Union Of India & Anr. vs Central Colleries Company & Anr.
2011 Latest Caselaw 4248 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                    Letters Patent Appeal No. 658/2010

                                      Reserved on: 5th August, 2011
%                                 Date of Decision:1st September, 2011

Union of India & Anr.                               ....Appellants
                   Through                Mr. Jatan Singh, Advocate.


                     VERSUS

Central Colleries Company & Anr.                      ....Respondents
                        Through           Mr.Rishi Kapoor and Mr.Paras,
                                          Advocates for the respondent
                                          No.1.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA

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

2. To be referred to the Reporter or not ?                    Yes.
3. Whether the judgment should be reported in the Digest ?    Yes.

SANJIV KHANNA, J.

The Union of India has filed the present intra court appeal

assailing the decision dated 16th April, 2010 passed by the learned

Single Judge allowing Writ Petition (Civil) No. 8944/2005, filed by the

Central Collieries Company Limited, respondent No. 1 herein.

Learned Single Judge has given the following directions in paragraph

63 of the impugned decision:

"63. It is hereby directed that within a period of four weeks from today, the lease deed will be executed afresh by the State Government in terms this judgment in favour of CCCL incorporating the conditions set out by the Central Government in its letter dated 28th December 1999. CCCL will be permitted to submit a revised mining plan to the Central Government which will consider the said mining plan in accordance with law and grant CCCL permission subject to any condition as it may deem fit to impose within a period of four weeks thereafter. CCCL will adhere to the conditions imposed by the Central Government in granting such approval. The consequential orders will be passed by the State Government within a period of four weeks thereafter."

2. The respondent No. 2 in the present appeal is the State of

Maharashtra.

3. The respondent No. 1 had applied to the Ministry of Coal,

Union of India, for allotment of Takli-Jena-Bellora block for

development as a captive coal mine for a proposed power project.

The proposal was considered by the Screening Committee

constituted by the Ministry of Coal and allocation of southern part of

the Takli-Jena Bellora block was approved for 3x30 MWs Captive

Power Plant (CPP), subject to conditions, two of which are as under:-

"(c) The party shall set up a washery for washing this coal and use washed coal for generation of power through these CPPs.

(d) The party shall take necessary steps for obtaining mining lease within six months of issue of these minutes and comply with various legal requirement."

4. Screening Committee was an inhouse mechanism set up by

the Central Government to identify coal blocks which can be

allotted. Coal mines were nationalized with enactment of Coal

Mines (Nationalisation) Act, 1973 (CMNA). The said Act allows

private sector Indian companies engaged in the specified industrial

activity to carry on coal mining for their end use in accordance with

Section 3(iii) of the said Act.

5. By a letter dated 2nd September, 1999, Ministry of Coal,

Government of India had approved the mining plan submitted by

respondent No. 1. The said letter further mentions that they were

directed to convey approval of the Central Government under

Section 5(2)(b) of the Mines & Minerals (Development and

Regulations) Act, 1957 (MMDR Act, for short). There is controversy

with regard to the approved mining plan and this aspect has been

noticed below.

6. In respect of major minerals, powers to make rules to carry

out the purposes of MMDR Act, vest with the Central Government.

The provisions of MMDR Act, in respect of major minerals have been

noticed and discussed below.

7. Section 5 of the MMDR Act reads as under:-

"5. Restrictions on the grant of prospecting licences or mining leases-(1) A State Government shall not grant a [reconnaissance permit, prospecting licence or mining lease] to any person unless such person -

(a) is an Indian national, or a Company as defined in sub- section (1) of Section 3 of the Companies Act, 1956; and

(b) satisfies such conditions as may be prescribed :

Provided that in respect of any mineral specified in the First Schedule, no [reconnaissance permit, prospecting licence or mining lease] shall be granted except with the previous approval of the Central Government.

Explanation - For the purposes of this sub-section, a person shall be deemed to be an Indian national, -

(a) in the case of a firm or other association of individuals, only if all the members of the firm or members of the association are citizens of India; and

(b) in the case of an individual, only if he is a citizen of India;]

(2) No mining lease shall be granted by the State Government unless it is satisfied that-

(a) there is evidence to show that the area for which the lease is applied for has been prospected earlier or the existence of mineral contents therein has been established otherwise than by means of prospecting such area; and

(b) there is a mining plan duly approved by the Central Government, or by the State Government, in respect of such category of mines as may be specified by the Central Government, for the development of mineral deposits in the area concerned."

