Delhi High Court
M/S Standard Metalloys Pvt. Ltd. vs Union Of India And Ors. on 6 February, 2019
$~1 to 4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 25.01.2019
Pronounced on: 06.02.2019
+ W.P.(C) 7537/2018 & CM APPLN. 28828/2018
M/S STANDARD METALLOYS PVT. LTD. ..... Petitioner
versus
UNION OF INDIA AND ORS. ..... Respondents
+ W.P.(C) 7553/2018 & CM APPLN. 28875-76/2018
M/S RVG MINERALS AND METALS PVT. LTD. ..... Petitioner
versus
UNION OF INDIA AND ORS. ..... Respondents
+ W.P.(C) 7555/2018 & CM APPLN. 28879-80/2018
M/S RVG METALS AND ALLOYS PVT. LTD. ..... Petitioner
versus
UNION OF INDIA AND ORS. ..... Respondents
+ W.P.(C) 7591/2018 & CM APPLN. 29004-05/2018
M/S APEX METALLOYS PVT. LTD ..... Petitioner
versus
UNION OF INDIA AND ORS. ..... Respondents
Advocates of the case:
Counsel for the Petitioners: Mr.Dhruv Mehta, Sr. Adv. with Mr.Aman
Vachher, Mr. Saket Sikri, Mr.Yashraj Deora,
Mr.Ashutosh Dubey, Ms.Anu Srivastava &
Mr.Arun Nagar, Advs.
W.P.(C) 7537/2018 and batch matters Page 1 of 95
Counsel for the Respondents: Mrs. Maninder Acharya, ASG with Mr.Ripu
Daman Bhardwaj, CGSC, Mr.Viplav
Acharya, Mr. Sahil Sood, Ms. Hina
Bhargava, Mr. Harshul Choudhary and
Ms. Veena Kumari, Director, Ministry of
Mines for UOI.
CORAM:
HON'BLE MR. JUSTICE SURESH KUMAR KAIT
JUDGMENT
1. Vide these petitions, the petitioners have challenged the order dated
30.06.2016 passed by respondent No. 2 i.e. Controller General, IBM as
Administering Authority appointed under Section 10 of the offshore Areas
Mineral (Development and Regulation) Act, 2002 (herein after referred as
OAMDR Act), whereby the respondent No. 2 has sought to annual the
notification dated 07.06.2010 inviting applications for allotment of
exploration license. As a result of the same, the respondent No. 2 has also
annulled all the subsequent actions including the order dated 05.04.2011 by
which the exploration licenses had been granted.
2. The facts and issues in the present petitions are same and similar,
therefore, the present petitions are being disposed of by this common
judgment. The facts and page numbers shall be discussed with reference to
Writ Petition No. 7537/2018, however, facts and other petitions shall not be
repeated for the sake of brevity being similar.
3. The impugned order dated 30.06.2016 is broadly challenged on the
following grounds:-
(a) The impugned order dated 30.06.2016 was without jurisdiction and
ultra vires the statute as there is no power to review the order of grant
under the OAMDR Act, 2002.
(b) The impugned order dated 30.06.2016 is vitiated on account of
violation of principles of natural justice.
(c) The reasons provided in the impugned order dated 30.06.2016, to
annul the notification dated 07.06.2010 viz. (i) that some blocks are
allegedly overlapping with onshore area, (ii) prohibition on mining in
CRZ area, are baseless.
4. The brief facts of the above-captioned cases are that the petitioners
had initially filed W.P. No. 1529/2018 before this Court seeking a writ of
mandamus for execution of the exploration license under the OAMDR Act,
2002, however, owing to certain subsequent events after the filing of the
writ petition, the present petition is being preferred by way of abundant
caution to also raise a challenge to the order dated 30.06.2016. Though the
said order as of date does not exist owing to its having been set aside by this
Court vide order dated 09.11.2017 in W.P. No. 5734/2016. The respondent
No.1 is the Ministry of Mines through Secretary. The grievance in the
present petitions is that due to various directions being issued by the said
Ministry from time to time, which have finally culminated into the order
dated 30.06.2016 and even after the aforesaid order was set aside, due to
directions issued by the said Ministry, exploration licenses have not been
executed with the petitioners. The Controller General of respondent No.2
was originally appointed as the administering authority for implementing
provisions of the OAMDR Act, 2002 and the grant order dated 05.04.2011.
However, passed impugned order dated 30.06.2016. The respondent No.3 is
the authority that has currently been appointed as the Administrating
Authority w.e.f. 06.04.2018.
5. OAMDR Act, 2002 was enacted in the year 2003 with a view to
develop, regulate, exploit the mineral resources available in the territorial
waters, continental shelf and other maritime zones of India so as to augment
the national wealth. In exercise of powers under the said Act, the Offshore
Areas Mineral Concession Rules, 2006 (hereinafter shall be referred as
OAMC Rules, 2006) were framed to regulate the procedure for grant of
operating rights in respect of such areas mentioned above. According to the
said Act and the said Rules, it is clear that the following stages/phases are
contemplated, which are as follows:-
(a) Reconnaissance Permit - Stage-I
(b) Exploration License - Stage-II
(c) Production Lease - Stage-III
6. The concept of exploration license and production lease are two
separate and different forms of permissions/ concessions. Whereas under the
former, the licencee is only entitled to undertake investigation with the
objective to find availability of mineral and commercial viability of
operation. It is only on successful completion of such investigation under the
exploration licence and finding suitable minerals which can be commercially
exploited, the production lease will be granted. The instant petitions pertain
to only exploration licences which have already been granted vide order
dated 05.04.2011 and only the ministerial act of executing the licence under
the form remains. With a view to exploit the minerals available in the
offshore areas, which are admittedly not covered by the provisions of the
Mines and Minerals (Development and Regulation) Act, 1957, (herein after
referred as MMDR Act, 1957) Parliament enacted the OAMDR Act, 2002 in
the year 2003. In exercise of powers under the said Act, the Offshore Areas
Mineral Concession Rules, 2006 were framed to regulate the procedure for
grant of the operating rights in respect of such areas mentioned above, which
came into force on 15.01.2010 and were notified in the official gazette on
11.02.2010. For the purpose of identifying the blocks, where the mineral
concessions are to be granted as well as to make the grants, the power is
vested in the Administering Authority, who has to be notified in the official
gazette. Vide notification dated 11.02.2010 Controller General, IBM, was
appointed as „Administering Authority‟ (Respondent No. 2 herein) i.e. the
statutory authority under the OAMDR Act, 2002 to carry out the functions
prescribed under the provisions of the aforesaid Act, including and not
limited to identifying offshore blocks and granting of exploration licences.
The power to identify and grant mining concessions in offshore blocks is
within the sole power of the Administering Authority. The said Authority in
exercise of power under Section 10 of the OAMDR Act, notified 62 offshore
blocks having size of 5 mins latitude x 5 mins longitude, for grant of
exploration licenses vide notification S.O. 1341 (E) dated 07.06.2010, in
offshore areas and stipulated conditions to be fulfilled by the applicants for
grant of exploration licence. Pursuant to the aforesaid notification, publicity
was given by IBM i.e. the Respondent No. 2 herein, both in print and
electronic media during three months i.e. from 09.06.2010 to 14.9.2010.
Consequently, 53 applicants applied for the allotments of said blocks for
exploration license(s) for one or more out of the notified 62 blocks. The said
applicants were either companies registered under the Indian Companies
Act, 1956 or were partnership firms.
7. The application for grant of the exploration license of the petitioners
was for the following minerals:
―All minerals as specified in First Schedule of the OAMDR
Act, 2002 along with 9 minerals namely diamond,
construction sand, polymetallic nodules, copper tungsten,
nickel, calcite, manganese, and phosphorite. And the First
Schedule of the OAMDR Act includes minerals such as
Ilmenite, Rutile, Sillimanite, Zircon etc., which are also part
of the minerals specified as atomic minerals in Part-B of
First Schedule to the MMDR Act, 1957.‖
8. The Administering Authority, in view of the large number of
applications took a decision to make the process appropriate and transparent,
formed a Screening Committee to comparatively evaluate all the
applications. The said Screening Committee consisted of one technical
expert from Indian Institute of Oceanography, Goa, one technical expert
from Geological Survey of India, Kolkata and one technical expert from
Indian Bureau of Mines, Nagpur. After careful scrutiny of each application
and once the authorities were satisfied about the fulfilment of the criteria
laid down in Section 12 of the Act, orders granting exploration license were
uploaded on the website of Indian Bureau of Mines by Respondent No. 2 on
22.03.2011 and the petitioner was granted Exploration License in exercise of
power under Section 12 of the OAMDR Act read with Rule 16(1) of the
OAMC Rules, 2006 vide order of grant dated 05.04.2011, whereby
respondent No. 2 communicated the grant of the exploration licence to the
petitioner that the deed for exploration license in Form K has to be executed
within 90 days in terms of the Rule 19 of the OAMC Rules, 2006. However,
before the exploration licence could be executed certain petitions, details
provided hereinafter, came to be filed before various High Courts viz., High
Court of Bombay at Nagpur, High Court of Andhra Pradesh at Hyderabad
and High Court of Madras by different parties raising challenges to either
the selection process or the grants. Due to certain orders passed in the said
petitions as well as due to the pendency of the said petitions, it was stated by
the Respondent No. 2 that the execution of the exploration licence was
suspended to await the outcome of the said writs.
9. Mr. Dhruv Mehta, learned senior counsel appearing on behalf of the
petitioners submitted that at that stage itself the selection process for
allocating the blocks was tested before the High Court of Bombay, Nagpur
Bench in Writ Petition No. 1502 of 2011 filed by one M/s Rare Earth
Minerals. The High Court while rejecting the challenge of the said party,
found that the process of allotment of exploration licence was fair and in
accordance with the provisions of the OAMDR Act. Copy of the same is
marked as Annexure P-7. The said order was challenged before the Hon‟ble
Supreme Court of India in SLP (Civil) No. 5530/2013 and the Hon‟ble
Court vide order dated 31.03.2014 was pleased to dismiss the SLP and
refused to interfere with the order of the High Court. Copy of the order dated
31.03.2014 is marked as Annexure P-8.
10. Learned senior counsel further submitted that the aforesaid process
for granting explorations licences was also challenged by two separate
parties (M/s. TI Slag India Pvt. Ltd. And M/s Trimex Sands Pvt. Ltd.) before
the High Court of Madras and High Court of Andhra Pradesh at Hyderabad
vide W.P. (C) No. 12333/2011 and Writ Petition no. 12835 of 2011
respectively. The High Court of Madras vide order dated 24.06.2011 and
thereafter, vide order dated 11.12.2013 in Writ Appeal No. 1610 of 2011
refused to grant relief in the terms sought. Insofar as the petition before the
High Court of Andhra Pradesh is concerned, the same came to be dismissed
as withdrawn on 28.04.2017. Copy of the same is marked as Annexure P-9.
11. It is further submitted that after the dismissal of the petition before the
High Court of Bombay and thereafter on refusal of the Supreme Court to
interfere with the matter regarding selection, the Petitioner herein
approached the Administering Authority for execution of the exploration
licence which had been held back only owing to the matter before the High
Court of Bombay, at the instance of third parties. Thereafter, it is learnt that
IBM was keen on executing the exploration licences, and though pursuant to
the grant there was nothing further to discuss, had erroneously sought
permission from the Secretary, Ministry of Mines in a meeting to consider
the execution of the exploration license. The then Secretary, however in a
meeting on 14.07.2015 directed IBM i.e. Respondent No. 2 to consider ways
to re-allocate the blocks which were already granted. This direction was in
the teeth of the OAMDR Act, and clearly indicates the intention of the
Respondent No. 1 in trying to wriggle out of the grants already made. Copy
of the minutes of the meeting dated 14.07.2015 along with letter dated
06.08.2015 of Under Secretary, Ministry of Mines forwarding aforesaid
minutes for compliance which obtained under RTI by the Director of the
petitioner herein is annexed herewith and marked as Annexure P-10.
Thereafter, in a meeting dated 18.11.2015 reasons were manufactured to
achieve the objective decided on 14.07.2015, and Controller General, IBM
was issued directions on the erroneous presumption that application for
grants were pending. It was also alleged that there was allegedly prohibition
on mining activities within 12 nautical miles, when in fact there was no such
absolute prohibition as claimed. Subsequently, a direction was issued vide
letter dated 15.12.2015 to the IBM to implement the said direction of the
Secretary taken in the meeting. True copy of the minutes of the meeting
dated 18.11.2015 along with covering letter dated 15.12.2015 is annexed
herewith and marked as Annexure P-11, which have been received under
RTI by the director of the Petitioner. Subsequently, the petitioner came to
know from a letter dated 01.06.2016 received from Federation of Indian
Placer Minerals, Chennai that the Indian Bureau of Mines is in the process
of cancelling the exploration licenses already granted to the petitioner and
other successful applicants. Around the same time a news article was
published in the Financial Express on 03.06.2016 (Delhi Edition) which
affirmed news. In the said article, the then Secretary (Mines) has been
quoted saying that ―We have sought suggestions from the law ministry
whether we can extend the auctioning provision of the MMDR Act for
offshore minerals as well considering the provision of Section 29 of the
Offshore Minerals Act.‖
12. Accordingly, M/s. U.A. Minerals Pvt. Ltd., a sister concern of the
petitioner herein, filed a Writ Petition No. 5734 of 2016 on 07.06.2016 for
seeking a writ of mandamus to direct the Respondent to execute the deed for
exploration licence granted vide order dated 05.04.2011. Respondent No. 1
and 2 were duly served and represented when notice was issued on
24.06.2016. The Petitioner herein was aware that similar petitions were filed
in June 2016 before High Court of Bombay, Nagpur Bench and the
respondents were served in advance in all the said petitions. However, in the
background of the said petitions the Respondent No. 2 hurriedly drew up a
draft annulment order so as to comply with the illegal direction as recorded
in minutes of meeting dated 14.07.2015 and 18.11.2015. Thereafter, IBM
approached respondent No. 1 for vetting of the draft annulment order
however, when the file was put up to the Hon‟ble Minister of Mines, it was
duly recorded in the file that ―cancellation of exploration licenses granted
by IBM does not require approval of the Hon'ble Minister. IBM may take
appropriate decision on the issue after following due process.‖
13. Thereafter without affording any opportunity of hearing or issuing
any notice to the petitioner herein or any other affected party the
Administering Authority passed order dated 30.06.2016 thereby seeking to
annul the notification dated 07.06.2010 and as a consequence treat all
subsequent action also as annulled.
14. Learned senior counsel further submitted that the said order was
thereafter notified on 06.07.2016. The said order is void having been passed
by the Administering Authority, who has no power to review the order of
grant. Vide the said order inter alia it was sought to be alleged that no
purpose would be served in granting the exploration licence as
subsequently no production lease could be issued on account of the alleged
prohibition under the CRZ notification dated 06.01.2011.
