Federation Of Minor Minerals ... vs The Union Of India,
2022 Latest Caselaw 7523 AP

      THE HON'BLE SRI JUSTICE R.RAGHUNANDAN RAO

                  WRIT PETITION No.19482 of 2022


ORDER:

The 1st petitioner is the Federation of Minor Minerals

Industry and the 2nd petitioner, which is a member of the 1st

petitioner sought grant of a mining lease for granite, over 3

Hectares of land in Sy.No.1 of Addukouda Village, Tekkali

Mandal, Srikakulam District.

2. The Central Government exercising its power under

Section 18 of the Mines and Minerals (Development and

Regulation) Act, 1957 (hereinafter referred as "MMDR Act,1957")

had framed the Granite Conservation and Development Rules,

1999 (hereinafter referred to as the Granite Rules) which set out

the rules for Conservation, Systematic and Scientific

Exploitation of Granite Resources in India. All licenses and

leases, relating to exploitation of granite resources, are required

to be issued in accordance with these rules. The Government of

Andhra Pradesh had also issued, under Section 15 of the MMDR

Act, 1957, the Andhra Pradesh Mining Mineral Concession

Rues, 1996 (hereinafter referred as the "Minor Mineral

concession Rules, 1996") under G.O.Ms.No.1172 dated

04.09.1967. These rules have been amended from time to time

including the amendment by G.O.Ms.No.13, Industries &

Commerce (Mines-III), dated 14.03.2022 and G.O.Ms.No.14,

dated 14.03.2022. By virtue of these amendments, the manner

of granting quarry lease for exploitation of minor minerals has

been changed. G.O.Ms.No.13 dated 14.03.2022 brought in

various amendments to the Minor Mineral Concession Rules.

The amendments with which were are concerned are the

introduction of Rules 12(5)(a)(i), 12(5)(d) and 12(5)(h)(XI)(i) of the

Andhra Pradesh Minor Mineral Concession Rules, 1966 which

are set out in more detail herein after. G.O.Ms.No.13 also

amended Rule 7-A of the Minor Mineral Concession Rules

directing that all quarry leases for minerals, granite, marble and

31 minerals declared as minor minerals vide G.S.R.No.423(E)

dated 10.02.2015 shall be granted to preferred bidders selected

through the Andhra Pradesh Minor Mineral Auction Rules,

2022. The said Minor Mineral Auction Rules, 2022 were

introduced through G.O.Ms.No.14 dated 14.03.2022. These

rules required an auction to be conducted for any quarry lease

with an area exceeding 4 Hectares to be granted only by way of

an auction. Further discretion is given to the Mines and Geology

Department to decide whether quarry leases for areas between 1

Hectare and 4 Hectares should be done by auction or by

following the earlier regime of granting quarry leases of fist come

first served basis.

3. The petitioners contending that the respondents 2 to

5 would allot mining leases, for excavation of granite, by

conducting auction of the said leases, under the newly

amended Minor Mineral Concession Rules, have approached

this Court by way of the present writ petition seeking a writ or

direction holding and declaring that the Andhra Pradesh Minor

Mineral Auction Rules, 2022 and the Rules 12(5)(a)(i), 12(5)(d)

and 12(5)(h)(XI)(i) of the Andhra Pradesh Minor Mineral

Concession Rules, 1966 do not apply to the mineral granite and

to consequently restrain the respondents from conducting

auction of any granite mine/block.

4. Heard Sri Indrajit Sinha learned counsel, appearing

for Sri M.Balaji, learned counsel for the petitioners and the

learned Additional Advocate General, appearing for the

respondents.

5. It is the contention of the petitioners that there is

repugnancy to some extent between the Granite Rules, framed

by the Central Government and certain recently amended minor

mineral rules, 1966 rules and the Auction Rules which have

now been brought into the Minor Mineral Concession Rules,

1966 by the State Government. It is the case of the petitioners

that to the extent of such repugnancy, the provisions of the

Granite Rules would have to prevail and the provisions of the

Minor Mineral Concession Rules, to that extent would have to be

held to be not applicable in relation to grant of quarry leases, for

excavation of granite.

6. The Granite Conservations and Development Rules,

1999 framed by the Central Government under Section 18 of the

MMDR Act, 1957 provides for the exploitation of granite. The

learned Counsel for the petitioner has taken this court through

the various rules in the following manner:

A. Rule 4 of the Granite Rules stipulates that no

lease shall be granted by the State Government

unless it is satisfied that there is evidence to

show there is existence of Granite in the area

for which the lease is applied by way the area

being prospected earlier for granite or the

existence of granite therein has been

established otherwise. Rule 5 restricts the

period for which a prospecting licence can be

granted to two years.

