Andhra Pradesh High Court - Amravati

M/S Transworld Garnet India ... vs Union Of India, on 10 August, 2022

Bench: U.Durga Prasad Rao

         HON'BLE SRI JUSTICE U.DURGA PRASAD RAO

              Writ Petition Nos.10705 and 10773 of 2021

COMMON ORDER:

      Parties and facts, except the prayers, are similar in both these writ

petitions and hence they are disposed of by this Common Order.


2.    The petitioner's case succinctly is thus:

      (a) The petitioner is a Private Limited Company dealing in Beach

Sand Minerals(BSM) mining and Garnet production. BSM deposits in

our country contain seven important minerals viz., Ilmenite, Rutile,

Leucoxene (Titanium minerals), Monazite (Thorium mineral), Zircon

(Zirconium mineral), Garnet and Silimanite (Industrial minerals) co-

existing together. Of these, only monazite is radio-active & Prescribed

Substance. All these minerals are listed as Atomic Minerals under Part-

B, First Schedule of MMDR Amended Act, 2016 (Act 25 of 2016).

      (b) The petitioner company applied for mining lease for BSM in

the State of Andhra Pradesh.           The 2nd respondent issued its

recommendation dated 06.09.2000 for prior approval of the 1st

respondent under Section 5(1) of MMDR Act and Rule 27(3) of Mineral

Concession Rules, 1960 (for short "MC Rules, 1960"). The 1st

respondent vide its letter No.4/126/2000-M.IV, dated 12.04.2001 granted

approval after consultation with the Department of Atomic Energy

(DAE). The DAE suggested certain conditions and accordingly the

Central Government issued prior approval imposing the following

conditions:

(i)If, while mining garnet, the lessee comes across the deposits of any prescribed substances / atomic minerals, the same shall be disposed of any after obtaining license from DAE.

(ii)The tailings containing prescribed substances shall be disposed of only to another entity which holds a valid license under the Atomic Energy (Working of Mines, Minerals and Handling of Prescribed Substances) Rules, 1984.

(iii)If monazite is produced in the process of exploitation of beach sand minerals, the same shall be disposed of in accordance with the instructions of Atomic Energy Regulatory Board in accordance with the provisions of the Atomic Energy Act and Rules there under.

(iv)Since the applicant is not wholly Indian owned company, the applicant cannot engage in the separation and sale of prescribed substances in accordance with the policy resolution of the Government of India, DAE No.8/1[1], 97-PSU, dated 06.10.1998.

(v)The applicant should have no objection to Atomic Minerals Directorate for exploitation and research exploitation activities and inspection by officials of AMD/Government of India.

With the above conditions, the 2nd respondent granted mining lease to the

petitioner company for 95.085 hectors vide G.O.Ms.No.7, dated

05.01.2002 for a period of 30 years from 24.06.2002 to 23.06.2032.

Under the said G.O., the 2nd respondent granted permission to the

petitioner to mine the garnet and also the right to dispose of tailings as

per the conditions stipulated above. BSM are group of minerals which

exist together but not in isolation which is a well known geological fact.

In view of their conglomeration, mining of one mineral, necessarily

accompanies the mining of other minerals. When one of these minerals

is extracted from the beach sand, the residual sand left over after the

extraction is known as "Tailings".

intimation under rules 66A(1) of MC Rules, 1960, the petitioner started

extraction of garnet and obtaining permits since 2004. So far, the

petitioner company dispatched 2,56,287 MTs of Garnet mineral and

3,23,666 of MTs of tailings after payment of advance royalty and other

dues to the State Government. The petitioner subsequently requested the

2nd respondent to include the other heavy non Garnet minerals in the

existing mining lease and the same is pending.

(d) While the matter thus pending, the 1st respondent, all of a

sudden issued three memos dated 02.11.2018 suspending the mining

operations of the petitioner on the allegation of providing incorrect /

incomplete information in the annual returns for the year 2016-17.

Aggrieved, the petitioner challenged the proceedings in Memo

No.13302/M.III(2)/2010-1, dated 02.11.2018 in Writ Petition

No.41257/2018 and the Common High Court of Andhra Pradesh vide its

order dated 27.11.2018 stayed the impugned proceedings until further

orders. The petitioner submitted reply dated 12.11.2018 to the 2nd

respondent.