15. Mr. Mehta submitted that the granting of exploration licence and the
process thereof is governed by the provisions of OAMDR Act, 2002 which
came into force w.e.f. 15.01.2010. Thereafter, in terms of Section 4(a), the
Controller General, IBM was appointed as Administering Authority on
11.02.2010. In terms of Section 10 (1) of the said Act, the administering
authority was required by law to notify the blocks within six months of
commencement of the Act and accordingly, the notification dated
07.06.2010 was issued identifying the blocks and inviting applications for
exploration licence. The making of exploration licence and the receipt
thereof is governed by Rules 13 and 14 of OAMCR, 2006.
16. The grant of the licence is governing by Section 12 OAMCR, 2006. In
terms of Section 12, r/w Rule 16(1) the power to grant or refuse the licence
is vested solely with the Administering Authority, which is a statutory
authority under the Act. The applications were accordingly made on
04.09.2010 for all minerals included in First schedule of the OAMRD Act
and receipt for same issued on 14.09.2010, which shows that licence had
been sought for minerals like ilmenite, rutile, zircon, etc. Learned senior
counsel further submits that it is not in dispute that the process of selection
was enacted under Section 12 as is evident from the judgment of High Court
of Bombay at Nagpur dated 17.09.2013 which was upheld by the Supreme
Court. The selection process was under taken by the administering authority
with the help of experts from the IBM, GSI and NIO and the said process of
selection and grant has attained finality in so far as the respondents herein
are concerned in WP(C) No. 1052/2011 titled as M/s. Rare (H) Minerals
Pvt. Ltd. Vs. Union on India wherein a Division Bench of High Court of
Bombay at Nagpur on 17.09.2013 dismissed the challenge to the selection
process. Ultimately, the SLP (C) No. 5530/2014 which was filed to
challenge aforesaid order of the High Court of Bombay was also dismissed
by the Hon‟ble Supreme Court on 30.03.2014. Therefore, the said procedure
adopted for evaluating the applications as well as the grant of the
exploration licenses attained judicial acceptance and finality from the
Hon‟ble Supreme Court of India.
17. Mr. Mehta, learned senior counsel further submits that order dated
30.06.2016 suffer from lack of jurisdiction inasmuch as the Administering
Authority, has indirectly sought to review its order dated 05.04.2011, despite
it having no such power under the Act. Admittedly, the process of grant of
the exploration licence under OAMDR Act was concluded on 05.04.2011,
when the order was communicated to the successful parties.
18. The execution of the exploration licence was merely a ministerial Act
and would make no difference to the process of grant, which stood
completed on 05.07.2011. To strengthen his augmented on the aforesaid
issue, counsel for the petitioner has relied upon the case in Gujarat Pottery
works Pvt. Ltd. vs. B. P. Sood: AIR 1967 SC 964 whereby the Supreme
Court has held as under:-
―6. The correctness of the orders challenged in appeal is
ques- tioned on various grounds. The first is that the mining
lease in favour of the appellant is dated November 3, 1951
and therefore is not an 'existing mining lease' as defined in
Rule 2(c) of the 1956 rules. The lease was executed on
November 3, 1951 in execution of the decree for specific
performance. An agreement to lease was however executed
on December 2, 1939. The question is whether the lease can
be said to be granted in 1939 or in 1951. If it was granted in
1951, the contention for the appellant is sound, but if it is
held to be granted in 1939, the contention fails and the lease
would be liable to modification under the 1956 rules as Rule
2(c) defines an 'existing mining lease' to be a lease which
has been granted before October 25, 1949.
7. The granting of a lease is different from the formal
execution of the lease deed. The Mineral Concession Rules,
1949, made under Section 5 of the 1948 Act and hereinafter
referred to as ―the 1949 rules‖, deal with the procedure for
the grant of mining leases in respect of land in which the
minerals belong to Government, under Chapter IV. Rule 27
deals with applications for mining leases. Rule 28A
provides that when a mining lease is granted the formal
lease shall be executed within six months of the order
sanctioning the lease and if no such lease is executed within
the aforesaid period, the order sanctioning the lease shall
be deemed to have been revoked. It is really the sanctioning
of the lease which amounts to the granting of the lease.
Execution of the formal lease is only compliance with the
legal requirements to make the grant legally enforceable.‖
19. Mr.Dhruv Mehta, learned senior counsel submitted that once in terms
of section 12(2) of the OAMDR Act, read with Rule 69 of OAMC Rules
2006, the order is issued by the statutory authority, i.e., Administering
Authority, it only has power to enforce the conditions of grant and cannot
review or recall the order. However, it can cancel the grant for failure to
comply with the conditions mentioned as under:
―12.2 The Administering Authority may, if there is any
reasonable cause to believe that any person, to whom an
exploration licence has been granted, has violated any
undertaking given under clause (d) of sub-section (1),
terminate the exploration licence.‖
Rule 69:
―69. Cancellation of permit, licence or lease: (1) If the
permitee, licensee or lessee or his executor, administrator or
assignee at any time during the term of the permit, licence or
lease:
(a) Fails to fulfil or contravenes, any of the terms,
covenants and conditions contained therein, or
(b) Fails to use the offshore area covered by it for
bonafide purpose for which it has been granted, or
(c) Use such offshore area for a purpose other than
for which it has been granted, or
(d) Fails to comply with Indian laws and
regulations, international conventions or treaties to
which Government is a party and the laws and customs
governing the High Seas including those relevant to
environmental protection, pollution control including
hazardous wastes, or
(e) Fails to abide by the lawful directives of the
administering authority and Security agencies,
The administering authority may, where it is satisfied that
the failure, contravention or use is such as cannot be
remedied, may cancel the permit, licence or lease with
forfeiture of whole or any part of the security deposit
made under sub rule (1) of rule 11, sub rule (1) of rule 21,
or rule 34, after serving a thirty days notice to such
person and after considering the representation, if any,
made by him and such cancellation shall be conveyed to
the permitee, licensee or lessee by a registered letter and
shall be effective from the date of its receipt.
(2) if the failure, contravention or use referred to in sub-
rule (1), is considered to be of a remediable nature, the
administering authority shall give notice to such person
requiring him to remedy the same within sixty days from t
he date of receipt of the notice and informing him that
penalty as aforesaid may be imposed if such remedy is not
provided within such period. The administering authority
may, after considering the representation, if any, made by
such permitee, licensee or lessee, impose the aforesaid
penalty if such person fails to provide remedy within such
period.
Provided that the failure on the part of such a
person to fulfil any of the terms, covenants and conditions
of the permit, licence or lease shall not give the
administering authority any power to impose the
aforesaid penalty in so far as such failure arises from the
force majeure and if through force majeure the fulfilment
of any of the terms covenants and the conditions of the
permit, licence or lease is delayed, the period of such
delay shall be added to the period fixed by the permit,
licence or lease for the performance of any act.
Explanation: For the purpose of these rules ―Force
majeure‖ includes an act of God, war, storm, lightening,
explosion, fire, earthquake and any other happening
which the permitee, licensee or lessee could not
reasonably prevent or control.
(3) If reconnaissance, exploration or production
operations are not carried out as per the scheme of
reconnaissance or work programme for exploration or
work programme for production, as the case may be, the
administering authority may order suspension of all or
any of the operations and permit continuance of only such
operations as may be necessary to restore conditions as
envisaged in the scheme of reconnaissance or work
programme for exploration or work programme for
production.
(4) If during term of a permit, licence or lease any part of
the offshore area covered by it, is required for any public
purpose, the administering authority, may upon one
month's notice and after considering the representation, if
any, made by the person concerned, cancel such permit,
licence or lease in so far as it relates to the said part of
the offshore area subject to such restrictions and
conditions as it may impose, and such cancellation shall
be effective from the date of receipt of written
communication by the permitee, licensee or lessee.‖
20. It is further submitted that admittedly there has been no failure on the
part of the petitioner to comply with the conditions and neither is it the case
of the respondents that power under section 12(2) was being exercised. It is
settled law that power of review or revision has to be specifically conferred
by statute which is absent under the OAMDR Act. In fact under the
OAMDR Act even the Central Government does not have the power of
revision. In the absence of power of review or revision being conferred by
statute, the Administering Authority became functus offico insofar as issue
of grant was concerned. The order dated 30.06.2016 is attempt to annul the
order of grant dated 05.04.2011 and amounts to review/recall of the said
order dated 05.04.2011. This was impermissible in absence of statutory
power permitting such review or recall or revision.
21. To strengthen the arguments on the aforesaid issue, the petitioner has
relied upon case of Kalabharti Advertising vs. Hemant Vimalnath
Narichania: (2010) 9 SCC 437 whereby the Supreme Court has observed as
under:
―2. Facts and circumstances giving rise to these appeals
are that the appellant who is carrying out a business of
advertisement hoardings within the city of Bombay
approached the Society in 2001 for grant of permission to
erect a hoarding admeasuring 40'x20' in its compound.
The Society passed a Resolution in the year 2001,
permitting the appellant to erect a hoarding of the
aforesaid measurement. The appellant applied to the
Municipal Corporation (hereinafter called the
"Corporation") for grant of necessary permission for
erecting the same. The said application was allowed by
the Corporation vide order dated 4.8.2001. Subsequent
thereto an agreement dated 5.9.2001 was executed
between the appellant and the Society for a period of
three years on various terms and conditions mentioned
therein, and was given effect to. The said agreement was
renewed after expiry of the period of three years in the
year 2004 by the Society and ultimately vide Resolution
dated 12.8.2007 for a further period of three years.
7. Being aggrieved, some of the members of the Society
(Respondent Nos.1 to 5) filed Writ Petition No.2366 of
2007 before the Bombay High Court against the Society
and the appellant for cancellation of the permission
granted in favour of the appellant. During the course of
hearing of the said writ petition on 4.2.2008, the Joint
Municipal Commissioner (Education), Shri S.S. Shinde
filed an affidavit to withdraw the earlier order approving
the erection and for permission to pass a fresh order in
accordance with law. The court accepted the said
affidavit and permitted the Corporation to withdraw its
earlier order with further liberty to pass fresh orders
without giving an opportunity of hearing to the appellant
or the Society as it had already been done while passing
the earlier order. In pursuance of the said order, a fresh
order was passed by the respondent- Corporation on
11.2.2008, not approving the erection of hoarding which
had earlier been approved. Hence, these appeals.
12. It is settled legal proposition that unless the
statute/rules so permit, the review application is not
maintainable in case of judicial/quasi-judicial orders. In
absence of any provision in the Act granting an express
power of review, it is manifest that a review could not be
made and the order in review, if passed is ultra-vires,
illegal and without jurisdiction. (vide: Patel
ChunibhaiDajibha v. Narayanrao Khanderao Jambekar
& Anr. and Harbhajan Singh v. Karam Singh &Ors.
13. In Patel NarshiThakershi&Ors. v. Shri Pradyuman
Singhji Arjunsinghji, AIR 1970 SC 1273; Maj. Chandra
Bhan Singh v. Latafat Ullah Khan &Ors., AIR 1978 SC
1814; Dr. Smt. Kuntesh Gupta v. Management of Hindu
Kanya Mahavidhyalaya, Sitapur (U.P.) &Ors., AIR 1987
SC 2186; State of Orissa &Ors. v. Commissioner of Land
Records and Settlement, Cuttack &Ors., (1998) 7 SCC
162; and Sunita Jain v. Pawan Kumar Jain &Ors., (2008)
2 SCC 705, this Court held that the power to review is not
an inherent power. It must be conferred by law either
expressly/specifically or by necessary implication and in
absence of any provision in the Act/Rules, review of an
earlier order is impermissible as review is a creation of
statute. Jurisdiction of review can be derived only from
the statute and thus, any order of review in absence of
any statutory provision for the same is nullity being
without jurisdiction.
14. Therefore, in view of the above, the law on the point
can be summarised to the effect that in absence of any
statutory provision providing for review, entertaining an
application for review or under the garb of clarification/
modification/correction is not permissible.
29. The High Court could not have allowed the
Corporation to recall its earlier order and pass a fresh
order, that too, without giving an opportunity of hearing
to the appellant and the Society. Review is a statutory
remedy. In spite of several queries put by us to the
learned counsel for the respondents, no provision for
review under the statute could be brought to our notice.
The court cannot confer a jurisdiction upon any
authority. Conferring jurisdiction upon a
Court/Tribunal/Authority is a legislative function and the
same cannot be conferred either by the court or by the
consent of the parties. Such an order passed by the High
Court is without jurisdiction and, therefore, a nullity. Any
order passed in pursuance thereof, also remains
unenforceable and inexecutable. More so, the High Court
could not have permitted the Corporation to pass an
order without giving an opportunity of hearing to the
appellant and the society. More so, the Corporation could
not pass an order recalling the order passed by it earlier
and reviewing the same without assigning any reason. It
was obligatory on the part of the Corporation to explain
as to what was the material on record on the basis of
which the earlier order has been changed. Thus, the
order passed by the Corporation stood vitiated for not
recording reasons and violating the principles of natural
justice. It establishes the allegations of legal malice made
by the appellant against the Corporation.‖
22. He also relied upon the case of Kuntesh Gupta vs. Management of
Hindu KanyaMahavidyalaya, Sitapur UP& Ors: (1987) 4 SCC 525,
whereby the Supreme Court has held as under:
―1. Both the parties have made elaborate submissions at
the preliminary hearing of the special leave petition filed
by the appellant Dr. Smt. Kuntesh Gupta. The special
leave is granted and we proceed to dispose of the appeal
on merit.
2. The appeal is directed against the judgment of the
Allahabad High Court dismissing the writ petition of the
appellant on the ground of existence of an alternative
remedy under section 68 of the U.P. State Universities
Act, 1973.
3. The appellant, Dr. Smt. Kuntesh Gupta, was appointed
the Principal of Hindu Kanya Mahavidyalaya, Sitapur,
U.P., on June 4, 1984 and was confirmed in the said post
on May 4, 1985. In view of existence of two unrecognised
rival Committees of Management the State Government,
in exercise of its power under section 58 of the U.P. State
Universities Act, appointed one of the Additional District
Magistrates of the District the Authorised Controller of
the Institution. The Authorised Controller was entitled to
exercise all the powers of the Committee of Management.
4. It appears that the appellant, as the Principal of the
Institution, and the Authorised Controller could not see
eye to eye with each other and there were disputes and
differences between them in regard to the management of
the Institution. The differences between them reached to
such a degree that the Authorised Controller by his order
dated January 27, 1986 suspended the appellant. The
order of suspension was, however, stayed by the Vice-
Chancellor of the University on January 29, 1986. After
hearing the appellant and the Authorised Controller, the
Vice-Chancellor maintained the stay order. Thereafter,
the Authorised Controller held an ex parte enquiry and
by his order dated April 21, 1986 dismissed the appellant
from service in exercise of the powers of the Managing
Committee vested in him by Statute 17.06 of the Statutes
of the University. Statute 17.06 provides for the giving of
an opportunity of being heard to the teacher concerned
and prescribes a procedure for enquiry which, according
to the appellant, was not followed by the Authorised
Controller. A copy of the said order of dismissal was sent
to the Director of Education and to the Vice-Chancellor
for approval, as required under Statute 17.06(3).