8. It is clear from Section 5(1), that the State Government cannot

grant a mining lease to any person in respect of any mineral

specified in the first Schedule, except with the previous approval of

the Central Government. A prior approval is mandatory as per the

proviso to sub-section (1) to Section 5 of the MMDR Act.

9. Sub-section (2) to Section 5, prescribes the parameters which

a State Government is to keep in mind before granting a mining

lease, but it does not affect or nullify the proviso to sub-section (1)

to Section 5 which requires prior approval of the Central

Government for grant of a mining lease in case of any mineral

specified in the first Schedule. The proviso to sub-section (1)

obviously is not applicable in respect of minerals not specified in the

first schedule.

10. On 15th October, 1999, respondent No. 2 forwarded a

proposal for grant of mineral lease to the respondent No.1 for a

prior approval of the Central Government under Section 5(1) of the

MMDR Act. The relevant portion of the said letter reads as under:-

"3. Under the circumstances explained above the Mining lease may be granted to M/s. Central Collieries Company Ltd. for the total area 271.00 hects. on usual terms and conditions and following additional conditions:-

i) No mining operation should be started in any area which is not prospected by State Government or by the company.

ii) Minerals extracted from the above mines should be used as a captive source of raw material for their own plant only.

iii) The coal should not be used for commercial and trading purpose.

4. You are, therefore, requested to move the Government of India to approve the above proposal of the State Government to grant of Mining lease M/s. Central Collieries Company Ltd. Nagpur."

11. Ministry of Mines and Minerals, Department of Coal by their

letter dated 28th December, 1999 granted approval. The said letter is

relevant and for the sake of completeness is reproduced below:-

"Shri J P Dange Secretary Government of Maharashtra Trade, Commerce & Mining Department Mantralaya Mumbai-400 032

Subject: Grant of coal mining lease over an area of 271.00 hectares in Village Bellora-Jena-Takli, South Part, Tehsil Bhadrawati, District Chandrapur, Maharashtra to M/s Central Collieries Company Limited.

Sir,

I am directed to refer to your letter No.MNA- 1298/1586/(7642)/Desk-IV dated 15.10.99 on the subject mentioned above and to convey previous approval of the Central Government under the proviso to Section 5 (1) of the Mines and Minerals (Regulation & Development) Act, 1957 for grant of coal mining lease over an area of 271.00 hectares in Village Bellora- Jena-Takli, South Part, Tehsil Bhadrawati, District Chandrapur, Maharashtra to M/s Central Collieries Company Limited for a period of 30 years.

2. Previous approval of the Central Government under Rule 27(3) of the Mineral Concession Rules, 1960 is also hereby accorded for incorporation of the following additional conditions in the lease deed to be

executed between the State Government and M/s Central Collieries Company Limited:-

(a) No coal mining operations in the leased area shall be started by M/s Central Collieries Company Limited unless that area is not prospected either by the State Government or by M/s Central Collieries Company Limited.

(b) All raw coal mined from the leased area by M/s Central Collieries Company Limited shall be exclusively used for power generation in the power plants of M/s Central Collieries Company Limited who may improve the quality of the raw coal by beneficiation in the washeries owned by them before feeding into their power plants.

3. A copy of the lease deed executed with M/s Central Collieries Company Limited with the above mentioned additional conditions incorporated therein may be forwarded to this Department immediately after execution.

Yours faithfully,

(A Banerji) Director

Copy for information and necessary action to Shri. G D Daga, Director, M/s Central Collieries Company Limited, Temple Road, Civil Lines, Nagpur 440 001 with reference to his letter No.CCCL/99-2000/F-31A/250 dated 6.11.99.

(A Banerji) Director"

12. Copy of the said letter was also marked to Mr. G.D. Daga,

Director of the respondent No. 1, with reference to his letter dated

6th November, 1999.

13. In the meanwhile, however, respondent No. 1 had written a

letter dated 10th November, 1999 to respondent No. 2 seeking

withdrawal of the 3 conditions imposed by the said respondent in

their earlier letter dated 15th October, 1999, which has been quoted

above.