B. Rule 3(i) defines a lease to mean a lease granted

for the purpose of undertaking mining or

quarrying operations for granite.

C. Rule 3(L) defines "prospect" means an area

where existence of granite has been established.

D. Prospecting licences, under Rule 3(m) means a

licence granted for the purpose of undertaking

any operation for the purpose of exploring,

locating or proving granite deposits.

E. Rule 6 stipulates that lease can be granted for a

period which shall not be less than 20 years and

which shall not exceed 30 years with an option

to renew a lease for a period not exceeding 20

years.

F. Rule 7 stipulates that the minimum area which

can be granted under a lease shall be not less

than 1 Hectare and the maximum area that may

be granted shall not exceed 50 Hectares unless

the State Government for reasons to be recorded

in writing, after satisfying itself, grants or renew

of lease with an area more than average limit or

less than the minimum limit.

G. Rule 12 stipulates that no lease shall be granted

or renewed by the State Government unless

there is a mining plan which has already been

approved by the State Government or by any

person authorized on this behalf by the

Government for the development of the granite

deposit.

H. Rule 52 mandates that the provisions of the

Minor Mineral Concession Rules or any other

rules framed by the State Government under

Section 15 of the Act shall be applicable to

quarry leases to the extent they are not

repugnant to or inconsistent with these rules.

7. The provisions of the Minor Mineral Concession

Rules, as amended by G.O.Ms.No.13 and G.O.Ms.No.14 dated

14.03.2022, applicable to the present case, are as follows.

A. Rule 12(5)(a)(i) provides that all quarry leases

for granite and some minerals shall be granted to

the preferred bidders through the Andhra Pradesh

Minor Mineral Auction Rules, 2022.

B. Rule 12(5)(d) stipulates that all mineral concession

applications for minor minerals except for those

under Rule 12(5)(a)(i) received for grant of lease

prior to the date of commencement of the Andhra

Pradesh Minor Mineral Concessions Rules, 2022

shall become ineligible.

C. Rule 12(5)(h)(xi)(i) stipulates that all quarry leases

granted before the commencement of Andhra

Pradesh Minor Mineral Auction Rules shall be

deemed to have been granted for a period of 20

years and all quarry leases granted before

commencement of the Andhra Pradesh Minor

Mineral Auction Rules shall be deemed to have

been extended up to 31.03.2023 with effect from

the date of expiry of the period of renewal lease

made, or till the completion of renewal period, or

20 years from the date of initial grant of such

licence whichever is later.

8. Sri Indrajit Sinha learned counsel, appearing for the

petitioners on the basis of the above statutory provisions would

submit that under the granite rules, the State Government,

before considering the grant of a quarry lease for Granite, has to

first satisfy itself that granite exists in the area for which a lease

is sought, either by way of prospecting earlier or by considering

evidence to show that there is granite in the area for which the

lease is applied. Any such lease cannot be for a period below 20

years or for a period of above 30 years. There is a provision for

renewing a lease which had been granted earlier, subject to the

condition that the renewal would be for twenty year or lesser.

The area of the lease cannot be less than 1 Hectare or more than

50 Hectares. The lease can be granted or renewed by the State

Government only when a mining plan has already been

proposed by the State Government or any person authorized in

this behalf by that Government.

9. Sri Indrajit Sinha learned counsel, submits that in

contradiction to these stipulations in the granite rules, the new

regime introduced under G.O.Ms.Nos.13 and 14 stipulate under

Rule 12(5)(a)(i) the grant of quarry lease for granite would be

done under the new auction rules brought in by G.O.Ms.No.14

under Rule 12(5)(d), the applications filed prior to the Auction

Rules, 2022 become ineligible and all quarry leases shall be

deemed to have been extended up to 31.03.2023 or till the

completion of renewal period, or 20 years from the date of initial

grant of lease whichever is later.

10. Sri Indrajit Sinha would submit that the right of

obtaining renewal, provided under Rule 6(2) of the Granite Rules

has effectively been set aside under Rule 15(5)(h)(xi)(i) of the

Andhra Pradesh Minor Mineral Rules as no further renewal is

permissible under the new rules. Rule 12(5)(d) takes away the

right of the applicants, whose applications are pending for grant

of lease as the leases cannot be auctioned.

