Karnataka High Court
Mspl Limited vs State Of Karnataka on 27 September, 2023
Bench: Chief Justice, M.G.S. Kamal
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R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27th DAY OF SEPTEMBER, 2023
PRESENT
THE HON'BLE MR.PRASANNA B.VARALE, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE M.G.S.KAMAL
WRIT PETITION No. 14760 OF 2022 (GM-MMS)
C/W
WRIT PETITION No.14795 OF 2022 (GM-MMS)
AND
WRIT PETITION No.23151 OF 2022 (GM-FOR)
IN WRIT PETITION No.14760 OF 2022
BETWEEN:
1. MSPL LIMITED
A COMPANY WITHIN THE
MEANING OF COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE
AT BALDOTA ENCLAVE ABHERAJ
BALDOTA ROAD
HOSAPETE-583 203.
REPRESENTED BY ITS
AUTHORISED SIGNATORY
MR. K.A.V PRASAD
(VICE PRESIDENT - LEGAL).
2. MR. RAHULKUMAR N. BALDOTA
SON OF NARENDRAKUMAR A.,
BALDOTA
AGED ABOUT 54 YEARS
HAVING OFFICE AT BALDOTA
ENCLAVE
ABHERAJ BALDOTA ROAD
HOSAPETE - 583 203.
...PETITIONERS
(BY SRI. ASHOK HARANAHALLI SR. ADVOCATE FOR
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SRI. ADITYA NARAYAN ADVOCATE)
AND
1. STATE OF KARNATAKA
COMMERCE AND INDUSTRIES DEPARTMENT
(MSME AND MINES)
KARNATAKA GOVERNMENT SECRETARIAT
VIKASA SOUDHA
BANGALORE-560 001.
REPRESENTED ITS PRINCIPAL SECRETARY.
2. UNION OF INDIA
MINISTRY OF ENVIRONMENT
FOREST AND CLIMATE CHANGE
REGIONAL OFFICE (SOUTH ZONE)
KENDRIYA SADAN
4TH FLOOR E AND F WINGS
17TH MAIN ROAD
KORAMANGALA II BLOCK
BANGALORE-560 034.
ALSO AT:
INDIRA PARYAVARN BHAWAN
JOR BAGH ROAD, LODI ROAD
NEW DELHI-110 003
REPRESENTED BY ITS SECRETARY.
3. STATE OF KARNATAKA
FOREST, ECOLOGY AND
ENVIRONMENT DEPARTMENT
KARNATAKA GOVERNMENT
SECRETARIAT, ROOM NO.448
4TH FLOOR, GATE NO.2,
M.S. BUILDING
BENGALURU-560 001
REPRESENTED BY ITS PRINCIPAL
SECRETARY (FORESTS).
...RESPONDENTS
(BY SRI. S.S. MAHENDRA, AGA FOR R1 & R3;
SRI. B.M. KUSHALAPPA, CGC FOR R2)
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THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
i) A WRIT OF CERTIORARI QUASHING THE IMPUGNED
COMMUNICATION DATED:13/06/2022 STYLED AS SHOW
CAUSE NOTICE BEARING NO.CI 118 MMM 2021
(ANNEXURE-A) ISSUED BY RESPONDENT NO.1 ii) A WRIT
OF MANDAMUS DIRECTING THE RESPONDENT NO.1 TO
FORTHWITH EXTEND THE TERM OF THE LETTER OF INTENT
UNTIL THE ISSUANCE/TRANSFER OF FOREST CLEARANCE
IN FAVOUR OF THE PETITIONER NO.1 AND ETC.
IN WRIT PETITION No.14795 OF 2022
BETWEEN:
1. MSPL LIMITED
A COMPANY WITHIN THE
MEANING OF COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE
AT BALDOTA ENCLAVE ABHERAJ
BALDOTA ROAD
HOSAPETE-583 203.
REPRESENTED BY ITS
AUTHORISED SIGNATORY
MR. K.A.V PRASAD
(VICE PRESIDENT - LEGAL).
2. MR. RAHULKUMAR N. BALDOTA
SON OF NARENDRAKUMAR A.,
BALDOTA
AGED ABOUT 54 YEARS
HAVING OFFICE AT BALDOTA
ENCLAVE
ABHERAJ BALDOTA ROAD
HOSAPETE - 583 203.
...PETITIONERS
(BY SRI. ADITYA NARAYAN, ADVOCATE)
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AND
1. STATE OF KARNATAKA
COMMERCE AND INDUSTRIES DEPARTMENT
(MSME AND MINES)
KARNATAKA GOVERNMENT SECRETARIAT
VIKASA SOUDHA
BANGALORE-560 001.
REPRESENTED ITS PRINCIPAL SECRETARY.
2. UNION OF INDIA
MINISTRY OF ENVIRONMENT
FOREST AND CLIMATE CHANGE
REGIONAL OFFICE (SOUTH ZONE)
KENDRIYA SADAN
4TH FLOOR E AND F WINGS
17TH MAIN ROAD
KORAMANGALA II BLOCK
BANGALORE-560 034.
ALSO AT:
INDIRA PARYAVARN BHAWAN
JOR BAGH ROAD, LODI ROAD
NEW DELHI-110 003
REPRESENTED BY ITS SECRETARY.
3. STATE OF KARNATAKA
FOREST, ECOLOGY AND
ENVIRONMENT DEPARTMENT,
KARNATAKA GOVERNMENT
SECRETARIAT, ROOM NO.448
4TH FLOOR, GATE NO.2,
M.S. BUILDING,
BENGALURU-560 001
REPRESENTED BY ITS PRINCIPAL
SECRETARY (FORESTS).
...RESPONDENTS
(BY SRI. S.S. MAHENDRA, AGA FOR R1 & R3;
SRI. B.M. KUSHALAPPA, CGC FOR R2)
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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA PRAYING TO i)A WRIT OF
CERTIORARI QUASHING THE IMPUGNED COMMUNICATION
DATED 13/06/2022 STYLED AS SHOW CAUSE NOTICE
BEARING NUMBER NO.CI 120 MMM 2021 (ANNEXURE-A)
ISSUED BY RESPONDENT NO.1 ii) A WRIT OF MANDAMUS
DIRECTING THE RESPONDENT NO.1 TO FORTHWITH
EXTEND THE TERM OF THE LETTER OF INTENT UNTIL THE
ISSUANCE/TRANSFER OF FOREST CLEARANCE IN FAVOUR
OF THE PETITIONER NO.1 AND ETC.
IN WRIT PETITION.23151 OF 2022
BETWEEN:
SRI. RAI BAHADUR SETH SHREERAM
NARASINGADAS PVT LTD.,
A COMPANY REGISTERED UNDER THE
COMPANIES ACT
REP. BY ITS AUTHORISED REPRESENTATIVE
OF THE BOARD OF DIRECTOR
SRI. SUDHINDRA V. JOSHI
S/O. LATE SRI. VENKOBA ACHAR JOSHI
AGED ABOUT 67 YEARS,
NO. 1499/1, POST BOX No.38
KARIGNOOR, HOSPET
VIJAYANAGAR DISTRICT - 583 201.
...PETITIONER
(BY SRI.LAKAMAPURMATH CHIDANANDAYYA, ADVOCATE)
AND
1. THE UNION OF INDIA
REP. BY MINISTRY OF ENVIRONMENT
FORESTS AND CLIMATE CHANGE
GOVERNMENT OF INDIA
INDIRA PARYAVARAN BHAWAN
ALIGUNJ, JORBHAG ROAD
NEW DELHI - 110 003.
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2. DIRECTOR GENERAL OF FOREST
AND SPECIAL SECRETARY,
MINISTRY OF ENVIRONMENT,
FORESTS AND CLIMATE CHANGE,
GOVERNMENT OF INDIA,
INDIRA PARYAVARAN BHAWAN,
ALIGUNJ JORBHAG ROAD,
NEW DELHI - 110 003.
3. THE ASSISTANT INSPECTOR
GENERAL OF FORESTS
MINISTRY OF ENVIRONMENT,
FORESTS AND CLIMATE CHANGE,
GOVERNMENT OF INDIA,
INDIRA PARYAVARAN BHAWAN,
ALIGUNJ JORBHAG ROAD,
NEW DELHI - 110 003.
4. THE STATE OF KARNATAKA
REP. BY THE ADDL. CHIEF SECRETARY,
FOREST DEPARTMENT,
VIDHANA SOUDHA
BENGALURU - 560 001.
5. THE PRINCIPAL CHIEF CONSERVATOR
OF FORESTS
FOREST DIVISION AND NODAL OFFICER,
GOVERNMENT OF KARNATAKA,
ARANYA BHAVAN,
MALLESHWARAM,
BENGALURU - 560 003.