14. Respondent No. 2 by their letter dated 21st December, 1999,

informed the respondent No. 1 that the matter had been examined

at their end and they had decided to waive the three conditions

mentioned in the letter dated 15th October, 1999. The respondent

No. 1 claims that this letter was sent to the appellant. The appellant,

however, states that the copy of this letter was not available on their

records and came to their possession only on or after 24th May,

2002. We do not think this controversy is required to be

resolved/decided for the reasons stated below, but it does appear

that the stand of the appellant is correct. It is difficult to accepted

the finding of the learned single judge that the denial of the receipt

of the letter dated 21st December, 1999 by the Central Government

was not convincing as the counter affidavit filed by the respondent

No. 2, indicated that the copy of the said letter was indeed marked

to the Central Government. Learned single judge has rightly

adversely commented upon the vacillating stand of the second

respondent. The letter dated 21st December, 1999, written by the

respondent No. 2 to respondent No. 1 reads as under:-

"M/s Central Collieries Co. Ltd., 5, Temple Road, Civil Lines, Nagpur-440 001.

Sub. :- WAIVAL (sic) OF ADDITIONAL CONDITIONS FOR GRANT OF COAL MINING LEASE-TAKLI-JENA-BELLORA AREA COAL BLOCK.

Ref.:- YOUR LETTER NO.CCCL/COAL/F-31A/99-

TH 2000/253 DATED 10 NOVEMBER, 1999 & NO.CCCL/COAL/F-31A/99-2000, DATED 15TH DECEMBER, 1999.

Dear Sir,

We are in receipt of your letter No.CCCL/COAL/F- 31A/99-2000/253 dated 10th November, 1999 & No. CCCL/COAL/F-31A/99-2000 dated 15th December, 1999 requesting us to waive conditions put by us vide our letter No.MNA-1298/1586/(7642)Desk-IV dated 15th October, 1999. The matter has been examined t our end and we are pleased to inform you that the additional conditions namely "3 (i) No mining operation should be started in any area which is not prospected by State Government or by the company (ii) Minerals extracted from the above mines should be used as a captive source of raw material for their own plant only (iii) the coal should not be used for commercial and trading purpose are being waived.

                                                      Yours faithfully,

                                                      (J.P. DANGE)
                                               Secretary               to
           Government"

15. The said letter as noticed above, is not addressed to the

Central Government. The letter does not seek approval of the

Central Government under Section 5(1) of the MMDR Act. We have

already referred to and quoted above the letter dated 15th October,

1999, written by respondent No. 2 to the Central Government

seeking approval under Section 5(1) of the MMDR Act. In case, the

respondent No. 2 wanted to amend or modify their earlier letter

dated 15th October, 1999, this should have been mentioned and

stated in the letter dated 21st December, 1999. As noticed above,

prior approval under Section 5(1) of the MMDR Act is mandatory.

Further, the approval granted by the Central Government vide letter

dated 28th December, 1999 was specific and clear. It was accorded

and subject to the condition that the lease deed executed between

the two respondents shall have a condition that all raw coal mined

from the lease area shall be exclusively used for power generation in

the power plant of the respondent No. 1 who may improve the

quality of raw coal by beneficiation in the washeries owned by them

before feeding into their power plants. Even if it is assumed that the

letter dated 21st December, 1999 was sent to and received by the

Central Government, it was of no consequence as the Central

Government had imposed a specific condition. We may also notice

here that the respondent No. 1 did not challenge or question the

said condition inspite of letter dated 21st December, 1999 written by

respondent No. 2 to the respondent No. 1 deleting/waiving three

conditions which were mentioned in their letter dated 15th October,

1999. The respondent no.1 did question and challenge the

conditions imposed by the appellant by writing a letter of protest.

16. Learned counsel for the respondent No. 1, has emphasized

and referred to the unamended Rule 27(3) of the Mineral

Concession Rules 1960 (MC Rules, for short). The Rule 27(3), before

amendment w.e.f. 17th January, 2000, read as under:-

"The State Government, if it is of the opinion that in the interest of mineral development it is necessary so to do, may, in any case, with the previous approval of the Central Government, impose such further conditions as it thinks fit".

17. The aforesaid Rule stipulates that the State Government with

the previous approval of the Central Government could impose

further conditions as it deemed fit. The learned Single Judge has

accepted the contention of the respondent No. 1 that the three

conditions imposed by the respondent No. 2 in their letter dated 15th

October, 1999, were additional or further conditions covered by Rule

27(3) and, therefore, these could have been withdrawn and waived

by the State Government without previous approval of the Central

Government. The learned Single Judge in this regard has contrasted

Rule 27(3) of the MCR after its amendment w.e.f. 17th March, 2000,

which thereafter reads as under:-

"The State Government may, either with the previous approval of the Central Government or at the instance of the Central Government, impose such further conditions as may be necessary in the interests of mineral development, including development of atomic minerals."