11. Sri Indrajit Sinha would further submit that in view

of the repugnancy between the provisions of the granite Rules

and the aforesaid provisions of the Andhra Pradesh Minor

Mineral Concession Rules, it would have to be held that

provisions of the Andhra Pradesh Minor Mineral Granite Rules

would have give way to the provisions of Granite Rules. In view

of Rule 52 of the Granite Rules which stipulates that only those

State Minor Mineral Concession Rules which are not repugnant

to the Granite Rules would be applicable to the regulation of the

exploitation of granite in that State. He relies upon a Judgment

of the erstwhile High Court of Andhra Pradesh in Hampi

Enterprises and etc., Vs. Director of Mines and Geology,

Hyderabad and Ors.1 .

12. The learned Additional Advocate General, appearing

for the respondents, would submit that, there are no conflicts

between the Rules, for grant of any direction by this Court. He

would submit that rule 4 of the Granite Rules provides for grant

AIR 2002 AP 361: (2001) 5 ALD 691 : (2001) 6 ALT 298

of mining leases of granite if it is established, otherwise then by

prospecting, there is presence of granite in the proposed lease

area and as such, the petitioners cannot insist that a

prospecting licence has to be issued first and that mining of

lease can be given only after such prospecting licences have

been granted and the existence of granite has been formed. He

would further submit that the writ petitioners have not

challenge G.O.Ms.No.13 and G.O.Ms.No.14, which are said to be

repugnant to the Granite Rules and in the absence of such

challenge, the writ petitioners cannot seek any relief against the

rules made/amended under these two G.Os. Referring to Rule

52 of the Granite Rules, the learned Additional Advocate General

would contend that beside rule does not repeat auction of

leasehold rights. The learned Additional Advocate General

relying upon the judgment of the Hon'ble Supreme Court in

Sulekhan Singh and Company Vs. State of Uttar Pradesh and

Ors.,2 had also held that natural resources should be done in a

transparent way and that auctioning of the said rights was the

most appropriate way for determining who should be granted

the right to exploit natural resources. He submits that in view of

the observations of the Hon'ble Supreme Court in the above

(2016) 4 SCC 663

case, grant of appropriate method to be followed and the

petitioners cannot have any grievance against such a system.

13. The learned Additional Advocate General would also

contend that the new rules do not contract rule 6 of the Granite

Rules.

Consideration of the Court:

14. The contention of the writ petitioners is there is

repugnancy between Andhra Pradesh Minor Mineral Concession

Rules and the Auction Rules, issued by G.O.Ms.No.14 on one

hand and the Granite Rules, 1999 on the other hand. The

learned Advocate General contends that there is no repugnancy

between these rules and in any event, in the absence of

challenge to G.O.Ms.No.13 and 14 which are introduced the

rules assailed by the petitioners, no relief can be sought by the

petitioners.

15. The first issue that comes up before this Court is

which rules would prevail over the other, in the event of

repugnancy. This issue had been considered by a learned Single

Judge of the erstwhile High Court of Andhra Pradesh in Hampi

Enterprises and etc., Vs. Director of Mines and Geology,

Hyderabad and Ors. The learned Single Judge had held that the

A.P.Minor Mineral Rules made by the State Government under

Section 15 of MMDR Act would have to be subservient to the

Granite Rules 1999, made by the Central Government in

exercise of the powers under Section 18 of the Act. I am in

respectful agreement with the said judgment.

16. Once, the Granite Rules 1999 are held to prevail

over the Minor Mineral Concession Rules, it would have to be

further seen whether there is any space for the Andhra Pradesh

Minor Mineral Rules to operate in the face of the Granite Rules,

1999.

17. Rule 52 of the Granite Rules reads as follows:

52. Applicability of the provisions of Minor Mineral

Concession Rules framed by the State Government:

"The provisions of the Minor Mineral Concession Rules or any other rules framed by the State Government under Section 15 of the Act shall be applicable to granite quarry leases to the extent they are not repugnant to or inconsistent with these rules."

18. This Rule does not contemplate the eclipse of all the

minor mineral concession rules. It states that the minor mineral

concession rules would continue to apply to granite quarry

leases. However, the minor mineral concession rules, to the

extent they are repugnant or inconsistent with the granite rules,

would have to be disregarded and the rule in the Granite Rules,

would have to be applied. In the circumstances, the petitioners

are not required to challenge G.O.Ms.No.13 or G.O.Ms.No.14 as

the said rules, which operate in relation to all other minor

minerals, can be applied to the granite rules barring those rules

which are repugnant or inconsistent with the Granite Rules.