5. The Vice-Chancellor after hearing the parties, by her
order dated January 24, 1987 disapproved the order of
dismissal of the appellant on the ground that the charges
against the appellant did not warrant her dismissal from
service and directed that the appellant should be allowed
to function as Principal of the College forthwith.
6. After the said order was passed by the Vice-Chancellor
reinstating the appellant and granting liberty to the
Authorised Controller to impose lesser punishment on the
appellant, if deemed necessary, the Authorised Controller
without passing any lesser punishment, by his order dated
January 27, 1987 allowed the appellant to function as the
Principal, but put various restraints and constraints on
her powers and duties as Principal and directed her to
vacate the quarters in which she was residing. Feeling
aggrieved, the appellant moved the High Court
under Article 226 of the Constitution of India against the
imposition of such restraints and constraints on her
powers and duties as the Principal of the College. The
High Court, after considering the fact and circumstances
of the case, by its judgment dated March 10, 1987
quashed the said order dated January 27, 1987 of the
Authorised Controller and directed him to allow the
appellant to function as the full-fledged Principal of the
Institution in accordance with law. The High Court
further granted liberty to the Authorised Controller to go
ahead with the imposition of minor penalty on the
appellant in accordance with law and as provided in the
said order of the Vice-Chancellor.
7. It appears that while the matter was pending before the
High Court, at the instance of the appellant, the Vice-
Chancellor passed an order dated March 7, 1987, that is
to say, three days before the date of the judgment of the
High Court, reviewing her earlier order disapproving the
dismissal of the appellant from service. By the order
dated March 7, 1987 passed on review, the Vice-
Chancellor approved the order of the Authorised
Controller dismissing the appellant from service on the
basis of two reports of the Joint Director of Higher
Education, U.P., one dated August 1, 1986 and the other
dated July 18, 1986, alleging great financial
irregularities committed by the appellant. Although the
said order dated March 7, 1987 was passed by the Vice-
Chancellor on review three days before the delivery of
the judgment by the High Court, no steps were taken by
the Authorised Controller, who was a party in the writ
petition, to bring to the notice of the High Court the said
order of the Vice-Chancellor dated March 7, 1987.
11. It is now well established that a quasi judicial
authority cannot review its own order, unless the power
of review is expressly conferred on it by the statute under
which it derives its jurisdiction. The Vice-Chancellor in
considering the question of approval of an order
of dismissal of the Principal, acts as a quasi judicial
authority. It is not disputed that the provisions of the U.P.
State Universities Act, 1973 or of the Statutes of the
University do not confer any power of review on the Vice-
Chancellor. In the circumstances, it must be held that the
Vice-Chancellor acted wholly without jurisdiction in
reviewing her order dated January 24, 1987 by her order
dated March 7, 1987. The R said order of the Vice-
Chancellor dated March 7, 1987 was a nullity.‖
23. Learned counsel submits that in view of the aforesaid settled law, the
impugned order is illegal and nullity. In fact knowing fully well that the
Administering Authority did not have power to review /recall order dated
05.04.2011 an attempt was made to achieve indirectly what could not be
done directly by seeking to annul the notification dated 07.06.2010. This
action of annulling the notification dated 07.06.2010 and recall order of
grant dated 05.04.2011 is nullity in the teeth of law settled in a catena of
decisions including but not limited to Manipal University vs. Union of
India: (2017) 15 SCC 664, whereby the Supreme Court has held under:
"10. Determination of a quota for NRI seats is beyond the
domain of the second Respondent. The direction given by
the second Respondent by its letter dated 08.02.2005
directing the Appellant not to make admissions in the NRI
quota to the extent of 103 seats during the years 2005 to
2008 amounts to interfering with the quota. We do not
agree with the submission made by Mr. Vikas Singh that
the second Respondent has power to issue such directions
in the interest of merit based selection as provided by
Regulation 5 of the 1997 Regulations. It is no doubt true
that the second Respondent has a duty to ensure merit
based selections. However, no direction can be issued by
the second 8 Respondent interfering with the regulation
or supervision of sub categories. The direction issued by
the second Respondent by its letter dated 08.02.2005 is
ultra vires and is liable to be declared illegal. Exercise of
power by an authority has to be within the contours
conferred by the statute and for the purpose of
promoting the objectives of the statute. There is no
express power conferred on the second Respondent in
the Medical Council of India Act to interfere in
allocation of quotas for sub categories.
11. In the facts and circumstances of this case it is not
possible to hold that the second Respondent has power to
issue directions pertaining to NRI quota even by
reasonable implication. It is relevant to refer to a
judgment of the House of Lords in Elizabeth Dowager
Baroness Wenlock v. River Dee Co. [Elizabeth Dowager
Baroness Wenlock v. River Dee Co., (1885) LR 10 AC
354 (HL)] (AC pp.362-63):
―But I cannot assent to the doctrine which was contended
for by Mr. Rigby. Whenever a corporation is created by
an Act of Parliament, with reference to the purposes of
the Act, and solely with a view to carry on these purposes
into execution, I am of opinion, not only that the objects
which the Corporation may legitimately pursue must be
ascertained from the Act itself, but that the powers which
the corporation may lawfully use in furtherance of these
objects must either be expressly conferred or derived by
reasonable implication from its provisions.
That appears to me to be the principle recognized by this
House in Ashbury Company Carriage and Iron Co. Ltd. v.
Riche [Ashbury Company Carriage and Iron Co. Ltd. v.
Riche: (1875) LR 7 HL 653 (DC)] and in Attorney-
General v. Great Eastern Railway Company [Attorney-
General v. Great Eastern Railway Company (1880) LR 5
AC 473 (HL)]".
13. The 1997 Regulations obligate the second Respondent
to ensure merit based selection to admissions in medical
colleges. However, the second Respondent cannot issue
directions interfering with the quota in the guise of
exercising power under Regulation 5 of the said
Regulations. It is settled law that what cannot be done
directly, cannot be done indirectly. See State of Tamil
Nadu and Ors. v. K. Shyam Sunder and Ors. (2011) 8
SCC 737 (Para 43).(emphasis supplied)
24. It is further submitted that the impugned order is also vitiated on
account of colourable exercise of power. The minutes of the of the meeting
dated 14.07.2015 (page 166-168 Sl. No.6) shows that the Secretary was
seeking to place reliance on the amendment to the provisions of the MMDR
Act, 1957 in the year 2015 to suggest that the exploration licences granted
under OAMDR Act should be cancelled and re-granted through auction.
The said directions are vitiated as under the provisions of the OAMDR Act,
2002 there is no provision to provide for grant by auction and no amendment
as carried out in the MMDR Act has been carried out in the OAMDR Act.
Secondly even under the MMDR Act, 1957 as amended, under section 10A
of the MMDR Act all existing grants and vested rights on the date of
amendment have been protected. The order dated 30.06.2016 seen in the
background of the minutes dated 14.07.2015 clearly suffers from colourable
exercise of power as the purpose of exercise of power was to achieve an
object not provided under the OAMDR Act.
25. To strengthen the argument on the aforementioned issue, learned
counsel for the petitioners has relied upon the case of Dipak Babaria and
Anr. vs. State of Gujarat: (2014) 3 SCC 502 whereby the Supreme Court
has held as under:
―60. We may refer to Lord Bingham's work titled ‗Rule of
Law' where in the Chapter on exercise of power, he
observes that:
‗Ministers and public officers at all level must exercise
the powers conferred on them in good faith, fairly, for the
purpose for which the powers were conferred, without
exceeding the limits of such powers and not
unreasonably' .
He quotes from R v. Tower Hamlets London Borough
Council ex p Chetnik Developments Ltd., which states:
‗Statutory power conferred for public purposes is
conferred as it were upon trust, not absolutely, that is to
say, it can validly be used only in the right and proper
way which the parliament, when conferring it, is
presumed to have intended.' (AC p.872C)
61. It is well settled that where the statute provides for a
thing to be done in a particular manner, then it has to be
done in that manner and in no other manner. This
proposition of law laid down in Taylor Vs. Taylor: (1875)
1 Ch D 426,431 was first adopted by the Judicial
Committee in Nazir Ahmed Vs. King Emperor reported in
AIR 1936 PC 253 and then followed by a bench of three
Judges of this Court in Rao Shiv Bahadur Singh Vs. State
of Vindhya Pradesh reported in AIR 1954 SC 322. This
proposition was further explained in paragraph 8 of State
of U.P. Vs. Singhara Singh by a bench of three Judges
reported in AIR 1964 SC 358 in the following words:-
―8. The rule adopted in Taylor v. Taylor is well
recognised and is founded on sound principle. Its result is
that if a statute has conferred a power to do an act and
has laid down the method in which that power has to be
exercised, it necessarily prohibits the doing of the act in
any other manner than that which has been prescribed.
The principle behind the rule is that if this were not so,
the statutory provision might as well not have been
enacted....‖ This proposition has been later on reiterated
in Chandra Kishore Jha Vs. Mahavir Prasad,
Dhananjaya Reddy Vs. State of Karnataka and Gujarat
Urja Vikas Nigam Limited vs. Essar Power Limited.
69. Besides, the present case is clearly a case of dictation
by the State Government to the Collector. As observed by
Wade and Forsyth in Tenth Edition of Administrative
Law:-
―If the minister's intervention is in fact the effective
cause, and if the power to act belongs to a body which
ought to act independently, the action taken is invalid on
the ground of external dictation as well as on the obvious
grounds of bad faith or abuse of power‖.
The observations by the learned authors to the same
effect in the Seventh Edition were relied upon by a bench
of three judges of this Court in Anirudhsinhji Karansinhji
Jadega and anr. vs. State of Gujarat. In this matter the
appellant was produced before the Executive Magistrate,
Gondal, on the allegation that certain weapons were
recovered from him. The provisions of TADA had been
invoked. The appellant's application for bail was
rejected. A specific point was taken that the DSP had not
given prior approval and the invocation of TADA was
non-est. The DSP, instead of granting prior approval,
made a report to the Additional Chief Secretary, and
asked for permission to proceed under TADA. The Court
in para 13, 14, 15 has held this to be a clear case of
‗dictation', and has referred to Wade and Forsyth on
‗Surrender Abdications and Dictation'.
70. The respondent No.5 had the courage to state that the
notings of the Secretaries were inconsequential. As a
beneficiary of the largesse of the Government, respondent
No.5 could say that, but it is not possible for us to accept
the same. In Trilochan Dev Sharma vs. State of
Punjab what is observed by this Court is relevant for our
purpose: (SCC p.273, para 16)
―In the system of Indian Democratic Governance, as
contemplated by the constitution, senior officials
occupying key positions such as Secretaries are not
supposed to mortgage their own discretion, volition and
decision making authority and be prepared to give way or
being pushed back or pressed ahead at the behest of
politicians, for carrying out commands having no sanctity
in law.‖ A higher civil servant normally has had a varied
experience and the ministers ought not to treat his
opinion with scant respect. If Ministers want to take a
different view, there must be compelling reasons, and the
same must be reflected on the record. In the present case,
the Secretaries had given advice in accordance with the
statute and yet the Minister has given a direction to act
contrary thereto and permitted the sale which is clearly
in breach of the statute.
26. It is further submitted that the intent to auction is also evident from
respondent no.1‟s affidavit dated 26.09.2017 in W.P.(C) No. 5734/2016 at
page 174, 184-185 (para 12 & 14) and news item dated 03.06.2016 (page
471-473).
27. It is submitted that the Administering Authority is the statutory
authority under the provisions of the OAMDR Act and such authority
having acted on the dictates of the Secretary (Mines), as evident from the
minutes of the meeting dated 14.07.2015 and 18.11.2015 at page 167 of the
petition. The order dated 30.06.2016 is vitiated in terms of law settled in a
catena of decisions included in Dipak Babaria (supra) wherein the Supreme
Court in para 69 observed as under:
―If the Minster's intervention is in fact the effective
cause, and if the power to act belongs to a body which
ought to tact independently, the action taken is invalid on
the ground of external dictation as well as on the obvious
grounds of bad faith or abuse of power.‖
28. It is further submitted that the impugned order is also a nullity on
account of the fact that the Administering Authority under the OAMDR Act
has acted beyond the power delegated to the said Authority by Parliament
under section 12 of the OAMDR Act. A statutory authority can only act
within four corners of the statute.
29. On the aforesaid issue, counsel for the petitioner has relied upon the
case of DDA vs. Joint Action Committee, Allotment of SFS Flats: (2008) 2
SCC 672,
―65. Broadly, a policy decision is subject to judicial
review on the following grounds :
(a) if it is unconstitutional;
(b) if it is de hors the provisions of the Act and the
Regulations;
(c) if the delegatee has acted beyond its power of
delegation;
(d) if the executive policy is contrary to the statutory or a
larger policy.
75. Again, by reason of the office order dated 31.3.1999,
the delegation of power in favour of various authorities
was redefined. The Vice-Chairman could deal with delay
or default even if it exceeds one year and six months.
22.8.1996 was prescribed as the cut off date for the
purpose thereof. Price of the flat was to be calculated on
the basis of either current price or old price whichever is
higher. It was sought to be applied irrespective of the
extent of delay. On what basis 22.8.1996 was taken to be
the cut off date has not been disclosed. We would,
however, assume that the said date was taken into
consideration in view of the Resolution dated 27.8.1996.
76. An executive officer, in absence of any provision of a
statute, cannot apply his own decision with a
retrospective effect. A delegatee is bound to act within the
four corners of the delegation and not beyond the same.
77. Delegation of power in favour of an authority under a
statute must also be tested in terms of the statutory
provisions. No provision under the Act or the Regulations
has been brought to our notice which empowers the
delegatee to alter the terms and conditions of the contract
with retrospective effect. The purported policy decision
must, therefore, be tested not only having regard to the
provisions of the statute but also having regard to clause
4 of the offer.
78. Current cost has been calculated upon computing
20% over and above the actual cost. A provision for
surcharge had also been made in terms whereof a
premium of 20% over the disposal cost was worked out
on current cost for the SFS flats in South Delhi.
Imposition of surcharge is subject to the condition that
the real value in the market of DDA flats would be much
more than it had been charging as per the cost formula.
Parameters of computation of disposal price have been
laid down which we have noticed supra. The authority
having itself adopted a formula for computing the
disposal cost, the same was binding upon the delegatees.
A delegatee cannot take any action contrary to or
inconsistent with the factors laid down for computation of
disposal cost as defined in Section 2(30) of the Act.
Regulations 5 and 6 do not authorize the delegatee to
apply a formula which was not contemplated by the
Authority itself. If an Executive Authority in absence of
any statutory provision cannot apply a decision with
retrospective effect, the same would be ultra vires.
79. In Vice Chancellor, M.D. University, Rohtak v. Jahan
Singh, this Court observed:
―The Act does not confer any power on the Executive
Council to make a regulation with retrospective effect.