6. THE STATE OF KARNATAKA
REP. BY THE SECRETARY TO THE
DEPARTMENT OF INDUSTRIES
AND COMMERCE,
S.S.I TEXTILE AND MIENS,
VIKASA SOUDHA,
BENGALURU - 560 001.
7. THE DIRECTOR
DEPARTMENT OF MINES AND GEOLOGY
KHANIJA BHAVAN,
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RACE COURSE ROAD
BENGALURU - 560 001.
8. THE DEPUTY CONSERVATOR OF FOREST
CHITRADURGA DIVISION
CHITRADURGA DISTRICT
CHITRADURGA - 577 501.
...RESPONDENTS
(BY SRI. KUMAR M.N., CGC FOR R1 TO R3;
SRI. S.S. MAHENDRA, AGA FOR R4 TO R8)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
a) CALL FOR RECORDS, WHICH ULTIMATELY RESULTED IN
COMMUNICATION DATED 07.07.2021, 27.04.2022 AND
05.11.2022 WHICH IS AT ANNEXURE-A, A1,AND A2
b) ISSUE AN ORDER, DIRECTION WRIT IN THE NATURE OF
THE CERTIORARI QUASHING THE COMMUNICATION DATED
05.11.2022 AT ANNEXURE-A2 PASSED BY THE 5TH
RESPONDENT BEARING No.KFD.HOFF/A5-1-MNG-12/2022-
FC AND THE CLARIFICATION AT ANNEXURE-A DATED
07.07.2021 ISSUED BY THE 3RD RESPONDENT DECLARING
THAT THE LESSEE WILL HAVE TO MAKE A FRESH
APPLICATION AND THE COMMUNICATION AT ANNEXURE-
A1 DATED 27.04.2022 ISSUED BY THE 4TH RESPONDENT
AND DECLARE THAT THE INSISTENCE TO OBTAIN A FRESH
STATUTORY PERMISSIONS INCLUDING THE PERMISSION
UNDER SECTION 2 OF FOREST (CONSERVATION) ACT IS
CONTRARY TO ORDER DATED 30.07.2015 VIDE
ANNEXURE-J PASSED BY THE HON'BLE SUPREME COURT
OF INDIA IN WP No-562/2009 VIDE ANNEXURE-J AND ETC.
THESE PETITIONS HAVING BEEN HEARD AND
RESERVED, COMING ON FOR PRONOUNCEMENT OF ORDER,
THIS DAY, CHIEF JUSTICE., MADE THE FOLLOWING:
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ORDER
Since the facts and circumstances and the issues
involved in the aforesaid writ petitions are common,
they are taken up and heard for common disposal.
2. Petitioners in WP No.14760/2022 and
WP No.14795/2022 are common and are raising
common contentions as under;
2.1. Petitioners in W.P.No.14760/2022 are
before this Court contending that the respondent No.1
had put in public auction Lease hold rights in respect of
a quarry lease bearing Old ML No.2563 in respect of
30.09 hectares of forest land in Ramanadurga village,
Sandur Taluk, Bellary District, which was earlier
granted in favour of Sri.Kanhaiyalal Dudheria
(M.L.No.2563) in which the bid of the petitioner No.1
was accepted and a Letter of Intent dated 06.10.2018
had been issued in its favour. Similarly, the petitioners
in W.P.No.14795/2022 claimed to have participated in
public auction of Lease hold rights in respect of a
quarrying lease bearing Old No.2148 to an extent
60.66 hectares in Dharmapura village, Sandur Taluk,
Bellary District, which was earlier granted in favour of
Sri.H.G.Rangangouda Mine (M.L.No.2148) in which the
bid of the petitioner No.1 was accepted and a Letter of
Intent dated 06.10.2018 had been issued in its favour.
2.2. That in terms of the Letters of Intent, issued
in their favour as above they were required to obtain
permissions and clearances including Forest Clearances
(hereinafter referred as 'FC' for short) under section 2
of the Forest (Conservation) Act, 1980 (herein after
referred to as FC Act for short) within a period of 30
months from the date of issuance of Letters of Intent.
That upon obtaining all permissions, respondent No.1
would execute a mining lease in their favour. That the
petitioners had obtained all requisite consents
including R & R Plans, environmental clearances and
mining plans from Indian Bureau of Mines except FC.
That petitioners applied for transfer of FC which was
issued in favour of earlier lessee. The said applications
were rejected constraining the petitioners to file fresh
applications. That despite applications,
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representations, constant requests and reminders,
respondent No.2 authority failed and neglected to
transfer/grant FC to the petitioners. That due to
inaction on the part of the respondent Nos.1 and 2 in
transferring/granting FC, the period prescribed under
Letters of Intent expired.
2.3. That the respondents are under obligation
to transfer/grant the FC in view of the order dated
30.07.2015 passed by the Apex Court in the case of
Samaja Parivartana Samudaya & Others vs. State
of Karnataka and others reported in (2017) 11
SCC 509 and also in view of amendment to the Mines
and Minerals (Development and Regulation) Act, 1957
(hereinafter referred to 'MMRD Act' for short) which
was amended on 28.03.2021 by inserting Section 8B
providing for transfer of permissions and licenses in
favour of the subsequent lessees. That the respondent
authorities contrary to the above judgment of the Apex
Court and the aforesaid provisions of law had issued
show-cause notices dated 30.06.2022 holding that
Letters of Intents issued in favour of the petitioners
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have expired and have called upon the petitioners to
show-cause as to why the Letters of Intent shall not be
treated as invalidated and consequential action should
not be taken.
2.4. Thus, being aggrieved by the same, the
petitioners in the aforesaid writ petitions are before
this Court seeking directions to the respondents to
transfer the FC pertaining to their respective mining
leases and also to extend the term of Letters Of Intent
and to quash the aforesaid show-cause notices dated
30.06.2022.
3. Petitioner in W.P.No.23151/2022 is before
this Court claiming to have participated in E-bidding
invited by respondent on 04.08.2022 in respect of
mining lease for an area of 74.86 hectares situated at
K.K. Kaval, State Forest, Hosadurga Taluk, Chitradurga
District. That, the petitioner being successful bidder
was issued with a Letter of Intent dated 21.09.2022 in
terms of which, petitioner had paid bid amounts. That,
the petitioner had sought for transfer of FC held by the
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earlier lessee namely, Mr. M. Srinivasulu as mandated
by the Apex Court in its judgment rendered in Samaja
Parivartana Samudaya & Others (supra). That, the
application of the petitioner was rejected by the
respondent authorities vide communication dated
15.11.2022 as per Annexure-A2 declining to transfer
the FC. Thus, being aggrieved by the same, the
petitioner is before this Court seeking quash of said
communication dated 15.11.2022 at Annexure-A2 and
other communications and for a direction in the nature
of mandamus to the respondent authorities to transfer
the permission under Section 2 of the Forest
(Conservation) Act in favour of the petitioner.
4. Statement of objections have been filed on
behalf of the respondent Nos.1 to 3 to the aforesaid
writ petitions denying the petition averments. It is
contended that the petitioners have violated clause
12.2.2. of the tender condition and have defaulted in
upfront payment. That they have also violated the
condition No.5 of the order of the Apex Court dated
30.07.2015 with respect to 50% of the permissible
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annual production as guaranteed dispatch as
prescribed under approved R & R plan. That the initial
18 months provided to the petitioners to obtain
statutory approvals calculated from the date of
issuance of acknowledgement as successful bidders
has expired. That after lapse of 18 months period, the
petitioners are obligated to make payment of
applicable amount based on quantity notionalized as
per guaranteed dispatch. Since the petitioners have
not made the payment towards of quantity of
guaranteed dispatch even after expiry of period of 18
months, as per Rule 14 of the Mineral Auction Rules,
2015, petitioners are obligated to pay interest @ 15%
p.a. on the amounts payable. Since the petitioners
have submitted a representation seeking extension of
validity of Letter of Intent on the ground of delay in
obtaining FC, respondent -authority issued show cause
notice dated 13.06.2022 with a view to provide an
opportunity to the petitioners in accordance with law
and in compliance with the conditions stipulated by the
Hon'ble Supreme Court.
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4.1. It is further contended that it is for the
lessee to obtain FC by making proper application as
per rules in that regard. That in terms of Section 8B
(1) of MMDR Act, 1957, the licenses should have been
valid. Further, as per the Government of India, Ministry
of Environment, Forest and Climate Change Guidelines
dated 07.07.2021, the lessee has to satisfy condition
Nos.(i) to (viii) for transfer to take place. Further, as
per the guidelines dated 27.04.2022, the transfer of
Category "C" lease can only be done by Government of
India. That as per the latest order of the Ministry of
Environment, Forest and Climate Change Guidelines
dated 13.09.2022 even guidelines dated 07.07.2021
are not applicable to Category "C" mines and the same
is to be treated as a fresh lease. Thus, in terms of
guidelines dated 13.09.2022, transfer of FC is not
applicable to the present cases. The lessee has not
identified 30.09 hectares of non-forest Compensatory
Afforestation Land (CA land).
