Afr vs Union Of India And Others
2023 Latest Caselaw 1904 Ori

               ORISSA HIGH COURT : CUTTACK


                     W.P.(C) No. 4301 OF 2021

      In the matter of an application under Articles 226 and
      227 of the Constitution of India.
                             ---------------

AFR Larsen & Toubro Limited ..... Petitioner

-Versus-

Union of India and others ..... Opp. Parties

For Petitioner : Mr. C.S.Vaidyanathan, Sr. Advocate and Mr. S.K. Padhi, Sr. Advocate along with M/s S.S. Mohanty, S. Rout, J.P.

Rath and S.K. Rout, Advocates.

For Opp. Parties: Mr. P.K. Parhi, Dy. Solicitor General of India, along with Mr. S.S. Kashyap, CGC [O.P.No.1]

Mr. A.K. Parija, Sr. Advocate, Advocate General, Odisha along with Mr. P.K. Muduli, Addl. Govt. Advocate and Mr. T. Pattnaik, Addl. Standing Counsel [O.P. No. 2] // 2 //

Mr. Manoj Mishra, Sr. Adv.

along with Mr. T. Mishra, Advocate [Intervenor]

Mr. D.P. Nanda, Sr. Advocate along with Mr. P.K. Nayak, Advocate [Intervenor]

P R E S E N T:

THE HONOURABLE DR. JUSTICE B.R.SARANGI AND HONOURABLE MR. JUSTICE M.S. SAHOO

Date of hearing: 24.02.2023 :: Date of judgment: 02.03.2023

DR. B.R. SARANGI, J. Larsen and Toubro Limited, a company

registered under the Companies Act, 1956, represented

through its Chief Executive - Special Projects and

Authorized Representative, has filed this writ petition with

the following prayers:-

"Al. Issue a writ, order or direction of mandamus or any other writ, order or direction of like nature declaring the Proviso inserted in Section 10A (2) (b) of the Mines and Minerals (Development and Regulation) A c t , 1 9 5 7 b y w a y of t h e M i n e s a n d M i n e r al s (Development and Regulation) Amendment Act, 2021, i.e., amendment Act No. 16 of 2021 as being violative of Articles 14 of the Constitution of India, // 3 //

A2. Issue a writ, order or direction of mandamus or any other writ, order or direction of like nature declaring the Proviso added to Section 10A(2)(b) by way of the Mines and Minerals (Development and Regulation) Amendment Act, 2021 not to be applied retrospectively to the case of the Petitioner,

A 3 . Is s u e a W r i t o f M an d a m u s , o r a n y o t h e r appropriate Writ, Order or Direction, directing the Opposite Parties not to create any third-party rights w i t h respect to the area covered under t h e Recommendation made by the State Government vide Letter No. 4567 dated 18.05.2015 for grant of Mining Lease in favour of the Petitioner for Bauxite Mines in Kalahandi and Rayagada districts of Odisha over an area of 2,263.941 Ha.

A4. Issue a Writ of Mandamus , or any other appropriate Writ, Order or Direction, directing the Opposite Party No.1 to consider and decide upon the recommendation made by the State Government vide Letter No.4567 dates 18.05.2015, for grant of Mining Lease in favour of the Petitioner for Bauxite Mines in Kalahandi and Rayagada districts of Odisha over an area of 2,263.941Ha., in a stipulated timeframe;

A5. For interim reliefs in terms of prayer clauses (a1) - (a4) above;

A6. Pass such order and further orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case."

// 4 //

2. The factual matrix of the case, in a nutshell, is

that Larsen and Toubro (L&T) Limited, the petitioner

herein, proposed to set up a 100% export oriented

integrated bauxite mining-cum-alumina project with a

capacity to manufacture one million tonnes of

metallurgical grade alumina per annum in a joint venture

with IPICOL (hereinafter called the "plant"). The petitioner

applied to the Central Government for issuance of Letter

of Intent for the plant. On 31.10.1990, the petitioner filed

three applications for prospecting licenses (hereafter "PL"

for short) for bauxite deposits of 7.25 sq.kms in Kutrumali

(Kalahandi), 14.5 sq.kms in Sijimali Plateau (Kalahandi)

and 13.5 sq.kms in Malipadar Village (Rayagada) for

captive use within the plant. In all the three applications,

the petitioner mentioned that it is proposing to set up the

plant and that the project will be based on Sijimali

bauxite deposits in Kalahandi and Koraput districts and

Kutrumali bauxite deposit. The said three applications for

prospecting licenses were duly recommended by the State // 5 //

Government stating inter alia; (i) the applicant had

proposed to set up the plant; and that (ii) issuance of LoI

in favour of the applicant for setting up such plant. The

Central Government, on 22.05.1992, communicated its

approval under Section 5(1)(b) of the MINES AND

MINERALS (DEVELOPMENT AND REGULATION) ACT,

1957 (for short "MMDR Act, 1957") to grant PL for all

three applications for a period of two years subject to the

conditions that in case the petitioner failed to get Letter of

Intent within one year for the project based on these

deposits or such a Letter of Intent is issued to any other

party other than the petitioner for a project based on the

above noted deposits, the PL of the petitioner will be

prematurely determined under Rule 14(3) of Mineral

Concession Rules, 1960 (hereinafter "MCR, 1960" for

short). The State Government, on 27.05.1992, issued

terms and conditions including such condition for

premature determination under Rule 14(3) of the MCR,

1960 for the grant of PL to the petitioner for acceptance.

// 6 //

The petitioner, vide letter dated 03.06.1992, accepted the

terms and conditions issued by the State Government.

Consequentially, the State Government, vide letter dated

06.06.1992, granted PL in favour of the petitioner for all

the three bauxite deposits subject to the terms and

conditions mentioned therein.

2.1 Accordingly, deeds were executed for a period of

two years and, thereafter, on 24.09.1992, the Central

Government issued the Letter of Intent to the petitioner

for setting up of the plant.

2.2 After completing the prospecting operation, the

petitioner, on 11.04.1994, applied for three mining leases

(MLs) over bauxite deposits measuring a total area of

2263.941 Ha.[734.128 Ha. in Sijimali (Kalahandi),

699.037 Ha. in Kutumali (Kalahandi) and 830.776 Ha. in

the district of Rayagada, respectively]. The petitioner also

sought the mining lease for captive use of bauxite in the

plant. As such, under clause (xix) of its three ML

applications, the petitioner had mentioned that bauxite // 7 //

ore from the bauxite deposits shall be used for captive use

in the plant and had filled as 'Not Applicable' against

indigenous consumption and export.

2.3 On 06.07.1995 and 08.10.1995, the petitioner's

PLs expired and thereafter the petitioner failed to take

steps to set up its plant. As such, the State Government

reminded the petitioner for its inaction at the level of Chief

Secretary time and again. Thereafter, vide letter dated

21.10.1997, the petitioner indicated time schedule for

completion of its plant through joint venture partnership

that (i) by April, 1998, it will sort out various issues and

sign a MoU with the technical collaboration; (ii) by March,

1999, it will complete other critical advanced activities

including land acquisition; (iii) by December, 1998, there

will be financial closure of Joint Venture; (iv) from April,

1999 the construction will start; and (v) it will cover 3-1/2

years after construction starts. Even though such time

schedule was provided, the petitioner could not adhere to

the same, rather failed to act in accordance with the time // 8 //

schedule and could not close a JV partnership for their

plant as per the schedule. Consequentially, on

08.02.1999, the State Government issued a show cause

notice as to why the ML applications of the petitioner

should not be rejected and, as such, the State

Government rejected petitioner's ML applications after

giving a personal hearing. It may be noted that on

26.09.2000, the petitioner's Letter of Intent with the

Central Government for the plant was renewed till

23.09.2002.