(e) While so, following the directions in F.No.1/1/2019-M.VI,

dated 01.03.2019 of the GoI directing the GoAP to prematurely terminate

all the existing mineral concessions of BSM held by private persons /

companies, the mining operation of the petitioner is stopped. As things

thus stand, the 3rd respondent issued impugned show cause notice vide

Memo No.4337687/D1-1/2021, dated 08.03.2021 asking the petitioner

company to show cause why the mineral confiscated on 21.11.2018

cannot be shifted to the custody of the 5th respondent for further disposal.

The petitioner submitted reply dated 28.03.2021 requesting the 3rd

respondent for the documents which were relied in the show cause notice

including the communication / correspondence of inspection, recorded

statement and confiscation order dated 21.11.2018. It is submitted that

no confiscation was made on 21.11.2018 as mentioned in the show cause

notice. So to cover the said mistake, the 4th respondent officials addressed

mail dated 10.05.2021 seeking inspection of petitioner company on the

very next day i.e., on 11.05.2021. On that day the 4th respondent seized

the stock and handed over to the 5th respondent:

(f) The petitioner specifically requested the 3rd respondent that it

cannot effectively give a reply without knowing what material was relied

upon by the 3rd respondent in its show cause notice dated 28.03.2021.

However, so far, no documents were furnished. Further, the stock was

illegally confiscated on 11.05.2021 and placed in the custody of the 5th

respondent. The action of the 3rd respondent is arbitrary and illegal,

besides violative of principles of natural justice.

(g) In similar circumstances when the respondent issued Memo

No.13302/M.III(2)/2010-3, dated 02.11.2018 without supplying the

documents, the petitioner filed W.P.No.84/2019 which was allowed by

this Court on 03.01.2019 with a direction to the respondents to furnish

the documents to enable the petitioner to give reply to the show cause

notice.

Hence, the Writ Petition No.10705 of 2021 to declare the show

cause notice vide Memo No.4337687/D1-1/2021, dated 08.03.2021, and

consequential confiscation of minerals on 11.05.2021 as illegal, arbitrary

and consequently to set aside the same.

3. Writ Petition No.10773 of 2021 is concerned, the petitioner's plea

is that pursuant to the confiscation of the mineral on 11.05.2021, the 5th

respondent / APMDC issued e-Tender No.APMDC/GEO/BSM-1/2021,

dated 19.05.2021 in respect of the minerals (1) Garnet - 15000 MTs (2)

Ilmenite rich tailings - 38,000 MTs and (3) Silimanite 2,400 MTs

belonging to the petitioner which is illegal, inasmuch as, no opportunity

was given to the petitioner to submit its reply to the show cause notice

dated 08.03.2021. In the e-Tender it was stated that the 5th respondent

was appointed as custodian by the GoI vide letter dated 20.08.2018

issued by the Ministry of Mines, GoI to confiscate the minerals. In fact

the said letter dated 20.08.2018 has been challenged by the petitioner in

W.P.No.658/2019 and the same is pending before this High Court.

Though the matter is subjudice, the 5th respondent issued present e-

Tender to sell the minerals on 21.05.2021 illegally. Hence Writ Petition

No.10773 of 2021 with a prayer to declare the action of the 5th

respondent in issuing e-Tender No.APMDC/GEO/BSM-1/2021, dated

19.05.2021 for the aforesaid minerals as illegal, arbitrary and violative of

principles of natural justice and to set aside the same.

4. Respondent Nos.2 to 6 filed counter opposing the writ petitions as

follows:

(a) The writ petition is not maintainable and liable to be

dismissed in limini for the facts

(i) The petitioner has not approached the Court with clean hands; as the High Court of Madras, Madurai Bench appointed Receiver (Mrs. Justice Dr. S.Vimala, Retd. Judge of the High Court of Madras) for the petitioner company vide judgment dated 08.04.2021 in the partition proceedings between the family members who owns the petitioner company and hence, the petitioner cannot file writ petitions.

(ii) The signatory of the present writ petition was appointed as General Manger by one of the Directors who was not delegated such powers by the Board of Directors, as Board Resolution is not filed.

(iii) The petitioner concealed material facts pertinent to the judgments in Writ Petition No.658/2019, dated 16.08.2019 and Writ Appeal No.285/2019, dated 27.09.2019. Hence the petitioner company has no right to file the writ petition.

