Satyanarayan G.Agarwal vs Uoi And Ors
2011 Latest Caselaw 6279 Del

26.
*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+                        Date of Decision: 21.12.2011

%      W.P.(C) 8883/2011 & C.M. No. 20082/2011


       SATYANARAYAN G.AGARWAL                  ..... Petitioner
                     Through: Mr. Sandeep Sethi, Sr. Adv. with
                              Ms. Smita Bankoti, Advocate
                versus


       UOI AND ORS                                     ..... Respondent
                            Through:   Ms. Sapna Chauhan for UOI


       CORAM:
       HON'BLE MR. JUSTICE VIPIN SANGHI


       1. Whether the Reporters of local papers may
          be allowed to see the judgment?           :

       2. To be referred to Reporter or not?            :

       3. Whether the judgment should be reported
          in the Digest?                                :

VIPIN SANGHI, J. (Oral)

1. The petitioner assails the order dated 23.09.2011 passed by the

Mines Tribunal, whereby the said tribunal has allowed the revision

preferred by respondent no.4, Ispat Industries Limited under Section

30 of the Mines and Minerals (Development and Regulation) Act, 1957

(The Act) and Rule 55 of the Mineral Concession Rules (The Rules), and

remanded the case back to the State Government for reconsideration

of the aspect of grant Prospecting License (PL), who had recommended

the grant of the PL in favour of the petitioner herein.

2. On 12.10.2006, the State of Maharashtra issued a notification

inviting applications for grant of PL over an area of 579 hectares

situated in Mauze Gundurwaymeta, Tehsil Etapalli, Distt. Gadchiroli.

Respondent no.4, Ispat Industries Limited filed their application for

grant of PL on 20.11.2006 over an area of 2581.12 hectares in village

Malermeta, Tehsil Etapalli, Distt. Gadchiroli. The time limit for inviting

the application was extended upto 31.01.2007.

3. On 31.01.2007, the petitioner applied for grant of PL for iron ore

over an area of 579 hectares in Mauza Gundurwaymeta, Taluka

Etapalli, Distt. Gadchiroli, Maharashtra. Just one day before the

hearing was held before the Chief Minister of Maharashtra for

consideration of all the applications, on 06.05.2009 the petitioner

entered into a Memorandum of Understanding with Adhunik

Corporation Limited (ACL) for forming a joint venture company to carry

out business of prospecting, mining operation, steel manufacturing etc.

4. On 07.05.2009, the Chief Minister of Maharashtra held the

hearing to consider the various applications for grant of PLs. On

28.08.2009, the Chief Minister passed an order recommending grant of

PLs to the petitioner under Section 11(2) and 11(4) of the aforesaid

Act, over an area of 579 hectares situated in Mauze Gundurwaymeta,

Tehsil Etapalli, Distt. Gadchiroli.

5. The respondent no.4 herein, Ispat Industries Ltd. preferred the

aforesaid revision application before the Mines Tribunal being

application no.17(19)2009/RC/II under Rule 54 of the Mineral

Concession Rules on 01.12.2009 to challenge the order of the State of

Maharasthra dated 31.08.2009.

6. By the impugned order, as aforesaid, the revision has been

allowed by the Mines Tribunal. The relevant part of the said order

reads as follows:

"6. Perused the impugned order dated 31.8.2008 wherein inter-se merits were analysed by the State Government and it was found that Shri Satyanarayan G Agrawal is an emerging entrepreneur and has entered into MoU with M/s Adhunik Corporation Ltd, which is having experience of mining. There is no provision under Section 11(3) of MMDR Act for grant of mining lease in favour of emerging entrepreneur. Sub-Section 3 of Section 11 of the MMDR Act normally mentions (a) special knowledge of, or experience in, reconnaissance operations, prospecting operations or mining operations (b) financial resources (c) technical staff employed and (d) investment proposed by both parties as criteria for grant of PL. The inter-se analysis clearly states that Shri Agrawal has no experience in mining, no specified knowledge. His annual income is only Rs.1,25,693/- and he did not show any proposed investment. Therefore considering his case over and above other qualified applicants is not as per provisions of Section 11(3) of MMDR Act. The State Government should have taken into consideration the strength of the applicant and compared to the other more qualified applications for grant of PL. Therefore, the State Government impugned order has not properly analysed the inter-se merit as per Section 11(3) of MMDR Act and the impugned order of the State Government is arbitrary. The impugned order dated 7.7.2008 is set aside and the matter is remanded back to the State Government to decide the matter as per MMDR Act".

7. The first submission of learned senior counsel for the petitioner is

that the Mines Tribunal has failed to consider the fact that respondent

no.4 Ispat Industries Ltd. already held PLs in respect of an area of

24.86 sq. kms. According to the petitioner, respondent No. 4 could not

have been awarded an area in excess of 25 Sq. Kms. for prospecting.

