Mineral Enterprises Limited vs State Of Karnataka
2021 Latest Caselaw 373 Kant

                             1



     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

         DATED THIS THE 07th DAY OF JANUARY, 2021

                        PRESENT

      THE HON'BLE MR.ABHAY S. OKA, CHIEF JUSTICE

                           AND

THE HON'BLE MR.JUSTICE SACHIN SHANKAR MAGADUM

        WRIT PETITION NO.24316 OF 2019 (GM-MM-S)


BETWEEN:

MINERAL ENTERPRISES LIMITED
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT, 1956

HAVING ITS REGISTERED OFFICE AT
KHANIJA BHAVAN, 3RD FLOOR
WEST WING No.49, RACE COURSE ROAD
BANGALORE-560 001

REPRESENTED HEREIN BY ITS
AUTHORISED SIGNATORY
MR.M.S.SRINIVASA RAGHAVAN
                                           ... PETITIONER
(BY SRI.K.G.RAGHAVAN, SR. ADVOCATE FOR
    SRI.ADITYA NARAYAN, ADVOCATE)

AND:

1.      STATE OF KARNATAKA
        MINISTRY OF COMMERCE AND INDUSTRY
        3RD FLOOR, KHANIJA BHAVAN (EAST WING)
        No.49, RACE COURSE ROAD
        BENGALURU-560 001
        REPRESENTED BY ITS SECRETARY

2.      DEPARTMENT OF MINES AND GEOLOGY
        No.49, KHANIJA BHAVAN
        RACE COURSE ROAD
                                 2



      BENGALURU-560 001
      REPRESENTED BY ITS DIRECTOR

3.    JSW STEEL LIMITED
      JSW CENTRE
      BANDRA KURLA COMPLEX
      BANDRA EAST
      MUMBAI-400 051
                                              ... RESPONDENTS

(BY SRI.TARANATH POOJARY, AGA FOR R1 & R2
    SMT.S.R.ANURADHA, ADV. FOR R3)


      THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA, PRAYING TO QUASH
NOTIFICATION DTD:08.03.2019 ISSUED BY THE R-2
(ANNEXURE-A) AND THE AMENDMENT TO THE NOTIFICATION
DTD: 01.04.2019 (ANNEX-B) CORRIGENDUM No.2 TO THE
IMPUGNED NOTIFICATION DTD: 02.05.2019 (ANNEX-C)
CORRIGENDUM No.3 TO THE IMPUGNED NOTIFICATION DTD:
03.05.2019 (ANNEX-D) AND CORRIGENDUM No.4 TO THE
IMPUGNED NOTIFICATION DTD: 22.05.2019 (ANNEXURE-E)
AND ETC.

     THIS PETITION COMING ON FOR ORDERS THIS DAY,
CHIEF JUSTICE MADE THE FOLLOWING:


                            ORDER

Hearing of this writ petition was given out of turn priority

in view of the order of the Apex Court dated 17th August, 2020

passed in Writ Petition (Civil) No.800/2020. In terms of the

said order of the Apex Court, application for amendment of the

petition was allowed earlier and yesterday, we commenced the

final hearing of the petition. Out of turn priority was given to

hearing only in view of the decision of the Apex Court under the

aforesaid order.

2. To put it mildly, this is a classic case of a party

indulging in suppression of material facts. Before we refer to

the facts of the case, we may hasten to add that the learned

Senior Counsel representing the petitioner appeared and

stated before the Court today that he, as a Senior Counsel of

this Court, will never tolerate such conduct on the part of a

party and therefore, he has advised the petitioner to

immediately withdraw the petition. He also stated on

instructions that apart from the fact that the petitioner wants to

unconditionally withdraw this petition, the petitioner will not

press IA.No.58584/2019 filed before the Apex Court seeking a

direction for extension of mining lease subject matter of this

petition. A memo for withdrawal of this petition has been

accordingly filed by the learned counsel for the petitioner in

which a prayer is made for permitting unconditional withdrawal

of this petition.