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4.2. That Category "C" leases were the one
where the violation of FC Act, 1980 was maximum, as
such, there is no question of transfer of existing
approvals to the new lessees. That therefore, the
Ministry of Environment, Forest and Climate Change,
by communication dated 30.09.2020 asked the
petitioners to apply a fresh FC. The applications filed
on-line by the petitioners were defective and as such
the same was returned. The petitioners have re-
submitted applications. The hardcopies of the said
applications have been submitted on 22.12.2020 which
is the relevant date for issuance of fresh FC. That on
27.07.2021, the proposal is sent to the Government of
Karnataka. It is seen in the said proposal that the
lessee have to identify 32.49 hectares of non-forest
compensatory afforestation land and the petitioners
have given an undertaking in that regard. That there
is a delay on the part of petitioners in complying with
the requirement, namely, identification of
compensatory afforestation land which is a condition
precedent before issuance of FC is to be considered.
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Whether the approval clearances of the previous
lessees are valid or not is to be decided by the Forest
Authorities. Obtaining FC is not automatic and that the
same is subject to fulfillment of condition as provided.
Unless the same are complied with, the petitioners are
not entitled for grant of FC.
Hence, sought for dismissal of the petitions.
Submissions of the learned counsel for the
petitioners;
5. Sri. Ashok Haranahalli, learned Senior Counsel
appearing for Sri. Aditya Narayan, learned Counsel for
petitioners in W.P.Nos.14760/2022 and 14795/2022
reiterating the grounds urged in the memorandum of
petitions submitted that;
5.1. the petitioners participated in the public
auction of the Category 'C' iron ore leases upon specific
representation made by the State authorities that they
would be entitled for all the benefits as mandated by
the Hon'ble Apex Court in its order dated 30.07.2015,
in that, as directed by the Hon'ble Apex Court, all
licenses, approvals and clearances which were issued
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in favour of the earlier lessees would stand transferred
in favour of the petitioners being preferred
bidders/subsequent lessees.
5.2. Drawing attention of this Court to clause
1.1. of the Tender Notification (Annexure-D), learned
Senior Counsel submitted that the very tender
notification provides that the same had been issued
pursuant to the order passed by the Hon'ble Apex
Court in its judgment rendered in Samaj Parivartana
Samudaya and others (supra) and that all information
provided in the tender documents should be read
together with Acts and Rules made thereunder and
the aforesaid judgment.
5.3. Further drawing attention of the Court to
clause 10.3. of the Tender Document, learned Senior
Counsel submitted that the said clause leaves no doubt
that in terms of the judgment of the Apex Court,
existing statutory approvals/clearances that were in
favour of lessees of the erstwhile Category 'C' mining
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leases will have to be transferred in favour of the new
lessees.
5.4. He referred to Notification and Notice
Inviting Tender dated 26.09.2018 in support of his
contention that the very notification inviting tenders
was issued by the State Government pursuant to the
aforesaid judgment of the Apex Court.
5.5. Referring to provision of Section 8B of The
Mines and Minerals (Development and Regulation) Act,
1957 (for short 'MMRD Act') as amended in 2021,
wherein a provision is made to the effect that all valid
rights, approvals, clearances, licences and the lease
granted to the lessee in respect of mines shall continue
to be valid even after expiry or termination of lease
and such approvals, clearances, licences and the like
shall be transferred to and vested in the successful
bidder of mining lease selected through auction. Thus,
he submits, apart from the directions of the Hon'ble
Apex Court, even in terms of mandate of Section 8B as
amended in 2021 of the MMRD Act, respondent-
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authorities are bound to transfer the FC in favour of
the petitioners.
5.6. That despite earnest and sincere efforts of
the petitioners to secure the FC in respect of the
subject mines and despite the order of the Hon'ble
Apex Court dated 30.07.2015 mandating expeditious
transfer /issuance of the clearances to the auction
purchaser and despite being statutory mandated in
terms of the amendment to the Act, respondents have
failed to abide by the said directions and perform their
duty in transfer and issue of FC for the subject mine to
the petitioner No.1.
6. Learned Senior Counsel for the petitioners
relied upon the following judgments in support of his
contentions;
(i) Samaj Parivartana Samudaya and
others vs. State of Karnataka and
others -(2017) 11 SCC 509.
(ii) Orissa vs. Mohd. Illiyas-
(2006) 1 SCC 275
(iii) Commissioner of Wealth Tax vs. Dr. Karan
Singh, 1993 Supp. (4) SCC 500
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Hence, seeks for allowing of the petitions.
7. Sri. L.M. Chidanandayya, learned Counsel for
the petitioner in W.P.No.23151/2022 apart from
reiterating the grounds urged in the memorandum of
writ petition and supplementing the submissions made
by Sri. Ashok Haranahalli, brought to the attention of
this Court, the notification dated 02.03.2007 issued
under Section 5 read with Section 8 of the MMRD Act
evidencing grant of lease in favour of earlier lessee
namely, Sri. M. Srinivasulu and also brought to the
notice of this Court, a communication dated
31.03.2010 issued by the office of Ministry of
Environment and Forests, Government of India
addressed to Principal Secretary to Government,
Forest, Ecology and Environment Department,
Karnataka Government Secretariat, Bengaluru
evidencing the fact of Central Government according
approval under Section 2 of FC Act, 1980 for diversion
of Forest land for the purpose of mining in favour of
Sri.Srinivasulu. He also referred to a communication
dated 03.05.2017 produced at Annexure-K issued by
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the office of Ministry of Environment, Forest and
Climate Change(Forest Conservation Division),
Government of India addressed to Principal
Secretary(Forest), all States/Union Territories wherein
at paragraph No.4, the Ministry has indicated its no
objection for transfer of FC clearance in favour of new
leases /LOI holders. Thus, he submits the petitioner
being the successful bidder having been issued Letter
of Intent is entitled for transfer of FC and the State
Government cannot contend to the contrary.
7.1. He referred to the terms and conditions
calling for e-auction for mining lease and a
communication dated 04.08.2022 as per Annexure-M
issued by the petitioner clarifying that they are
participating in the e-auction acting upon the contents
of the tender documents dated 11.07.2022. He further
points out that by communication dated 03.09.2022 as
per Annexure-N, respondent/authorities had declared
him to be the bidder and Letter of Intent was issued by
the Government of Karnataka on 21.09.2022 as per
Annexure-P. He submits that nowhere in these
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communications did the respondent/authority indicate
that they would not transfer the FC certificate as
mandated by the Hon'ble Apex Court. That the
requisition letter was addressed by the petitioner on
07.10.2022 as per Annexure-Q seeking transfer of
forest clearance as per the directions of the Apex
Court. In response to the same, the
respondent/authorities issued a communication dated
05.11.2022 as per Annexure-A2 by which the
respondent/authority relying upon the guidelines dated
07.07.2021 and the clarification dated 13.09.2022
sought to reject the request of the petitioner and
calling upon the petitioner to apply afresh for the
forest clearance as per the FC Act, 1980 through
Parivesh web-portal in Form-A. He submitted that the
reasons assigned in the impugned communication
dated 05.11.2022 is contrary to the directions of the
Apex Court issued vide its order dated 30.07.2015.
Learned Counsel relied upon the following judgment in
support of his case.
(1) Mohinder Singh Gill & Anr v. Chief Election
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Commissioner, New Delhi & Ors, reported
in AIR 1978 SC 851.
Hence, seeks for allowing of the writ petition.
8. Per contra, Sri. S.S.Mahendra, learned
Additional Government Advocate drawing attention of
this Court to the prayer made by the petitioners in
W.P.No.14760/2022 and W.P.No.14795/2022
submitted that the writ petitions in principle have been
filed challenging the show cause notice dated
13.06.2022 at Annexure-A, which is issued under
Mineral Auction Rules, 2015 and that the petitioners
are required to give their explanation to the said show
cause notice instead of invoking writ jurisdiction of this
Court. That there is an alternate remedy under section
30 of the MMDR Act, if any order is passed on the show
cause notice.
8.1. He submitted that the directions of the Apex
Court in its order dated 30.07.2015 cannot be given
effect to unconditionally. Referring to clause 12.2.2 of
the tender condition, learned Additional Government
Advocate submitted the petitioners in the instant cases
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have violated the said terms with regard to 50% of the
permissible annual production as prescribed under the
approved R & R plan which is stipulated to be
guaranteed dispatch.
8.2. He further submits that the petitioners were
given initial period of 18 months to obtain statutory
approvals from the date of issuance of
acknowledgment as successful bidder on 20.03.2019
and the same ended on 22.06.2021. That after expiry
of the said period of 18 months, in terms of condition
No.5, the petitioners are obligated to make payment of
the applicable amount based on the quantity
notionalised as guaranteed dispatch.