18. No doubt there is difference in the language of Rule 27(3)

before and after its amendment, but this to our mind is

inconsequential and irrelevant in the present case, as the Central

Government has power to reject or approve a proposal under the

proviso to Section 5(1) of the MMDR Act. The rules can supplement

but cannot supplant the main enactment. There cannot be iota of

doubt that the Central Government can impose a condition while

granting an approval under section 5(1) of the MMDR Act. A

conditional approval can be granted. The Central Government while

granting approval had directed and stated that the two conditions

including the condition of captive use of the mined coal in the power

plant must be mentioned in the lease deed executed between the

two respondents. It is also apparent that in the approval dated 28th

December, 1999, the Central Government had examined the

proposal on the basis of the conditions mentioned in the letter dated

15th October, 1999. As noticed above, in case these conditions

mentioned in the letter dated 15th October, 1999, were deleted or

waived, the approval of the Central Government was still necessary

under Section 5(1) of the MMDR Act. Approval can be given by the

Central Government after examining and considering the proposal.

Approval cannot be given to a proposal which has not been

examined or considered. The approval dated 28th December, 1999,

therefore, cannot be regarded as approval by the Central

Government of the letter dated 21st December, 1999 deleting the

three conditions. Approval granted by the Central Government was

on the basis of and on the presumption that the letter of proposal

dated 15th October, 1999, had been not been amended or altered.

19. Learned Single Judge has held that the lease deed after it was

executed on 17th February, 2000, without incorporating the

conditions imposed by the Central Government in their letter dated

28th December, 1999, was sent to the Indian Bureau of Mines and

Chief Inspector of Mines, in accordance with Rule 57 of the MCR.

Thus it can be presumed that the said lease deed was within the

knowledge of the Central Government throughout and, therefore, it

cannot claim ignorance that the lease deed was executed without

incorporating the additional conditions.

20. Letter granting permission dated 28th December, 1999 had

specifically stipulated that the lease deed executed between the two

respondents with the conditions stipulated in paragraph 2 of the

approval should be forwarded to "this department immediately after

the execution". This letter was written by the Department of Coal,

Ministry of Mines and Minerals, Government of India. It will be

wrong to presume that once a copy of the lease deed was sent to

the Chief Inspector of Mines and Indian Bureau of Mines, the

concerned department who had granted the permission had come

to know and were aware that the lease deed executed on 17th

February, 2000 had not incorporate the additional conditions

mentioned in the approval. There cannot be any such assumption.

21. In this regard, the following correspondence exchanged

between the parties may be noticed. The respondent No. 1 by letter

dated 1st December, 1999, made an application to open the mines

under clause 14 of the Colliery Control Order 1945 (CCO, for short).

By letter dated 17th December, 1999, the Coal Controller, Calcutta

informed respondent No. 1 that the approved mining plan has not

been enclosed with the application. By another letter dated 28th

January, 2000, Coal Controller's Organisation, Nagpur informed the

respondent No. 1 that the matter had been discussed with the Coal

Controller, Calcutta and the respondent No. 1's request for opening

of the coal mines under clause 14 of the CCO could be examined

after obtaining copy of the mining lease. By letter dated 8th

February, 2000, respondent No. 1 enclosed a copy of the

Government order granting them coal mining lease. The letter did

not enclose a copy of the mining lease. Along with the letter dated

18th February, 2000, an application for permission for opening of coal

mine was enclosed. Against Column 9, respondent No. 1, with regard

to details of mining lease, had stated that "the mining lease granted

by the Government of Maharashtra (respondent No. 2) vide order

No. xxx dated 29th January, 2000, was annexed as Annexure B". The

said application form again did not specifically and clearly state that

the mining lease which was executed on 17th February, 2000 was

enclosed. It is not clear whether the order dated 29th January, 2000

was enclosed or the mining lease executed a day earlier was

enclosed. Approval in respect of the opening of the mine was

granted under new CCO, 2000 vide letter dated 28th February, 2000.

The above correspondence, does not support the contention of the

respondent no.1 that a copy of the mining lease was furnished to the

Department of Coal, Central Government.

