M/S.Oriental
Select Granite Pvt. Ltd Vs. State of Karnataka & Ors [2007] Insc 1250 (11 December 2007)
G.P.Mathur
& Aftab Alam
SPECIAL
LEAVE PETITION (C) No.23678 of 2004 W I T H S.L.P.(C) Nos.23686 of 2004,
24313-24314 of 2004, 19352-19354 of 2004, 25275 of 2004 and 21130 of 2005. Aftab
Alam,J.
In all
the six petitions for Special Leave to Appeal, challenge is made to the same
demand notice (of course with varying amounts in regard to different
petitions). In all cases the challenge to the demand notice is on the same
grounds.
Hence,
all the six cases were heard together and are being disposed of by this common
order.
By the
impugned demand notice, the petitioners were asked to pay the value of the
granite excavated and transported by them during the period August 27, 1993 to January 18, 1996. The demand is raised on the basis that though the grant of
quarrying leases by the State Government (in all 302 in number, including those
in favour of the petitioners), was eventually held to be bad and illegal by the
Karnataka High Court and the Supreme Court (vide judgment and order in Alankar
Granites Industries & Ors. vs. P.G.R. Scindia, MLA & Ors.
[(1996)
7 SCC 416], nonetheless, the lessees, including the petitioners, were able to
carry on quarrying operations on the basis of the interim order passed in the
case by this Court on August 27, 1993 till the appeals were finally dismissed
on January 18, 1996. Here it may also be noted that the question regarding the
grantees' liability to make good to the State the value of granite excavated by
them during the aforesaid period has been settled by the Supreme Court in the
Mines & Geology & Anr. [(2004) 2 SCC 783]. But on behalf of the six
petitioners, presently before this Court, it is contended that during the period
in question they carried on the excavation of granite not on the basis of the
interim order passed by this Court in Alanakar Granites but on the basis of
certain orders passed by the High Court. The ground on which the impugned
notice is based, therefore, does not apply to them and as a matter of fact the
petitioners are protected in view of some observations made in the decisions in
Alankar Granites and Karnataka Rare Earth. In our view the contention is not
sustainable either on facts or in law. This would be evident if the relevant
facts are put in proper sequence.
The
facts of the case are taken from Special Leave Petition (Civil) Ors.) which was
argued as the lead case in the batch.
Prior
to 1990 the petitioner held a mining lease for granite. On expiry of the lease
period, sometime in the year 1990 its request for renewal of the lease was not
allowed by the concerned authority in view of the bar created by Rule 3-A that
was introduced in the Karnataka Minor Mineral Concession Rules, 1969.
At
that stage the petitioner went to the Karnataka High Court in Writ Petition
No.20939 of 1990 questioning the constitutional validity of Rule 3-A and
seeking appropriate directions to the concerned authority for renewal of the
quarrying lease granted in its favour, besides some other incidental reliefs.
On October 24, 1990, a learned Single Judge of the
Court passed an interim order in the writ petition in the following terms :
"Pending
disposal of the aforesaid Writ Petition it is hereby ordered by this Court on
24.10.90, the operation of Rule 3-A of K.M.M.C.Rules insofar as the petitioner
is concerned, be and the same is hereby stayed.
Further,
that the Respondents be and are hereby restrained from interfering with the
petitioner's right to carry on quarry operation in the schedule land on payment
of royalty and transportation of the granite."
(portions
in italics indicate emphasis laid on behalf of the petitioner) The writ
petition lay pending in the High Court for over 3-1/2 years. In the meanwhile
Karnataka Minor Mineral Concession Rules, 1969 that contained Rule 3-A was
replaced by Karnataka Minor Mineral Concession Rules, 1994 w.e.f. May 23, 1994. Taking note of the legislative
development the writ petition was finally disposed of by order, dated June 24, 1994. The relevant extract from this
order is as follows :
"The
Respondents have refused to grant the renewal sought for on the basis of the
said Rule as it stood at the relevant time. The said Rule 3A has undergone
several changes and it has also been interpreted by this Court on several
occasions. In the meanwhile the respondents have repealed the old Rules and
have introduced new Rules i.e. Karnataka Minor Mineral Concession Rules, 1994
replacing the Rules of the year 1969 in which Rule 3A occurs. In the light of
the later developments the respondents have to consider the application filed
by the petitioner for renewal of the licence in the light of the law laid down
by this Court and in the light of the Rules. Until then status quo shall be
maintained, subject to relevant Rules. On this basis several petitions have
been disposed off.