3. Considering the extent of suppression of facts

indulged by the petitioner, notwithstanding the fact that the

petitioner has agreed to withdraw the petition, it is necessary

for us to pass an order regarding payment of costs. Therefore,

a brief reference to the facts of the case is necessary.

4. The subject matter of this petition under Article

226 of the Constitution of India is the mining lease granted to

the predecessor of the petitioner under the provisions of the

Mines and Minerals (Development and Regulation) Act, 1957

(for short 'the said Act of 1957'). The mining lease was in

respect of Iron Ore and Manganese. In paragraph 3 of the

petition it is claimed by the petitioner that it is a 'model Miner'

and has adopted best practices in mining activities. The

petitioner is relying upon mining lease No.2346 (for short 'the

said lease'), a copy of which is annexed as Anneuxre-K. The

said mining lease was originally granted to Sri

Y.Hanumanthappa by the erstwhile Government of Mysore on

7th October, 1952. The lease was transferred to M/s. Jyothi

Brothers on 22nd February, 1956 and on 9th September, 1969,

the lease was transferred to the present petitioner.

5. On 7th October, 1952 the lease was granted for a

period of 20 years till 6th October, 1972. The further extension

from 7th October 1992 was granted in respect of a part of the

area of the original lease as per the Government Notification

dated 8th April, 2001. The renewal of lease granted for 20 years

was in respect of 103.81 Hectares from 7th October, 1992.

Thus, the renewal was granted till 6th October 2012. An

application for further renewal dated 26th February 2009 was

actually filed on 7th March 2009. The said application is at

Annexure-K1 which seeks extension of lease for a period of 20

years.

6. In the petition as originally filed, the challenge is to

the Notifications issued by the State Government inviting bids

for grant of mining lease in respect of the area of the lease

earlier granted to the petitioner. The objection of the petitioner

to the impugned notifications inviting bids was essentially on

the ground that the petitioner is entitled to extension of lease till

6th October, 2032.

7. There are some developments which took place

before filing of the petition. In Writ Petition (Civil) No.562/2009,

on 29th July, 2011, the Apex Court passed an order prohibiting

Iron Ore and other mining activities in Bellary District. A similar

order was passed on 26th August, 2011 in respect of Iron Ore

and mining activities in Chitradurga and Tumakur Districts. As

the mining lease subject matter of this petition was categorized

as 'A' Category, by the order dated

3rd September, 2012, the Apex Court permitted the mining

activity. The petitioner is relying upon the orders passed by the

Apex Court on 2nd November, 2012 and 18th April, 2013, by

which assurance of the State Government was noted regarding

disposing of the pending renewal applications within a period of

one month.

8. Now comes the crucial part of this petition and

especially the amended petition. In paragraph 8 of the

amended petition, reliance is placed on the application for

renewal which was filed on 2nd March, 2009 and it is contended

that the petitioner was legally entitled to the renewal of the said

lease.

9. What is material is paragraph 9 of the petition,

which reads thus:

"9. Despite the fact that the petitioner had filed its application well before the expiry of the then current lease term, the respondents failed to consider the

same, until after the amendment to the MMDR Act, 1956, in 2015, whereunder all existing leases were automatically extended until at least 31.03.2020. The Respondents also caused delays in processing the forest clearance in favour of the petitioner. As a result, the lease deed came to be executed in favour of the petitioner only on 05.12.2016. The same was done by misapplying Section 8A of the MMDR Act, 1956, as amended and taking advantage of the delay in processing the pending renewal application of the petitioner. The sole reason for the delay and the resulting execution of extension lease deed was that the State government did not process the application filed by the petitioner and, instead, kept the same pending.

      (Amended by         insertion     vide   Order     dated
      13.10.2020)."

                       (underlines supplied)

10. Thereafter, there is a reference to the orders

passed in Writ Petition (Civil) No.562/2009, which we have

already referred earlier. In paragraph 9, a grievance has been

made that the State Government has not processed the

application filed by the petitioner on 2nd March, 2009.

Paragraph 9I refers to the amendment made to the said Act of

1957 with effect from 12th January, 2015 by which Section 8A

was incorporated. In paragraph 9I, a specific reliance has

been placed perhaps on Section 8A of the said Act of 1957.