19. The respective contentions relating to the

repugnancy between the amended minor mineral concession

rules/auction rules and the Granite Rules would have to be

considered.

20. The contention of Sri Indrajit Sinha is that since the

Granite Rules do not provide for auction of leasehold rights, the

same cannot be done under the Andhra Pradesh Minor Mineral

Concession Rules.

21. The question of repugnancy or inconsistency

between rules would arise if there are two rules which are

repugnant or inconsistent with each other. The Granite Rules do

not stipulate the manner in which the mining lease is to be

granted and, the method, of first come first serve, stipulated

under the Andhra Pradesh Minor Mineral Concession Rules was

being followed, earlier, for grant of quarrying leases for granite.

In the said circumstances, there is no repugnancy on account of

the Auction rules made under G.O.Ms. No. 14 providing for

quarry leases being granted by way of auction of such leases.

Further, as held by the hon'ble Supreme Court, in Sulekhan

Singh and Company Vs. State of Uttar Pradesh and Ors., 3

the grant of leases by auction would ensure more revenue to the

state and would be a more transparent method of granting such

leases.

22. The writ petitioners are aggrieved by the Rule

12(5)(d) which makes all applications, received prior to the date

of commencement of the Andhra Pradesh Minor Mineral

Concession Rules, ineligible. This rule is not repugnant to the

Granite Rules as there is no provision in the Granite Rules,

which stipulates that applications for grant of quarry leases

cannot be closed in this manner.

23. 12(5)(h)(XI)(i) of the Andhra Pradesh Minor Mineral

Concession Rules, 1966 is challenged on the ground that the

said rule restricts the grant of quarry leases for granite, to a

period of 20 years and also restricts the extension of the leases

up to 31.03.2023 where leases have expired and effectively rules

out renewal of leases and the same is inconsistent with rule 6

of the Granite Rules, which stipulates that a lease for granite

shall not be less than 20 years and shall not exceed 30 years

with an option to renew the lease for a period not exceeding 20

years.

(2016) 4 SCC 663

24. Under Rule 6 of the granite Rules, the period of lease

has to be fixed by the competent authority between 20 to 30

years. However, rule 12(5)(h)(XI)(i) restricts the period of the

lease to a maximum period of 20 years. In this manner the said

rule is taking away the discretion of the competent authority,

under Rule 6 of the Granite Rules, and would have to be held to

be inconsistent with Rule 6 of the Granite Rules. Consequently,

the period of lease for granite would have to be in accordance

with Rule 6 of the Granite Rules and not Rule 12(5)(h)(XI)(i) of

the A.P.Minor Mineral Rules.

25. Similarly, rule 6 of the Granite Rule permits renewal

of the lease, for a further period not exceeding 20 years. This

right to apply for renewal is being shut out by 12(5)(h)(XI)(i) and

consequently, rule 12(5)(h)(XI)(i) would not be applicable to

quarry leases for granite.

26. Sri Indrajit Sinha has also contended that a mining

lease can be granted only when a mining plan has been

approved by the State Government or by a person authorized in

this behalf. The Minor Mineral Rules are silent on this issue. As

such, this requirement stipulated under the Granite Rules,

would have to be complied with. This would mean that a

successful applicant, in the auction process, would be granted

the formal lease only after obtaining such a duly approved

mining plan.

27. Sri Indrajit Sinha also contends that the

Government would have to first satisfy itself about the existence

of granite in the area in which a lease is sought either by way of

prospecting or by considering any other evidence in this regard

and that the said requirement under the Granite Rules is not

provided under the new regime of auction of leases. The said

issue would come up as and when there is violation of the

Granite Rules and where an auction is sought to be conducted

without such verification being carried out. In the event of any

such violation, it would always be open to any of the affected

parties to approach this Court.

28. Accordingly, this writ petition is disposed of. There

shall be no order as to costs.

Miscellaneous petitions, pending if any, shall stand closed.

___________________________________ JUSTICE R.RAGHUNANDAN RAO Date : 30.09.2022 RJS

THE HON'BLE SRI JUSTICE R.RAGHUNANDAN RAO

WRIT PETITION No.19482 of 2022

Date : 30.09.2022

RJS