Learned
counsel however submits under the new Rules renewal is not automatic and
therefore the position as regards status quo should not be continued. But I do
not think that I should detract from the earlier position now unless
respondents themselves take appropriate action in that regard. Petition shall
stand disposed off accordingly."
(words
in italics indicate emphasis laid on behalf of the petitioners) Mr.Altaf Ahmad,
Senior Advocate, appearing on behalf of the petitioner strongly argued that the
petitioner carried on the excavation and transport/export of granite on the
basis of the interim order passed by the High Court on October 24, 1990, long before the interim direction
given by the Supreme Court on August 27, 1993
in Alankar Granites. Further, the petitioner was able to continue the
operations on the basis of the direction of the High Court to maintain status
quo by its order dated June
24, 1994 while Alankar
Granites remained pending in the Supreme Court. The petitioner was allowed to
carry on excavation and transport/export of granite till January 18, 1996 when the Supreme Court pronounced
judgment in Alankar Granites and all operations were then stopped by the State
authorities. It was thus wrong to club the petitioner along with the lessees
who were in operation on the basis of the interim direction given by the
Supreme Court on August
27, 1993 in Alankar
Granites and the respondents- authorities had wrongly raised the demand against
the petitioner along with the demand notices issued to the other lessees. Mr.Ahmad
further submitted that in the case of the petitioner the interim direction of
this Court was not to simply allow him to continue quarrying but the operation
of Rule 3-A itself was stayed and that brought about a material difference in
the case of the petitioner. Learned counsel submitted that on June 24, 1994
when the writ petition came up for final disposal before the High Court the
interim direction staying operation of Rule 3- A had lost relevance but the
other interim direction whereby the respondents were restrained from
interfering with the petitioners right to carry on quarrying operation was
extended by directing to the parties to maintain status quo. He went so far as
to say that on the basis of the status quo order, it was still open to the
petitioner to carry on quarrying operation in case the respondents had not so
far considered its application for renewal of the licence. Learned counsel also
referred to certain observations made in paragraph 8 of the decision in Alankar
Granites and in paragraph 17 in Karnataka Rare Earth and submitted that the two
decisions of this Court had made a distinction in case of grantees who carried
on operations on a basis other than the interim order passed by this Court and
in their case some room was allowed for concession.
The
submission appears to be devoid of merit. One or two sentences picked up from
here and there from the decisions in Alankar Granites and Karnataka Rare Earth
referred to by Mr.Ahmad in no way support or protect the petitioners. Most
importantly, the reliance placed on the two orders passed by the High Court
would appear to be wholly misconceived and unfounded when viewed in the
totality of relevant facts and circumstances.
It is
noted above that the petitioner filed Writ Petition No.20929 of 1990 seeking
directions to the concerned authority for renewal of the quarrying licence
granted in its favour. The High Court passed certain interim orders in the case
on October 24, 1990 that are reproduced above. On June 18, 1991, while this writ petition was
pending the State Government granted/renewed 203 mining leases for granite to
different parties, including the six petitioners presently before this Court.
The action of the State Government in granting/renewing the leases (203 in
number) came under challenge before the High Court in several writ petitions
filed by way of Public Interest Litigation. All the writ petitions were allowed
by a learned Single Judge of the Court and all the leases granted/renewed by
the State Government were set aside. Some of the lessees aggrieved by the
judgment of the Single Judge took the matter in appeal in W.A.Nos.538-539 of
1993 and connected matters. A Division Bench of the High Court dismissed all
the appeals and confirmed the judgment of the learned Single Judge by order
dated June 25, 1993. Against the decision of the
Division Bench appeals were taken to this Court. All those appeals were put
together and were referred to by the title of the leading case, Alankar
Granites. It is an admitted position that the six petitioners presently before
this Court had also filed appeals against the decision of the Karnataka High
Court and their appeals too were part of the batch of Alankar Granites. In Alankar
Granites this Court passed the following order on August 27, 1993 :
"Issue
Notice.