The purported regulations, thus, could not have been
given retrospective effect or retro-active operation as it is
now well- settled that in absence of any provision
contained in the legislative Act, a delegatee cannot make
a delegated legislation with retrospective effect.‖ [See
also Ashok Lanka and Another v. Rishi Dixit and Others]
30. Learned senior counsel submitted that the power of pre-maturely
terminate the exploration licence is provided under section 7 of the OAMDR
Act and such power is vested only with the Central Government and not the
Administering Authority, who has issued the order dated 30.06.2016.
Further, section 7 power can be exercised only on the grounds mentioned
therein and only after providing an opportunity of hearing. Admittedly, the
said power was not exercised in the present case where law requires a thing
to be done in a particular manner it should be done in that manner alone and
in no other manner.
31. On the aforesaid issue, counsel for the petitioner has relied upon the
case of Babu Vargese vs. Bar Council of Kerala: (1999) 3 SCC 422, it has
been held as under:
―31. It is the basic principle of law long settled that if the
manner of doing a particular act is prescribed under any
Statute, the act must be done in that manner or not at all.
The origin of this rule is traceable to the decision in
Taylor vs. Taylor which was followed by Lord Roche in
Nazir Ahmad vs. King Emperor who stated as under :
"Where a power is given to do a certain thing in a certain
way, the thing must be done in that way or not at all."
32. This rule has since been approved by this Court
in Rao Shiv Bahadur Singh & Anr. vs. State of Vindhya
Pradesh and again in Deep Chand vs. State of Rajasthan.
These cases were considered by a Three-Judge Bench of
this Court in State of Uttar Pradesh vs. Singhara Singh &
Ors. and the rule laid down in Nazir Ahmad's case
(supra) was again upheld. This rule has since been
applied to the exercise of jurisdiction by courts and has
also been recognized as a salutary principle of
administrative law.
32. Learned counsel submits that Administering Authority in terms of
section 12(2) read with Rule 69 of the OAMC Rules, 2006 has power to
terminate the exploration licence only in case of failure to comply with the
terms of the licence would arise only after execution of the licence deed
which has not been done in the present case.
33. Mr.Mehta further submitted that arguments advanced by the
petitioners on the issue of "no power to review" and "colourable exercise of
power", the order dated 30.06.2016 also stands vitiated on account of „legal
malice‟. The Hon‟ble Supreme Court in Kalabharti Advertising (supra) has
explained Malice as under:
―25. The State is under obligation to act fairly without ill
will or malice- in fact or in law. "Legal malice" or
"malice in law" means something done without lawful
excuse. It is an act done wrongfully and willfully without
reasonable or probable cause, and not necessarily an act
done from ill feeling and spite. It is a deliberate act in
disregard to the rights of others. Where malice is
attributed to the State, it can never be a case of personal
ill-will or spite on the part of the State. It is an act which
is taken with an oblique or indirect object. It means
exercise of statutory power for "purposes foreign to those
for which it is in law intended." It means conscious
violation of the law to the prejudice of another, a
depraved inclination on the part of the authority to
disregard the rights of others, which intent is manifested
by its injurious acts. (Vide Addl. Distt. Magistrate,
Jabalpur v. Shivakant Shukla, Smt. S.R. Venkataraman v.
Union of India, State of A.P. v. Goverdhanlal Pitti,
Chairman and M.D., B.P.L. Ltd. V. S.P. Gururaja&Ors.
and West Bengal State Electricity Board v. Dilip Kumar
Ray.
26. Passing an order for an unauthorized purpose
constitutes malice in law. (Vide Punjab State Electricity
Board Ltd. v. Zora Singh &Ors. and Union of India
Through Government of Pondicherry & Anr. v. V. Rama
krishnan &Ors.
27. The instant case is required to be examined in the
light of the aforesaid settled legal propositions.
28. Admittedly, Writ Petition No. 1132 of 2002, wherein
the issue of examining the violation of guidelines issued
by the Corporation had been raised and the High Court
had passed certain directions which had been complied
with and in pursuance of the same the Corporation
passed an order dated 6.4.2004 that an order passed by it
would be subject to the decision in the said Writ Petition
No. 1132 of 2002 is still pending before the High Court.
In such a fact-situation, if the respondent Nos. 1 to 5 were
aggrieved by the order passed by the Corporation they
ought to have filed an application for intervention and
appropriate directions in the said writ petition.
Undoubtedly, there could be no prohibition for filing a
fresh writ petition, but it would have been more
appropriate for them to file an application in the said
pending writ petition as it is necessary that contradictory
orders must not be passed in similar circumstances.
29. The High Court could not have allowed the
Corporation to recall its earlier order and pass a fresh
order, that too, without giving an opportunity of hearing
to the appellant and the Society. Review is a statutory
remedy. In spite of several queries put by us to the
learned counsel for the respondents, no provision for
review under the statute could be brought to our notice.
The court cannot confer a jurisdiction upon any
authority. Conferring jurisdiction upon a
Court/Tribunal/Authority is a legislative function and the
same cannot be conferred either by the court or by the
consent of the parties. Such an order passed by the High
Court is without jurisdiction and, therefore, a nullity. Any
order passed in pursuance thereof, also remains
unenforceable and inexecutable. More so, the High Court
could not have permitted the Corporation to pass an
order without giving an opportunity of hearing to the
appellant and the society.‖
34. Learned senior counsel further argued that admittedly no notice or
opportunity of hearing was provide to the grantees before passing of the
impugned order dated 30.06.2016. A grant/vested right as conferred on
05.04.2011 in favour of the petitioners was being taken away by the order
dated 30.06.2016 and without giving hearing of being heard. The statute
under section 7(2) of OAMDR Act and Rules 69(1) & (2) of OAMC Rules
provides for giving an opportunity of hearing before taking any action which
would prejudicially affect the rights of a person in whose favour there is a
grant. In fact under the OAMC Rules, a right of hearing has also been
conferred on a person who has merely made an application for grant under
Rule 16(2) of OAMC Rules. In the present case, however, admittedly no
hearing was provided to the petitioners in whose favour a vested right
existed as the application has been allowed and the order of grant issued.
35. To strengthen the arguments on the aforesaid issue, counsel for the
petitioner has relied upon the case of Baraka Overseas Traders vs. Director
General of Foreign Trade: (2006) 8 SCC 103, wherein Supreme Court has
held as under:
"15. The DGFT was of the view that the license was
granted to the appellant contrary to the Circular dated
31.3.1997 whereby the Licensing Authority was advised
to issue advance licenses strictly as per the standard
input output norms (SION) in respect of fish and marine
products.
16. In our opinion, the view taken by the High Court as
well as the DGFT was clearly erroneous in law and liable
to be set aside. There is no dispute that the appellant was
granted the advance licenses which were applied for. If
there was any complaint that the licenses were not validly
granted, then a show cause notice should have been
issued to the appellant to show cause why the said
licenses should not be cancelled, and thereafter
cancellation order could have been passed. However, in
the present case, neither was any show cause notice
issued to the appellant nor the licenses were actually
cancelled.
17. If a license is granted to someone certain rights
accrue to the licence holder, and deprivation of such
right without a hearing is violation of natural justice.
Before withdrawal of such right opportunity of hearing
has to be given. In the present case, no such opportunity
was given at all. The stand of the respondents is that
grant of a licence does not confer any vested right in
favour of the licencee if the licence has been obtained by
misrepresentation. We do not agree. The grant of a
licence certainly creates certain rights in favour of the
licencee, and if the Licensing Authority was of the
opinion that the licence was obtained by
misrepresentation, then a show cause notice should have
been given to the appellant, as well as an opportunity of
hearing. In the present case neither an opportunity of
hearing was given to the appellant nor was the licence
cancelled.‖
36. Learned senior counsel further submitted that the allegations
pertaining to overlapping is nothing but an eyewash. In fact, the size of the
blocks for exploration licenses are statutorily provided under section 10(3)
of the OAMDR Act, 2002 as 5 minute longitude by 5 minute latitude, as no
physical boundaries can be provided over sea/ocean waters. Admittedly, as
the shoreline of the country does not run parallel to the longitudes, and in
view of the physical features of indentations, etc., there is bound to be a
certain degree of overlap regarding those blocks which are next to the shore.
This however, does not mean that the licensee has any right over the onshore
areas. Even IBM was aware of this fact which is evident from the report
dated 11.12.2017 of the Controller General, IBM and Administering
Authority wherein it is admitted that the said reasoning in order dated
30.06.2016 was absolutely erroneous. The relevant extract of paras 8 & 9 of
the said report dated 11.12.2017 are reproduced below:
―8. Regarding the issue of overlapping of some of the
onshore areas, it is stated that in some instances there is
an overlap with onshore areas and that too because the
OAMC Rules, 2006 mandate that all blocks have to be of 5
min X 5 min and since the coastline is not in a straight
line, it is imperative that for blocks adjoining the coast,
some overlap will be there.
9. However, the OAMDAR Act only gives operating rights
to any licensee/lessee over areas covered in the territorial
waters only whereas any right over onshore areas can only
be won under the MMDR Act and it is for this reason that
while executing the deed for exploration license with M/s
UA Minerals Pvt. Ltd., it has been specifically clarified in
the accompanying letter dated 30.11.2017 (copy enclosed
as Annexure-IV) that the granted under exploration license
excludes all areas lying onshore to which OAMDR Act,
2002 does not apply. Relevant extracts of point 3 of the
accompanying letter are reproduced hereinbelow:
―The area granted under reference in Schedule A of the
exploration license deed excludes all areas lying in
onshore to which the Offshore Area Mineral Development
and Regulation Act, 2002 does not apply.‖‖
37. It is further submitted that the order of grant dated 05.04.2011 itself
provides that it shall be subject to such further terms as may be imposed.
Administering Authority under Rule 18(2) of OAMC Rules, 2006 has power
to impose additional conditions while executing the exploration licence.
Accordingly, even while granting the exploration licenses to M/s UA
Minerals Pvt. Ltd., a condition was imposed that no rights would be accrued
by the allottees over any onshore area covered under the exploration license
which is at page 203-204. The relevant portion of condition no.3 of the deed
for exploration license dated 30.11.2017 is reproduced herein below:
―The area granted under reference in Schedule A of the
exploration license deed excludes all areas lying in
onshore to which the Offshore Area Mineral
Development and Regulation Act, 2002 does not apply‖.
38. The aforesaid fact further removes any ambiguity over the said issue
as a specific condition has been additionally imposed by the Administering
Authority to restrict the areas that are granted under exploration licenses.
And the same condition can also be imposed upon the petitioner. In fact, the
parties while submitting their applications were ad idem, that if successful
they would derive rights only in the offshore areas. The grants orders were
also for offshore areas and the petitioner has never claimed any right over
the onshore area.
39. On the other hand, Mrs. Maninder Acharya, learned Additional
Solicitor General submitted that mining is governed by the provisions
envisaged under MMDR Act, 1957 and OAMDR Act, 2002. Onshore
mining is governed by MMDR Act whereas Offshore Mining is governed by
OAMDR Act and the rules framed thereunder. Genesis of the present matter
lies in the fact that under Section 10(1) of OAMDR Act, the Administering
Authority, i.e., the Controller General, IBM (appointed for the purposes of
the OAMDR governed by the Ministry of Mines) notified 63 mineral
bearing offshore blocks for grant of exploration licenses vide notification
dated 07.06.2010. Pursuant thereto, 377 applications were received from 53
applicants out of which 16 applicants were shortlisted for grant of 62
exploration blocks. It is for the first time in the Country that Offshore blocks
were notified for allocation of exploration licences. While evaluating the
applications, Screening Committee (constituting members from NIO,
Geological Survey of India and IBM) pointed out that many of the blocks
notified overlapped with the onshore areas. However, the Administering
Authority proceeded and issued order dated 05.04.2011 for grant of
exploration licences. Therefore, the identification of blocks by then
Administering Authority is itself vitiated and void ab initio. Learned ASG
further submitted that Section 4(o) defines "operating right". It means the
right of holder of a reconnaissance permit, or an exploration licence, or a
production lease. So besides these instruments, Operating Rights cannot be
granted vide other provisions under the Act. The act provides for only the
operating right as defined above. In the present case, no Exploration Licence
was granted to the party, and only a letter showing the intention to grant an
Exploration Licence was issued.
40. Learned ASG further submitted that Section 5(4) of the OAMDR Act,
2002 says as under:
―(4) No operating right shall be granted or renewed
otherwise than in accordance with the provisions of this
Act and the rules made thereunder and any
reconnaissance permit, exploration licence or production
lease granted, renewed or acquired in contravention of
the provisions of this Act or any rules made thereunder,
shall be void.‖
41. Further Section 10 (3) of the OAMDR Act says as under:
―(3) operating rights shall be granted in standard block
of five minutes longitude by five minutes latitude and such
grant may cover more than one standard block which
shall be contiguous.‖
42. Accordingly, the exploration blocks notified for grant of exploration
licences vide notification 07.06.2010 overlap with areas other than offshore
areas, to which OAMDR Act does not apply. Conjoint reading of these
provisions clearly sets out that in case of overlapping of areas, if the areas
which are under onshore is removed then the size of the block will be less
than 5 x5 and the same shall be in contravention of the provisions set out
above and VOID and no operating rights can be granted in that case.
43. Section 6 of the OAMDR Act sets out the eligibility conditions for
grant of operating rights. It says as under:
―The Central Government shall not grant an operating right to
any person unless such person--
(a) Is an Indian national, or a company as defined in section
3 of the Companies Act, 1956 (1 of 1956); and
(b) Satisfies such conditions as may be prescribed:
Provided that no production lease for atomic minerals or
prescribed substances may be granted without consultation with
the Department of the Government of India dealing with the
Atomic Energy.‖
44. Section 12 of OAMDR Act deals with the Grant of exploration
licence.
―(1) The administering authority may grant an
exploration licence to any person who -
(a) is eligible under section 6 for grant of operating
right;
(b) produces, to the satisfaction of the administering
authority, evidence that such person possesses the
requisite technical ability and financial resources to
undertake exploration based on such scientific
parameters, as may be prescribed;‖
45. Learned ASG submits that a person has to fulfil the eligibility criteria
under Section 6 for having an operating right in its favour. Further, the
applicant has to satisfy the technical capability to undertake the Exploration.
The notification dated 07.06.2010 initially called for applications for
exploration of all minerals but now on account of CRZ Notifications 2011
and 2017, mining of atomic minerals only can be undertaken in these blocks.
In view of this, there is no possibility of exploration of other minerals as
every exploration leads to Production Lease. Now the technical capability
and statutory clearances required for atomic minerals is entirely different.
Moreover, since applications for all minerals were invited, and with the
coming of the CRZ notifications, the whole game has changed and hence the
notification dated 07.06.2010 is of no relevance. Section 9 of the Act deals
with power to close areas:
―(1) The Central Government may, in the public interest,
by order in writing and communicated to the permittee,
licensee or lessee, as the case may be, close any area
either in part or whole, covered under any operating
right, for the preservation of natural environment and
prevention of pollution, or to avoid danger to public
health, or communication, or to ensure safety of any
offshore structure of platform, or for the conversation of
offshore mineral, or for national security or for any other
strategic consideration.