11. In paragraph 9J, a specific contention has been

raised that the petitioner was entitled to extension of lease for a

period of 20 years from 7th October, 2012 (i.e., up to 6th

October, 2032).

12. Now we come to paragraph 9K which must be

quoted. Paragraph 9K reads thus:

"9K. However, more than six years after the renewal application was filed, the respondent No.1-State of Karnataka finally executed the Supplementary Lease Deed dated 05.12.2016 in favour of the petitioner (produced as Annexure K hereto), only until 30.03.2020. The State, thereby, unlawfully took advantage of its own inexcusable delays, and misapplied the amended provisions.

      (Amended by           insertion       vide   Order       dated
      13.10.2020)."

                             (underlines supplied)

13. Paragraph 9K suggests that the first respondent

on its own executed Supplementary Lease Deed dated 5th

December, 2016 in favour of the petitioner which was valid till

30th March, 2020. The further allegation is that the State

Government unlawfully took advantage of its own inexcusable

delays and misapplied the amended provisions.

14. Paragraph 9M alleges that the State's inaction is

unlawful in the light of final judgment of the Apex court dated

18th April, 2013.

"9M. It is submitted that the delay in renewal was, itself wholly inexcusable and unlawful. Most egregiously, the State's inaction was in the teeth of both the Order dated 02.11.2012 and the final judgment of the Hon'ble Supreme Court dated 18.04.2013, wherein express directions were issued to the State Government to process the pending applications.

      (Amended by             insertion      vide     Order      dated
      13.10.2020)."

15. Paragraph 9Q is also relevant, which reads thus:

"9Q. As is clear from the aforesaid provisions, the petitioner was entitled to consideration of its renewal application and grant of renewal lease term from 07.10.2012 to 06.10.2032, and, consequently, the Petitioner was also entitled to extension of the lease until 06.10.2032, under Section 8A(6). However, taking advantage of its own wrongful and contumacious delays, the Respondent No.1 - State of Karnataka chose to curtail the period of extension only until 30.03.2020 in the Supplementary Lease Deed dated 05.12.2016, by wholly misapplying the

provisions of Section 8A of the MMDR Act, 1957 (Amended by insertion vide Order dated 13.10.2020)."

(underlines supplied)

16. As a specific reliance was placed yesterday by the

learned Senior counsel for the petitioner on paragraph 9H, we

are quoting the same, which reads thus:

"9H. The petitioner had, right from 08.10.2012, fervently followed up with the State Government, requesting it to take steps in accordance with its legal obligations, and process and grant the Petitioner's renewal application.

      (Amended by          insertion     vide   Order   dated
      13.10.2020.)"

                             (underlines supplied)

17. Yesterday, when the hearing was about to

conclude, the learned Additional Government Advocate invited

our attention to order dated 17th August, 2016 passed by a

Division Bench of this Court in Writ Petition No.31404/2016

filed by the petitioner. Therefore, we called for the file of the

said writ petition. First thing which must be noted here is that

there is a complete suppression by the petitioner of filing of the

said writ petition in the present writ petition either in the original

petition or in the amended version. We find from the perusal of

the said Writ Petition No.31404/2016 that it was filed on

30th May, 2016. The substantive prayer made in the said

petition is in terms of prayer (a) which reads thus:

"a. To direct the respondents to execute supplementary lease deed in accordance with MMDR (Amendment) Act, 2015, extending the period of ML No.2346 in favour of the petitioner and permit the petitioner to conduct mining operations."