22. In this context, we may examine the controversy with regard

to the approved mining plan. The said plan had to be approved by

the Central Government. Learned Single Judge has held that the

respondent No. 1 had submitted a detailed mining plan in which

they had stated that at least upto sixth year after the mine was

opened, it would not get sufficient quantity of coal for being used in

the power plant. This has been interpreted to mean that the coal

extracted from the mine would remain as an over burden and

unutilized for first six years after opening of the mine. It is stated in

the impugned decision that there was no denial by the appellant of

the assertion made by the respondent No. 1 in this regard. In this

connection, we may notice the specific finding recorded in the order

dated 3rd November, 2004 passed under Section 30 of the MMDR

Act, wherein it has been held :-

"12......

i) M/s CCCL had submitted that the mining plan approved by the Central Government allowed them to dispose coal during the interim period till the mine reaches its rated capacity in the 6th year of production at pages 15-16 of Annexure-III of the Supplementary Note on the Mining Plan. To substantiate this submission copies of the relevant pages from the mining plan retained with them were submitted by M/s. CCCL and the Government of Maharashtra respectively. This was rebutted by the Department of Coal, who submitted that the approved mining plan retained with the Department has no such provision and produced the mining plan retained with them before the undersigned. Department of Coal explained that from the mining plan approved by the Central Government one copy was retained in the Department and one was sent/given to M/s. CCCL, who were requested to give original to the State Government and retain a photocopy with themselves. M/s. CCCL, in their subsequent written submission, however, inter- alia stated that they do not wish to press this point any further. It is interesting to note that this permission by the Central Government in the approved mining plan to sell coal during the interim period does not seem to find mention at any time before the case was taken up revision. Department of Coal would do well to have it investigated as to how the mining plan with it and those with M/s CCCL and that given to Government of Maharashtra by M/s. CCCL differ. However, for the purpose of this case, the copy with Department of Coal is considered to be the authentic copy and is relied upon, also since M/s. CCCL has submitted not to press the argument that the mining plan approved by the Central Government allowed them to sell coal."

23. Therefore, the finding on the mining plan in the impugned

decision in this regard is contrary to the facts on record. The mining

plan available on record of the Central Government, was not

disputed by the respondent No. 1.

24. The conduct of the Central Government may also be noticed.

On the basis of the report received from the Western Coal Fields

Limited and the Officer on Special Duty, Coal Controller's Office that

the respondent No. 1 had started coal mining activities without

installing the plant/unit to consume coal produce, a show cause

notice dated 27th October, 2000 was issued by the appellant -

Central Government to the respondent No. 1 to show why the said

alleged acts should not be held to be in violation of the conditions

under which the coal mining had been approved. Respondent No. 1

replied vide letter dated 6th November, 2000. The reply was found

to be unsatisfactory and a letter dated 13th July, 2001 was written by

the appellant to the respondent No. 2 for cancellation of the lease

granted to respondent No. 1. There is certainly some delay between

November 2000 and 13th July, 2001, but this fact does not, in view of

the other factors we have noticed above, justify dismissal of the

present appeal. It may be noticed here that a show cause notice was

issued by the respondent No. 2 to the respondent No. 1, but

subsequently respondent No. 2 informed the appellant by their

letter dated 18th March, 2002 that they had withdrawn the show

cause notice for termination of the lease. Thereafter, the appellant

on 1st May, 2002, asked for a copy of the show cause notice issued to

respondent No. 2 by respondent No. 1 and the copy of the lease

deed. Copy of the lease deed was received as per the appellant on

24th May, 2002. Thereupon, the appellant referred the matter to

Revisionary Authority under Section 30 on 27th August, 2002 and

notices were issued by the Revisionary Authority to the two

respondents on 4th September, 2002.

25. The Coal Controller passed an order dated 30th October, 2002,

under the CCO, 2000, prohibiting the respondent No. 1 from using or

supplying the coal mined to anyone else other than it's own power

plant. In the revision petition also, a stay order passed by the

revisionary authority. However, it has been stated by the appellant

that in the interregnum, without permission or approval under the

CCO, the respondent No. 1 had sold the coal to third parties before

the stay order was passed by the Coal Controller/Revisionary

Authority.

26. In the direction given vide order dated 30th October, 2002, it

was mentioned that the coal mined in the captive block was being

disposed of in favour of the other parties and this was confirmed by

the respondent No. 1 by its interim reply dated 9th December, 2002,

wherein it was stated that the coal was not being sold immediately

but it was sold only after it was washed. Washing of coal is a captive

use within the meaning of CMNA and, therefore, sale of coal after

being washed is not prohibited.