(2) Any area, either in part or whole closed under sub-
section (1) and included in any operating right, shall,
from the date of such order, be deemed to be excluded for
the purposes of the operating right and the holder of the
operating right shall not undertake any operation in the
area covered under such order from the date specified
therein.‖
46. Learned ASG further submitted that it is well within the powers of the
Central Government, in public interest, close any areas covered under any
operating right. Since Atomic minerals hold strategic importance especially
monazite which is extracted along with other associated atomic minerals, the
issue requires to be addressed in detail in both the offshore Act and Rules
otherwise it may lead towards loss of strategic national mineral wealth from
the offshore areas.
―Section 20 of the OAMDR Act states:
Prevention and control of pollution and protection of
marine environment
(1) Every holder of the operating rights shall carry out
the operations authorised under this Act subject to the
provisions of this Act and the rules made thereunder and
any other law and the rules made thereunder, for the time
being in force for the prevention and control of pollution
and protection of marine environment.‖
47. It is further submitted that not only the provisions of OAMDR Act
and the rules made thereunder but any other Act and Rules for protecting the
environment also has to be abided by the licence holder. Atomic Minerals
are valuable natural resources and also they release radioactivity which may
affect the environment. In this case, hence the CRZ Notifications are
relevant as those notifications aim to protect the marine environment and
these notifications prohibit mining except mining of atomic minerals. Thus,
the restrictions under CRZ notifications, Act and Rules dealing with Atomic
Minerals, their handling and storage etc. cannot be overlooked and have to
be in conformity. So, event the MMDR and the rules framed thereunder i.e.
Atomic Mineral Concession Rules, 2016 shall apply and operating rights of
the holder shall be subject to the provisions of those acts and rules.
48. Learned ASG further submitted that Rule 18 of the OAMCR, 2006
stipulates the conditions to be fulfilled for grant of exploration licences.
Proviso to Rule 18 (1) (iv) (b) of OAMC Rules, 2006 states that in case of
discovery of atomic mineral during exploration activities in the offshore
area, such minerals shall be included in the exploration license only with the
approval of DAE. There is no mechanism available in the OAMC Rules,
2006 with respect to modalities of preparation of prospecting report nor
Method of cross verification of prospecting report and data transfer to DAE
as mentioned in Mineral (Conservation and Development) Rules, 1988/2017
for onshore minerals.
CRZ Notifications and mining in offshore areas
CRZ Expansion of Area Restrictions Impact on the
Notifications of Mining offshore blocks
Notified on
07.06.2010
CRZ, 1991 As per the CRZ, At the time of
1991 notification the
the coastal notification of
regulation zone was the offshore
upto 500 meters blocks for
landside from the exploration,
High Tide Line the CRZ
(HTL) and land restrictions
between High Tide were mainly
Line and Low Tide towards the
Line (LTL). landward side
of the coast.
CRZ, 2011 As per the CRZ The CRZ All the notified
notification, 2011 Notification blocks now come
the coastal now includes under the restriction
regulation zone 500 mts. of CRZ Area. Now
extended from the Towards the only rare earth
existing area upto land side and minerals can be
12 Nautical Miles 12 NM mined in the blocks
towards the sea towards the now coming into the
side. sea side. CRZ area.
CRZ, 2017 CRZ, 2017 does not All the blocks Mining of the only
have any change in notified atomic minerals used
area as mentioned continued to for strategic purpose
in the CRZ, 2011. be under can be carried out in
restrictions CRZ. The statutory
imposed on clearances and
mining in technical capabilities
CRZ area. required for mining
of atomic minerals
are different from
that the requirement
for other minerals.
49. Learned ASG submitted that it is clear from the aforesaid table that
prohibitions on mining were there since 1991 Notification but under the
CRZ Notifications 2011 and 2017, in order to protect the marine
environment and eco system, limited mining only is permitted. However, the
expanse of the CRZ areas has changed since the Notification of 2010
inviting applications. In 2010, CRZ 1991 was applicable and CRZ area was
minuscule part of the blocks and major part of the blocks were open for
mining as they did not attract CRZ restrictions as it can be seen from the
Maps shown to this Court during the arguments. On perusal of the map, it is
established at that time only visible ribbon line was covered under the CRZ.
However, with the coming of CRZ 2011, most of the blocks fell under the
CRZ areas thereby attracting restrictions but the Screening Committee did
point out these overlaps.
50. Learned ASG states that the process for allocation of 62 offshore
blocks was challenged in various High Courts of the Country and the
Licence Deed in FORM K could not be executed within 90 days as
prescribed under Rule 19 of OAMCR. Thereafter, the Administering
Authority vide its order dated 30.06.2016 annulled/cancelled the notification
dated 07.06.2010 with effect all the subsequent actions undertaken for grant
of the 62 exploration licenses vide order dated 05.04.2011 stood rescinded.
51. Mrs.Acharya, learned ASG submitted that the respondent has filed a
review of the order dated 09.11.2017 passed by this Hon‟ble Court in Writ
Petition No. 5734/2016 in the case titled as „M/s U.A. Minerals Pvt. Ltd v.
Union of India and Anr.‟ whereby the annulment order dated 30.06.2016
passed by the then Administering Authority was set aside solely on the basis
of the statement of the then learned Additional Solicitor General and the
answering respondent was directed to process the grant of exploration
License pursuant to the order dated 05.04.2011 in accordance with law. The
said review petition is pending for adjudication.
52. Learned ASG further submitted that annulment order dated
30.06.2016 was passed mainly on two grounds: (a) Overlapping (b) CRZ
restrictions. The maps clearly indicate that the blocks overlap with the
onshore areas which is outside the purview of the OAMDR Act. And the
blocks cannot be cut or divided as it shall attract the provision of Section
10(3) and thus be void as it will not correspond to 5 x 5 specifications. At
that time of inviting applications by way of notification dated 07.06.2010,
most of the areas were not falling under the CRZ. And now with coming
into effect of CRZ, 2017, Atomic Mineral mining only is permissible.
Mining of „Atomic mineral‟ was not envisaged at that time and the test was
never of Atomic minerals. Applications were called and processed for all
minerals. Now for „atomic minerals‟, as per CRZ 2017, the qualifications in
terms of technical capabilities to explore atomic minerals would be different.
The applicants were evaluated on the basis of this criteria. Also the
approvals required for atomic minerals is different. Hence the rule of game
itself is changed and in the present scenario, the whole process has to be
evaluated afresh.
53. Learned ASG submitted that learned counsel appearing on behalf of
the petitioner argued that order for grant dated 05.04.2011 has created vested
right in their favour. As already elaborated above, under Section 4(o) of the
OAMDR Act, „operating rights‟ means holder of 3 instruments only and in
the present case none has been issued in favour of the petitioners and thus,
no vested rights has accrued. Order for grant is only an in-principle
approval, subject to the conditions to be fulfilled under the notification dated
07.09.2010. The same are reproduced hereunder:
―9. The grant of exploration licence in the offshore blocks
as contained in the schedule annexed to any selected
applicant shall be subject to the following conditions:
I) Prior clearance from the Ministry of Environment and
Forest under Environment Impact Assessment, 2006, and
coastal Zone regulations notified under the Environment
(Protection) Act, 1986 if applicable shall be obtained by
the selected applicants;
II) The areas already granted under petroleum
exploration license for oil and gas shall not available for
grant of exploration licence under this notification
(applicants are advised to obtain details of the area
already under Petroleum Exploration Licence from
Directorate General of Hydrocarbons);
III) Prior approval of the Ministry of Home Affairs
shall be obtained before the employment by a selected
applicant;
IV) Prior approval of Ministry of Defence and
Ministries of Agriculture, Dairy and Fisheries, and
Ministry of Shipping, Road Transport and Highways shall
be obtained by the selected applicant;
V) Applications shall be made for a minimum standard
block of five minutes longitude by five minutes latitudes
or multiples thereof, which shall be contiguous.
Further the order for grant in its concluding para stated
that:
This order is being issued without prejudice to any other
act, rules, notifications, honourable court
orders/directions applicable in this regard.‖
54. Learned ASG Submitted that the language of the order itself states
that it is subject to the other acts rules etc. and in the light of CRZ
notifications and restrictions thereunder, it could not have been processed.
The order for grant only qualifies the petitioner to have the deed executed as
it is only a stage in the execution of licence deed, which is granted only after
fulfilling the terms and conditions stipulated. Admittedly, no clearance has
been obtained by the petitioners. Even otherwise, there is no concluded
contract between the parties.
55. To strengthen the above argument, learned ASG has relied upon the
case of Rishi Kiran Logistics Pvt. Ltd. Vs. Board of Trustees of Kandla
Port Trust and Ors. (21.04.2014 - SC): MANU/SC/0370/2014 held;
―34. At this juncture, while keeping the aforesaid
pertinent features of the case in mind, we would take note
of the 'Rules and Procedure for Allotment of Plots' in
question issued by Kandla Port Trust. As per clause 12
thereof the Port Trust had reserved with itself right of
acceptance or rejection of any bid with, specific
stipulation that mere payment of EMD and offering of
premium will not confer any right or interest in favour of
the bidder for allotment of land. Such a right to reject the
bid could be exercised 'at any time without assigning any
reasons thereto'. Clause 13 relates to 'approvals from
statutory authorities', with unequivocal assertion therein
that the allottees will have to obtain all approvals from
different authorities and these included approvals from
CRZ as well. As per clause 16, the allotment was to be
made subject to the approval of Kandla Port Trust Board/
Competent Authority. In view of this material on record
and factual position noted in earlier paras we are of the
opinion that observations in the case of Dresser Rand S.
A. v. M/s. Bindal Agro Chem. Ltd. & Anr.;
MANU/SC/0151/2006: AIR 2006 SC 871, would be
squarely available in the present case, wherein the court
held that a letter of intent merely indicates a parties
intention to enter into a contract with the other party in
future. A letter of intent is not intended to bind either
party ultimately to enter into any contract.
It is no doubt true that a letter of intent may be construed
as a letter of acceptance if such intention is evident from
its terms. It is not uncommon in contracts involving
detailed procedure, in order to save time, to issue a letter
of intent communicating the acceptance of the offer and
asking the contractor to start the work with a stipulation
that a detailed contract would be drawn up later. If such
a letter is issued to the contractor, though it may be
termed as a letter of intent it may amount to acceptance
of the offer resulting in a concluded contract between the
parties. But the question whether the letter of intent is
merely an expression of an intention to place an order in
future or whether there is a final acceptance of the offer
thereby leading to a contract, is a matter that has to be
decided with reference to the terms of the letter. When the
LOI is itself hedged with the condition that the final
allotment would be made later after obtaining CRZ and
other clearances, it may depict an intention to enter into
contract at a later stage. Thus, we find that on the facts of
this case it appears that a letter with intention to enter
into a contract which could take place after all other
formalities are completed. However, when the completion
of these formalities had taken undue long time and the
prices of land, in the interregnum, shot up sharply, the
respondent had a right to cancel the process which had
not resulted in a concluded contract.‖
56. In Commissioner of Municipal Corporation, Shimla v. Prem
Lata: (2007) 11 SCC 40, it has been observed by their Lordships:
―39. It is now well-settled that where a statute provides
for a right, but enforcement thereof is in several stages,
unless and until the conditions precedent laid down
therein are satisfied, no right can be said to have been
vested in the person concerned. The law operating in this
behalf, in our opinion is no longer res integra."
37. In Savita Rawat and Ors. vs. State of M.P. and Ors. (11.03.2016 -
MPHC): MANU/MP/0227/2016, it has been held that:
57. Proviso under Section 5(1) as it stood prior to its
substitution w.e.f. 12.1.2015 provided for "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", which when read with Rule
31 of the Rules 1960, contemplates passing of an order
for grant of such lease. Thus, an order of grant of lease is
a condition imperative as would protect such applicants.
[Rule 31 of MCR 60 uses wordings as Rule 19 OAMCR]
58. The second part of clause (c) of sub-section (2) of
Section 10A of Amendment Act, 2015, would govern the
cases pertaining to non-scheduled major minerals
wherein the grant of previous approval is not a condition
imperative. Such cases, as is evident, were governed by
unamended Section 11 of MMDR Act which provided for
that "where a reconnaissance permit or prospecting
licence has been granted in respect of any land, the
permit holder or the licensee shall have a preferential
right for obtaining a prospecting licence or mining lease,
as the case may be, in respect of that land over any other
person". However, evident it is from unamended sub-
section (1) of Section 11 of MMDR Act that fulfilment of
four conditions were still necessary before the
preferential right is considered and these are those very
conditions which are brought under clause (b) of sub-
section (2) of Section 10A of Amendment Act, 2015: Thus,
even with the issuance of letter of intent, unless the four
condition under sub-section (1) of Section 11 of
unamended Section of MMDR Act are fulfilled, there is
no accrual of right as could be protected under clause (c)
of subsection (2) of Section 10A.
In the case on hand, as already observed, unless a
deed is executed for reconnaissance permit/ prospecting
license/mining lease as contemplated under Rules 7A, 15
and 31 of 1960 Rules respectively, neither the possession
nor the permission of operating reconnaissance
permit/prospecting license /mining lease is granted. Thus,
the execution of deed for reconnaissance
permit/prospecting license/mining lease is a condition
precedent to avail the grant and treated as eligible as per
the amended provision."
57. In Dresser Rand S.A. vs. BINDAL Agro Chem Ltd. and Ors.
(12.01.2006 - SC): MANU/SC/0151/2006, it has been held that:
34. It is now well-settled that a Letter of Intent merely
indicates a party's intention to enter into a contract with
the other party in future. A Letter of Intent is not intended
to bind either party ultimately to enter into any contract.
This Court while considering the nature of a Letter of
Intent, observed thus in Rajasthan Co-operative Dairy
Federation Ltd. V. Maha Laxmi Mingrate Marketing
Service Pvt. Ltd. AIR1997SC66
.. The Letter of Intent merely expressed an intention to
enter into a contract. There was no binding legal
relationship between the appellant and Respondent 1 at
this stage and the appellant was entitled to look at the
totality of circumstances in deciding whether to enter into
a binding contract with Respondent 1 or not."
58. Learned ASG further argued that the petitioners have relied upon the
judgment of the Hon‟ble Supreme Court in Bhushan Power and Steel
Limited v. S.L. Seal and Ors.: (2017) 2 SCC 125 citing that the judgment in
Savita Rawat‟s case (supra) stands overruled. In this regard, she submitted
that in that case all the clearances had been obtained and only the contract
was to be executed which is not so in the case at hand.
59. Learned ASG further submitted that the execution action cannot be
hampered as has been held in Pallava Granite Industries (India) Pvt. Ltd.