2.4 Against rejection of its ML applications, the

petitioner approached this Court by filing OJC No. 12185

of 1999, which was disposed of vide order dated

09.08.2001 as infructuous, as the order rejecting its ML

applications was not communicated to the petitioner.

Aggrieved by the order dated 09.08.2001 the petitioner

moved to the apex Court by filing SLP (C) No. 13626 of

2001, which was disposed of vide order dated 20.08.2001

with the direction that the order of rejection passed by the // 9 //

State Government to be communicated forthwith and the

company would be at liberty to pursue such remedies

under the law within three weeks from the date of receipt

of the order of rejection of ML applications. In compliance

of the order dated 20.08.2001, the order of rejection was

communicated to the petitioner on 01.09.2001. The State

Government had rejected petitioner's ML applications (3

nos.) in respect of grant of bauxite ore on the ground that

the petitioner had "not taken effective steps for

establishment of the Alumina project in spite of lapse of

about 9 years after grant of PL". After receipt of the

aforesaid rejection order, the petitioner challenged the

same before the Revisional Authority, Govt. of India and

in turn the Revisional Authority, vide order dated

05.09.2002, set aside the order of rejection and remanded

the matter back to the State Government for fresh

consideration on the ground that opportunity of personal

hearing was not given to the petitioner to explain the

steps it took towards establishing its plant. In adherence // 10 //

to the order passed by the Revisional Authority, fresh

hearing was given to the petitioner on 17.03.2003 with an

opportunity to file written notes of submissions.

2.5 Thereafter, the petitioner entered into a MoU

with Vedanta Aluminium Limited (VAL) on 21.02.2012 for

supply of VAL's refinery. Under clause 3(ii) of the MoU the

parties agreed that the bauxite shall be supplied "subject

to receipt of necessary approval from the relevant

Government authorities". As a consequence thereof, the

petitioner, vide letter dated 03.03.2012, made a fresh

proposal to the State Government for grant of ML on the

basis of its MoU with VAL.

2.6 Meanwhile, the MMDR Amendment Act, 2015

came into force on 12.01.2015 introducing the auction

regime. Under Section 10A(1) of the amended MMDR Act,

all pending ML applications became ineligible, except

those applications saved by Section 10A(2) of the

amended MMDR Act. Section 10(A)(2)(b) of the MMDR Act

saves pre-auction regime applications of PL holders under // 11 //

certain circumstances, namely, bauxite being a mineral

specified under the First Schedule of the MMDR Act

requires prior approval of the Central Government for

grant of mining lease. On 18.05.2015, the State

Government sought approval of the Central Government

to grant the mining lease in favour of L&T subject to the

following conditions:-

"(i) The company will set up and commission 3 MTPA Alumina Refineries in Odisha. In the first phase, a refinery of at least 1.5 MTPA will be commissioned within maximum period of 5 years from the date of execution of Mining Lease Deed.

(ii) The Bauxite excavated from the mine will be utilized exclusively for the Alumina Refinery set up by the lessee, provided that until commissioning of the Refinery by the lessee company, such Bauxite may be sold to the Alumina Refineries located within the State for their use within the State."

2.7 As a consequence thereof, approval of the

Central Government was sought by the State Government

under proviso to Section 10A(2)(c), as bauxite is a First

Schedule mineral, and under Section 6(1) of the MMDR

Act. As the applied lease area exceeded 10 sq.kms and the // 12 //

petitioner was seeking ML for captive use, therefore, both

Rule 27(3) of the MCR, 1960 and Rule-12(4) of the MCR,

1960 require approval of the Central Government when

the State Government imposes conditions of captive use

on the grant of mining lease.

2.8 On 31.07.2015, the Central Government sent

the State Government's recommendations to the Indian

Bureau of Mines (IBM) for views on relaxation under

Section 6(1) (b) of the amended MMDR Act. Thereafter, on

31.07.2015, the Central Government sought following

clarifications from the State Government regarding ML

application(s) of the petitioner:-

"(c) To provide a chronology of events relating to the proposal and thus establish a reasonable explanation to the fact that a delay of about 22 years have been there. Even after the order of revision a delay of 13 years have taken place.

(d) furnish a copy of the MOU agreements signed between them and VAL in this regard.....

(e) ... clarification by the State Government that during signing MoU/agreement with the applicant company whether such // 13 //

condition [captive use for Alumina refinery] was incorporated. If not, then what is the logic behind imposing such conditions.

(f) "Because of huge delay and as MMDR Act, 1957 has been amended which has opened the gate or auction route for providing mineral concession, by which State Government can generate a lot of revenue compared to traditional method then, why State Government did not prefer to go through the auction route?"

2.9 Thereafter, on 19.09.2015, the State

Government responded to the Central Government

queries by furnishing relevant documents. On

04.01.2016, IBM responded to Central Government's

letter dated 31.07.2015 providing technical comments

and referred the proposal to the Bhubaneswar and

Nagpur Regional Office for examination. Consequentially,

on 08.02.2016, The Central Government sought further

queries, documents and clarifications from the State

Government to the following effect:-

"(i) sequence of events leading to State Government's delay in processing L&T's ML application;

// 14 //

(ii) "what is the legal basis for insisting for such captive use."

(iii) Whether the petitioner had obtained the Letter of Intent within 1 year for setting up an 100% EOU alumina-based project. [Note: L&T has been in violation of this condition since 2008]."

2.10 When the matter stood thus, Minerals (Other

than Atomic and Hydro Carbons Energy Minerals)

Concession Rules, 2016 came into force on 04.03.2016.

Rule-7 of the said Rules, stipulated the process for

savings under Section 10A(2)(b) of the amended MMDR

Act and the modalities for executing the lease for cases

covered under the said Section. As per Rule-7(6)(b) the

State Government has to forward the application of the

petitioner to the Central Government for its previous

approval for grant of mining lease for bauxite, being a

mineral specified in part-C of the First Schedule to the

Act. On 06.05.2016, the Central Government sought

further clarification whether the area proposed overlaps

with the area reserved in favour of OMC Limited under

Section 17A(2) of the MMDR Act, which was clarified by // 15 //

the State Government on 17.05.2016 that the area

proposed to be granted to the petitioner does not overlap

with the area reserved in favour of OMC Limited under

Section 17A(2) of the MMDR Act. On 06.07.2017, the

Central Government sought certified copies of all

documents regarding the decision to grant ML to the

petitioner. As a consequence thereof, on 08.08.2017, the

State Government provided all the relevant documents

regarding its decision to grant ML to the petitioner. Again

clarification was sought by the Central Government on

29.11.2017, which was clarified by the State Government

on 21.03.2018 with a request to consider the eligibility of

the applications of the petitioner.