27. One of the contentions which was raised and has been

considered as a relevant circumstance in favour of respondent No. 1

is the prayer made in the statement of facts of the case. It is alleged

that this was prayer made by the appellant before the revisionary

authority. The relevant paragraph reads as under:-

"17. It is accordingly submitted that the Revisional Authority constituted in the Department of Coal to exercise the powers of revision of the Central Govt. u/s. 30 of the MMDR Act, 1957 take into revision the said defective lease grant/sanction order and the consequent lease deed and pass suitable orders thereupon which may, inter-alia, include due incorporation of the exclusive use condition in the order and the consequent lease deed."

28. It is submitted that the appellant had never prayed for and

had never asked for declaration that the lease deed dated 17th

February, 2000 should be declared as void.

29. The aforesaid argument though attractive should be rejected.

The show cause notice which was issued by the Revisionary

Authority after examining the facts of the case dated 4th September,

2002, reads:-

"9. Therefore, both the State Government and M/s CCCL are asked to explain as to why the mining lease order/deed accorded in favour of M/s CCCL be not declared void and without effect u/s 19 of the MMDR Act. The reply should reach this Department within one month's period from the date of receipt of this communication."

30. Thus, it is quite clear that the respondent No. 1 was not in

doubt and was fully aware and conscious of the fact that the

revisionary authority had taken suo motu notice under Section 30 of

the MMDR Act. The statement of facts of the case was a note which

was put up before the revisionary authority. On the basis of the said

facts, it was for the revisionary authority to take action under

Section 30 of the MMDR Act. Revisionary authority was required to

apply its mind and then proceed. The power of the revisionary

authority exercising jurisdiction under Section 30 of MMDR Act

cannot be curtailed by an office note or a note on facts. Further,

there cannot be any doubt that the respondent No. 1 was aware that

the lease in question could be declared void by the revisionary

authority. Respondent No. 1 was not taken by surprise or kept in

dark. Whether or not what action should be taken or what order

should be passed, is decided by the revisionary authority, which has

been conferred with the power under the said Section.

31. Section 19 of the MMDR Act reads as under:-

"19. Prospecting licences and mining leases to be void if in contravention of Act.--Any reconnaissance permit, 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. Explanation.--Where a person has acquired more than one [reconnaissance permit,] prospecting licence or mining lease [* * *] and the aggregate area covered by such permits, licences or leases, as the case may be, exceeds the maximum area permissible under Section 6, only that reconnaissance permit, prospecting licence or mining lease the acquisition of which has resulted in such maximum area being exceeded shall be deemed to be void."

32. It is clear from the said Section that any lease granted in

contravention of the provisions of the Act or Rules or orders made

thereunder is void and cannot have any effect. The revisionary

authority has come to the conclusion and in our opinion rightly that

there was violation of proviso to Section 5(1) and the lease deed

dated 17th February, 2000 was executed contrary to the terms of the

prior approval. The lease deed, therefore, is void in terms of Section

19 of the Act and cannot confer any right on the respondent No. 1.

33. One of the contentions which found favour and accepted

in paragraphs 55 to 55, is that the procedure adopted in the

proceedings before the revisionary authority was illegal. Initially, the

revision petition was set up and heard by two member Bench

consisting of Mr. A.P.V. N. Sharma, Joint Secretary, Ministry of Coal

and Mr. B.N. Aggarwal, Joint Secretary (Law). The two members

could not arrive at a consensus and no order was passed by them.

Though it was not stated by the respondent No. 1 in the writ

petition, it is clear from Annexure XXXIII to the writ petition filed

before the learned Single Judge, that a Writ Petition No. 1922/2004

was filed before the High Court of Bombay, Nagpur Bench.