18. We have carefully perused the said petition. In the

petition, there is a specific reference in the synopsis to the

application filed for renewal on 2nd March, 2009. However, the

specific contention raised in the petition as can be seen from

various paragraphs including paragraph-7 is that by virtue of

provisions of sub-section (6) of Section 8A of the said Act of

1957, the lease stood extended up to 31st March 2020. It is not

even a case made out in the said petition that in terms of the

application for renewal filed on 2nd March 2009, the petitioner

was entitled to renewal of lease for a period of 20 years from

7th October 2012 till 6th October, 2032. In fact, in paragraph 16

it is reiterated that period of lease granted as per the

amendment to the said Act of 1957 would come to an end on

31st March, 2020. It is alleged that on account of the inaction

on the part of the respondents, the petitioner has not been

permitted to work in the mines even from the date of the

amendment i.e., 12th January, 2015. Thus, the petitioner after

referring to the application filed for renewal on 2nd March, 2009

claimed a writ of mandamus in the said petition filed on

30th May, 2016 for grant of deemed extension till 31st March,

2020 specifically in terms of sub-section (6) of Section 8A of

the said Act of 1957 which was added by the amendment

effected with effect from 12th January, 2015. The writ petition

was disposed of by order dated 17th August, 2016, recording

the statement of the learned Additional Government Advocate

that lease will be executed within four weeks and that is how on

5th December, 2016, the State Government executed renewal

lease providing for a term up to 30th March, 2020. The

petitioner never made any grievance about the term of the

lease in the renewal lease dated 5th December, 2016. Thus,

the petitioner accepted the fact that notwithstanding the

application filed on 2nd March, 2009, it is entitled to extension of

lease only up to 30th March, 2020. Thus, the petitioner filed

the said petition in May, 2016 claiming extension of lease in

terms of sub-section (6) of Section 8A of the said Act of 1957

only till the end of March, 2020. The petitioner accepted the

said supplementary lease extending the lease up to 30th March

2020 and signed it without making any grievance. Thus, the

suppression by the petitioner of filing of earlier Writ Petition

No.31404/2016 is very crucial. Not only that filing of the

petition and the order passed thereon which was invited by the

petitioner itself was suppressed, the averments made in the

amended petition and in particular, in paragraph 9 seem to

indicate that the grievance of the petitioner is that a lease was

executed valid only up to 30th March, 2020 by applying Section

8A of the said Act of 1957. The averments made in the

amended petition give an impression that the State on its own

executed a lease on 5th December, 2016, extending the period

of lease up to the end of March, 2020, by ignoring the pending

application. It was the bounden duty of the petitioner to have

disclosed that in May, 2016 the petitioner itself filed the

aforesaid writ petition claiming extension of lease till the end of

March, 2020 by specifically relying upon sub-section (6) of

Section 8A of the said Act of 1957. In terms of the order

passed in the said petition, the petitioner voluntarily executed a

lease which was valid up to 30th March 2020 without any

protest. This is, therefore, a gross case of suppression of

material facts.

19. The matter does not rest here. In the petition,

even as originally filed, reliance was placed on IA filed by the

petitioner being IA.No.58584/2019 in Writ Petition (Civil)

No.562/2009. A copy of the said application is annexed as

Annexure-L, which we have carefully perused. The IA appears

to have been filed on 6th April, 2019 in which it is stated that the

application filed for renewal on 2nd March, 2009 was kept

pending and various averments have been made in the said IA

regarding delay on the part of the State Government in granting

forest and other clearances and the delay in execution of

supplementary lease deed. Those averments are found at

pages 13 and 14 of the IA. Even in the said application, the

petitioner seems to have suppressed filing of Writ Petition

No.31404/2016 and the order passed thereon. In any case,

the IA proceeds on the footing that the petitioner was entitled to

renewal of lease up to the end of March, 2020. The prayer in

the IA was that on account of the delay in execution of the

lease, petitioner be granted extension up to 31st March, 2025.

Thus, even the said application filed before the Apex Court

proceeds on the footing that the petitioner was entitled to

extension of lease till the end of March, 2020, but due to the

delay on the part of the authorities of the State Government,

considering the huge investment allegedly made by the

petitioner that the lease should be extended up to 31st March,

2025. Thus, even the said application proceeds on the footing

that the entitlement of the petitioner to the renewal was up to

the end of March, 2020. Not even a whisper in the said

application filed before the Apex Court as late as on 6th April,

2019 that under the application for renewal filed on 2nd March,

2009, the petitioner was entitled to extension of lease for 20

years from 7th October, 2012. Perhaps only after 30th March

2020 that the petitioner invented a theory that it is entitled to

extension till 6th October 2032.