2.11 After the proposal for grant of ML in favour of

the petitioner was submitted to the Central Government,

there has been series of communications between the

State and the Central Government seeking and providing

clarifications in the matter and the State Government has

submitted all the clarifications that have been sought by // 16 //

the Central Government. Thereafter, there has been no

communication by the Central Government seeking any

further clarification implying thereby that all the queries

pertaining to grant of ML to the petitioner have been

clarified and, as such, all the queries of the Central

Government have been satisfactorily answered.

2.12 Due to inordinate delay on the part of the

Central Government for grant of mining lease in its

favour, the petitioner made representation to the Inter-

Ministerial Project Monitoring Group (PMG) coordinated

by the Department for Promotion of Industry and Internal

Trade (DPIIT), Ministry of Commerce and Industry on

26.06.2019 seeking a resolution to the issue. Thereafter,

review meetings were held on 12.09.2019, 26.11.2019

and 03.01.2020, which were duly attended by the officials

of the petitioner. As such, in every meeting,

representatives of the Central Government were asked by

the petitioner to expedite the processing of the petitioner's

ML applications, which did not yield any result. The // 17 //

Central Government enacted MMDR Amendment Act

No.16 of 2021 with effect from 28.03.2021 adding a

proviso to Section 10A(2)(b) and a further Section

10A(2)(d).

3. Mr. C.S. Vaidyanathan, learned Senior Counsel

and Mr. S.K. Padhy, learned Senior Counsel appearing

along with Mr. S.S. Mohanty, learned counsel for the

petitioner contended that in spite of recommendation

made by the State Government to the Central

Government, due to inaction and gross delay, the ML was

not granted by the Central Government to the petitioner

by incorporating proviso to Section 10(A)(2)(b) and, as

such, the Central Government cannot take away any right

accrued in favour of the petitioner declaring the ML

applications to have lapsed. The amendment to Section

10A(2)(b) by incorporating the proviso takes away the

vested right of the petitioner, which was already accrued

by virtue of granting PL to it. The petitioner has been

disentitled for grant of mining lease despite the fact that it // 18 //

has complied with all conditions set out in Section

10A(2)(b)(i)-(iv) and was recommended for grant of mining

lease by the State Government on 18.05.2015. The

petitioner is a victim of inaction of the Central

Government, as by virtue of the amendment made to the

provision, the right which had been accrued has been

lapsed and, as such, the petitioner has been denied the

benefit for grant of ML. Hence, this writ petition.

3.1 It is contended that a bare reading of Section

10(A)(2)(b) would show that it categorically recognized the

right of a prospecting license holder to obtain a mining

lease, if certain conditions as enumerated under Section-

10A(2)(b)(i)-(iv) are complied with. Even though the

petitioner had complied with the conditions and the

recommendation was made in its favour by the State

Government on 18.05.2015, which is also fortified by IBM

vide communication dated 04.01.2016, but by causing

unnecessary delay the Central Government has frustrated

the very purpose of granting mining lease in favour of the // 19 //

petitioner which is not permissible. By introducing proviso

to Section 10A(2)(b), the Legislature chose to effectively

negate the main provision, which is not permissible. It is

further contended that the sole purpose of introducing the

proviso is to nullify the effect of Section 10A(2)(b) and,

therefore, the proviso is ultra vires the main section and

must be struck down. It is further contended that

introduction of Section 10A(2)(b) by way of 2015

Amendment is only in order to protect a certain category

of persons who had invested in prospecting activities as

per the old regime and were given a right to obtain mining

lease. The Central Government, having sat over the

matter, without granting approval w.e.f. 18.05.2015, has

acted arbitrarily and unreasonably to deprive the

legitimate claim of the petitioner. It is further contended

that by inserting proviso to Section 10A(2)(b), the Central

Government cannot take away the vested right of the

petitioner with retrospective effect, rather it has to proceed // 20 //

with based on law, as it stood then and take it to its

logical conclusion.

3.2 It is further contended that Section 10A(2)(b)

provides that a person shall have a right for obtaining

mining lease, on satisfaction of the State Government, on

the conditions of clause-(i) to clause-(iv) whereby the

satisfaction of the State Government is arrived at.

Consequentially, where the satisfaction of the State

Government has been arrived at, the State is rendered

functus officio and the rights stand crystallized. Thereby, it

is emphatically submitted that the proviso to Section

10A(2)(b) incorporated vide Amendment Act No.16 of 2021

on 16.03.2021 is not applicable to the petitioner on its

claim for grant of ML and execution of ML under Section

10A(2)(b) prior to approval.

3.3 It is further contended that thread of

reasonableness runs through the entire fundamental

rights chapter of the Constitution of India. What is

manifestly arbitrary is obviously unreasonable and being // 21 //

contrary to the rule of law, would violate Article 14. It is

further contended that the proviso should be limited to its

operation to the subject-matter in a clause. The proviso is

ordinarily a proviso and has to be harmoniously construed

with the provisions.

3.4 It is further contended that any measure

restricting a right must have a legitimate goal. Therefore,

the application for grant of statutory permission like

mining lease ought to have been considered within a

reasonable time. Unreasonable delay in approval of the

statutory claim would amount to violation of Article 14

and 19(1)(g) of the Constitution of India and, as such,

delay in performance of statutory duties amounts to abuse

of process of law. It is further contended that if the

decision on an application is not taken within the fixed

time period it would be presumed that the application has

been approved and not withheld. Thereby, the approval of

the Central government under MMDR Act, 1957 may be

expressed or implied. It is further contended that the // 22 //

proviso which negates or nullifies the main provision

ought to be struck down and effect must be given to other

part of the provisions, the legislature must be deemed to

give meaning to each part of the section. Thereby, the

legislation which are manifestly arbitrary can be struck

down being violative of Article 14 of the Constitution of

India. Section 10A(2)(b) creates a vested right for grant of

ML in favour of the petitioner and once the condition set

out in the provisions are met, the said right cannot be

taken away by subsequent amendment.

3.5 To substantiate their contentions, learned

Senior Counsels appearing for the petitioner relied upon

the judgments of the apex Court in the cases of J.K.

Cotton Spinning and Weaving Mills Co. Ltd v. State of

Uttar Pradesh, (1961) 3 SCR185; Aswini Kumar Ghose

v. Arabinda Bose, 1953 SCR 1; Quebec Railway, Light

Heat and Power Co. Ltd v. Vandry, AIR 1920 PC 181;

Chloro Controls India Ltd. v. Seven Trent Water

Purification Inc., (2013) 1 SCC 641; J.K. Industries // 23 //

Ltd. v. Chief Inspector of Factories and Boilder, (1996)

6 SCC 665; Indore Development Authority v.

Manoharlal, (2020) 8 SCC 129; Casio India Co.(P) Ltd.

v. State of Haryana, (2016) 6 SCC 209; O.P. Singla v.

Union of India, (1984) 4 SCC 450; Shayara Bano v.

Union of India, (2017) 9 SCC 1; Hitendra Vishnu

Thakur v. State of Maharastra, (1994) 4 SCC 602;

Natural Resources Allocation In re. Special Reference

No.1 of 2012, (2012) 10 SCC 1; Bhusan Power and

Steel v. State of Odisha, (2017) 2 SCC 125; K.S.

Puttuswamy v. Union of India, (2019) 1 SCC 1; Modern

Dental College & Research Centre v. State of Madhya

Pradesh, (2016) 7 SCC 353; and Indocil Silicons Pvt.