Renewals
of existing grants in favour of the petitioners shall continue till further
orders of the Court."
Finally,
however, all the appeals were dismissed by judgment and order dated January 18, 1996 and this Court held that the
decision of the High Court striking down the grant of 203 leases (including
those in favour of the petitioners) did not suffer from any infirmity.
The
matter did not stop there. After all the appeals were dismissed by this Court
on January 18, 1996, two of the lessees covered by the decision, namely, M/s.God
Granites and Karnataka Rare Earth applied before the concerned authorities of
the State Government for transport permits for transportation of granites
quarried before the dismissal of the appeals by the Supreme Court and permits
were granted to them under the relevant Rules. Later on, the authorities issued
notice asking the two lessees to make good the value of granite that was
transported after dismissal of the appeals. The demand notice was sought to be
challenged before the High Court in W.P.Nos.5392-5394/1996. The two writ
petitions were dismissed by a learned Single Judge by order dated March 4, 1996.
The
matter was taken in appeal before the Division Bench. The Division Bench, while
dismissing the appeal made the observation that the concerned authorities
'could have directed the recovery of the whole of the granite excavated during
the period of its stay or its price'. Against the order of the Division Bench,
Karnataka Rare Earth & Anr. came in appeal before this Court in Civil
Appeal Nos.3618- 3619 of 1999. The appeals were finally dismissed by judgment
and order dated January
23, 2004.
The
demand notices that are sought to be challenged in this round on behalf of the
six petitioners were issued in light of the observation made by the Division
Bench of Karnataka High Court and upheld in appeal by this Court in Karnataka
Rare Earth.
In
view of the facts and circumstances noted above, the very premise on which the
case of the petitioners' is based appears to be quite unfounded and
unacceptable. It is wrong and incorrect to say that the petitioners carried on
quarrying operations on the basis of the interim order and the final order of
status quo passed by the High Court in their writ petitions. On June 18, 1991,
when the State Government renewed the petitioners' leases (besides many
others), the writ petitions seeking direction to the concerned authorities in
the State Government for renewal of their quarrying leases were rendered infructuous.
The renewal of lease by the State Government opened up a new chapter in the
controversy. The leases granted/renewed by the State Government on June 18, 1991, were struck down by a learned
Single Judge of the Court and the judgment was affirmed in appeal by the
Division Bench. In view of this development it cannot be said that the
petitioners carried on their quarrying operations on the basis of the interim
order passed by the High Court on October 24, 1990. In appeals from the decision of
the High Court this Court in Alankar Granites passed the interim order on August 27, 1993. It is thus evident that the six
petitioners, like all others covered by the decision in Alankar Granites, were
able to carry on their quarrying operations on the basis of the interim order
of this Court dated August 27, 1993 and not on the basis of any other order
passed by the High Court. When the writ petition (W.P.No.20939/1990) came up
for final disposal the Court was not informed that it was infructuous. The
Court was also not informed about the developments taking place during its pendency
and the matter of grant of lease being pending before this Court. The High
Court, thus unaware of those developments, passed the final order, without any
adjudication on the issues involved in the case, directing the parties to
maintain status quo.
It is
thus to be seen that the petitioners' contention that they carried on quarrying
operations on the basis of the interim order of the High Court dated October 24, 1990 coupled with the final order of
status quo dated June
24, 1994 is untenable
for more reasons than one. First, the writ petition was rendered infructuous on
June 18, 1991 when the petitioners' leases were
renewed by the State Government. The interim order dated October 24, 1990 became ineffective with the renewal
of the leases and it lost all force when the grant/renewal of leases by the
State Government was struck down by the High Court. No reliance can also be
placed on the final order in the writ petition as it was passed in a petition
that was infructuous. Secondly, it was passed without any adjudication on the
issues involved in the case and without determining the rights and liabilities
of the parties. Thirdly, it was passed without the Court being informed about
the developments that took place during the pendency of the case and the matter
being pending before this Court. Most importantly, it is basic and elementary
that once the same issues between the same or similarly placed parties are
decided by this Court no order or direction passed by the High Court contrary
to or at variance with the decision of this Court would survive.