V. Union of India: 2006 (11)SCALE 511 wherein the Hon‟ble Court has
observed as under:-
―The Apex Court dismissed the Special Leave Appeals on
the ground that no mining lease was granted to the
appellants and there was no crystallization of any rights
in favour of the appellants and therefore, there was no
bar for reserving the land for exploration to public sector
corporation and undertaking. In the above case, even the
decision to grant mining lease in favour of the appellant
was taken and the Apex Court held that such a grant
cannot fetter or hamper future executive action/decision
to revoke the grant in public interest. It was further held
that when the State Government detected an important
source of revenue in the form of granite reserve and even
at one point of time the State Government decided to
exploit the granite through private parties, later on with
globalization the State Government decided to go for
global tenders since the above course of action was open
to the Government, but ultimately it was decided to
exploit the granite through State of Andhra Pradesh
Mineral Development Corporation, it was found that
earlier decision of exploitation of granite through private
parties cannot come in the way of decision of the State
Government to exploit and develop reserved area of
granite through APMDC.‖
60. She submitted that since no vested rights have accrued to the
petitioner(s), therefore, there is no violation of principles of natural justice.
Notification dated 07.06.2010 itself has been annulled/cancelled thereby
cancelling the whole process of grant of exploration licences. Rule 16(2) of
OAMCR, providing for opportunity of being heard in case of refusal to grant
or renewal of an exploration licence does not apply to the present case as it
was not that individual applications were refused as envisaged in Rule 16.
61. On the argument of the petitioner that the annulment was malice in
law. Learned ASG argued that the whole process considering the CRZ
restrictions and Overlapping issue was cancelled and no Licence has been
given to anyone else. (except for UA Minerals and the same is pending
adjudication under review).
62. Learned ASG further submitted that notifications can be withdrawn in
public interest/change of policy. In MP Mathur and Ors. (supra) the
Hon‟ble Supreme Court held that once the public interest is accepted as the
superior equity which can override individual equity, the principle would be
applicable. If there is a supervening public equity, the Government would be
allowed to change its stand and has the power to withdraw from
representation made by it which induced persons to take certain steps which
may have gone adverse to the interest of such persons on account of such
withdrawal. Merely because the resolution was announced for a particular
period, it did not mean that the Government could not amend and change the
policy under any circumstances. If the party claiming application of the
doctrine acted on the basis of a notification, it should have known that such
notification was liable to be amended or rescinded at any point of time, if the
Government felt that it was necessary to do so in public interest.
63. In Sales Tax Officer and Ors. vs. Shree Durga Oil Mills and Ors.
(15.12.1997 - SC) : MANU/SC/0879/1998, it has been held that:
―18. The question of applicability of the doctrine of
promissory estoppel against the Government has been
considered in a number of cases by this Court.
19. In the case of Kasinka Trading and Another v. Union
of India and Another, 1994ECR637(SC), a notification
was issued by the Customs Department under Section
25(1) of the Customs Act in public interest exempting
certain goods from basic import duty and specified the
date upto which it will remain in force. Prior to expiry of
that date another notification was issued withdrawing the
exception and imposing customs duty on import of such
goods. A challenge was made to withdrawal of the
notification by some importers who claimed that they had
entered into agreements on the basis of the earlier
notifications. It was held by this Court that the
Government had issued the first notification in public
interest for a certain period. But it was felt later that in
public interest, exemption should not be continued even
though that period had not expired. Therefore the
Government withdrew it. It was held that when exemption
was granted under statutory power, it was implicit that it
could also be rescinded or modified in exercise of the
same power.
20. In the instant case, Section 6 of the Orissa Sales Tax
Act specifically lays down that the exemption notification
issued under that Section can be withdrawn at any point
of time.
21. Moreover withdrawal of notification was done in
public interest. The Court will not interfere with any
action taken by the Government in public interest.
Public interest must override any consideration of
private loss or gain.
22. The view taken by its Court in Kasinka's case was
reiterated by a Bench of three-judges in the case of
Shrijee Sales Corporation & Anr. Vs. Union of India
(1997) (89)ELT452(SC). It was laid down in that case
that the determination of applicability of promissory
estoppel against the Government hinges upon balance of
equity or public interest. In case there is a supervening
public equity, the Government would be allowed to
change its stand; it would then be able to withdraw from
representation made by it which induced persons to take
certain steps which may have gone adverse to the interest
of such persons on account of such withdrawal. Once
public interest was accepted as the superior equity which
can override individual equity, the aforesaid principle
should be applicable even in cases where a period had
been indicated for operation of the promise. In that case,
a notification was issued exempting customs duty on
PVC. By a second notification the exemption was
withdrawn. The Court held that the facts of the case
revealed that there was a supervening public interest and
the Government was competent to withdraw the first
notification without giving any prior notice to the
respondent.
23. In the instant case, it has been stated on behalf of the
State that Various notifications granting sales tax
exemptions to the dealers resulted in severe resource
crunch. On reconsideration of the financial position, it
was decided to limit the scope of the earlier exemption
notifications issued under Section 6 of the Orissa Sales
Tax Act. Because of this new perception of the economic
scenario of the State, the scope of the earlier notifications
had to be restricted. They were first abrogated altogether
on 20.5.1977. Thereafter, it was decide to grant
exemption at a limited scale.
24. In our opinion, the plea of change of policy trade on
the basis of resource crunch should have been sufficient
for dismissing the respondent's case based on the
doctrine of promissory estoppel.‖
64. In B. Kumaragowda and Sons vs. Union of India and Ors.
(01.11.2012 - DELHC): MANU/DE/5342/2012, it has been held that:
―19. We are fortified in our views by the observations of
the Supreme Court in Pallava Granite Industries (India)
(P) Ltd.‟s case (supra). In the said case, the matter
pertained to grant of mining lease and it was observed
that in scrutiny of administrative or executive function,
there has to be flexibility and play given for exercise of
power / discretionary power as long as it is in public
interest. Thus, the right of the Government to employ its
own agency by cancelling its decision to grant contract to
private parties was upheld and, in fact, it was observed
that a grant cannot fetter or hamper future executive
action / decision to revoke grant in public interest. In the
context of Section 17A(2) of the said Act, while examining
the reserving and demarcating mining areas for
development through State Government agencies
requiring approval of the Central Government, it was
observed that the approval in that case was not a
conditional approval. The Supreme Court relied upon the
observations made in Antonio Buttigieg v. Stephen H.
Cross, AIR 1947 PC 29, which held that a Government
cannot, by contract, hamper its freedom of executive
action in matters which concern the welfare of the State.
Similarly, the Supreme Court referred to, with approval,
the observations made in Edward Keventers (Successors)
(P) Ltd. v. Union of India, AIR 1983 Del 376 that every
grant has to be subject to any future executive action,
which must be decided by the needs of the community and
that the Government cannot, by contract, hamper its
freedom of action in matters concerning the welfare of
the State. Distinction was, thus, drawn between creation
of a right or interest in the property as against transfer of
such right or interest.‖
65. Further the Hon‟ble Supreme Court in the matter of Threesiamma
Jacob and Ors. vs. Geologist, Dptt. of Mining and Geology and Ors.: AIR
2013 SC 3251 has observed that even with regard to the minerals which are
greatly important and highly sensitive in the context of the national security
and also the security of humanity like uranium - the Atomic Energy Act,
1962 only provides under Section 5 for prohibition or Regulation of mining
activity in such mineral. Under Section 10 of the Act, it is provided that the
Government of India may provide for compulsory vesting in the Central
Government of exclusive rights to work those minerals.
66. Learned ASG submitted that in the mining and mineral separation of
beach sand, the heavy minerals are separated and monazite rich tailings are
stockpiled as per Atomic Energy Regulation Board (AERB) guidelines for
future processing and/or acquisition by DAE, as prescribed in Rule-7 of the
AMCR, 2016. At present, IREL is the only company engaged in mining and
processing of monazite to recover rare earths, thorium and uranium. Beach
Sand Minerals has been notified on 21.08.2018 by DGFT as a canalized item
to be exported only by Indian Rare Earths Limited (IREL), a Government of
India undertaking. Mining leases were granted to Parties in Onshore areas
under MMDR Act. Several complaints were received by the State
Governments about the illegal mining. Consequently, the State Government
of Tamil Nadu constituted a Special Team to look into the matter and the
Team submitted its report to the State Government pointing out various
violations in mining i.e. illegal mining of BSM. All applications of mining
leases in Tamil Nadu have been suspended subsequent to various
investigations.
67. Learned ASG argued that there were problems from the very
beginning with respect to the whole procedure of Offshore Mining which got
further complicated after coming into effect of CRZ 2017. Even the CBI, on
the matter of alleged irregularities in award of order for grant of Exploration
Licences further enquired the matter in relation to grant of exploration
licences based on the selection process adopted for short listing the
companies. The CBI, in its concluding para observed that:
―It was found that no clear cut guidelines were
formulated for shortlisting of the applicants and that the
criteria for selection of the applicants for issuance of
exploration licences was fixed after receipt of the
applications, which is a serious procedural irregularity.
It was also found that the Administering Authority carried
out the entire process without doing adequate
preparation before issuance of notification calling
applications for the exploration licences. They also did
not resort to get the DPR through an international
consultant. This exercise was being done for the first time
in India, and the above mentioned measures would have
resulted in more systematic and transparent process in
the selection of applicants for exploration licences.‖
68. Accordingly, during the enquiry it was also surfaced that Ministry of
Mines had kept the entire process in abeyance and that the Ministry was
considering the re-evaluation of the applications in accordance with the
criteria which is to be fixed by a committee consisting experts from various
fields. From the remarks of the CBI report, it is evident that the evaluation
of the applications were not proper and the Ministry had kept the entire
process in abeyance. Hence, the grant order issued to the applicants on the
basis of recommendation of the Screening Committee vide order dated
05.04.2011 cannot be considered valid.
69. It is also argued that the petitioners companies were not in existence
at the time of issuance of notification 07.06.2010. Five Companies which
applied for grant of exploration licence had the common Director, having
same address but registered under the Companies Act under different names
being the group companies and were allotted 28 blocks out of 62. They had
not submitted proper supporting documents on the basis of which the
marking was done in the evaluation sheet. Further, no document indicating
the sanctioned line of credit from any financial institutions/Banks had been
provided specific to the company.
70. Learned ASG further submitted that as per the notification available
in the website of Ministry of Corporate Affairs, the net worth is negative for
each of the companies during the last financial year, i.e. on 2016-17; the
companies as on date are not financially capable of undertaking any
activities/business operations. The petitioners neither had any previous
experience of Exploration in Offshore Mining Blocks nor any technical
capability to carry out such work. This is in utter disregard and violation of
the condition prescribed under Section 12 of the OAMDR Act that
preference would be given to those companies who either required mineral
for use in an industry owned by them or have taken sufficient steps to set up
such an industry. Further, according to Rule 18(1) (xii) of the OAMCR in
case foreign companies are to be deployed to undertake exploration
operations prior approval from the Ministry of Defence has to be obtained to
ensure appropriate security safeguards. While applying for the grant of
Exploration licence under FORM G, the petitioner(s) have stated in para 2
that it has signed an MOU with Williamson & Associates Inc., a USA based
company for technical tie-up. It has not sought approval from the Ministry
of Defence. Further of U.A. Minerals and Williamson & Associates has
been annexed in all the applications filed by the petitioners, MOU of U.A.
Minerals and Williamson & Associates has been annexed.
71. Learned ASG argued that the Government is competent and has
power to take any decision in the public interest. Therefore, this Court may
not interfere in the decision taken by the respondents. Accordingly, the writ
petitions are deserve to be dismissed.
72. I have heard learned counsel for the parties in length and perused the
material on record.
73. In case of State of Orissa vs. Binapani Dei: AIR 1967 SC 1269
whereby Supreme Court has held that any order is likely to cause prejudice
to any person, such person is entitled to a hearing. Accordingly, learned
counsel submitted that the petitioner in whose favour a grant order had been
issued has been prejudiced by order dated 30.06.2016 by the respondents by
not providing hearing before passing the impugned order. The impugned
order is also vitiated as the objective to cancel was predetermined as evident
from minutes dated 14.07.2015 when IBM was asked to try and cancel the
grants so that the exploration licence would be available for re-grant. Such
an act of pre-mediation is also violative of the principles of natural justice.
74. In addition of above, only reasons mentioned in the impugned order
dated 30.06.2016 to annul the notification dated 07.06.2010 and all
subsequent actions thereto including the order of grant dated 05.04.2011 are
as under:
a) Alleged overlap of the exploration blocks as identified with certain
onshore areas; and
b) The alleged prohibition of all mining activities within CRZ areas in
terms of CRZ notification dated 06.01.2011.
75. The issue of overlapping of some blocks is nothing but an
afterthought and the reasons have been manufactured to somehow cancel the
grants so that the same can be re-allocated/re-granted. The same is evident
from the following facts:
i. The notification inviting applications was issued on 07.06.2010
with prior approval and consent of Controller General and various
competent authorities and departments of Government of India.
The issue of overlapping was never raised by any such authority.
ii. In fact, a committee of experts had been constituted for the
purpose of selection of successful applicants and such committee
had members from IBM, GSI and NIO who also recommended the
granting of such blocks without finding any fault therein including
of the alleged overlapping.
iii. The order of grant was issued on 05.04.2011 and the said
authorities defended the action of grant before various High
Courts viz. Chennai, Andhra Pradesh (Counter of UOI and IBM
page 285-293) and Bombay (Nagpur Bench) (counter of IBM
page 435-452) and rather vehemently defended the issue of
overlapping raised by the writ petitioners before the Andhra
Pradesh High Court. They never found any such illegality for a
period of over 5 years since the issue of notification dated
07.06.2010.
iv. The fact that the said reason is manufactured one is also evident
from the minutes dated 14.07.2015 at pages 167-168 wherein
though IBM itself was asking for proceeding with execution of the
exploration licenses without finding any fault, however, the then
Secretary, Ministry of Mines directed that IBM should consider
some process by which the present grants could be cancelled and
the blocks put up for re-grant. In pursuant to such directions,
reasons were manufactured. In fact, writ petitions had been filed
before this Court in W.P.(C) No. 5734/2016 as well as before the
High Court of Bombay in W.P.(C) No. 3282//2016 and W.P.(C)
No. 3625/2016. Notice by this Court was issued in the month of
June 2016 and the Bombay High Court issued notice on
15.06.2016 wherein petitioners were seeking a
mandamus/direction to IBM to execute the exploration licenses
pursuant to grant. After waiving notice by IBM and Union of
India on 15.06.2016, the impugned order dated 30.06.2016 was
issued in a hurried manner with a predetermined approach.
76. The very fact that issue of overlap is an afterthought and a malafide,
reason is also evident from the counter affidavit filed by IBM before the
High Court of Andhra Pradesh in W.P.(C) No. 12835/2011 wherein while
defending the issue of overlap as alleged in the writ petitions mentioned
above, IBM in its counter affidavit specifically stated that under Rule 43(3)
of the OAMC Rules, 2006, no mining activity in any way is permissible
within one nautical mile of the shoreline and therefore, even if there was an
overlap, no rights would be vested and thereby the allocation of blocks,
with some overlap cannot be held to be beyond the jurisdiction of the
Administering Authority or in violation of the provisions of the OAMDR
Act.