8.3. That since, there is default on the part of
the petitioners in complying with this requirement,
under Rule 14 of The Mineral (Auction) Rules, 2015,
they are obligated to pay interest at the rate of 15%
per annum on the amount payable. He also contended
that the petitioners have failed to execute MDPA as per
sub-rule (6) of Rule 10 of The Mineral (Auction) Rules,
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2015. That the Letter of Intent has expired on
05.04.2021, extension of validity of which has been
sought for by the petitioners on the ground of delay in
obtaining FC.
8.4. That in the circumstances, authorities have
deemed it appropriate to afford an opportunity to the
petitioners and thus accordingly issued show-cause
notice dated 13.06.2022 which is in accordance with
the directions of the Hon'ble Supreme Court. It is
further contended that it is for the petitioners as
lessees to obtain FC by making proper applications as
per Rules. That in terms of Section 8B(1) of MMRD Act,
1957, the licences should have been a valid one. That
apart as per the Government of India, Ministry of
Environment, Forest and Environment Guidelines,
dated 07.07.2021, the lessee has to satisfy (i) to (viii)
conditions for transfer to take place. He also submitted
that as per the guidelines dated 27.04.2022, transfer
of Category 'C' lease can only be done by the
Government of India. Drawing attention of this Court
to the Guidelines dated 13.09.2022, learned Additional
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Government Advocate submitted that in view of latest
guidelines dated 13.09.2022, transfer of FC is not
applicable in the case of Category 'C' mine and they
have to apply afresh. He further brought to the notice
of this Court a letter of Undertaking for Non-forest
Compensatory Afforestation Land dated 26.07.2021
issued by the petitioners submitted that the said
condition had not been fulfilled by the erstwhile lessee,
therefore, the petitioners cannot as a matter of right
claim transfer of FC of the invalid licence.
8.5. He further submitted that even amongst
Category 'C' leases, there are differences. Referring to
paragraph 14 of the show-cause notice dated
13.06.2022, learned Additional Government Advocate
pointed out that in respect of several Category 'C'
mines, the preferred bidders had appropriately
obtained forest clearances and had even completed the
process of execution of mining lease. He pointed out
the forest clearances that have been obtained by some
of the lessees including the petitioners herein as found
- 27 -
in clause (c) of said paragraph 14 of the said show-
cause notice.
8.6. That the endorsement dated 30.09.2020,
declining to issue FC had been issued as per
Annexure-P and the same has not been challenged.
That the petitioners have indeed accepting the
rejection of requisition for transfer of FC filed fresh
application thereby Doctrine of acquiescence is
applicable to the facts of the present cases. He also
submitted that since the present writ petitions are filed
after about two years of rejection of application for
transfer of FC, the petitions also suffer from delay and
laches. Hence, seek for rejection of the writ petitions.
8.7. Learned Additional Government Advocate
relied upon the following judgments in support of his
contentions:-
(i) Executive Engineer vs. Ramesh
Kumar Singh and others- (1996) 1
SCC 327.
(ii) Union of India & Ors. vs. Coastal
Container- Civil Appeal
No.2276/2019.
- 28 -
(iii) Commissioner of Central Excise vs.
Krishna Wax Private Limited-
(2020) 12 SCC 572.
(iv) Union of India and others vs.
N.Murugesan and others-
(2022) 2 SCC 25.
9. Sri. Kumar M.N., learned counsel appearing
for respondent-Union of India submitted that the
Forest Clearance Certificate is issued subject to certain
conditions and same cannot be automatic. Referring to
para 8 of the judgment of the Apex Court dated
30.07.2015 with regard to transfer of FC/EC, more
particularly with regard to the direction to the
concerned authority to take expeditious action for
grant of statutory approvals such as the environmental
clearance and approval/TP under FC Act, 1980, learned
counsel submitted the said direction has to be read to
imply that the cases falling under Category 'C' mines
are to be considered expeditiously for the purpose of
granting approvals or temporary working permission
and same would not amount to automatic transfer of
the said approvals.
- 29 -
9.1. He also submitted that in view of the fact
that the very cancellation/termination of Category 'C'
licence were directed by the Apex Court owing to
damage caused to the forest land, it would not be
justified to allow resumption of mining operation
without any assessment of damage caused and
requirement of further remedial measures to be taken
in such cases.
9.2. He further submits that if the State
Government forwards the case of the petitioners to the
Central Government, its only then, the case for
granting of approval would be considered. Hence,
seeks for dismissal of the writ petitions.
10. Heard. Perused the records.
11. Before adverting to the rival submissions of
the parties it is necessary to refer to the background
based on which the present writ petitions have been
filed.
- 30 -
12. That one Samaja Parivartana Samudaya &
Others filed a writ petition against State of Karnataka
& Others before the Hon'ble Apex Court in Writ
Petition(Civil).No.562/2009 seeking to stop all mining
and other related activities that were being carried on
in the forest area of State of Karnataka in violation of
earlier orders passed by the Hon'ble Apex Court and
also that of the FC Act and had sought for a direction
declaring as null and void, retrospectively, all
contracts/sub-leasing which were in violation of the
MMDR Act and to initiate penal action against the
violators. The Hon'ble Apex Court constituted Central
Empowered Committee (CEC) and directed it to
conduct survey of all mining leases of iron ore in the
districts of Bellary, Chitradurga and Tumakuru. The
CEC submitted its final report to the Apex Court on
03.02.2012. Considering the quantum and magnitude
of illegal mining activities, the leases were categorized
into category 'A', 'B' and 'C'. The CEC recommended
cancellation/determination of mining leases falling
under Category 'C' and to allot such mines to the end
- 31 -
users through bidding in a transparent way.
Accordingly, the Hon'ble Apex Court vide its order
dated 18.04.2013 passed in W.P.(Civil) No.562/2009
reported in (2017) 11 SCC 509 directed cancellation of
certain Category `C' leases and further directed the
State Government to auction the said leases.
Subsequently, the Hon'ble Apex Court vide order dated
30.07.2015 dealt with the issue with regard to
modalities that would govern the auction of Category
'C' leases. While directing auction of 15 such Category
'C' leases, it laid down certain modalities and specific
conditions for auctioning of such mines. One such
condition/modality as imposed by the Hon'ble Apex
Court was in respect of transfer of existing approvals
and clearances in favour of new lessees. In that, the
Hon'ble Apex Court has exclusively directed that all
statutory approvals and clearances which were issued
in favour of earlier lessees would be transferred in
favour of new lessees.
- 32 -
13. The said order of Hon'ble Apex Court dated
30.07.2015 is extracted hereunder for immediate
perusal.
"1. The issue with regard to modalities that
would govern the auction of the Category "C'
mines which have been ordered to be
cancelled by our judgment and order
dated:18.04.2013 passed in Samaj
Parivartana Samudaya v. State of Karnataka
and other connected matters is being dealt
with by the present order.
2. Shri Nilaya Mitash, IAS, Secretary,
Commerce and Industries Department
(Mines), Government of Karnataka, Bangalore
is personally present in Court at the request
of the Court. From the materials on record
and the statement made by Shri Nilaya
Mitash, Secretary, Commerce and Industries
Department (Mines), Government of
Karnataka, it appears that 15 of the Category
'C' mines are ready for auction. We,
therefore, direct that the auction of the
aforesaid mines, details of which are
indicated herein below will commence
immediately and stand concluded within
outer-limit of 32 weeks preferably within 26
weeks with effect from today.
Sl. ML No.
Name of the Mine
No.
1 Deccan Mining Syndicate (P) Ltd 2525
2. Karthikeyas Managanese 2559
3. Hothur Traders 2313
4. V.S. Lad & Sons 2290
5. B.R. Yogendranath Singh 2186
6. M/s Lakshminarayan Mining Co 2487
7. Rama Rao Paol 2621
8. Ramgad Mines & Minerals Pvt Ltd 2451
9. M/s Channakeshava Reddy 2566
10. M/s Nidhi Mining Company 2433
- 33 -
11. M/s S.B. Minerals 2393
12. M/s Srinivasalu Mines 2631
13. M/s Tungabhadra Minerals Pvt. Ltd 2365
14. M/s Tungabhadra Minerals Pvt. Ltd., 2366
15. M/s Mineral Mines and Traders 2185(A)
3. The modalities which would govern the auction
would be as follows:
3.1 The lease boundary of each of the mining
lease will be as approved by this Court by the
judgment and order dated:18.04.2013.
3.2 Only the end-users engaged in production of
sponge iron and/or pig iron and/or steel and/or
pellets will be eligible to take part in the auction.
The end-users will include public sector
undertakings.
3.3 The reserve price under Rule 8(1) of the
Mineral (Auction) Rules, 2015 will be specified in
the tender documents at 35%.
3.4. The permissible annual production will be as
prescribed under the approved R&R Plan prepared
until such time that the same is modified by this
Court.