Ltd. v. Union of India, W.P. No. 1920 of 2021 disposed of

on 27.05.2022 by the Karnataka High Court.

4. Mr. A.K. Parija, learned Advocate General

appearing along with Mr. P.K. Muduli, learned Addl.

Government Advocate and Mr. T. Pattnaik, learned Addl.

Standing Counsel for the State-opposite party, relying // 24 //

upon the Scheme of the Mines and Mineral (Development

and Regulation) Act, 1957:Union Control of Major

Minerals, contended that Entry-54 of list 1 of the Seventh

Schedule of the Constitution of India, 1950 provides

regulation of mines and mineral development to the extent

to which such regulation and development under the

control of the Union is declared by Parliament by law to be

expedient in the public interest. In view of the provisions

contained under Section 2 of the MMDR Act, a declaration

has been made that it is expedient in the public interest

that the Union should take under its control the

regulation of mines and the development of mineral to the

extent provided. In view of such declaration, the Union of

India has taken its control, the regulation of mines and

development of minerals. The MMDR Act is an enactment

by the Parliament and the function of the State

Government, as delineated under the said Act, is only that

of a delegatee of the Parliament. Therefore, MMDR Act and

Rules made thereunder forms a complete code in respect // 25 //

of minerals. As would be evident from Sections 3(e), 14

and 15 of the Act, regulation and control of minor

minerals have been vested with the State Government.

Sections 5(1)(b), 5(2)(b), 7(2), 8(3), 10A(2)(b), 10A(2)(c),

17A(2) and 17A(2A) of the Act, which deal with major

minerals, provide that under the statutory scheme, the

regulation and control has been exclusively vested with

the Central Government. Therefore, rights of an applicant

for grant of lease and renewal are covered under the

provisions of the Act and Rules. Prior to commencement of

Amendment Act, 2015, there was a preferential right

which is being exercised under the provisions of law.

There is a complete transition to the auction regime,

pursuant to Amendment Act, 2015 and Amendment Act,

2021. It is further contended that by virtue of the

Amendment Act, 2015, the regime for grant of mining

leases completely changed from the procedure set out

under Section 11 of the then existing Act (primarily

governed by first come first serve principles) to grant of // 26 //

mining leases by way of auction. It is further contended

that the reasons for such transition were set out in the

objects and reasons of the 2015 Amendment Act, by

which the State must ensure that it maximizes revenue

and receives adequate compensation for the allotted

resource. Under the new regime, Section 10A made all

pending applications in respect of major minerals except

coal and lignite ineligible. Thus, pending applications for

PL, mining lease reconnaissance permit lapsed and the

new auction regime set in.

4.1 It is further emphatically submitted that

Section 10A(2)(b) & 10A(2)(c) of the Act temporarily saved

some pending applications before the 2015 Amendment

and these exceptions were cases where an applicant for

mining lease had prospected the area, or in respect of

whom a recommendation was made by the State

Government and grant of approval by the Central

Government was pending. For the applications saved

under Sections 10A(2)(b) & 10A(2)(c) of the Act, approval of // 27 //

the Central Government was necessary before grant of

mining lease. By virtue of the Amendment Act, 2021, there

has been a further fortification of the auction regime by

providing proviso to Section 10A(2)(b), by which all

pending applications of non-auctioned mines lapsed and

such mines are to be leased out by auction. Therefore, the

temporary savings carved out under Section 10A(2) have

now been closed and all pending applications have

become ineligible.

4.2 It is further contended that by way of M.C.

(Fourth Amendment) Rules, 2021, the Central

Government also omitted Rule 7 and Rule-8 of the MC

Rules, 2016, wiping out the modalities for saved

applications under Section 10A(2)(b) and Section 10A(2)(c)

of the Act. It is further contended that no mining lease of a

major mineral can be granted under the provisions of the

MMDR Act, 1957 without the prior approval of the Central

Government. It is further contended that in view of the

incorporation of the first and second proviso, by which it // 28 //

can be construed that first proviso is not inequitable

because the second proviso reimburses the applicant for

their expenditure. Thereby, the amending Act is presumed

to be constitutional and the burden of proving its

unconstitutionality is upon the person challenging the

validity of such statute. It is further contended that the

Amendment Act, 2021 has a significant public interest

objective and has a rational nexus to that objective.

Meaning thereby, it is pursuing public interests, mineral

development and common good through transparency and

maximization of revenue for State which holds the mineral

as trustee of the public. The auction regime has, in fact,

increased revenue for the State. Thereby, the Amendment

Act, 2021, being consistent with the principles enshrined

under Article 39 (b) of the Constitution of India, completes

the transition to the auction regime by lapsing all pending

cases of non-auctioned PL holders to whom ML was not

granted. The first proviso to Section 10A(2)(b) of the Act,

furthers the legitimate aim of the 2015 and 2021 // 29 //

Amendments by declaring all pending applications under

Section 10A(2)(b) of the Act to have lapsed. It is further

contended that the first proviso does not suffer from any

repugnancy. Rather, it furthers the aim and objective of

Section 10A of the Act read as a whole, i.e., to make all

pending applications from the pre-2015 regime ineligible.

Thereby, the first proviso is not arbitrary because the

second proviso protects the interests of all the

applicants/holders of prospecting licenses, whose

applications lapsed under the proviso by reimbursing

them for their "expenditure incurred towards the

prospecting operations in such manner as may be

prescribed by the Central Government".

4.3 It is further contended that the PL holders do

not have a vested right under Section 10A(2)(b) of the Act,

as the said provision only saves pending applications for

consideration for grant of mining lease. It is further

contended that the judgment of Karnataka High Court in

the case of Indocil Silicons (supra) which held that the // 30 //

first proviso to Section 10A(2)(b) is erroneous and clearly

repugnant to the statutory provisions contained in the Act

and Rules, and is under consideration by the apex Court

in SLP (C) No. 15692 of 2022, where an order of status

quo has been granted. It is further contended that the

argument of the petitioner that in view of the judgment of

the apex Court in the case of Bhusan Power & Steel Ltd.

(supra) the applicants under Section 10A(2)(b) have a

vested right to ML, cannot have any justification and,

thereby, such argument cannot be sustained. It is further

contended that the claim of the petitioner with regard to

promissory estoppel is erroneous, in view of insertion of

first proviso to Section 10A(2)(b). Consequentially, it is

contended that the petitioner is not entitled to grant of ML

in view of Section 10A(2)(b) without prior approval of

Central Government under Section 6(1)(b) of the MMDR

Act and Rule 12(4) of the M.C. Rules. It is further

contended that Rule-7 of M.C. Rules having been omitted,

even otherwise there are no operational modalities for // 31 //

grant of lease and, as such, deletion of such provision

under Rule-7 having not been challenged, the petitioner

has no right to be considered for mining lease.

Consequentially, dismissal of the writ petition is sought

for.

4.4 To substantiate his contention, the learned

Advocate General has relied upon the judgments of the

apex Court in the case of State of Assam and others v.