77. On the stand of the respondents that the order is silent on the number
of blocks that actually overlap the onshore areas and 99% of the blocks
were overlapping. However, on perusal of the impugned order itself shows
that only some of the blocks overlap with onshore areas wherein it is
mentioned as under:
―Whereas it has come to the notice of the Administering
Authority that some of the exploration blocks notified for
grant of offshore exploration licences vide notification
dated 07.06.2010 overlap with areas other than offshore
areas.........‖
78. Thus, the case of the respondents is absolutely false and said issue is
without affidavit with an attempt to mislead this Court.
79. During the arguments, learned ASG contended that due to the overlap,
the grants allegedly stand vitiated as under section 10(3) read with section
5(4) of the OAMDR Act, blocks of only 5 x 5 minutes can be granted and as
such if area of overlap is excluded, the block will not be of 5 x 5 minutes.
Learned counsel for the petitioner submitted that the said contention is
absolutely erroneous and absurd. Section 10(3) merely fixes the size of the
blocks. Merely being granted a block does not mean that the licencee can
work all the areas in the said block. For example, under section 9, the
Central Government has power to close any area in part or whole from being
worked. Similarly, under Rule 43(3) of the OAMC Rules, when
undertaking mining a distance of one nautical mile has to be maintained
from the sea shore, though the block may be abutting the sea shore.
Therefore, if for the reasons stated in section 9, the Central Government
closes only a portion of one block, or obligation under section 43(3) of
OAMC Rules is complied with, it would not mean that the size of the block
is affected in any manner or that the block is no longer 5 x 5 minutes. Any
such interpretation as is being sought by the respondents would make the
entire act unworkable as every time power under section 9 or a condition
under Rule 18 or 43(3) is enforced, the same would then make the grant
invalid, if the argument of the learned ASG is to be accepted. Such a
construction would result in absurdity. Learned counsel for the petitioner
submitted that the OAMDR Act, under section 10 introduces standard block
sizes and measurements as there are no physical boundaries on the sea
surface and as such area can only be identified by longitudes and latitudes.
It is settled law that an Act should be interpreted as a whole and
interpretation which leads to absurdity is to be avoided at all costs.
80. On the issue of prohibition on mining in CRZ areas and CRZ
notifications, learned senior counsel for the petitioner submitted that the
petitioner has applied and was granted „exploration licence‟ on which
admittedly there is no prohibition under the CRZ notification and
exploration for all minerals can be carried out. The impugned order however
seeks to allege that there is a prohibition on all mining activity in CRZ areas
and, therefore, no purpose would be served in granting the exploration
licenses as subsequently no production leases can allegedly be granted. The
issue of prohibition on mining does not arise at the present stage as the
petitioner would, at its own cost, only be exploring for the kind of minerals
that are available and which can be commercially exploited, whereafter it
would submit a report to the Government of its findings. Admittedly,
exploration operations under section 4(e) are different and distinct from
mining which is defined as "production operation" under Section 4(s) of the
OAMDR Act. As the issue pertaining to mining would arise only after
exploration is completed and when the petitioner applies for a production
lease, but at this stage the respondents cannot pass order by pre-empting
what may or may not transpire in future. The respondents, have throughout
their arguments as well as on affidavits admitted that they would regrant the
blocks, preferably through auction. This itself amounts to an admission that
there is no prohibition in law on the issue of mining within the CRZ or else
then how can they grant the blocks when on the one hand they have
cancelled the blocks on the ground that no mining can be undertaken. The
entire case of the respondent‟s is full of contradictions and the pleas taken
are mutually destructive. Even otherwise the said reasoning is in the teeth of
the CRZ notification dated 6.1.2011 which actually, does not impose an
absolute prohibition on mining. The said notification specifically carves out
an exception permitting the mining of rare minerals not found elsewhere
outside the CRZ area. Further clause 4(ii)(g) which provides for permissible
activities within CRZ also reflects that mining of rare mineral is allowed. In
the same manner para 8 III (iii) (c) and para 8.IV (b) which are at page 242
specifically provide for mining of rare mineral in CRZ III and CRZ IV. The
grants of the petitioner herein fall within CRZ IV and page 242 reflects that
mining would be permitted within the said region.
81. Admittedly, the applications for grant of exploration licenses were
made for seeking permission to explore the availability of, amongst other
minerals, all the minerals as mentioned in the First Schedule of the
OAMDR Act, 2002 including atomic minerals. The First Schedule of the
aforementioned Act specifically mentions minerals such as ilmenite, rutile,
zircon, leucoxene, which are admittedly, rare minerals / atomic minerals not
found outside the CRZ, as has already been certified by GSI in its report
titled "Factsheet Offshore Mineral Exploration and Exploitation within
CRZ". The Geological Survey of India / Respondent no.3 is an expert
agency under the Ministry of Mines and has been in existence for more than
155 years. GSI under reply to questions under RTI, has once again affirmed
vide reply dated 26.09.2016" (which is at age 251-253) that the aforesaid
minerals are not available outside the CRZ. Therefore, the entire basis of the
impugned order dated 30.06.2016 viz. that allegedly mining within CRZ is
not permissible, is erroneous. The said reasoning also suffers for non-
application of mind in as much as at present, the stage is only of exploration
and no mining operations can be undertaken under an exploration license as
stated above. Unless exploration is undertaken, the category, kind, quantity
etc of minerals available cannot be known. The purpose of exploration is
therefore, to scientifically prove the existence of minerals and its availability
in quantities which can be commercially exploited, if economically viable.
The order dated 30.06.2016 therefore, amounts to putting the cart before the
horse in as much as unless and until exploration is undertaken and the
exploration reports disclose that there were no rare materials within the
blocks granted, the alleged reasoning pertaining to prohibition on mining
could not have been arrived at. In any event, exploration is not prohibited
even in CRZ areas.
82. In addition to above, the respondent no.1 i.e., Ministry of Mines in its
affidavit dated 26.09.2016 filed before this Court in WP No. 5734 of 2016
has admitted on oath that "limited mining was permitted in offshore areas
falling with in CRZ limits as per CRZ notification dated 26.09.2017 (page
174 @ 175 / para 3.1 - 3.2). Relevant extract of the said affidavit is
reproduced herein below:
―3.2 From the above it is emerges that in the CRZ area
only limited mining is permitted and that too for such ―
rare materials‖ which are not available outside the CRZ
area.....‖
83. Moreover the Administrating Authority itself vide report dated
11.12.2017 (pages 192 @ 194/ paras 1-5) has also admitted that the
reasoning in order dated 30.06.2016 was both misconceived and contrary to
law. The relevant extracts of the same are reproduced below:
―1. Notification dated 07.06.2010 and subsequent grant
of exploration licenses were annulled by the then
Controller General and Administering Authority vide
orders dated 30.06.2016 for the reason that mining is
prohibited in offshore areas of 12 nautical miles within
CRZ.
2. The said reasoning to annul the grant orders was both
misconceived and contrary to law since the mining of
rare minerals which were not found on onshore areas
was very much permissible in offshore areas of 12
nautical miles within CRZ even under CRZ notification
dated 06.01.2011.
3. On being asked to give comments, this office also
issued a clarification to Ministry of Mines vide email
dated 28.07.2017 (copy enclosed herewith for ready
reference). Relevant extracts of the said email are
reproduced herein below:
―However, CRZ notification dated 06.01.2011 has not
barred mining activities in CRZ area. As per this
notification, mining of only those rare mineral of CRZ
area are permitted which are not found/available
outside CRZ limit,"
4. A similar view was also taken by Ministry of Mines in
its additional affidavit dated 26.09.2017 filed with the
approval of the competent authority in Ministry of mines
in the matter of W.P. No. 5734 of 2016 filed by M/s. UA
Minerals Pvt. Ltd. In which both Secretary (Mines) and
Controller General of IBM were parties. Relevant
extracts of para 3 of the additional affidavit are
reproduced herein below:
"From the above, it emerges that in the CRZ area,
only limited mining is permitted and that too for such
"rare minerals" which are not available outside the
CRZ area, besides exploration and exploration pf Oil
and Natural Gas".
5. It is therefore clear that there was no blanket ban on
mining. The notification dated 06.01.2011 allowed
mining of rare minerals not found onshore and the same
permission has now been amended in the CRZ
notification dated 06.10.2017 to include mining of
minerals in Part B of the First Schedule to the MMDR
Act.‖
84. It is pertinent to mention here that the CRZ notification dated
6.1.2011 has been amended by notification dated 6.10.2017 (page 266-276).
The said amendment brings about further clarity on the rare materials which
can be mined within the CRZ. The said amendment, now provides that
atomic minerals as notified under Part B of the First Schedule of the MMDR
Act, 1957 are permitted to be mined within CRZ. The minerals mentioned
hereinabove, namely ilmenite, rutile, zircon etc. also are identified as atomic
minerals in Part-B of the First schedule of the MMDR Act. If the aforesaid
materials are found during exploration, there will be no impediment in
granting of production lease for the said minerals as the mining of the said
materials is expressly permitted by the CRZ notification. The policy as
reflected in notification dated 6.1.2011 stood modified by the notification
dated 6.10.2017 as under:
CRZ Notification dated CRZ Notification pursuant to
6.1.2011 amendment on 6.10.2017
3. Prohibited activities within 3. Prohibited activities within
CRZ, - The following are CRZ,- The following are
declared as prohibited activities declared as prohibited activities
with the CRZ,- within the CRZ,-
(x) Mining of sand, rocks and (x) Mining of sand, rocks and
other substrata materials other sub-strata materials
except,- except,-
(a) those rare minerals not (a) mining of Atomic Minerals
available outside the CRZ area, notified under Part-B of the First
Schedule of the Mining and
(b) exploration and exploitation Minerals (Development) Act,
of Oil and Natural Gas. 1957 (67 of 1957) occurring as
such or in association with one
or other minerals,
(b) exploration and exploitation
of Oil and Natural Gas.
85. It is pertinent to mention here that the Controller General, Indian
Bureau of Mines & Administering Authority in its report / email dated
24.10.2017 had informed the Ministry of Mines that in the light of the CRZ
notification dated 6.10.2017, exploration licenses can be granted for atomic
minerals. (page 268 @ 269). In fact, the pick and choose policy of the
respondents is evident from the fact that more than 50 mining leases (pages
258-263) for atomic minerals such as ilmenite, rutile, zircon etc. have been
granted to private companies, and all such leases within CRZ areas and
despite the new CRZ notification dated 6.10.2017, they are still being
allowed to operate. The aforesaid fact clearly demonstrates that firstly
mining of atomic minerals is permissible within the CRZ, irrespective of
whether the atomic minerals are above or below the prescribed threshold
value and secondly such mining is also permissible by private companies
and mining of said minerals is not restricted to being done by a state agency
or Department of Atomic Energy. During arguments, learned ASG in reply
alleged that leases in the State of Tamil Nadu had been suspended.
However, a perusal of page 258 shows such leases in Maharashtra, Kerala,
Andhra Pradesh and Odhisa, the suspension of leases in Tamil Nadu was
due to violation of certain terms but there is no allegation against the
petitioners in the present case.
86. The CRZ notification is in the nature of subordinate legislation issued
under the Environment Protection Act by the Ministry of Environment,
Forests and Climate Change. The very same Ministry viz., MoEF vide
clarification dated 9.2.2018 issued to M/s. UA Minerals Pvt. Ltd. have
clarified that mining of rare minerals was a permitted activity under CRZ
notification dated 6.1.2011 also and mining of atomic minerals as specified
in part B of the First Schedule of MMDR Act, 1957 is also a permitted
activity under CRZ notification dated 6.10.2017.
87. It is relevant to note here that the respondents though initially agreed
that pursuant to the amendment to CRZ notification on 16.10.2017 there
would be no impediment in executing the exploration licences, are now
seeking to allege in the counter affidavit that the production lease cannot be
executed allegedly on the ground viz.,
(a) That no production lease can be granted without
the prior permission of the Department of Atomic Energy
(DAE).
(b) Only those atomic minerals are permitted to be
mined in the CRZ, which are above the threshold value
prescribed by the DAE.
(c) That the notification dated 07.06.2010 was not
meant for atomic minerals.
(d) That the applications made by the petitioners
were not for atomic minerals.
(e) That private companies cannot be granted
exploration licenses for atomic minerals.
88. The OAMDR Act, 2002 governs the grant of mining concessions over
the Offshore Areas (Preamble and Section 4(n) which admittedly includes
CRZ IV i.e. territorial waters of the country (12 nautical miles). The said
Act governs grant of mines including "atomic minerals" (Section 3 read with
Section 4(1) and (b)). There is no restriction on the grant of exploration of
licence for any minerals under the OAMDR Act, 2002, neither is there such
a restriction under the CRZ notification. The limited restriction is at the
stage of production lease which stage has not been reached yet. In terms of
the proviso to Section 6 of the OAMDR Act, consultation is required with
Department of Atomic Energy before granting a „production lease‟. In the
present case the issue pertains to "exploration license" which is governed by
Section 12 whereas production lease is governed by Section 13 of the Act
and there is no requirement of consultation with DAE for grant of
exploration license. The reliance by the respondents on proviso to Rule
18(1)(iv)(a) of OAMC, 2006 is also misplaced as the proviso has been
inserted only as an exception to rights provided under sub clause (a) of
clause (1)(iv) of Rule 18 viz., that if any additional minerals which had not
been applied in the first place are discovered during exploration, in that
event except atomic minerals, such newly discovered minerals by legal
fiction would be part of the license. For atomic minerals which were not part
of the exploration license, prior approval of Department of Atomic Energy
would be required. In the present case, application was specifically made for
named atomic minerals and, therefore, the aforesaid Rule would not be
applicable to the present case.
89. It is further pertinent to mention that notification dated 7.6.2010 was
for all minerals including atomic minerals. The Offshore Areas Mineral
Development & Regulation Act, 2002 under Section 3(1) clearly states that
the said Act shall apply to all minerals in the offshore areas including any
mineral prescribed by notification under clause (g) of Sub Section (1) of
Section 2 of the Atomic Energy Act, 1962 (33 of 1962) except mineral oils
and hydrocarbons related thereto. The First Schedule of the OAMDAR Act,
2002 specifies the royalties for various minerals to be found in offshore
areas and includes minerals such as asilmenite, rutile, zircon, sillimanite and
leucoxene which also form part of the list of atomic minerals in part B of the
First Schedule of MMDR Act, 1957. Therefore, it is evident that the
OAMDR Act, 2002 always envisaged mining and exploitation of rare
minerals / atomic minerals such as ilmenite, rutile, zircon, sillimanite and
leucoxene by private companies and to this effect, specific provisions have
been laid down in the OAMDR Act, 2002 and OAMC Rules, 2006 wherein
it is contemplated that in case atomic minerals are found in the offshore
areas, what actions have to be undertaken by the authorities as well as the
permitee/licensee/lessee. This shows that exploration of atomic minerals was
always contemplated in the offshore mining Act / Rules. Admittedly,
Atomic Mineral Concession Rules, 2016, are not applicable to Offshore
Areas, having been framed under MMDR Act for onshore mining
concessions. Even otherwise, Atomic Mineral Concession Rules, 2016 also
does not provide any restriction as is being alleged and Rule 3 of the said
Rules merely provides the manner in which the mining concessions for
atomic minerals above and below the threshold value would be governed.