3.5. The successful bidder/lessee will be required
to produce and dispatch every year at least 50%
of the permissible annual production as
prescribed under the approved R&R Plan.
Whenever the dispatch in a year is below the
guaranteed dispatch as indicated above, in that
case irrespective of the quantity actually
dispatched, the total amount payable during the
year will be based on the guaranteed dispatch.
In addition, the lessee may also be required to
surrender the lease. This condition will not be
applicable during the initial period of 18 months
provided to the successful bidder/lessee to obtain
the statutory approvals.
3.6 The successful bidder/lessee will be required
to implement the prescriptions/provisions of the
approved R&R Plan in accordance with the
guidelines approved by this Court. The cost
incurred for this will be reimbursed by the State
- 34 -
Government to the successful bidder/lessee after
recovering the same from the erstwhile lessee.
3.7. Consortium of end-users will not be eligible
to participate in the auction.
3.8. The existing statutory
approvals/clearances in favour of the lessee
of the erstwhile Category 'C' mining leases
will be transferred in favour of the new
lessees. The authority concerned will take
expeditious action for the grant of the
statutory approvals such as the environment
clearance and approval TWP under the
Forest (Conservation ) Act, 1980.
3.9. The State of Karnataka will be at liberty to
reduce the reserve price for the mining leases for
which no bid above the reserve price is received.
3.10. The sale proceeds of the auction, for the
present, will be credited to the consolidated fund
to the extent of 75% and 25% to the account of
the special purpose vehicle (SPV). This will be
subject to such further orders as may be passed.
4. The above conditions will naturally be in
addition to all requirements spelt out by the
amendments to the Mines and Minerals
(Development and Regulation) Act, 1957 and the
Mineral (Auction) Rules, 2015.
5. On behalf of the State of Karnataka a further
submission has been made that for the present
auction in respect of 9 mines whose size is very
small may be kept in abeyance and out of the
remaining 27 mines the exploration work may be
permitted to be done in two phases. In the first
phase, 15 mines (10 in Bellary, 3 in Tumkur and 2
in Chitradurga Districts) are proposed for
exploration. According to the State, the
exploration work is likely to be completed by June
2016 whereafter the remaining 12 mines will be
taken up for exploration and completed by the end
of January 2017. This, however, is subject to such
orders that the Court may pass upon consideration
of the feasibility of commencement of exploration
work in a situation where the issue of
enhancement/reduction of the cap on production
is pending final decision. Upon due consideration,
- 35 -
we direct the State of Karnataka to proceed with
the exploration work as indicated above.
(Emphasis supplied by us)
14. Also relevant to refer to clauses 1.1, 3.1, 3.6
and 10.3 of the tender document which are extracted
hereunder;
1.1. This Tender Document has been issued
pursuant to notification of an area with the intent
to carry e-auction for grant of a mining lease for
mineral specified herein, pursuant to the Act and
the roles made thereunder and also the Supreme
Court's judgments, and orders in Samaj
Parivartana Samudaya and Ors. vs. State of
Karnataka and Ors in W.P. (C) 562 of 2009
(collectively the "Judgment"). All information
provided in this Tender Document should be read
together with the Act and the rules made
thereunder and the aforesaid Judgment. In the
event of a conflict between this Tender Document
and the aforesaid Judgment, the Act or the rules,
the aforesaid Judgment, the Act or the rules, as the
case may be, shall prevail.
3.1. In its Judgment, the Supreme Court cancelled
the leases in respect of certain iron-ore mines
(classified as Category "C" mines) located in
Karnataka on account of illegal mining. The
Supreme Court further directed to auction the
Category "C" mines to end-users engaged in the
production of sponge iron and/or pig iron and/or
steel and/or pellets in accordance with the
Judgment, the Act and the rules made thereunder.
3.6. The e-auction would be conducted in
accordance with the Judgment, Act, the Auction
Rules, the Minerals (Evidence of Mineral Content)
Rules, 2015, any other order or notification issued
by the Central Government pursuant to the Act and
this Tender Document.
10.3 Execution of Mine Development and
Production Agreement:
- 36 -
The State Government and the Successful Bidder
shall enter into the MDPA upon the Successful
Bidder having obtained all consents, approvals,
permits, no-objections and the like as may be
required under Applicable Law for commencement
of mining operations. In its Judgment, the Supreme
Court has directed that "existing statutory
approvals/ clearances in Favor of the lessee of the
erstwhile Category C mining leases will be
transferred in Favor of the new lessees". In its
Judgment, the Supreme Court has further directed
that "the concerned authority will take expeditious
action for the grunt of the statutory approvals such
as the environmental clearance and approval/ TWP
under the Forest (Conservation Act), 1980"
15. Perusal of the aforesaid clauses of the
tender documents also make it clear that the very
issuance of the tender calling for e-auction in respect
of category 'C' leases is in furtherance to the Act, Rules
and the order passed by the Apex Court in the case of
Samaj Parivartana Samudaya and others (supra).
16. In the aforesaid background, respondent
No.1 -State Government issued notices inviting
tenders notifying auction of leasehold rights in respect
of iron ore mining lease referred above. The petitioners
in the above writ petitions as noted above claim to
have participated in the said auction and further claim
to have been declared as preferred bidders. It is the
- 37 -
further claim of the petitioners that they secured all
necessary and relevant clearances except FC and they
applied for transfer of FC as per the mandate of
modality issued by the Apex Court vide its order dated
30.07.2015 and that they made representations to the
respondent -authorities to no avail.
17. Suffice to state that the State Government
in furtherance to the orders passed by the Hon'ble
Apex Court as noted above issued notification inviting
tenders and acting upon the same bidders like the
petitioners herein participated in the bidding process.
It is also not in dispute that after having been declared
as preferred bidders, the petitioners had
paid/deposited earnest amount and communication of
they being successful bidders followed by Letter of
Intent were issued in their favour.
18. Apart from the aforesaid order of the
Hon'ble Apex Court laying down the modalities for
auctioning category 'C' leases and transferring
permissions and clearances an amendment to MMRD
- 38 -
Act was brought in 2021. Section 8B of the MMRD Act
as amended in 2021 reads as under:-
9. For section 8B of the principal Act, the
following section shall be substituted, namely:--
"8B. (1) Notwithstanding anything contained
in this Act or any other law for the time being in
force, all valid rights, approvals, clearances,
licences and the like granted to a lessee in respect
of a mine (other than those granted under the
provisions of the Atomic Energy Act, 1962 and the
rules made thereunder) shall continue to be valid
even after expiry or termination of lease and such
rights, approvals, clearances, licences and the like
shall be transferred to, and vested; subject to the
conditions provided under such laws; in the
successful bidder of the mining lease selected
through auction under this Act:
(2) Notwithstanding anything contained in
any other law for the time being in force, it shall be
lawful for the new lessee to continue mining
operations on the land till expiry or termination of
mining lease granted to it, in which mining
operations were being carried out by the previous
lessee.".
19. Thus, as rightly contended on behalf of the
petitioners even in terms of the aforesaid provisions of
MMRD Act, respondent authorities are obligated to
transfer the Forest Clearance.
20. Learned counsel for the petitioners relied
upon the judgment of the Apex court in the case of
UNION OF INDIA AND OTHERS VS. INDO-
AFGHAN AGENCIES LIMITED reported in (1968) 2
- 39 -
SCR 366, wherein at paragraphs 20, 21 and 24, the
Apex Court has held as under;
20. We hold that the claim of the respondents is
appropriately founded upon the equity which arises
in their favour as a result of the representation
made on behalf of the Union of India in the Export
Promotion Scheme, and the action taken by the
respondents acting upon that representation under
the belief that the Government would carry out the
representation made by it. On the facts proved in
this case, no ground has been suggested before the
Court for exempting the Government from the
equity arising out of the acts done by the exporters
to their prejudice relying upon the representation.
This principle has been recognised by the Courts in
India and by the Judicial Committee of the Privy
Council in several cases. In The Municipal
Corporation of the City of Bombay v. The Secretary
of State for India in Council(1), it was held by the
Bombay High Court that even though there is no
formal contract as required by the statute the
Government may be bound by a representation
made by it. In that case in answer to a requisition
by the Government of Bombay addressed to the
Municipal Commissioner to remove certain fish and
vegetable markets to facilitate the construction of
an arterial road, the Municipal Commissioner
offered to remove the structures if the Government
would agree to rent to the Municipality other land
mentioned in his letter at a nominal rent. The
Government accepted the suggestion and
sanctioned the application of the Municipal
Commissioner for a site for tabling and establishing
the new markets. The Municipal Commissioner then
took possession of the land so made available and
constructed stables, workshops and chawls
thereon. Twenty-four years thereafter the
Government of Bombay served notices on the
Municipal Commissioner determining the tenancy
and requesting the Commissioner to. deliver
possession of the land occupied by the markets,
and to pay in the meantime rent at the rate of Rs.