I
have, therefore, no manner of doubt that the petitioners, like all other
lessees in Alankar Granites, carried on their quarrying operations on the basis
of the interim order dated August 27, 1993
passed by this Court and the petitioners are fully covered by the decisions in Alankar
Granites and Karnataka Rare Earth.
This
finding rejects the petitioners' plea that they carried on quarrying operations
under the interim order and the order of status quo passed by the High Court
and, therefore, no demand could be raised against them and they were protected
by certain observations made in the decisions in Alankar Granites and Karnataka
Rare Earth. But in fairness to Mr.Ahmad a reference may also be made to his
submissions based on the two decisions. Mr.Ahmad submitted that in paragraph 8
of the decision in Alankar Granites this Court had observed that no benefit
accrued to any lessee by virtue of the stay orders passed by the High Court
because the operation of Rule 3-A was neither suspended nor struck down. The
counsel pointed out that in the case of the petitioners the operation of Rule
3-A was, as a matter of fact, stayed by the High Court by interim order dated October 24, 1990 and, therefore, the petitioners
were not liable to pay the value of the granite.
Paragraph
8 of the decision from which the two sentences are picked up reads as follows :
"Shri
Soli Sorabjee, the learned counsel for some of the appellants, advanced another
argument to support these grants. He submitted that by virtue of the said order
of the High Court in the earlier writ petitions challenging the further
amendments made in Rule 3-A, the power under Rule 3(1) was available for making
these grants with the prior approval of the Government which was given by the
order dated 18-6-1991. We are unable to accept this
submission. The said order in the earlier writ petitions merely had the effect
of requiring the applications of the petitioners in those writ petitions to be
disposed of without reference to rule 3-A but the validity of the grant made to
those petitioners had to be adjudicated with reference to Rule 3-A unless Rule
3-A was struck down leading to its obliteration. Admittedly, Rule 3-A was not
struck down and, therefore, the validity of the grant, if any, made even in favour
of those petitioners had to be decided with reference to Rule 3-A. This being
so, no benefit accrued to any other person by virtue of those stay orders. It
is clear that the operation of Rule 3-A was not suspended and Rule 3-A has not
been struck down. The prohibition contained in Rule 3-A against making any such
grant, therefore, continued to operate."
From
the passage quoted above, it is evident that the leases granted/renewed by the
State Government were sought to be defended on the plea that in some earlier
cases filed before the High Court (like the ones filed by the petitioners) the
High Court had stayed the operation of Rule 3-A and consequently it was open to
the State Government to grant/renew the leases in exercise of its power under
Rule 3(1). The submission was turned down by this Court, holding that the validity
of the grant had to be judged with reference to Rule 3-A, unless Rule 3-A was
struck down leading to its obliteration. The observation relied upon by Mr.Ahmad
was made in that context. Placed in context the reliance on the two sentences
in the judgment appears to be quite misplaced.
Mr.Ahmad
also referred to paragraph 17 of the decision in Karnataka Rare Earth where
this Court observed as follows :
"Neither
the appellants prayed for such relief nor the Court passed any such order. What
this Court had not done, could not obviously have been done by the High Court
in exercise of its writ jurisdiction in view of the earlier judgment of this
Court having achieved a finality."
The
counsel submitted that the petitioners had no occasion to make the prayer because
they were already protected by the interim order of the High Court. It is
already seen that that was not the position and hence, the submission is quite
unacceptable.
Mr.Hegde
in support of the demand relied upon two decisions of this Electricity Board
& Ors. [(1997) 5 SCC 772] and the other in South Eastern placed but in
light of the discussions made above the case of the petitioners is quite
untenable even without adverting to those decisions.
In
view of the discussions made above we find no merit or substance in these
petitions for special leave. All the Special Leave Petitions are accordingly
dismissed. There shall be no order as to costs.
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