90. It is pertinent to mention that the learned ASG sought to allege that
the MMDR Act and Rules would be applicable in light of Section 20 of the
OAMDR Act. The submission of learned ASG is contrary to Section 20
which clearly shows that only Acts pertaining to environment have been
made applicable in addition and not the provisions of the MMDR Act as
alleged which is not an Environmental Act. If the contention of the learned
ASG is to be accepted it would amount to annulling a Parliamentary Act by
a side wind inasmuch as there are various provisions in the OAMDR Act
which are in complete contrast to the MMDR Act.
91. In addition to above, the grant of prospecting licences or mining
leases for atomic minerals on land is governed by the provisions of the
MMDR Act, 1957. Similarly, the grant of exploration licence or production
leases for atomic minerals from the sea bed is governed by the provisions of
the OAMDR Act, 2002.
92. It is also pertinent to mention here that the Government of India
introduced the Beach Sand Mining Policy on 16.10.1998 to encourage the
exploitation of the said minerals including ilmenite, rutile, zircon, leucozene,
garnet and silimanite through a mix of public and private sector participation
(including foreign investment). The primary objectives of the policy was
maximization of value addition to the raw minerals and for this purpose
participation of wholly Indian owned companies was permitted mining,
exploitation and value addition of the said resources with or without joint
venture with the Central or State Government(s) concerned or any existing
or new Central / State PSUs. In fact, even foreign direct investment was also
allowed where advance technology was brought in for value addition to the
aforesaid minerals. Therefore, atomic minerals such as i.e. ilmenite, rutile,
zircon could always be mined by private companies even when they were
part of the list of prescribed substances of Department of Atomic Energy,
however, prior to their delisting licence / permission from Department of
Atomic Energy under the Atomic Energy (Working of the Mines, Minerals
and Handling of Prescribed Substance) Rules, 1984 was required. And
subsequent to their de-listing from list of prescribed substances, vide
notification dated 20.01.2006, no such license / permission is required. In
this light, more than 50 + mining leases have been granted to private
companies by Ministry of Mines i.e. Respondent No.1 under the MMDR
Act within CRZ limits on the beaches all over the country for mining of
atomic minerals namely ilmenite, rutile, leucoxene and zircon. Such mining
leases have been granted to private companies for atomic minerals by
Government of India within the onshore limits of CRZ at various points of
time under all three CRZ notifications i.e. of 1999, 2011 and 2017. Fact
remains that the export of such atomic minerals is very much permissible as
is evident from the Government‟s own export policy. As per the notification
of the DGFT dated 21.08.2018, atomic minerals such as ilmenite, rutile,
zircon and leucoxene are freely exportable.
93. In their attempt to justify the cancellation, the respondents have also
sought to allege that in preliminary enquiry conducted by CBI, had found
serious irregularities with the process of grant of exploration licenses. The
respondent no.1 has suppressed the crucial fact that the said Preliminary
Enquiry had been closed by CBI in early 2013 wherein it was concluded that
no misconduct was found on the part of any public servant of IBM in the
case. The relevant extracts of the answers given by the then Minister of
Mines, Sh. Dinsha Patel while answering to a unstarred question in the
Parliament on 21.2.2014 (page 480) is reproduced herein below.
―The Central Bureau of Investigation has conducted a
Preliminary Enquiry to investigate alleged irregularities
in grant of Exploration Licenses in the offshore waters of
Bay of Bengal and Arabian Sea and concluded that no
misconduct was found on the part of any public servant of
IBM in the case.‖
94. In addition to above after the said Preliminary Enquiry, the Ministry
of Mines and IBM both defended the selection process before Hon‟ble High
Court of Bombay and vide its judgement dated 17.09.2013 in writ petition
1502 of 2011 upheld the process finding that the same was in accordance
with law and that there was no infirmity with the allocation process.
95. The learned Additional Solicitor General had vehemently argued that
entire exercise was undertaken in public interest and if it is not in public
interest the Government of India has power to take decision even after
granting executing the exploration deed with the parties.
96. On perusal of impugned order dated 30.06.2016 or the counter
affidavit filed by the respondents, no where stated regarding the public
interest. Thus, such contentions are not supported either by the submissions
on affidavit or in absence of any contention mentioned in the impugned
order. It is alleged that CRZ being an issue of environment, it would be in
public interest to cancel the grant. However, the said contention is then
contradicted by the respondents own admission that blocks would be re-
granted through auction. Therefore, it proves that mining ultimately would
be allowed in CRZ, which is in consonance with the various CRZ
notifications wherein mining of rare/atomic minerals is very much
permissible.
97. The issue of grant of production lease would arise only if the said
minerals are discovered in the exploration. More importantly again the said
contention is contradicted by the respondents admission that the blocks
would be auctioned, in which case again it would be private parties that
would be granted the blocks. Thus, it proves that no public interest has been
made out. Moreover, the respondents cannot act contrary to statutory
provisions and then claim the action to be in public interest. Moreover, it is
settled law that the respondents being State are estopped from pleading
anything to the contrary after successfully defending the grants before the
High Court of Bombay and order dated 17.9.2013 was not interfered with by
the Hon‟ble Supreme Court and SLP against the same was dismissed.
98. The learned ASG also sought to rely judgements in the case of Sales
Tax Officer v. Shree Durga Mills: (1998) 1 SCC 572; Rishi Kiran
Logistics v. Board of Trustees of Kandla Port: (2015) 13 SCC 233 to
contend that the Government can revoke any notification issued by it.
However, all these cited judgments are on the issue of promissory estoppel,
where based on some policy decision or certain acts were undertaken by the
affected persons.
99. It is pertinent to mention here that the petitioner has not based its right
on the doctrine of promissory estoppel but on the basis of statutory right.
Even assuming, the government has power to recall the notification, in the
present case it is not the government but the administering authority (a
statutory authority) who has issued the impugned order. In addition to
above, the learned ASG failed to show any power under provisions of
OAMDR Act which allowed the administering authority to recall a
notification. The administering authority is a statutory authority and can act
only within the four corners of the statute and does not have powers of the
Government to withdraw notifications.
100. In view of the above discussion and legal position, order dated
05.04.2011 created a vested right with the petitioner and the impugned order
dated 30.06.2016 was passed without jurisdiction and was ultra vires the Act
as there is no power of review with the Administering Authority. The
respondents in order to the achieve their goal of reallocating the offshore
blocks have manufactured the reasons cited in the impugned annulment
order dated 30.06.2016 clearly suffers from colourable exercise of power
and legal malice. The purpose of exercise of power was to achieve an object,
not provided under the OAMDR Act and more over without affording any
opportunity to the allottees, the impugned order dated 30.06.2016 was only
passed to cancel the already granted exploration licences and re-allocate the
same through auction. Therefore, no public interest was involved. Thus
respondents have acted contrary to statutory provisions and now claim their
action to be in public interest as an afterthought as is evident from the
impugned order where there is no mention of any public interest. The main
ground in the annulment order dated 30.06.2016 taken by the respondents
herein that there was a blanket on mining under CRZ notification dated
6.1.2011 was absolutely incorrect and contrary to law as mining of rare
minerals not found on onshore areas was always permitted within CRZ
areas. This fact has been admitted by Controller General, IBM and
Administering Authority in his report dated 11.12.2017 as well as Union of
India, respondent herein in its affidavit dated 26.09.2017 filed before this
Court as also by MoEFCC in its clarification dated 9.2.2018.
101. Moreover, the issue of overlapping was first raised in the petition
before Andhra Pradesh High Court in 2011 wherein the respondents
defended the same by stating that as per Rule 43(3) of OAMC Rules, 2006,
no mining activity can be undertaken till 12 nautical mile from low tide line.
Therefore, it is clear that the respondents were also well aware of the said
issue since 2011 and themselves defended it before the High Court of
Andhra Pradesh, however, this issue was never taken up before High Court
of Bombay at Nagpur in 2013 nor before the Supreme Court in 2014 and is
only manufactured in 2016 to provide a basis for issuing the annulment
order as it proves from the minutes of meetings chaired by Secretary,
Ministry of Mines on 14.07.2015 and 18.11.2015. As per the provisions of
the OAMDR Act mineral concessions can be granted to private parties for
all minerals found in offshore areas including atomic minerals. For the
aforesaid purpose no permission of the Department of Atomic Energy is
required for grant of exploration licences to the petitioner, however, only
„consultation‟ with Department of Atomic Energy is required at the time of
grant of production permits. However, that stage yet to come.
102. It is pertinent to mention here that the present petitions were heard on
20.12.2018 and reserved for the judgment. Thereafter, the petitioner in
W.P.(C) 7537/2018 moved C.M.APPLN. 3711/2019 whereby CRZ
notification dated 18.01.2019 has been placed on record and same was
allowed vide order dated 25.01.2019. On the date, Ms. Maninder Acharya,
ASG submitted that CRZ notification dated 18.01.2019 does not make any
difference to the case of the parties. Learned ASG further submitted that the
annulment order dated 30.06.2016 was passed mainly in view of the CRZ
restrictions and overlapping of identified blocks. The recent CRZ 2019
supersedes the earlier CRZ 2011 saving the things done or omitted to be
done before such supersession. It is reproduced as under:-
―Now, therefore in exercise of the powers conferred
by sub-section (1) and clause (v) of sub-section (2) of
Section 3 of the Environment (Protection) Act, 1986 (29 of
1986) and in supersession of the Coastal Regulation Zone
Notification 2011, number S.O. 19(E), dated the 6th
January, 2011, except as respects things done or omitted to
be done before such supersession, the Central Government,
with view to conserve and protect the unique environment of
coastal stretches and marine areas, .........
(emphasis added)‖
103. Accordingly, the action of respondent(s) in annulling the whole
process of grant of Exploration licenses in the Offshore areas is saved under
the notification itself. It is further submitted that the then CG, IBM
(Administering Authority) signed the licence deed with M/s UA Minerals
for six blocks on 30.11.2017 in haste without following the due procedure of
law justifying his action in compliance of the order dated 09.11.2017. The
answering respondent has preferred a review of the order dated 09.11.2017
and the same is pending adjudication. Learned ASG submitted that by any
stretch of imagination, seek any advantage by virtue of recent CRZ 2019 as
the position of the petitioners remain same and there is no change brought
about by the recent CRZ 2019 as regards the petitioners since
restrictions/regulations/clearances etc. as envisaged in the statute as well as
the notifications cannot be overlooked and still have to be complied with.
The earlier CRZ notifications were silent on the aspect of exploration in
Offshore areas and mining of only atomic minerals was permitted and
regulated to be done in CRZ but the recent CRZ 2019 has clarified that now
exploration of atomic minerals is also regulated in CRZ areas in addition to
mining of atomic minerals as prescribed on part B Schedule I of MMDR
Act, 1957. Accordingly, CRZ 2019 has made the procedure more stringent
as now exploration of atomic minerals regulated in CRZ areas are to be done
in accordance with the rules prescribed under Atomic Minerals Concession
Rules, 2016 and AMCR does not provide for issuance of prospecting licence
to private parties whereas clear guidelines have been specified for granting
Prospecting licence to a government company /corporation /entity notified
by the Central Government. As per CRZ 2017 and further CRZ 2019, the
mining activities in the Offshore areas are prohibited and exploration and
mining of atomic minerals is a regulated activity. Therefore, the eligibility
conditions for undertaking these activities are changed.
104. It is evident from CRZ notification dated 18.01.2019 that the
territorial waters of the country i.e. upto 12 nautical miles is classified as
CRZ IVA under para 2 of the notification as under:-
"2.0 Classification of CRZ. - For the purpose of
conserving and protecting the coastal areas and marine
waters, the CRZ area shall be classified as follows,
namely:-
2.4 CRZ- IV:
The CRZ- IV shall constitute the water area and shall be
further classified as under:-
2.4.1 CRZ- IVA:
The water area and the sea bed area between the Low Tide
Line up to twelve nautical miles on the seaward side shall
constitute CRZ-IVA.
2.4.2 CRZ- IVB:
Xxx xxx xxxx‖
105. As per the said notification, in para 4 lists of prohibited activities are
there whereas in para 5 all permitted and regulated activities in CRZ areas
are mentioned. It is under sub-para 5.4, which covers CRZ IV i.e. the
territorial waters, it is once again clarified that exploration and mining are
allowed within CRZ IV and states as under:-
5. Regulation of permissible activities in CRZ:
5.4 CRZ-IV:
Activities shall be permitted and regulated in the CRZ
IV areas as under:-
(i)-(x) xxxxx xxxxxx xxxxx
(xi) Exploration and mining of atomic minerals
notified under Part-B of the First Schedule of the
Mining and Minerals (Development and Regulation)
Act, 1957 (67 of 1957), occurring as such or in
association with other mineral(s) and of such
associated minerals(s).
(xii)-(xv)
106. Thus, it is evident from para 5 which details out all permissible
activities within CRZ IV areas that exploration and mining of the named
minerals including all atomic minerals as well as exploration and mining of
all associated minerals is very much permissible.
107. It is pertinent to mention here that the Administering Authority i.e.
Controller General, Indian Bureau of Mines had already considered the
above issues pertaining to implication of CRZ notification dated 6.10.2017,
overlapping of certain blocks with onshore areas and grant of mineral
concessions to private parties for atomic minerals and the same is evident
from its report dated 11.12.2017. It is only after considering of the aforesaid
issues, the respondent no.2 herein has executed the deed for exploration
licences with one M/s. U.A. Minerals Pvt. Ltd. on 30.11.2017 and till date
there is no stay on the said order.
108. In view of above discussion and the legal position, I hereby set aside
the order dated 30.06.2016 passed by respondent No. 2 and consequent
proceedings thereto. Consequently, the respondents are directed to execute
the exploration licences in favour of the petitioners as per the procedures
within four weeks from the receipt of this order.
109. Accordingly, the petitions are allowed.
CM APPLN. 28828/2018 in W.P.(C) 7537/2018
CM APPLN. 28875-76/2018 in W.P.(C) 7553/2018
CM APPLN. 28879-80/2018 in W.P.(C) 7555/2018
CM APPLN. 29004-05/2018 in W.P.(C) 7591/2018
In view of the order passed in the present writ petitions, these
applications have been rendered infructuous and are accordingly, disposed
of such.
(SURESH KUMAR KAIT)
JUDGE
FEBRUARY 06, 2019
rd/ab/gb