20. Yesterday, before the fact of filing of the earlier

petition was disclosed by the learned Additional Government

Advocate, we made a query to the learned Senior Counsel

appearing for the petitioner, whether any grievance was made

in writing by the petitioner at any time about the failure of the

State Government to grant lease for a period of 30 years on the

basis of the application filed on 2nd March, 2009. His only

answer was paragraph-9H of the amended petition, which we

have quoted earlier. In fact, Writ Petition No.31404/2016 filed

by the petitioner and I.A. filed by the petitioner before the Apex

Court in April, 2019 clearly indicate that the petitioner never

made out a case that it is entitled to extension of lease for a

period of 20 years from 7th October, 2012 on the basis of the

application dated 2nd March, 2009. Thus, the bald averment

made in paragraph-9H of the petition is obviously false. We

had also made a query to the learned Senior Counsel

appearing for the petitioner that when for the first time the

petitioner made a grievance regarding the failure to grant lease

for a period of 20 years on the basis of the application dated

2nd March, 2009, he stated that the said grievance was made

for the first time in July, 2020 by filing Writ Petition (Civil)

No.800/2020 before the Apex Court. Though a copy of the

said writ petition is not placed on record, we can safely infer

that the petitioner must not have disclosed to the Apex Court

the fact of filing of Writ Petition No.31404/2016, the order

passed thereon and the voluntary execution of the

supplementary lease on 5th December, 2016 by the petitioner

till 30th March, 2020. It appears from the order dated 17th

August, 2020 passed in Writ Petition (Civil) No.800/2020 that

the petitioner persuaded the Apex Court to pass an order

permitting the petitioner to raise the contentions which were

raised in the writ petition filed before the Apex Court in the

present petition. In fact, the Apex Court granted leave to

amend this petition. The petitioner also persuaded the Apex

Court to pass an order directing this Court to dispose of the

petition within a period of six months from the date of

communication of the order.

21. Even after the said order, the conduct of the

petitioner, which is reflected from the orders passed by this

Court is very peculiar. The conduct of the petitioner is noted

while passing the order dated 18th November, 2020. The said

order has been passed on the interlocutory application being

I.A.No.3/2020. The applicant in I.A.No.3/2020 was declared as

successful bidder on 26th July, 2019. The said successful

bidder was made a party in Writ Petition (Civil) No.800/2020

filed by the petitioner before the Apex Court. Though the

petitioner was fully aware of the successful bidder as the

petitioner itself had made him a party in the writ petition filed

before the Apex Court, while carrying out amendment in terms

of the order of the Apex Court, the petitioner deliberately

omitted to implead the said successful bidder. Paragraphs-4

and 5 of the order dated 18th November, 2020 read thus:

"4. In terms of the liberty granted by the Apex Court, an application for amendment of this writ petition was made by the petitioner. That application was allowed by order dated 13th October 2020. Today, learned counsel appearing for the petitioner states that, she has no objection for allowing the present application. But, there is no explanation coming from her for not impleading the successful bidder, though the petitioners were aware that the applicant is a successful bidder. In fact, the petitioners applied for extensive amendment by filing IA No.2/2019. However, there is no explanation why the petitioners omitted to implead the present applicant though in their own petition filed before the Apex Court, the present applicant was a party respondent. On the request made by the petitioners, the Apex Court has fixed a time bound schedule. The order of the Apex Court has been passed more than three months back. Still the petitioners have not chosen to apply for impleading the applicant, though the applicant appears to be a necessary party. While we are allowing the application, we direct the petitioner to file an affidavit explaining their conduct of not impleading the necessary party for a period of three months after the order of the Apex Court. Such an affidavit shall be filed within a period of two weeks from today.

5. Perusal of the amended petition shows that in Paragraph 34(A), it is specifically mentioned that the present applicant has been declared as a preferred bidder. In fact, it refers to a letter dated 13th August, 2019 issued to the applicant in the present application. Though today the learned counsel appearing for the petitioner stated that the petitioner has no objection for impleading the applicant, the petitioner owes an explanation to the Court why the applicant in the present application was not impleaded as a party- respondent while seeking amendment of the petition."