12,000/- per annum. The Municipality declined to
pay the rent, and the Secretary of State for India
filed a suit against the Municipal Commissioner for
a declaration that the tenancy of the Municipality
- 40 -
created by Government Resolution of December 9.
1865, stood determined and for an order to pay
rent at the rate of Rs.12,000/- per annum. It was
urged before the High Court of Bombay that the
events which had transpired had created an equity
in favour of the Municipality which afforded an
answer to the claim of the Government to eject the
Municipality. Jenkins, C.J.. delivering the judgment
of the Court observed:
"The doctrine, involved in this phase of the
case is often treated as one of estoppel, but I
doubt whether this is a correct, though it may
be a convenient name to apply.
It differs essentially from the doctrine
embodied in section 115 of the Evidence Act,
which is not a rule of equity, but is a rule of
evidence that was formulated and applied in
Courts of law; while the doctrine. with which I
am now dealing, takes its origin from the
jurisdiction assumed by Courts of Equity to
intervene in the case of, or to prevent fraud."
After referring to Ramsclen v. Dyson(1), the
learned Chief Justice observed that the Crown
comes within the range of equity and
proceeded to examine whether the facts of the
case invited the application of that principle.
21. This case is, in our judgment a clear
authority that even though the case, does not fall
within the terms of section 115 of the Evidence Act,
it is still open to, a party who has acted on a
representation made by the Government to claim
that the Government shall be bound to carry out
the promise made by it, even though the promise
is not recorded in the form of a formal contract as
required by the Constitution.
24. Under our jurisprudence the Government is
not exempt from liability to, carry out the
representation made by it as to its future conduct
and it cannot on some undefined and undisclosed
ground of necessity or expediency fail to carry out
the promise, solemnly made by it, nor claim to be
the judge of its own obligation to the citizen on an
ex parte appraisement of the circumstances. in
which the obligation has arisen. We agree with the
High Court that the impugned order passed by the
Textile Commissioner and confirmed by the Central
- 41 -
Government imposing cut in the import entitlement
by the respondents should be set aside and
quashed and that the Textile Commissioner and the
Joint Chief Controller of Imports and Exports be
directed to issue to the respondents import
certificates for the total amount equal to 100% of
the f.o.b. value of the goods exported by them,
unless there is some decision which fails within
clause 10 of the Scheme in question.
21. Similarly, in the case of M/S MOTILAL
PADAMPAT SUGAR MILLS CO. LTD., VS.STATE OF
UTTARA PRADESH AND OTHERS reported in
(1979) 2 SCC 409, the Apex Court has held as under;
"24. This Court finally, after referring to the
decision in the Ganges Manufacturing Co. v.
Surujmull (supra). The Municipal Corporation of the
City of Bombay v. The Secretary of State for India
(supra) and Collector of Bombay v. Municipal
Corporation of the City of Bombay & Ors. (supra),
summed up the position as follows:
"Under our jurisprudence the Government is not
exempt from liability to carry out the
representation made by it as to its future conduct
and it cannot on some undefined and undisclosed
ground of necessity or expediency fail to carry out
the promise solemnly made by it, nor claim to be
the Judge of its own obligation to the citizen on an
ex parte appraisement of the circumstances in
which the obligation has arisen."
The law may, therefore, now be taken to be settled
as a result of this decision that where the
Government makes a promise knowing or intending
that it would be acted on by the promises and, in
fact, the promisee, acting in reliance on it, alters
his position, the Government would be held bound
by the promise and the promise would be
enforceable against the Government at the
instance of the promises, notwithstanding that
there is no consideration for the promise and the
promise is not recorded in the form of a formal
contract as required by Article 299 of the
- 42 -
Constitution. It is elementary that in a Republic
governed by the rule of law, no one, howsoever
high or low, is above the law. Every one is subject
to the law as fully and completely as any other and
the Government is no exception. It is indeed the
pride of constitutional democracy and rule of law
that the Government stands on the same footing as
a private individual so far as the obligation of the
law is concerned: the former is equally bound as
the latter. It is indeed difficult to see on what
principle can a Government, committed to the rule
of law, claim immunity from the doctrine of
promissory estoppel. Can the Government say that
it is under no obligation to act in a manner that is
fair and just or that it is not bound by
considerations of "honesty and good faith"? Why
should the Government not be held to a high
"standard of rectangular rectitude while dealing
with its citizens"? There was a time when the
doctrine of executive necessity was regarded as
sufficient justification for the Government to
repudiate even its contractual obligations, but let it
be said to the eternal glory of this Court, this
doctrine was emphatically negatived in the Indo-
Afghan Agencies case and the supremacy of the
rule of law was established. It was laid down by
this Court that the Government cannot claim to be
immune from the applicability of the rule of
promissory estoppel and repudiate a promise made
by it on the ground that such promise may fetter
its future executive action. If the Government does
not want its freedom of executive action to be
hampered or restricted, the Government need not
make a promise knowing or intending that it would
be acted on by the promisee and the promisee
would alter his position relying upon it. But if the
Government makes such a promise and the
promises acts in reliance upon it and alters his
position, there is no reason why the Government
should not be compelled to make good such
promise like any other private individual. The law
cannot acquire legitimacy and gain social
acceptance unless it accords with the moral values
of the society and the constant endeavor of the
Courts and the legislatures must, therefore, be to
close the gap between law and morality and bring
about as near an approximation between the two
as possible. The doctrine of promissory estoppel is
a significant judicial contribution in that direction.
- 43 -
But it is necessary to point out that since the
doctrine of promissory estoppel is an equitable
doctrine, it must yield when the equity so requires.
If it can be shown by the Government that having
regard to the facts as they have transpired, it
would be inequitable to hold the Government to the
promise made by it, the Court would not raise an
equity in favour of the promisee and enforce the
promise against the Government. The doctrine of
promissory estoppel would be displaced in such a
case because, on the facts, equity would not
require that the Government should be held bound
by the promise made by it. When the Government
is able to show that in view of the facts as have
transpired, public interest would be prejudiced if
the Government were required to carry out the
promise, the Court would have to balance the
public interest in the Government carrying out a
promise made to a citizen which has induced the
citizen to act upon it and after this position and the
public interest likely to suffer if the promise were
required to be carried out by the Government and
determine which way the equity lies. It would not
be enough for the Government just to say that
public interest requires that the Government should
not be compelled to carry out the promise or that
the public interest would suffer if the Government
were required to honour it. The Government
cannot, as Shah, J., pointed out in the Indo-Afghan
Agencies case, claim to be exempt from the liability
to carry out the promise "on some indefinite and
undisclosed ground of necessity or expediency",
nor can the Government claim to be the sole judge
of its liability and repudiate it "on an ex-parte
appraisement of the circumstances". If the
Government wants to resist the liability, it will have
to disclose to the Court what are the facts and
circumstances on account of which the Government
claims to be exempt from the liability and it would
be for the Court to decide whether these facts and
circumstances are such as to render it inequitable
to enforce the liability against the Government.
Mere claim of change of policy would not be
sufficient to exonerate the Government from the
liability: the Government would have to show what
precisely is the changed policy and also its reason
and justification so that the Court can judge for
itself which way the public interest lies and what
the equity of the case demands. It is only if the
Court is satisfied, on proper and adequate material
- 44 -
placed by the Government, the over-riding public
interest requires that the Government should not
be held bound by the promise but should be free to
act unfettered by it, that the Court would refuse to
enforce the promise against the Government. The
Court would not act on the mere ipse dixit of the
Government, for it is the Court which has to decide
and not the Government whether the Government
should be held exempt from liability. This is the
essence of the rule of law. The burden would be
upon the Government to show that the public
interest in the Government acting otherwise than in
accordance with the promise is so overwhelming
that it would be inequitable to hold the
Government bound by the promise and the Court
would insist on a highly rigorous standard of proof
in the discharge of this burden. But even where
there is no such over-riding public interest, it may
still be competent to the Government to resile from
the promise "on giving reasonable notice which
need not be a formal notice, giving the promisee a
reasonable opportunity of resuming his position"
provided of course it is possible for the promisee to
restore status quo ante. If however, the promisee
cannot resume his position, the promise would
become final and irrevocable. Vide Emmanuel
Ayodeji Ajayi v. Briscoe".
22. In view of the aforesaid factual and legal
aspects of the matter, as rightly contended by the
petitioners the respondent authorities ought to have
transferred the Forest Clearance.