(b) It is true that vide G.O.Ms.No.7 the petitioner was granted

mining lease for Garnet mineral by GoAP over an extent of 95.085 Ha.

from the confluence of Nagavali River to south of Sy.No.1042 in

Srikurmam Village of Gara Mandal in Srikakulam District with certain

terms and conditions. It is categorically denied that the mining lease

gave a right to the petitioner to dispose of the tailings in accordance with

the conditions stipulated in the lease. The prior approval accorded by the

MoM under Section 5(1) of the MMDR Act, specified the condition to

dispose tailings only to another licensing entity to process/separate the

prescribed substances because the tailings contain not only Garnet but

other important minerals including Monazite which have significant

commercial value. Therefore, the petitioner as per the terms of the lease

has obligation to deal with the tailings as specified thereunder, but has no

right to dispose of the tailings. The petitioner company is not the owner

of the tailings containing other atomic minerals. As per Section 5(1) of

the MMDR Act, 2016, the petitioner company is required to obtain prior

approval to include all the minerals in the existing mining lease from the

MoM, GoI. Till then petitioner is permitted to mine only Garnet mineral,

for which mining lease has been granted. Regarding the occurrence of

other atomic minerals, the petitioner shall report to the GoAP and AMD

whenever it discovered atomic minerals under Rule 12(2) of the MCR,

2016 and Rule 7 of the AMCR, 2016. The petitioner company failed to

comply with these Rules as per the observation of the MoM, GoI in its

letter dated 20.08.2018. The petitioner's request for inclusion of other

minerals in its existing mining lease was rejected by the MoM, GOI vide

its letter No.F.No.4/17/2011-MIV dated 20.08.2018 after careful

consideration with a direction to the 2nd respondent to suspend mining

operations of the petitioner company for its failure to comply Rule 12(2)

of the MCR, 2016. Pursuant to the said direction of 1st respondent, the

2nd respondent issued Memo dated 02.11.2018 to petitioner company.

2019/M.IV dated 01.03.2019 was issued for premature termination of the

lease of the petitioner.

(d) It is stated that several policy decisions were taken by the

Central Government for regulation of atomic minerals including BSM.

They are:

(i) MMDR Act, 1957 was suitably amended in the year 2015 and new rules relating to the regulation and development of atomic minerals were framed. In view of Section 11B of the MMDR amended Act, 2015, the Central Government framed the Atomic Mineral Concession Rules, 2016 (for short, the AMC Rules, 2016').

(ii) The Threshold Value (THV) i.e., the weight of a particular atomic substance in BSM is specified in the above rules so as to regulate the mineral concessions in respect of BSM resources and to give complete control over atomic minerals to the Department of Atomic Energy (DAE). As per Rule 5(1) of the AMC Rules, 2016, where the THV of atomic minerals is equal to or above the THV, the mining lease will be granted only to Government companies in the place of private parties.

(e) In the light of above amendments, the MoM, in exercise of the

powers under Section 4A(1) of the MMDR Act and in consultation with

the State Governments, proposed to prematurely terminate the existing

mineral concessions of BSM held by private persons / companies and

accordingly, the State Governments were requested to take necessary

action in that regard. The GoAP has already issued show cause notice to

the petitioner company vide Memo dated 12.05.2021. The atomic

minerals in BSM have important strategic elements and their pilferage at

the stage of mineral processing / handling will affect the National

Security. The role of State Government is minimal which has to

implement the decisions taken by the Union of India in the interest of

nation. Therefore, the State Government confiscated the minerals and

mineral concentrates stored within the premises of the petitioner

company under its control on 21.11.2018.

5. It is further contended that BSM deposits in the country contain

seven minerals viz., (i) Garnet (ii) Silimanite (iii) Rutile (iv) Zircon (v)