(underlines supplied)

22. As far as the conduct of the petitioner is

concerned, paragraphs 2 and 3 of the order dated 2nd

December 2020 are material which read thus:

"On 17th August, 2020, when an order was passed by the Apex Court, the petitioner was aware of the requirement of impleading the applicant in I.A. No.1 of 2020. The petitioner did not take any steps for nearly two months. This becomes relevant as the petitioner persuaded the Apex Court to pass an order fixing a time bound schedule for the disposal of the petition.

Though we are not satisfied with the explanation offered by the petitioner, the issue regarding the conduct of the petitioner must rest here. The learned counsel appearing for the added respondent states that a copy of the amended petition was served in the

last week. Therefore, she seeks time of three weeks to file the statement of objections. Accordingly, we grant three weeks time to file the statement of objections."

23. We have already noted that the petitioner in

paragraph 3 of this petition has made a tall claim that it is a

'model miner' and has adopted best practices in mining

activities. As noted earlier, this is a gross case of suppression

of material facts by the petitioner. This is a gross case of

making false statements in the petition. This is a gross case

where not only this Court but also the Apex Court was taken on

ride by a company which makes a tall claim of being a model

miner.

24. Writ jurisdiction under Article 226 of the

Constitution of India is always discretionary and equitable.

Such equitable and discretionary jurisdiction is not meant to

litigants like the petitioner who have brazenly Indulged in

suppression of material facts, making false statements and

taking the highest Court in the nation as well as this Court for a

ride. All this was unearthed only when we called for the papers

of the Writ Petition No.31404/2016 filed by the petitioner. Now,

the learned senior counsel appearing for the petitioner has

taken a fair stand and has advised the petitioner to withdraw

the petition.

25. Not only that the petitioner has indulged in

suppression of material facts and has taken the Courts for a

ride, the petitioner has consumed very important and precious

time of this Court when there are large number of old matters

waiting in a queue for disposal. It is only because the petitioner

persuaded the Apex Court to pass an order directing disposal

of the petition in six months that an out of turn priority was

given to the hearing of this petition.

26. Time has come to give a clear signal to the

litigants that no one will be allowed to abuse the writ jurisdiction

of this Court in this manner. The petitioner is not an innocent

litigant. It is a limited company doing business in mining.

Moreover, in this case, we are dealing with a company which

boldly claims to be a 'model miner' and is claiming that it is

following the best practices. The other practice which the

petitioner has followed is of suppressing material facts while

filing proceedings before the Court. Therefore, the petitioner

will have to be saddled with exemplary costs which will be

payable to the Chief Minister's Relief Fund. We quantify the

amount of costs at Rs.5 lakhs which will be payable by the

petitioner to the Chief Minister's Relief Fund within a period of

six weeks from today.

27. We may note here that the learned senior counsel

appearing for the petitioner, on instructions, stated that the

pending IA.No.58584/2019 filed before the Apex Court will not

be pressed. From the facts which we have stated above and

considering the conduct of the petitioner, it is obvious that now

the petitioner is disentitled to initiate any proceedings on the

basis of the mining lease which is the subject matter of this

petition.

28. Accordingly, we pass the following:

ORDER

(i) The memo for withdrawal of the writ petition

is taken on record and the petition is

dismissed as unconditionally withdrawn;

(ii) The petitioner shall pay costs quantified at

Rs.5 lakhs to the Chief Minister's Relief

Fund within a period of six weeks from

today;

(iii) A compliance report shall be filed by the

petitioner enclosing a copy of the receipt;

(iv) We record the solemn assurance given by

the learned senior counsel appearing for the

petitioner, on instructions, that

IA.No.58584/2019 pending before the Apex

Court will not be prosecuted;

(v) We also make it clear that the petitioner will

not be entitled to initiate any proceedings on

the basis of the mining lease subject matter

of this petition bearing ML No.2346;

(vi) Though the petition is disposed of, place the

petition for orders on 23rd February, 2021 for

reporting compliance regarding order of

payment of costs.

Sd/-

CHIEF JUSTICE

Sd/-

JUDGE

TL/nd