34. After the arguments were addressed and the order was

reserved, the said annexure XXXIII was noticed, but the order passed

by the High Court of Bombay, Nagpur Bench, was not available on

the record. Accordingly, the matter was listed on 28th July, 2011 and

the respondent No. 1 was directed to file copy of the order for

appreciation of full facts in completeness. Copy of the said order

dated 30th September, 2004, passed by the High Court of Bombay,

Nagpur Bench in Writ Petition No. 1922/2004 was filed on 5th

August, 2011. The said order records and refers to an earlier order

dated 19th August, 2004, by which Revisionary Authority was

directed to dispose of the suo motu proceedings finally as per the

procedure and law, within a period of three weeks. Thereafter the

Union of India had filed the application no. 6455/2004, seeking

further extension of time. While disposing of this application, it was

recorded as under:-

"It is submitted that the above referred order is received on 13.9.2004 and the time is likely to expire on 4.10.2004, however, there is difference of opinion between the two members of Committee who were required to adjudicate the matter, and therefore, the matter is already referred to a third Member for adjudication and decision, who is likely to take time. Therefore, the learned Counsel for the Respondent No. 1 seeks further time of eight weeks by way of last chance to comply with the above referred direction issued by this Court by order dated 19th August, 2004.

Considering the contentions canvassed by the learned Counsel for the Respondents, time is extended by further period of three weeks from 4.10.2004 and no further time shall be granted and the Revisional Authority is directed to dispose of the proceeding as directed by this Court vide order dated 19th August, 2004, within extended time granted to them.

Needless to mention that the Revisional Authority shall give copies of the opinion on which the Revisional Authority has differed, to the parties, if they so desire."

35. Thereafter the appellant wrote letter dated 18th October,

2004, to the respondent No. 1 stating inter alia :-

"The copies are of opinions as draft stage. As no consensus could be reached, no further discussions between the members took place and the opinions remained at draft stage only. These are opinions and not orders, no finality can be attached as such to their contents. The Revision case is now before the

Additional Secretary (Coal) who, in the order of the Hon'ble High Court of Mumbai (Nagpur Bench) referred to above, has been directed to dispose of the case within three weeks from 4.10.2004."

36. As per the stand of the appellant, the members did not reach

any conclusion/opinion and no further discussion took place.

Therefore, the opinion expressed by the members was not an order

and no finality was attached to their contents. The revision petition

was referred to Additional Secretary (Coal), as per the order of the

High Court of Bombay (Nagpur Bench), with a direction to him to

dispose of the petition within three weeks from 4th October, 2004.

This order has not been referred to in the impugned decision. It is

apparent from the aforesaid order that keeping in view the facts of

the case and as there was no consensus and the two members were

not able to pronounce the order, the matter was referred to the

Additional Secretary (Coal) for his decision. The said procedure was

accepted by the High Court of Bombay (Nagpur Bench) and a

direction was issued to the Additional Secretary (Coal) to dispose of

the revision petition. It was pursuant to the said direction that the

order dated 3rd November, 2004 was passed by the Additional

Secretary (Coal), acting as a revisionary authority under Section 30

of the MMDR Act, which was impugned by the respondent No. 1

before the Single Judge of the High Court. In these circumstances, it

cannot be said that the procedure for disposal of the revision

petition was illegal or contrary to law.

37. We do not think that the respondent No. 1 can now question

and challenge adjudication and decision by the third member.

Respondent No. 1 had participated in the said proceedings and taken

chance and if there was any irregularity in the procedure, it should

have challenged it immediately. It may be noticed that the objection

raised is technical and procedural in nature and not substantative.

38. The last contention raised by the respondent No. 1, which has

also found acceptance and is one of the reasons why writ petition

has been allowed, is the fact that after the Coal Mines

(Nationalisation) Amendment Act, 1993, under Section 3(iii) of the

CMNA Act, washing of coal is treated as an end user. This no doubt

is correct but the stand taken by the appellant and which has been

accepted by the revisionary authority is that inspite of amendment,

the Central Government had not taken any decision whether or not

to grant coal mining permission for washeries by treating them as an

end user. The prior approval granted by the appellant and the

conditions imposed were not challenged.

39. During the pendency of the writ petition before the learned

Single Judge, respondent No. 1 had agreed and accepted the

condition of captive consumption and that the said condition may be

incorporated and mentioned in the lease deed. Vide order dated

27th July, 2006, respondent No. 1 was permitted to amend the writ

petition and incorporate facts concerning the steps taken by it to

obtain permissions for power project and place on record guidelines

issued by the Central Government for disposal of mined coal during

the development phase of the mine, which were posted on the

website of the Ministry of Coal. Respondent No. 1, placed on record

a copy of the Circular dated 29th November, 2002, for

amendment/revision of the mining lease incorporating certain

conditions. Learned Single Judge in this connection as recorded as

under:-

"22. It must be mentioned here that CCCL has categorically stated before this Court during the arguments as well as in its written submissions that it is open to the very same conditions being incorporated in the lease deed and it is only aggrieved by the cancellation of the lease itself. It is pointed out that CCCL has since taken effective steps for making the power project operational. CCCL has made heavy investments to acquire 250 hectares of land and more than Rs. 15 crores have already been spent by it on the project. It is stated that the holding cost of the project is Rs. 2.5 crores every year. CCL refers to certain other instances where the leases were not declared void for

non-inclusion of the conditions but an order was passed requiring inclusion of such conditions. It is accordingly prayed that CCCL should not be discriminated against in this regard."

