areas of mineral bearing lands
which have been reserved for the public sector. Its interests do not clash or
come into conflict with those of private applicants which can only claim a
right to the extent the SG is willing to relax the rule of reservation. We do
not think the OMC or IDCOL have any voice in requiring that the SG should keep
certain extents of land reserved and should not grant any ML at all in favour
of an), private party. The interests of these corporations are safe in the
hands 01' the S.G. and the allocation of MLs to these organisations is a matter
of discretion with the S.G. Strictly speaking,, therefore. no question of any
application by them for ML need arise at all. But, when made, their applications
arc considered by the S.G. and, on revision by the C.G. as a matter of form.
this extent, they have a statutory remedy but, beyond this. we think they
cannot go. We are of opinion that their interests are safe with the S.G. and
need no directions from us.
IMFA and FACOR urge that their claims to further leases deserve consideration.
Rao has already adjudicated upon their claims and "recommended"
leases to them to the extent indicated. If they apply to the S.G. for more
open to the S.G. to consider whether they deserve any further leases and if so,
to what extent. more reserved areas could be released in their favour.
learned Advocate General for the State emphasised that the State is also
interested in its industrial develop- ment and the national economy and that,
while reserving substantial areas for public sector exploitation, the State has
a well-formulated policy in respect of grant of private leases which has been
placed before Rao. He also submits that, even if grant of a ML in favour of a
particular party is not found feasible, the State will do its best to ensure
that the ore mined in the 96 State is equitably distributed so as to meet the
legitimate needs of all industries operating in the State. We have no doubt
that the S.G. will keep. all relevant aspects urged by the parties in reaching
their decision on the matters re- manded to it by us.
circumstances, we accept and confirm Rao's recom- mendation for grant of MLs to
IMFA, FACOR and AIKATH, to the extent indicated by him. We set aside his
rejection of the claims of OCL and ORIND. We leave it open to all the parties
to place their claims, or further claims, as the case may be, in regard to the
areas applied for by them on or before 30.4.1987, backed by supporting reasons,
before the S.G. in the form of representations within four weeks from the date
of this order. The S.G., we hope, will dispose of these applications within the
statutory period failing which the parties will have their remedy under the statute
by way of revision to the C.G. In arriving at its decisions, it will be open to
the S.G. to take into account the discussions and findings of the Rao report in
the light of this judgment.
S.G. should also keep in mind that no leases to any of the parties (other than
OMC & IDCOL) can be granted unless either the areas so proposed to be
leased out are dereserved and thrown open to applications from the public or
unless the C.G., after considering the recommendations of the S.G., for reasons
to be recorded in writing, considers a relaxa- tion in favour of any of the
parties necessary and justi- fied.
we conclude, we should like to place on record our appreciation of the detailed
and excellent report given by Dr. Rao. He has brought together all the relevant
data and analysed the various claims put forward before him; a detailed note on
chromite deposits in the State of Orissa prepared by the Chief Mining Geologist of the Indian Bureau of Mines
has also been made an Annexure to the report. The report and its annexures are
bound to be of immense help and value to the S.G. and C.G. in arriving at their
decisions not only on the various applications but also in regard to their
future policy in the matter of grant of chromite leases and of the supply of
chromite to the needy applicants in an equitable manner.
No. 14116/87 and the other applications are dis- posed of in the above terms.
There will be no order as to costs.
Petitions disposed of.