Leucoxene (vi) Ilmenite and (vii) Monazite. All these minerals are

classified as atomic minerals under Part B of the First Schedule to the

MMDR Amended Act, 2016. At the time of initial grant of mining lease,

the Garnet and other minerals were not atomic minerals and remaining

minerals were administered as Prescribed Substances under the Atomic

Energy Act, 1962 and were under the administrative control of DAE. It

is true that subsequently vide Gazette notification dated 18.01.2006, these

Prescribed Substances were delisted from the list of Prescribed

Substances w.e.f. 02.01.2007. Since at the time of lease the petitioner

company was a foreign company and as it was not eligible to mine the

prescribed substances / atomic minerals, it obtained mining lease only for

Garnet. So far as the other associated minerals were concerned, the GoI

and the DAE found suitable mechanism, keeping in view the mineral

conservation and development and National Security, to dispose the

minerals other than Garnet to meet the needs of the industry. Thus, the

mining lease for the petitioner company is only for Garnet and not for

other minerals. As on the date of confiscation the petitioner company has

no right on the other minerals. In the past, the petitioner was permitted to

dispose of the non-Garnet mineral mixture called as "Tailings" to another

company which has a valid license from the DAE/Atomic Energy

Regulatory Board. However, that is not the case now. The proposal for

inclusion of non-Garnet minerals in the existing mining lease of the

petitioner company was rejected for the above reasons. Against non-

inclusion of other minerals in the mining lease, the petitioner filed

W.P.No.658/2019. In the said writ petition, an interim order was sought

for and the same was dismissed. The petitioner filed W.A.No.285/2019

and the same was also dismissed on 27.09.2019. The petitioner company

has no ownership over Tailing minerals and in the light of the relevant

statutes and regulations, the confiscation of those minerals by the

respondents is valid. Hence, the writ petitions may be dismissed.

6. The 5th respondent filed counter and opposed the writ petitions.

The contention of the petitioner that the recorded statement and

confiscation order dated 21.11.2018 were not furnished to the petitioner

and hence, it could not submit its response to the show cause notice is

false. On the other hand, on 21.11.2018, during confession, the statement

of the petitioner was recorded and he was directed not to disturb the

maintained stocks and the statement bears his signature. So it is not

correct to claim that no confiscation was taken place. The request of the

petitioner to include other BSM in his lease was rejected by 1st

respondent and the said fact was concealed by the petitioner. The

rejection was challenged in W.P.No.658/2019, wherein I.A.No.1/2019

was filed seeking a direction to the respondents to issue permit for

dispatch of minerals. However, the said I.A. was dismissed and the

W.A.No.285/2019 filed by the petitioner was also dismissed. All these

facts were suppressed by the petitioner. The writ petition is not

maintainable for non-inclusion of the Atomic Mineral Directorate, which

is the competent authority. The petitioner has no right over the minerals

notified in the impugned tender notification. The writ petition is liable to

be dismissed.

7. The 7th respondent filed counter contending thus:

(a) Vide G.O.Ms.NO.7 the petitioner was granted mining lease for

recovery of only Garnet with a condition to dispose the tailings to another

entity which holds valid license from DAE. The petitioner applied for

inclusion of other heavy minerals in his lease, but the same was rejected

vide letter dated 20.08.2018 by the Ministry of Mines and the

Government of A.P. was directed to confiscate the minerals. In

compliance thereof, the GoAP issued show cause notice dated

08.03.2021 to the petitioner for disposal of confiscated minerals stocked

with the petitioner. The Mineral Concession Rules, 1960 were repealed

and the MCR, 2016 were notified. As per Rule 12(2) of the MCR, 2016,

the holder of a mining lease shall have no right over the discovered

mineral and shall not dispose of such mineral. The State Government

will have control in respect of such mineral.

(b) Further, the AMC Rules, 2016 were notified and with the

amendment of THV of Monazite, all the mineral deposits of beach sand

came under the purview of the AMCR, 2016 and the mining lease shall

be granted to the Government companies / corporations in the changed

scenario. The MOM vide its letter dated 01.03.2019 requested all the

State Governments to take action for premature termination of the mining

leases of BSM held by the private firms and accordingly, the GoAP

issued show cause notice dated 08.03.2021 to the petitioner and thus, its

action is within the purview of mineral laws in force. The mineral laws

in the country are amended from time to time basing on the strategy /

industrial policy of the country. The holder of mineral concession has to

comply with the provisions of mineral laws in force and hence, the

petitioner cannot claim any right over the Tailing minerals. The action

taken by the GoAP is in accordance with law. Finally it is stated that the

Memo in 12719/M.III(2)/2010-1 dated 23.03.2018 was not issued by the

DAE / AMD as claimed by the petitioner and the writ petition is sought

to be dismissed.