Om Prakash Mehta and others, (1973) 1 SCC 584;

Sandur Manganese and Iron Ores Ltd. v. State of

Karnataka, (2010) 13 SCC 1; Monet Ispat and Energy

Limited v. Union of India, (2012) 11 SCC 1; Bhusan

Power v. State of Odisha, (2017) 2 SCC 125; Goa

Foundation v. Sesa Sterlite Ltd., (2018) 4 SCC 218;

Giomin Minerals v. State of Odisha, (2013) 7 SCC 571;

Greater Bombay Coop. Bank Ltd. v. United Yarn Tex,

(P) Ltd., (2007) 6 SCC 236; Welfare Association, ARP

Maharastra and Anr. V. Ranjit P. Gohil, (2003) 9 SCC

358; J.K. Industries Ltd. v. Chief Inspector of // 32 //

Factories and Boilers, (1996) 6 SCC 665; Indore

Development Authority v. Manoharlal, (2020) 8 SCC

129; State of Tamil Nadu v. Hind Stone and others,

(1981) 2 SCC 205; Amritlal Nathubhai Shah v. Union

Govt. of India, (1976) 4 SCC 108; Howrah Municipal

Corporation v. Ganges Rope Co. Ltd., (2004) 1 SCC 663;

Chet Ram Vashisht v. Municipal Corporation of Delhi

and another, (1980) 4 SCC 647; Commissioner of

Municipal Corporation Shimla v. Prem Lata, (2007) 11

SCC 40; State of Orissa v. Anup Kumar Senapati,

(2019) 19 SCC 626; Sethi Auto Service Station and

another v. Delhi Development Authority, (2009) 1 SCC

180; and Quarry Owner's Association v. State of Bihar

and others, (2000) 8 SCC 655.

5. Mr. P.K. Parhi, learned Deputy Solicitor General

of India appearing along with Mr. S.S. Kashyap, learned

Central Government Counsel for opposite party no.1-

Union of India supported the arguments advanced by

learned Advocate General and contended that there is // 33 //

always a presumption in favour of the constitutional

validity of an Act and the burden lies on the person who

seeks to challenge the validity of the provisions of the Act

to show that there has been transgression of

constitutional principles/provision. It is further contended

that the constitutional validity of the Act can be

challenged only on two grounds, viz., (i) lack of legislative

competence and (ii) violation of any of the fundamental

rights guaranteed in Part-III of the Constitution or of any

other constitutional provisions. No third ground can

invalidate a piece of legislation. It is further contended

that the petitioner has sought to challenge the vires of

proviso to Section 10A(2)(b) of Amended Act, 2015, which

provides that right of the petitioner for grant of mining

lease has lapsed after coming into force of the Amendment

Act/provisions. Thereby, no enactment can be struck

down by just saying that it is arbitrary or unreasonable.

Some or other constitutional infirmity has to be found

before invalidating the Act. Thereby, the vires of the // 34 //

provisions has to be judged by this Court only in the

judicial capacity which must necessarily involve its

application to facts of a particular case. It is further

contended that the petitioner is not having any accrued

right as on the date of the commencement of the

Amendment Act, 2021 and, therefore, the case of the

petitioner has to be dealt with in consonance with the

amended provisions. It is further contended that the

Amendment Act, 2021 falls within the parameters of the

policy decision so taken by the Government of India in

accordance with the law laid down by the apex Court.

Thereby, the provisions under the MMDR Amendment Act,

2021, which have been inserted, have legal force in the

eye of law and the same is to be operative in relation to

the cases wherein the prospecting license of Mining Lease

has not been granted prior to 28.03.2021, when the

amendment was notified.

To substantiate his contention, Mr. Parhi has

relied upon the judgments of the apex Court in the case of // 35 //

Manohar Lal Sharma v. The Principal Secretary and

others, W.P.(Crl.) No.120 of 2012 disposed of on

25.08.2014; Centre for Public Interest Litigation v.

Union of India, (2012) 3 SCC 1; Geomin Minerals and

Marketing Private Limited v. State of Orissa, (2013) 7

SCC 571; Sanjeev Coke Manufacturing Company v.

Bharat Cooking Coal Ltd., (1983) 1 SCC 147; Howrah

Municipal Corporation v. Ganges Rope Company

Limited, (2004) 1 SCC 663; Commissioner of Municipal

Corporation Shimla v. Prem Lata, (2007) 11 SCC 40;

Essar Steel Ltd. v. Union of India, (2016) 11 SCC 1; and

Shri Sidhbali Steel Ltd. v. State of Uttar Pradesh,

2011 (3) SCC 193.

6. This Court heard Mr. C.S. Vaidyanathan,

learned Senior Counsel and Mr. S.K. Padhy, learned

Senior Counsel appearing along with Mr. S.S. Mohanty,

learned counsel for the petitioner; Mr. A.K. Parija, learned

Advocate General appearing along with Mr. P.K. Muduli,

learned Addl. Government Advocate and Mr. T. Pattnaik, // 36 //

learned Addl. Standing Counsel for the State-opposite

party; and Mr. P.K. Parhi, learned Deputy Solicitor

General of India appearing along with Mr. S.S. Kashyap,

learned Central Government Counsel for opposite party

no.1-Union of India by virtual mode and perused the

records. Pleadings having been exchanged between the

parties, with the consent of learned counsel for the parties

this writ petition is being disposed of finally at the stage of

admission.

7. This Court also heard Mr. Manoj Mishra,

learned Senior Counsel appearing along with Mr. T.

Mishra, learned counsel for intervenor, who is a

prospective bidder and Mr. D.P. Nanda, learned Senior

Counsel appearing along with Mr. P.K. Nayak, learned

counsel for another intervener and also prospective

bidder. Though the intervention petitions have not been

allowed, but they were heard in the matter.

8. It is of relevance to note that Article 246 of the

Constitution of India provides legislative powers of Central // 37 //

and State Government. Wherein, the Seventh Schedule of

the Constitution of India provides the subject-matter of

legislation by the Parliament and State Legislatures. As

per Entry 54 of List 1 (Union List), the Central

Government has powers for "Regulation of Mines and

Mineral Development to the extent to which such

regulation and development under the control of the

Union is declared by Parliament by law to be expedient in

the public interest". According to Entry 23 of List II (State

List), the State Governments have powers for "Regulation

of Mines and Mineral Development subject to the

provisions of List I with respect to regulation and

development under the control of the Union." Therefore,

the Ministry of Mines administers the Mines and Minerals

(Development and Regulation) Act, 1957, which is the

Central Act which governs the development and

regulation of mines and minerals in terms of the powers

vested in the Central Government as per Entry 54 of List I

of the Seventh Schedule of the Constitution. Thereby, the // 38 //

Mines and Minerals (Development &. Regulation) Act,

1957 was enacted by the Parliament. Section 2 of the

MMDR Act, 1957 reads as follows:-

"2. Declaration as to the expediency of Union control- It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided."

9. In view of the declaration made in Section-2, as

mentioned above, the Union has taken under its control

the regulation of mines and development of minerals. The

MMDR Act 1957, inter-alia, provides for procedures to

grant mineral concessions, regulate mining activities and

provisions for mineral development in the country.

Section 4 of the MMDR Act 1957 reads as follows:-

"4. Prospecting or mining operations to be under licence or lease.--

(1) No person shall undertake any reconnaissance, prospecting or mining operations in any area, except under and in accordance with the terms and conditions of a reconnaissance permit or of a prospecting licence or, as the case may be, of a mining lease, granted under this Act and the rules made thereunder.

.......

// 39 //

(2) No reconnaissance permit, prospecting licence or mining lease shall be granted otherwise than in accordance with the provisions of this Act and the rules made thereunder."