23. The petitioners in Writ petition
Nos.14760/2022 and 14795/2022 had filed an
application for issuance of fresh FC which application
- 45 -
has been eventually rejected. It appears that the
petitioners had filed yet another application as a
matter of abundant caution. It is contended on behalf
of the respondent authorities that the fact that the
petitioners had filed applications seeking grant of fresh
FC would amount to acquiesce on the part of the
petitioners. This Court in view of the aforesaid facts
and circumstances of the matter, is not inclined to
accept the contentions of the respondent-State. It is
an admitted fact that the petitioners had participated
in the e-auction acting upon the representation made
by the respondent authorities that the successful
bidders upon payment of required bid amounts would
be issued a Letter of Intent and thereafter the licences
and the approvals which existed in the name of earlier
lessees would be transferred and that the petitioners
had constantly issued reminders and requests for
issuance of FC. In these admitted factual situation
merely because the respondent authorities for the
reasons best known to them opted to reject the
applications constraining the petitioners to file fresh
- 46 -
applications, Respondent - State would not be justified
to contend that the said act would amount to an act of
acquiesce.
24. The Apex Court in the case of P.JOHN
CHANDY & CO. (P) LTD V. JOHN P. THOMAS
reported in (2002) 5 SCC 90 at paragraphs 11 and
12 while dealing with the ingredients of acquiesces has
held as under;
"11. Section 11 (4) (i) of the Kerala Buildings
(Lease And Rent Control) Act 1965 reads as under:
11. (4) A landlord may apply to the Rent Control
Court for an order directing the tenant to put the
landlord in possession of the building,
(i) if the tenant after the commencement of
this Act, without the consent of the landlord,
transfers his right under the lease or sub-lets
the entire building or any portion thereof if
the lease does not confer on him any right to
do so;
Provided.."
A perusal of the relevant provision as quoted above
clearly indicates that the landlord can claim
possession of the building from the tenant in case
of sub-letting by the tenant without the consent of
the landlord, in case the lease does not confer on
the tenant a right to sub-let. The provision provides
for "conferment" of right on the tenant to sub-let
the accommodation. That is to say, so as to be
entitled to sub-let, the tenant must be granted that
right to do so, by the landlord. The expression
`confer' is pointer to something done overtly and
explicitly. The meaning of the word `confer' as
indicated in the Law Lexicon by P. Ramanatha Aiyar
- 47 -
2nd Ed.Reprint 2000 at Page 381 means "to give".
"Conferring is an act of authority--------men in
power confer". It is therefore clear that the
conferring indicates some positive action in giving
something, may be some right or privilege to
another person. It is in this background that the
word `consent' as occurring in clause (i) of sub-
s.(4) of Section 11 of the Kerala Buildings (Lease
and Rent Control) Act 1965 is to be seen.
According to the said provision if the lease does not
"confer" a right on the tenant to sub-let, he cannot
do so without the consent of the landlord. If he
does so after coming into force of the Act, he would
be liable to be evicted and the possession be given
to the landlord. On reading of the whole provision
proposition of implied consent, in such cases,
would not be readily acceptable. The consent of the
landlord should be in a positive way, clear cut and
without ambiguity since otherwise right to sub-let
is only to be conferred on the tenant by the
landlord in the lease itself. It can reasonably be
expected that a right which is otherwise to be
conferred by having such a condition in the lease
itself, consent, in absence thereof, preferably be in
writing and in case it is not so, it is to be clear cut
without any ambiguity or shadow of doubt. The
conduct of the landlord which has been mainly
taken into account on the point of implied consent
is his inaction for a long time despite the
knowledge of the fact of sub- letting by the tenant
to other persons. The period of 32 years as
indicated by the appellate authority is incorrect as
discussed earlier. Nonetheless it can be said that
there has been inaction on the part of the landlord
for some years if not 32 years. But inaction in
every case does not necessarily lead to an
inference of implied consent or acquiescence. In
this connection we may refer to Words and Phrases
Legally Defined Vol.1 Third Ed. Page 27 where we
may first see what has been said about
Acquiescence. It is as follows:
"Mere inactivity on the part of a defendant is
not to be construed as acquiescence in delay
by the plaintiff. "sleeping dogs, in the form
of sleeping plaintiffs, need not be aroused by
defendants from their slumbers" (per Roskill
LJ in Compagnie Francaise de Television v.
Thorn Consumer Electronics Ltd. [[1978]
RCP 735 at 739]); Bremer Vulkan Schiffbau
- 48 -
und Maschinenfabrik v. South India Shipping
Corporation [1979] 3 All ER 194 at 198, per
Donaldson J."
It may also answer the observation of the appellate
court that the landlord by inaction is to be taken to
have waived his right to take any action against the
tenant.
12. A distinction has also been drawn
between `Acquiescence' and `Consent'. It is in
relation to a dispute between a landlord and a
tenant and we again refer to Words and Phrases
Legally Defined Vol.1 Third Ed. Page 314 "[The
Landlord and Tenant Act 1954, S.23(4) is
concerned with a situation where an immediate
landlord or his predecessor in title has `consented'
to a breach of covenant, or the immediate landlord
has acquiesced in it.] `I agree.. .that in the context
of Section 23(4) of the Act, whatever consent or
acquiescence may mean in different contexts, in
that context 'consent' is put in plain antithesis to
'acquiescence', and that, therefore, if something
falls within the description 'acquiescence', it is not
consent. The difference which is pointed out
between the two in this context is that 'consent'
involves some affirmative acceptance, not merely a
standing by and absence of objection. The
affirmative acceptance may be in writing, which is
the clearest obviously; it may be oral; it may
conceivably even be by conduct, such as nodding
the head in a specific way in response to an
express request for consent. But it must be
something more than merely standing by and not
objecting. `Bell v Alfred Franks & Bartlett Co. Ltd.
[1980] 1 All ER 356 at 362. C.A. per Megaw LJ."
- 49 -
The above observations though no doubt made in
reference to particular provision, yet they throw
some light on the question of implied consent that
there has to be something more than mere inaction
or lack of initiative on the part of the landlord. In
context with the above, we find our view reinforced
on the meaning and import of the word `consent'
as used in Cl.(i), sub.s.(4) of Section 11 of the Act
when read in the background of the word `confer'
in the latter part it will only mean that consent has
to be with some positive action on the part of the
landlord so that the tenant can be said to have had
the authority to sub-lease his lease rights. Mere
silence may not be enough.
25. Thus, the respondent authorities cannot be
heard to justify the refusal to grant FC on the ground
of acquiesce.
26. As regards the contention of the State that
in order to transfer the FC, the same must be valid and
that in the instant case the FC was not valid in view of
non- compliance of the terms of the FC by the earlier
lessees in the nature of non-furnishing of
Compensatory Afforestation Land being canvassed also
cannot be countenanced. It is necessary to note at
this juncture that the petitioner in W.P.No.23151/2022
- 50 -
in its rejoinder to the statement of objections filed by
the State has brought on record the facts that various
persons similar to that of the petitioners herein had
participated in the e-auction conducted by the State
Government and that the Government of India had
transferred all statutory permissions including
permissions under Section 2 of FC Act on the
recommendation made by the State Government. In
furtherance to the said contention the petitioners
therein had produced proceedings of the Government
of Karnataka recommending transfer of FC pursuant to
the orders passed by the Hon'ble Supreme court of
India. Copies of the orders are produced at
Annexures-T and V series. Perusal of the said orders
reveal that the recommendations were made by the
State Government and based on which orders were
passed transferring the FCs in favour of subsequent
lessees/ successful bidders as that of the petitioners
herein subject to fulfillment of conditions enumerated
therein. Thus, it is clear from the perusal of the said
recommendations of the orders that the FCs were
- 51 -
directed to be transferred in favour of the successful
bidders of the e-auction subject to conditions to be
fulfilled. Therefore, there is no justification in the
contentions raised by the respondent Nos.1 and 2 that
the FCs would be transferred if it is valid and only if
the conditions are fulfilled by the previous lessee.
27. It is also contended by the respondent
authorities that the petitioners had given undertaking
to furnish compensatory afforestation land and that
would itself is an indication that FC would be
transferred on fulfillment of such condition. The said
contention also runs contrary to the orders of Hon'ble
Apex Court and the communication issued by Ministry
of Environment and Forests.
28. The respondent authorities have further
relied upon the Circulars dated 07.07.2021 and
13.09.2022 to contend that in view of the said
Circulars, FC cannot be transferred. It is to be noted
that the said circulars have been issued subsequent to
the orders of 30.07.2015 passed by the Apex Court in
- 52 -
the case of Samaja Parivartana Samudaya (supra).
Besides, the said circulars are not in consonance with
the provisions of Section 8B of the MMRD Act.
29. The Apex Court in the case of GODREJ
AND BOYCE MANUFACTURING COMPANY LTD VS.
STATE OF MAHARASHTRA AND OTHERS reported
in (2009) 5 SCC 24 at paragraph 43 and 64 dealing
with circulars running contrary to the statutes has
held as under;
"43. Mr Desai submitted that in Pune
Municipal Corp. v. Promoters and a Builders Assn.
this Court held that the Development Control Rules
framed under the Maharashtra Regional and Town
Planning Act, 1966 had statutory force. On the
other hand the circulars issued by the Municipal
Commissioner were simply executive instructions.