8. The petitioner filed rejoinder denying the counter allegations.

9. Heard arguments of Sri Ravi Cheemalapati, learned counsel for

petitioner, and learned Assistant Solicitor General of India representing

the respondents 1 & 7, learned Government Pleader for Mines &

Geology representing the respondents 2 to 4 and Sri V.R.N.Prashanth,

learned counsel for 5th respondent.

10. The point for consideration is:

Whether the actions of the respondents, particularly the 3rd

respondent in issuing show cause notice vide Memo No.4337687/D1-

1/2021, dated 08.03.2021 to the petitioner company and the action of

the 5th respondent in making consequential confiscation of the minerals

on 11.05.2021 and issuing e-tender notification dated 19.05.2021 for

auctioning the BSM seized from the petitioner as illegal, arbitrary and

violative of principles of natural justice for non-furnishing of the

documents sought for by the petitioner to submit an effective reply to

the show cause notice dated 08.03.2021?

11. Point: While it is the contention of the petitioner that the

respondents 3 to 5 have illegally seized the tailings of BSM extracted and

stored by the petitioner on a false ground that the petitioner has not

complied with the provisions of the relevant laws, particularly Rule 12(2)

of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals)

Concession Rules, 2016 [M(OTAHBM) CR, 2016] and making hectic

preparations to sell the seized tailings of BSM by issuing the e-auction

notification dated 19.05.2021 without affording an opportunity to the

petitioner by supplying relevant material to enable it to submit its reply to

the show cause notice dated 08.03.2021, per contra, the respondents

would contend that the petitioner was given lease to mine and dispose

only the Garnet, one of the beach sand minerals, but not other tailings

and that it shall dispose of other tailings to a licensed entity only after

obtaining permission from the DAE, however, the petitioner grossly

contravened the terms of the lease and also the provisions of relevant

laws and therefore, on the directions of the MoM, GoI, the 2nd respondent

issued instructions to the respondents 3 & 4 to seize the BSM tailings

stored by the petitioner and hand over to 5th respondent and accordingly,

they seized the minerals and confiscated to the State and the 5th

respondent issued e-auction notification dated 19.05.2021 and thus, the

acts of the respondents are well within the law.

The above is the crux of the lengthy pleadings of either side. I

gave my anxious consideration to the respective contentions.

12. Geographically, the Beach Sand Minerals (BSM) are a group of

minerals which exist together and cannot be found in isolation. There

are about seven important minerals viz., Ilmenite, Rutile, Leucoxene

(Titanium minerals), Monazite (Thorium mineral), Zircon (Zirconium

mineral), Garnet and Silimanite (Industrial minerals) which exist

together. Of them, Monazite is a radio-active and a Prescribed

Substance. In view of their conglomeration, the mining of one mineral

necessary accompanies the mining of other minerals. When one of these

minerals is extracted from the beach sand, residual sand left over after

extraction is known as "tailings". Of these sand minerals, Garnet is

having industrial potentiality and therefore, the enthusiastic entrepreneurs

seek for mining lease of Garnet from the BSM. Since, no single BSM

can be extracted in isolation and further, as one of the tailings viz.,

Monazite is a concentrated atomic mineral, in order to balance the

industrial requirement and also to safeguard the public interest and

security, the respective State Governments will follow the directions

issued by the GoI before issuing mining lease of BSM to the enthusiastic

miners. The terms and conditions imposed for issuing mining lease will

be in consonance with the Atomic Energy Act, 1962 and rules and

regulations thereof. The GoI, basing on the changes occasioned in

political, scientific, technological and industrial fields, adopt its policy

towards the BSM and its mining operations.

13. Be that it may, the petitioner company which is primordially deals

with BSM mining and Garnet production, applied for mining lease and

after necessary formalities, the GoAP granted mining lease for Garnet to

the petitioner company over an extent of 95.085 Has. from the

confluence of Nagavali River upto Sy.No.1042 of Srikurmam Village in

Srikakulam District for 30 years from 24.06.2002 to 23.06.2032 vide

G.O.Ms.No.7 dated 05.01.2002 with certain conditions enumerated

therein viz.,

(i) If, while mining Garnet, the lessee comes across deposits of any Prescribed Substances / Atomic Minerals, the same shall be disposed of only after obtaining license from the DAE as required under the Atomic Energy [Working of Mines, Minerals and Handling of Prescribed Substances] Rules, 1984.

(ii) The tailings containing the Prescribed Substances shall be disposed of only to another entity which holds a valid license under the aforesaid Rules.