Section 5, before amendment to the Act in 2015, reads as

follows:-

"5. Restrictions on the grant of prospecting licences or miningleases.- 1. A State Government shall not grant a Reconnaissance permit,prospecting licence or mining lease to any person unless such person (a) is an Indian national, or a company as defined in sub-section 1. of Section 3 of the companies Act, 1956; and

(b) satisfies such conditions as may be prescribed..

Provided that in respect of any mineral specified in the First Schedule, no reconnaissance permit, prospecting licence or mining lease shall be granted except with the previous approval of the Central Government...0'.

(i) Section 5 (after amendment in the Act in 2015. w.e.f. 12.01.2015):

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

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

(b) satisfies such conditions as may be prescribed:

// 40 //

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

Section-5, after amendment to the Act in 2015, w.e.f.

12.01.2015, reads as under:-

"5. Restrictions on the grant of prospecting licences or mining leases.-

1. A State Government shall not grant a reconnaissance permit, prospecting licence or mining lease to any person unless such person

(a) is an Indian national, or a company as defined in clause (20) of Section 2 of the Companies Act, 2013(18 of 2013),' and

(b) satisfies such conditions as may be prescribed:

Provided that in respect of any mineral specified in Part A and Part B of the First Schedule , no mineral concession shall be granted except with the previous approval of the Central Government:"

10. In Manohar Lal Sharma V. The Principal

Secretary & Ors. (W.P.(Crl) No. 120/2012 disposed of on

25.08.2014), wherein the subject-matter of consideration

was the allocation of coal blocks for the period from 1993

to 2010, the apex Court observed that allocation of // 41 //

natural resources has to meet the twin constitutional

tests, one, the distribution of natural resources that vest

in the State is to sub-serve the common good and, two,

the allocation is not violative of Article 14. In paragraphs

71 and 99 of the judgment dated 25.08.2014, the apex

Court observed as follows:-

"71. xxx xxx xxx Obviously, therefore, such allocations has to meet twin constitutional tests, one, the distribution of natural resources that vest in the State is to sub-serve the common good and, two, the allocation is not violative of. Article 14.

99. xxx xxx xxx We are fortified in our view by a recent decision of this Court (3- Judge Bench) in (Goa Foundation v. Union of India and Others,. [(2014) 6 SCC 5901) Goa Foundation wherein ,follolving Natural Resources Allocation Reference, it is stated, ".., it is for the State Government to decide as a matter of policy in what manner the leases of these mineral resources would be granted, but this decision has to be taken in accordance with the provisions of the MMDR Act and the Rules made thereunder and in consonance with the constitution provisions."

11. Section 6 of the MMDR Act, 1957 reads as

follows:-

"6. Maximum area for which a prospecting licence or mining lease may be granted.―[(1) No person shall acquire [***] in respect of // 42 //

any mineral or prescribed group of associated minerals [in a State]―

(a) one or more prospecting licences covering a total area of more than twenty-five square kilometres; or (aa) one or more reconnaissance permit covering a total area of ten thousand square kilometres:

Provided that the area granted under a single reconnaissance permit shall not exceed five thousand square kilometers; or]

(b) one or more mining leases covering a total area of more than ten square kilometres:

Provided that if the Central Government is of the opinion that in the interest of the development of any mineral or industry, it is necessary so to do, it may, for reasons to be recorded by it in writing, permit any person to acquire one or more prospecting licences or mining leases covering as area in excess of the aforesaid total area;

(c) any reconnaissance permit, mining lease or prospecting licence in respect of any area which is not compact or contiguous:

Provided that if the State Government is of opinion that in the interests of the development of any mineral, it is necessary so to do, it may, for reasons to be recorded in writing, permit any person to acquire a reconnaissance permit, prospecting licence or mining lease in relation to any area which is not compact or contiguous.] (2) For the purposes of this section, a person acquiring by, or in the name of, another person a reconnaissance permit, prospecting licence or mining lease] which is intended for himself shall be deemed to be acquiring it himself."

// 43 //

The aforesaid provision specifically mentioned with regard

to the maximum area for which a prospecting licence or

mining lease may be granted. If it exceeds the area as

contained in clauses (a), (aa) and (b), it is protected under

the proviso to the effect that if the Central Government is

of the opinion that in the interest of the development of

any mineral or industry, it is necessary so to do, it may,

for reasons to be recorded by it in writing, permit any

person to acquire one or more prospecting licences or

mining leases covering as area in excess of the aforesaid

total area. Thereby, the rights have been protected by

such proviso incorporated under Section 6 (b) of the Act

itself.

12. Section 11 of the MMDR Act, 1957 reads as

follows:-

"11. Preferential right or certain versions•- (I) Where a reconnaissance permit or prospecting licence has been granted in respect of any land, the permit holder or the licensee shall have a preferential right for obtaining, a prospecting licence or mining lease, as ease may be, in respect of that land over any other person:

// 44 //

Provided that the State Government is satisfied that the permit holder or the licensee. as the case may be,-

(a) has undertaken reconnaissance operations or prospecting operations, as the case may be, to establish mineral resources in such land;

(b) has not committed any breach of the terms and conditions of the reconnaissance permit or the prospecting licence:

(c) has not become ineligible under the provisions of this Act: and

(d) has not failed to apply for grant o Iprospecting licence or mining lease, as the case may be, within three months after the expiry of reconnaissance permit or prospecting licence, as the case may be, or within such further period, as may be extended by the said Government.

(2) Subject to the provisions of sub-section (1), where the State Government has not notified in the Official Gazette the area For grant of reconnaissance permit or prospecting licence or mining lease, as the case may be, and two or more persons have applied fora reconnaissance permit, prospecting licence or a mining lease in respect of any land in such area, the applicant whose, application was received earlier, shall have the preferential right to be considered for grant of reconnaissance permit, prospecting licence or mining lease, as the case may be, over the applicant whose application was received later:

Provided that where an area is available for grant of reconnaissance permit, prospecting licence or mining lease, as the case may be, and the State Government has invited applications by notification in the Official Gazette for grant of such permit, licence or lease, all the applications received // 45 //

during the period specified in such notification and the applications which had been received prior to the publication of such notification in respect of the lands within such area and had not been disposed of, shall be deemed to have been received on the same day for the purposes of assigning priority under this sub-section:

Provided further that where any such applications are received on the same day, the State Government, after taking into consideration the matter specified in sub- section (3), may grant the reconnaissance permit, prospecting licence or mining lease, as the case may be. to such one of the applicants as it may deem fit.

xxx xxxx xxx."

On perusal of the aforesaid section, it is made clear that

where a reconnaissance permit or prospecting licence has

been granted in respect of any land, the permit holder or

the licensee shall have a preferential right for obtaining, a

prospecting licence or mining lease. That preferential right

is subject to Section-5 mentioned above. As per sub-

sections (1) and (2) of Section 11, the right given to the

applicants is a preferential right to be considered for grant

of reconnaissance permit, prospecting licence or mining

lease, as the case may be over the applicants whose // 46 //

applications are received latter. Thereby, the provision has

carved out a preferential right in favour of the applicants,

who seek for Reconnaissance Permit, Prospecting Licence

or Mining Lease and they are entitled to get preferential

right over and above the applications received later.