40. Before the learned Single Judge in the order dated 19th March,

2007, it was recorded that the respondent No. 1 would be willing to

inclusion of the condition of captive use to be incorporated in the

lease deed. An affidavit to the said effect was also filed. Certain

letters exchanged between the Government of Maharashtra and the

Central Government have been also referred to in paragraphs 30, 31

and 32 of the impugned decision, which for the sake of convenience

are reproduced below:-

"30. It may be mentioned that on 19th March 2007, this Court passed an order recording the statement of the Senior counsel of the Petitioner that CCCL would be willing to inclusion of the conditions of captive use of the mined coal into the lease deed. Pursuant thereto an affidavit was filed on 10th September 2007 by CCCL where apart from enclosing copies of letters exchanged with the State Government regarding CCCL's supplying material to the Maharashtra Power Generation Company, a copy of the letter dated 17th July 2007 written by the State Government to the Central Government on the alleged irregularities committed by the officers of the State Government was enclosed. By the said communication dated 17th July 2007 the State Government conveyed to the Central Government that:

"The concerned State Government Officers have taken decisions in the interest of the State and the Senior Officers have supported the same. In any

case, the Government of India has cancelled the said Mining Lease and also the matter is `subjudice' before the Hon'ble High Court, New Delhi."

31. Thereafter this Court passed a detailed order th on 15 January 2008 where after noticing some facts, it was directed that the Respondents should take a relook and place the direction/decision on affidavit before the Court.

32. Pursuant thereto, on 3rd March 2008 the State Government filed an affidavit stating that in its view after the impugned order dated 13 th November 2004 was passed by the Revisional Authority, "the existence and validity of the order granting mining lease in favour of the Petitioner came to an end". Thereafter a letter dated 4th December 2005 was written by the State Government to the Central Government to reserve certain coal blocks, including those granted to CCCL on lease, for the Maharashtra Power Generation Company. It was stated that the State Government would abide by the decision of the Court."

41. However, the Central Government by affidavit dated 1st

September, 2008, declined to accept the proposal of respondent No.

1 for incorporation of the conditions into the lease deed on the

ground "since it is fraught with dangerous consequence as it would

set a wrong precedent and others may get encouraged to resort to

such malpractices". Be it noted that the learned Single Judge inspite

of allowing the writ petition, in paragraph 63 of the impugned

decision which has been quoted above, has directed that a fresh

lease deed would be executed by the State Government

incorporating the conditions set out by the Central Government in its

letter dated 28th December, 1999. Further the respondent No. 1

would be permitted to submit revised mining plan to the Central

Government which would consider the mining plan in accordance

with law within the time limit stipulated therein.

42. Learned single Judge has rightly observed and adversely

commented on the oscillating stand of the State of Maharashtra,

respondent No.2. The respondent No.1 to a large extent has been

the beneficiary of the said stand. Possibly there is merit in the

contention of the appellant that the respondent No.2 has

deliberately and intentionally helped and favoured the respondent

No.1. Having deliberated upon the factual matrix, we do not think

that the respondent No.1 can be granted any relief in spite of change

in their stand. However, it is clarified that the aforesaid cancellation

and the grounds, on which the cancellation has been affected

including the mining activities, will not be a ground or reason to deny

mining lease in future. It is open to the respondent No.1 to apply

afresh for grant of mining lease and if any such application is filed,

the same will be considered in accordance with law.

43. With the aforesaid observations, the present appeal is allowed

and the impugned decision dated 16th April, 2010, passed by the

learned Single Judge is set aside. The order passed by the revisionary

authority dated 3rd November, 2004 is upheld. There will be no order

as to cost.

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(SANJIV KHANNA) JUDGE

-sd-

( DIPAK MISRA ) CHIEF JUSTICE September 1, 2011 KKB