(iii) If Monazite is produced in the process, the same shall be disposed of by the lessee on its cost in accordance with the instructions / directives of the Atomic Energy Regulatory Board.

(iv) Since the lessee is not a wholly Indian owned company, it cannot engage in the separation and sale of Prescribed Substances.

(v) The company shall have no objection for inspection by the officials of AMD / GoI besides the company shall obtain all necessary permission from the concerned Department.

Accordingly, a Lease Deed dated 24.06.2002 was entered into between

the petitioner and 3rd respondent. The petitioner, after getting all

permissions, started mining operations actively from 2004.

14. While so, Ilmenite, Rutile, Leucoxene and Zircon were ceased to

be Prescribed Substances w.e.f. 01.01.2007 vide Gazette Notification

dated 18.01.2006 published in the Gazette of India, Extraordinary, Part

II, Section III(ii). The petitioner appears to have filed several writ

petitions when permission was not accorded for transporting the Garnet

and tailing minerals with which we are not concerned. Be that it may, the

GoI having regard to the prevailing conditions changed its policies in

relation to atomic minerals. Section 11B was introduced to the MMDR

Act, 1957 by virtue of Amendment Act 10 of 2015 w.e.f. 12.01.2015. As

per Section 11B, the Central Government was conferred powers to make

Rules for regulating the grant of mining leases or other mineral

concessions in respect of minerals specified in Part B of the First

Schedule and the State Government shall grant a reconnaissance permit,

prospecting license or mining lease in respect of such mineral in

accordance with such rules framed by the Central Government. It is to be

noted that Part B of the First Schedule of the MMDR Act, 1957 relates to

'Atomic Minerals'. Sl.No.12 relates to Beach sand minerals i.e.,

economic heavy minerals found in the Teri or beach sands which include

Ilmenite, Rutile, Leucoxene, Garnet, Monazite, Zircom and Sillimanite.

Therefore, the Central Government was vested with power to make rules

relating to the Atomic Minerals contained in Part B of First Schedule

regulating the grant of mining leases in respect of those minerals.

15. While so, in exercise of the power conferred under Section 11B of

the MMDR Act, 1957, the Central Government brought forth the Atomic

Mineral Concession Rules, 2016. Rule 7 specifies that if a holder of a

mineral concession discovers any atomic mineral, he shall report the

findings to the Directorate and the State Government in the prescribed

format and the atomic minerals so discovered shall be handled and

disposed of in accordance with the directives issued by the Department.

Further, the mining lease will be continued with the prior approval of the

Department and in case of refusal by department, the mining lease shall

be terminated by the State Government.

16. In addition to the above rules, the Central Government in exercise

of the powers conferred on it under Section 13 of the MMDR Act, 1957,

issued rules called as the Minerals (Other than Atomic and Hydro

Carbons Energy Minerals) Concession Rules, 2016 [M(OTAHEM)

CR, 2016]. Rule 12 deals with the terms and conditions of the mining

lease. As per Rule 12(2), the lessee shall report to the State Government,

the discovery in the leased area of any mineral not specified in the lease

within a period of 60 days from the date of such discovery and shall not

win and dispose of such discovered mineral.

17. After introduction of the above policy decisions and also the

statutory rules, the 3rd respondent issued the impugned notice dated

08.03.2021 to the petitioner company stating that the MoM, GoI vide

F.No.4/17/2011.M.IV dated 20.08.2018 directed the GoAP to confiscate

those minerals under Rule 12(2) of the M(OTAHEM) CR, 2016 for

failure of the petitioner to comply with the requirement of Rule 12(2) of

the AMCR, 2016. It is further stated that the petitioner's request for

inclusion of other heavy minerals in its lease was rejected and therefore,

it has no right on the tailing minerals. It is also stated in the show cause

notice that the MoM, GoI vide letter in F.No.1/1/2019-M.VI dated

01.03.2019 directed the GoAP to prematurely terminate all existing

mineral concessions of Beach Sand Minerals held by private persons /

companies and accordingly, the 3rd respondent submitted proposals to the

Government for premature termination. It is also stated in the show

cause notice that the Ministry of Home Affairs, GoI vide File

No.15012/09/2018-CSR.III dated 15.11.2018 instructed the State

Government to confiscate the minerals stored within the lease premises

and plants of lessee and accordingly, the minerals stored in the factory

premises of the petitioner were confiscated on 21.11.2018. The

particulars of the confiscated minerals are mentioned in the show cause

notice.