13. In view of the provisions contained in MMDR

Act, 1957, once the Reconnaissance Permit or Prospecting

Licence or Mining Lease of an area granted to an

applicant, the operation thereof was not done in proper

perspective for the benefits of the public at large and the

revenue to be earned from the minerals. Therefore,

amendments to the MMDR Act, 1957 were required to

bring in necessary changes, keeping with the changing

scenario in the mining sector as also with the requirement

of complying with various judgments of the apex Court.

14. The MMDR Act, 1957 and the Rules made

thereunder forms a complete code in respect of minerals.

As would be evident from Sections-3(e), 14 and 15 of the

Act, the regulation and control of minor minerals have // 47 //

been vested with the State Government. So far as major

minerals are concerned, Sections 5(1)(b), 5(2)(b), 7(2), 8(3),

10A(2)(b), 10A(2)(c), 17A(2) and 17(A)(2A) of the Act

provide that in case of major minerals under the statutory

scheme, the regulation and control has been exclusively

vested with the Central Government.

15. In State of Assam v. Om Prakash Mehta

(1973) 1 SCC 584, in which the apex Court had the

occasion to deal with the rights of an applicant for grant

of lease/renewal, it was held as follows:-

"The Act and the Rules thus contain the complete code in respect of the grant and renewal of prospecting licences as well as mining leases in lands belonging to Government as well as lands belonging to private persons. The main point to be kept in mind is the fact that the mining lease in question is in a land belonging of Government and it is for a mineral included in the First Schedule to the Act in respect of which no mining lease can be granted without the previous approval of the Central Government. Normally the Government like any other owner of property is entitled to choose with whom it shall deal and what sort of a contract it will enter into, but being a public authority its acts are necessarily regulated by certain rules. The Act and the rules in this case are intended to regulate // 48 //

the development of mines and minerals under the control of the Union and contain the provisions necessary for that purpose. No person can claim any right in any land belonging to Government or in any mines in any land belonging to Government except under and in accordance with the Act and the Rules or any right except those created or conferred by the Act. There is no question of any fundamental right in any person to claim that he should be granted any lease or any prospecting licence or mining lease in any land belonging to the Government. It is necessary to bear this in mind because some sort of vague right was claimed on behalf of the respondents as though there is a right of renewal of the mining lease in question even apart from the rules."

[emphasis supplied]

The said judgment of the apex Court has also been

considered in Sandur Manganese and Iron Ores Ltd. V.

State of Karnataka, (2010) 13 SCC 1 and Monnet Ispat

and Energy Limited v. Union of India, (2012) 11 SCC 1.

16. In Centre for Public Interest Litigation v.

Union of India, (2012) 3 SCC I (commonly known as 2G

judgment), the apex Court at paragraphs 74, 75, 85 and

89 observed the following on the allocation of natural

resources:-

// 49 //

"74. At the outset, we consider it proper to observe that even though there is no universally accepted definition of natural resources, they are generally understood as elements having intrinsic utility to mankind. They may be renewable or non renewable. They are thought of as the individual elements of the natural environment that provide economic and social services to human society and are considered valuable in their relatively unmodified, natural, form. A natural resource's value rests in the amount of the material available and the demand for it. The latter is determined by its usefulness to production. Natural resources belong to the people but the State legally owns them on behalf of its people and from that point of view natural resources are considered as national assets, more so because the State benefits immensely from their value.

75. The State is empowered to distribute natural resources. However, as they constitute public property/national asset, while distributing natural resources, the State is bound to act in consonance with the principles of equality and public trust and ensure that no action is taken which may be detrimental to public interest. Like any other State action, constitutionalism must be reflected at every stage of the distribution of natural resources. In Article 39(b) of the Constitution it has been provided that the ownership and control of the material resources of the community should be so distributed so as to best sub-serve the common good, but no comprehensive legislation has been enacted to generally define natural resources and a framework for their protection. Of course, environment // 50 //

laws enacted by Parliament and State legislatures deal with specific natural resources, i.e., Forest, Air, Water, Costal Zones, etc.

xxx xxx xxx

85. As natural resources are public goods, the doctrine of equality, which emerges from the concepts of justice and fairness, must guide the State in determining the actual mechanism for distribution of natural resources. In this regard, the doctrine of equality has two aspects: first, it regulates the rights and obligations of the State vis-`- vis its people and demands that the people be granted equitable access to natural resources and/or its products and that they are adequately compensated for the transfer of the resource to the private domain; and second, it regulates the rights and obligations of the State vis-`-vis private parties seeking to acquire/use the resource and demands that the procedure adopted for distribution is just, non-arbitrary and transparent and that it does not discriminate between similarly placed private parties.

xxx xxx xxx

89. In conclusion, we hold that the State is the legal owner of the natural resources as a trustee of the people and although it is empowered to distribute the same, the process of distribution must be guided by the constitutional principles including the doctrine of equality and larger public good."

// 51 //

17. The reforms in the mining sector through the

amendment to the MMDR Act, 1957 were required to

bring in necessary changes in keeping with the changing

scenario in the mining sector as also with the requirement

of complying with important judgments of the apex Court.

The amendment to the MMDR Act, 1957 was required to

be carried out to expedite the mining operation across the

country and for the revenue generation for the State

Governments in the interest of public at large.

18. The Mines and Minerals (Development and

Regulation) Act, 1957 is the Central Act which governs the

development and regulation of mines and minerals in

terms of the powers vested in the Central Government.

The provisions of the MMDR Act extend to the whole of

India. State Governments have to regulate the mines and

minerals in terms of the MMDR Act. The said Act has

been amended several times over the years, notably in

1972, 1986, 1994 and 1999. Even though endeavour has

been made by introducing Mines and Minerals // 52 //

(Development and Regulation) Bill, 2011 in the Lok Sabha

on 12.12.2011, extensive consultations preceded the

finalization of the draft of the Bill. The same was

intensively scrutinized by the Standing Committee on

Coal and Steel who gave their Report in May 2013. But

the Bill could not be passed before the dissolution of the

15th Lok Sabha and consequently lapsed. The reasons for

Amendment Act, 2015 is crystal clear that the mining

sector has been subjected to numerous litigations in the

past few years. Important judgements related to the

mining sector have been pronounced by the Supreme

Court, besides judgments on the issue of allocation of

natural resources which have direct relevance to the grant

of mineral concessions.

19. Therefore, the statement of objects and reasons

for Amendment Act, 2015 reads as follows:-

          "1.       xxx        xxx       xxx
          2.        xxx        xxx       xxx

3. The mining sector has been subjected to numerous litigations in the past few // 53 //

years. Important judgments related to the mining sector have been pronounced by the Supreme Court, besides judgments on the issue of allocation of natural resources which have direct relevance to the grant of mineral concessions.

4. The present legal framework of MMD Act, 1957, does not permit the auctioning of mineral concessions. Auctioning of mineral concessions would improve transparency in allocation. Government would also get an increased share of the value of mineral resources. Some provisions of the law relating to renewals of mineral concessions have also been found to be wanting in enabling quick decisions. Consequently , there has been a slowdown in the grant of new concessions and the renewal of existing ones. As a result, the mining sector started registering a decline in production affecting the manufacturing sector which largely depends on the raw material provided by mining sector. The Government has therefore felt it necessary to address the immediate requirements of the mining sector and also to remedy the basic structural defects that underlie the current impasse.