Mr. Sethi has placed reliance on Section 6(1)(a) of the Act, which states

that no person shall acquire in respect of any mineral or prescribed

group of associated minerals in a State, one or more PL covering a

total area of more than 25 sq. kms.. This objection had been squarely

taken by the State Government in their response before the Mines

Tribunal. This submission has also been noted in the impugned order

in para-5. However, the same has not been dealt with in the impugned

order.

8. The issue raised in the revision application before the Tribunal

was with regard to the validity of the recommendation of the State

Government for grant of PL in favour of the petitioner herein. The

issue with regard to the grant of any further PL in favour of respondent

no.4, even though it held PL in respect of an area of 24.86 sq. kms.,

was not an issue before the Tribunal.

9. Moreover, the proviso to section 6 of the Act states that if the

Central Government is of the opinion that in the interest of

development of any mineral, it is necessary so to do, it may, for

reasons to be recorded by it in writing, permit any person to acquire

one or more PLs or mining leases covering an area in excess of the

aforesaid total area.

10. Therefore, even if respondent No. 4 already has PLs to the extent

of 24.86 sq. kms., that by itself cannot debar it from being considered

and recommend for grant of PL by the State Government, if it is

otherwise found to be most suitable and meritorious, as the issue,

whether or not the proviso to Section 6 should be operated, has to be

decided by the Central Government and not by the State Government.

If an applicant has PLs to the extent of 25 sq. kms., and the State

Government finds that applicant to be most suitable for grant of PLs,

the State Government should recommend the name of that applicant,

subject to consideration, by the Central Government of the issue

whether the grant of further PL is in the interest of development of the

mineral in question.

11. It is also pertinent to note that the State Government did not

reject the application of respondent No. 4, only on account of the fact

that it was already holding PLs over an area of 24.86 sq kms. The

application of respondent no.4 and various other eligible applicants

were rejected by observing in para 3(a) that these applicants have

been recommended/granted mineral concession by the State of

Maharashtra and other States on the basis of their merit, and new and

other eligible applicants need to be considered.

12. So far as the petitioner's case is concerned, the State

Government in its order observed that the applicant "do have

experience of mining and is an emerging entrepreneur in the field of

mining. He has signed MoU with Adhunik Corporation Ltd., (ACL) a

renowned name in the field of Steel, Cement, Power and Ferro Alloys

Industry. A best team of technical expert has been appointed who will

carry out prospecting in a scientific manner with modern equipments

and latest techniques and care will be taken to protect the

environment as per prevailing Rules and Regulations. He has

submitted Solvency of Rs.1.00 crore and Bank has agreed to finance

the P.L. operation and ensuing project of Iron Ore Benefication Plan of

0.5 MTPA with investment of Rs.100.00 crores. The associate Co. of

the applicant i.e. ACL has signed MoU with Govt. of Maharashtra for

setting up of 1.1 MTPA Steel Plant. Positive steps are taken to set-up

the Plant by 2011-12. Thus, his planned objective to implement the

project within two years corroborates simultaneous completion of P.L.

This will lead to captive use of mineral and economical growth of area.

He will also participate in development of local area in the field of

construction of Roads, Plantation, Health Services, Education etc. In

view of all these factors, I am satisfied that he is a most eligible

applicant to be recommend for grant of P.L. for Iron Ore over the

applied area by him".

13. A perusal of the impugned order shows that the Tribunal has

observed and, in my view, rightly so, that there is no provision in

Section 11(3) of the Act for grant of mining lease in favour of a so-

called "emerging entrepreneur". Sub section (3) of Section 11 of the

Act lays emphasis on special knowledge of, or experience in,

reconnaissance operations, prospecting operations or mining

operations, financial resources, technical staff employed and

investment proposed by the applicant as criteria for grant of PL.

14. The petitioner has not been able to show before me, and it

appears that even before the Tribunal no material was placed to show

that the applicant, by himself, had any past experience of carrying out

any prospecting or of mining operations. The entire merit of the

petitioner's application is dependent upon the experience and

expertise, which is claimed to be that of Adhunik Corporation Limited,

which was not existing on the date of the application, but was

"acquired" one day before the consideration of the applications by the

State Government. This shows that when the application was made by

the petitioner, it was not a serious and genuine applicant, inasmuch,

as, the applicant himself had no experience or expertise to show for.

15. The modus operandi adopted by applicants, of making an

application for grant of PL/ML, without having any expertise, experience

or infrastructure, and of entering into joint ventures with other existing

players in the field on the eve of consideration of their application for

grant of PL/ML licenses, is a dangerous trend and, if encouraged, would

only lead to trading in such licenses and also breed corruption.

16. For the aforesaid reasons, I find no infirmity in the impugned

order, and no merit in this petition. The same is accordingly dismissed.

VIPIN SANGHI, J DECEMBER 21, 2011 sr