18. Thus, the notice was issued to the petitioner to show cause as to

why the minerals confiscated on 21.11.2018 cannot be shifted to the

custody of APMDC/5th respondent for further disposal. To the above

notice, the petitioner submitted a preliminary reply dated 28.04.2021

stating that it has received the show cause notice on 17.04.2021 but it has

not received any communication / correspondence nor the alleged

confiscation order dated 21.11.2018 mentioned in the show cause notice.

Therefore, in the said reply, the petitioner requested the 3rd respondent to

forward copy of the communication / correspondence and confiscation

order dated 21.11.2018 along with proof of service thereof so as to enable

the petitioner to submit a detailed reply and to defend itself. However, it

appears, without responding to the reply of the petitioner, the 3rd

respondent handed over custody of the confiscated material to the 5th

respondent vide Mediators report dated 11.05.2021. Hence, the

petitioner challenged the show cause notice dated 08.03.2021 and the

Mediators report dated 11.05.2021 by which the confiscated material was

handed over to 5th respondent, in W.P.No.10705/2021.

19. Whereas, questioning the Auction Notification dated 19.05.2021

issued by the 5th respondent, the petitioner filed W.P.No.10773/2021.

This Court passed interim order dated 03.06.2021 to the effect that the

auction may go on pursuant to the proceedings dated 19.05.2021 but the

respondents shall not finalize the same. The interim order admittedly is

in force.

20. I have gone through the impugned show cause notice dated

08.03.2021 and the preliminary reply dated 28.04.2021 submitted by the

petitioner. In the show cause notice the stand of the respondents is that in

view of the change in the policy of the GoI and introduction of statutory

rules, the lessee has no right over the tailing minerals and it has to inform

about the discovery of tailing minerals other than the mineral for which

the lease was granted and since the petitioner has not submitted such

particulars, the lease was proposed to be prematurely terminated on one

hand and the stock existing with the petitioner was sought to be

confiscated on the other. Needless to emphasize that when such drastic

actions of termination of lease as well as confiscation of minerals for

whatever valid reasons are contemplated, it is the duty of the respondent

authorities to give an opportunity of filing reply by the petitioner and also

to afford a personal hearing. No doubt, a show cause notice was issued

to the petitioner asking to submit reply within 15 days. However, when

the petitioner sent a letter dated 28.04.2021 stating that he has not

received any communication / correspondence nor the alleged

confiscation order dated 21.11.2018 referred in the show cause notice and

requested the 3rd respondent to furnish copy of communication /

correspondence and the alleged confiscation order dated 21.11.2018 so as

to enable the petitioner to submit its full-fledged reply and to defend its

case, the respondent authorities have not furnished the documents sought

for by the petitioner nor gave any reply to the petitioner. In my

considered view, this amounts to the violation of principles of natural

justice.

21. Needless to emphasize that when there is gross violation of

principles of natural justice, this Court can exercise its plenary

jurisdiction under Article 226 of the Constitution of India in the interest

of justice. This proposition of law has been reiterated by Hon'ble Apex

Court in Whirlpool Corporation v. Registrar of Trade Marks,

Mumbai1 and observed thus:

"14. The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of Habeas Corpus, Mandamus, prohibition, Qua Warranto and Certiorari for the enforcement of any of the Fundamental Rights contained in Part III of the Constitution but also for "any other purpose".

15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this court not to operate as a bar in at least three contingencies, namely, where the Writ Petition has been filed for the enforcement of any of the Fundamental rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case law on this point but to cut down this circle of forensic whirlpool we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field."

It should be noted that in the instant case there is no efficacious

and alternative remedy available to the petitioner to seek for. That is also

one of the grounds which weigh with this Court to exercise the writ

jurisdiction.

22. Accordingly, the Writ Petition Nos.10705 and 10773 of 2021 are

disposed of with the following directions:

(a) The petitioner shall make a fresh application to the 3rd

respondent within two weeks mentioning the relevant documents which

are required by it to submit its detailed reply to the show cause notice

dated 08.03.2021 and also the Mediators Report dated 11.05.2021.

AIR 1999 SC 22 = MANU/SC/0664/1998

(b) Within two (2) weeks from the date of receipt of such