The circulars, therefore, could not override or
supersede the provisions of the Regulations. He
further submitted that the municipal authorities too
were fully aware and conscious of this legal b
position and had accordingly requested the State
Government vide Letter dated 19-7-1997 to
suitably modify Para 6 of Appendix VII of the
Regulations.
64. Having regard to the nature of the law
the submission advanced on behalf of the municipal
authority would lead to palpably unjust and
inequitable results. The landowner whose land is
designated in the development plan as reserved for
any of the purposes enumerated in Section 22 of
the Act or for any of the amenities as defined under
Section 2(2) of the Act or Regulation 2(7) [sic
Regulation 3(7)] of the Regulations is not left with
- 53 -
many options and he does not have the same
bargaining position as the municipal authority.
Therefore, surrender of the land in terms of clause
(b) of Section 126(1) of the Act cannot be
subjected to any further conditions than those
already provided for in the statutory provisions. It
is of course open to the legislature to add to the
conditions provided for in the statute (or for that
matter to do away with certain conditions that
might be in existence). But it certainly cannot be
left in the hands of the executive to impose
conditions in addition to those in the statutes for
accepting the offer to surrender the designated
land".
30. Thus, in view of the above factual aspect of
the matter, the contentions of the State authorities
cannot be countenanced.
31. As regards the contention of the State that
the relief sought by the petitioners being premature as
the State has merely issued show cause notices and
that the petitioners can very well issue reply or appear
before the concerned authorities instead of
approaching this Court, as rightly contended by the
petitioners perusal of the show cause notices would
indicate that the explanation for delay offered by the
petitioners namely, non availability of the FC has been
negated and the respondents authorities have
- 54 -
contended as noted above that the petitioners are not
entitled for transfer of FC. When the respondent
authorities have already expressed their opinion with
regard to non accepting reasons offered by the
petitioners for delay, relegating the petitioners to
the respondent authorities would not meet ends of
justice.
32. The Apex Court in the case of SIEMENS
LTD., VS. STATE OF MAHARASHTRA AND OTHERS
reported in (2006) 12 SCC 33 while dealing with
nature of show cause notice, at paragraphs 9 and 10
has held as under;
"9. Although ordinarily a writ court may
not exercise its discretionary jurisdiction in
entertaining a writ petition questioning a notice to
show cause unless the same inter alia appears to
have been without jurisdiction as has been held by
this Court in some decisions including State of
Uttar Pradesh v. Brahm Datt Sharma and Anr. AIR
1987 SC 943, Special Director v. Mohd. Ghulam
Ghouse and Another, (2004) 3 SCC 440 and Union
of India and Another v. Kunisetty Satyanarayana,
2006 (12) SCALE 262], but the question herein has
to be considered from a different angle, viz, when a
notice is issued with pre-meditation, a writ petition
- 55 -
would be maintainable. In such an event, even if
the courts directs the statutory authority to hear
the matter afresh, ordinarily such hearing would
not yield any fruitful purpose [See K.I. Shephard
and Others v. Union of India and Others (1987) 4
SCC 431 : AIR 1988 SC 686]. It is evident in the
instant case that the respondent has clearly made
up its mind. It explicitly said so both in the
counter-affidavit as also in its purported show
cause notice.
10. The said principle has been followed by this
Court in V.C. Banaras Hindu University and Ors. v.
Shrikant [2006 (6) SCALE 66], stating: (SCC p.60,
paras 48-49)
"48. The Vice Chancellor appears to have made up
his mind to impose the punishment of dismissal on
the Respondent herein. A post decisional hearing
given by the High Court was illusory in this case.
49. In K.I. Shephard & Ors. etc. etc. v. Union of
India & Ors. [AIR 1988 SC 686], this Court held :
(SCC p.449, para 16).
"It is common experience that once a decision has
been taken, there is tendency to uphold it and a
representation may not really yield any fruitful
purpose."
33. As regards issuance of order dated
05.12.2022 in the case of petitioner in
W.P.No.23151/2022 rejecting the application for
transfer of FC on the premise of petitioner requiring to
- 56 -
file fresh application is also unsustainable on the facts
situation of the matter. The reasons assigned in the
said order is that The Government of India has issued
Guidelines on 07.07.2021 for transfer of approvals
granted under FC Act, 1980 to new lessees as per
MMRD (Amendment) Act, 2021 subject to certain
conditions and that by letter dated 13.09.2022 MOEF
and CC had issued clarification that the Guidelines
dated 07.07.2021 were not applicable in case of a
lease which had lapsed or terminated or cancelled by
the Central Government or State Government or by
any Court of law and therefore a category 'C' mine
shall have to apply afresh and transfer in the case was
not tenable. This reasoning found at in the impugned
order at Annexure-A2 is completely contrary to the
facts situation of the matter. At the cost of repetition
it is to be noted that the petitioner is also one of the
auction purchaser of category 'c' mine which was put
to auction pursuant to the orders passed by the
Hon'ble Apex Court in the case of Samaja Parivartana
Samudaya (supra). The subsequent
- 57 -
circulars/clarifications cannot lend any credence to
justify the auction of rejection as done in the instant
case.
34. The Apex court in the case of MOHINDER
SINGH GILL & ANR V. CHIEF ELECTION
COMMISSIONER, NEW DELHI & ORS reported in
AIR 1978 SC 851 has held;
" The second equally relevant matter is that
when a statutory functionary makes an order based
on certain grounds its validity must be judged by
the reasons so mentioned and cannot be
supplemented by fresh reasons in the shape of
affidavit or otherwise. Otherwise, an order bad in
the beginning may, by the time it comes to the
Court on account of a challenge, get validated by
additional grounds later brought out".
35. It is also not in dispute that the erstwhile
lessees had been issued/granted approvals by the
Ministry of Environment and Forest, Government of
India.
36. Thus, a simple reading of the orders passed
by the Hon'ble Apex Court with the terms and
conditions of the notification inviting tenders as
- 58 -
extracted hereinabove would leave no doubt that the
respondent authorities ought to have transferred the
FC in favour of the petitioners. The contentions urged
by the respondent authorities that the transfer of FC is
subject to certain conditions, such as fulfillment of the
conditions by the erstwhile lessee with regard to
compensatory afforestation, production of 50% of
notional ore after expiry of 18 months and requirement
of payment of 50% production to be condition
precedent for transfer of FC in favour of the
petitioners, in our considered opinion, is innovative and
do not find place either in the order of the Hon'ble
Apex Court or in the terms of the notification. It may
be that the subsequent transferee of the Category 'C'
lessees would be bound by the conditions of FC and
fulfillment of terms thereof, but to say that non-
fulfillment of such conditions by the previous lessees
would be a bar to seek transfer of said FC by the
subsequent lessee cannot be accepted, because if that
was the condition, the same would have found mention
in the order passed by the Apex Court or in the terms
- 59 -
and conditions of the Notification. Learned Additional
Government Advocate as well as learned Standing
Counsel for Union of India are unable to given any
plausible reasons and explanation in this regard except
referring to condition No.10 governing auctioning of
Category 'C' leases.
37. Yet another circumstance to be noted is
with regard to issuance of show cause notices. When
the petitioners from the inception have been
requesting and demanding issuance of FC enabling
them to commence production after obtaining
permission and the same not having been considered
by the respondent authorities, it would not be prudent
to expect the petitioners to comply with condition
No.10 governing the auction. This is particularly in
view of special circumstances of petitioners
participating in the bidding process of Category 'C'
leases in view of the order passed by the Hon'ble Apex
Court.
- 60 -
38. For the aforesaid reasons and analysis, we
proceed to pass the following;
ORDER
(1) The writ petitions are partly allowed.
(2) (a) The show cause notices dated 13.06.2022
issued to the petitioners in W.P.Nos.14760/2022
and 14795/2022 are quashed.
(b) The respondent Nos.1 and 3 are directed to
submit the proposal to respondent No.2 to
transfer FC which was issued in respect of the
erstwhile lessees pertaining to M.L.No.2563 and
M.L.No.2148 respectively in favour of petitioners
in W.P.Nos.14760/2022 and 14795/2022 and
respondents are further directed to transfer the
same in accordance with law.
(c) The respondents are directed to extend the
term of Letter of Intent until issuance of FC in
favour of the petitioners.
- 61 -
(3) (a) The Communication dated 05.12.2022
issued as per Annexure-A2 in
W.P.No.23151/2022 is quashed.
(b) The respondent Nos.5 and 6 are directed to
submit the proposal of the petitioner for transfer
of FC/permission granted in favour of
Sri. Srinivasulu in respect of M.L.No.2631 to the
petitioner and to transfer the FC/permission in
accordance with law.
Sd/-
CHIEF JUSTICE
Sd/-
JUDGE
RU