5. In view of the urgent need to address these problems, the Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015 was promulgated on 12th January,2015 The Present Bill is to replace this Ordinance. This bill is designed to put in place mechanism for:

(i) Eliminating discretion;

// 54 //

(ii) Improving transparency in the allocation of mineral resources;

(iii) Simplifying procedures;

(iv) Eliminating delay in administration, so as to enable expeditious and optimum development of the mineral resources of the country;

(v) Obtaining for the government an enhanced share of the value of the mineral resources of the country; and

(vi) Attracting private investment and the latest technology;

6. The salient features of MMDR Amendment Bill, 2015 are as follows:

(i) Removal of discretion; auction to be sole method of allotment The amendment seeks to bring in utmost transparency by introducing auction mechanism for the grant of mineral concessions. The tenure of mineral leases has been increased from the existing 30 years to 50 years. There is no provision for renewal of leases.

(ii) Impetus to the mining sector: The mining industry has been aggrieved due to the second and subsequent renewals remaining pending. In fact, this has led to closure of a large number of mines. The Bill addresses this issue also. The Bill provides that mining leases would be deemed to be extended from the date of their last renewal to 31st March, 2030 (in the case of captive mines) and till 31st March, 2020 (for the merchant miners) or till the completion of the renewal already granted, if any, or a period of fifty // 55 //

years from the date of grant of such leave, whichever is later.

(iii) Safeguarding interest of affected persons: There is provision to establish District Mineral Foundation in the districts affected by mining related activities.

(iv) Encouraging exploration and investment: The Bill proposes to set up a National Mineral Exploration Trust created out of contributions from the mining lease holders, in order to have a dedicated fund for encouraging exploration in the country. Transfer of mineral concessions granted through auction will be permitted in order to encourage private investors.

(v) Simplification of procedures and removal of delay: The amendment removes the need for "previous approval" from the Central Government for grant of mineral concessions in case of important minerals like iron ore, bauxite, manganese etc. thereby making the process quicker and simpler. Similarly, the State Governments will devise a system for filling of a mining plan obviating the need for prior approval of the Mining Plans by the Central Government The Central Government will have revision powers in case State Governments fail to decide issues within the prescribed time.

(vi) Stronger provisions for checking illegal mining: In order to address the serious problem of illegal mining, the penal provisions have been made further stringent by prescribing higher penalties up to 5 laid) rupees per hectare and imprisonment up to 5 years. State Governments will now be able to set up Special Courts for trial of offences under the Act."

// 56 //

20. The objects and reasons given for introducing a

bill in the legislature can be referred to only as expressing

the motives which were present to the particular members

of the legislature. Experience has abundantly shown that

in the course of legislations, the objects and reasons so

stated are altogether lost sight of or abandoned, different

arguments are to be:-

"The objects and reason given for introducing a Bill into a legislature can be referred to only as expressing the motives which were present to the particular members of the legislature .Experience has abundantly shown that in the course of legislation the objects and reasons so stated are altogether lost sight of or a abandoned, different arguments are put forward to justify legislative action and the law ultimately passed bears only a slight resemblance to the Bill on which it professes to be based. The motive or intention or the movers of the Bill is not necessarily a true guide to the mind of the legislature as represented by the majority who passed the Act. Nor is it possible to say definitely that the original object has been retained unless the entire proceedings of the legislature are examined. Although it may not be permissible to take the statements of objects and reasons into consideration for construing the provision s of an Act the facts contained in such a statement can // 57 //

certainly be looked at for the purpose of seeing any alleged infringement of Art 14 of the Constitution."

21. As the method of auction provides for

transparent mechanism in the allocation of mineral

resources and a need was felt to revisit the provisions of

the existing MMDR Act, 1957 for adoption of auction as a

method of grant of mineral concessions. Accordingly, the

MMDR Act was amended in 2015 (w.e.f. 12.01.2015)

mandating that mineral concessions for major minerals

shall be granted through auction by a method of

competitive bidding. However, an exception to this was

created under Section 10A, relevant part of which is

reproduced below:-

"Section - 10A. Rights of existing concession holders and applicants.--

(2) Without prejudice to sub-section (1), the following shall remain eligible on and from the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015:--

a. xxx xxx xxx b. where before the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 a reconnaissance permit or prospecting licence has been granted in respect of any land for cur)) mineral, the permit holder or the // 58 //

licensee shall have a right for obtaining a prospecting licence followed by a mining lease, or a mining lease, as the case may be, in respect of that mineral in that land, if the State Government is satisfied that the permit holder or the licensee, as the case may be,--

(1) has undertaken reconnaissance operations or prospecting operations, as the case may be, to establish the existence of mineral contents in such land in accordance with such parameters as may be prescribed by the Central Government;

(ii) has not committed any breach of the terms and conditions of the reconnaissance permit or the prospecting licence;

(iii) has not become ineligible under the provisions of this Act; and

(iv) has not failed to apply for grant of prospecting licence or mining lease, as the case mar be, within a period of three months after the expiry of reconnaissance permit or prospecting licence, as the case may be, or within such further period not exceeding six months as may be extended by the State Government:

c. xxx xxx xxx Provided that in respect of an• mineral specified in the First Schedule, no prospecting licence or mining lease shall be granted under clause (b) of this subsection except with the previous approval of the Central Government."

22. Clause (b) of Section 10A(2) provided that a

reconnaissance permit (RP) holder or prospecting licence

(PL) holder who was granted RP or PL before 2015 // 59 //

amendment (12.01.2015), had a right to obtain a PL

followed by a mining lease (ML ), or a ML, as the case may

be, if the State Government is satisfied that such RP or PL

holder meets the conditions mentioned in sub-clauses (i)

to (iv) of Section 10A(2)(b). Further, the proviso to section

10A(2) provided another condition that previous approval

of the Central Government for grant of PL and ML was

mandatory in respect of any mineral specified in the First

Schedule of the Act.

23. The MMDR Act, 1957 was comprehensively

amended in 2015 to bring several reforms in the mineral

sector, notably, mandating auction of mineral concessions

to improve transparency, establishing District Mineral

Foundation and National Mineral Exploration Trust and

stringent penalty for illegal mining, The Act was further

amended in the years 2016 and 2020 to allow transfer of

leases for non-auctioned captive mines and to deal with

the emergent issue of expiry of leases on 31st March 2020.

// 60 //

24. Thereby, the Mines and Minerals (Development

and Regulation) Amendment Bill, 2021, was introduced,

which provides as follows:-

"(i) to remove the distinction between captive and merchant mines by providing for auction of mines in future without restriction of captive use of minerals and allowing existing captive mines including captive coal mines to sell up to fifty per cent. of the minerals produced after meeting the requirement of linked end use plants to ensure optimal mining of mineral resources and specify the additional amount to be charged on such sale. The sale of minerals by captive plants would facilitate increase in production and supply of minerals, ensure economies of scale in mineral production, stabilize prices of ore in the market and bring additional revenue to the States;

(ii) to provide for payment of additional amount to the State Government on extension and grant of mining lease of Government companies to create level playing field between the auctioned mines and the mines of Government companies;

(iii) to provide that all the valid rights, approvals, clearances, licences and the like granted to a lessee in respect of a mine shall continue to be valid even after expiry or termination of lease and such clearances shall be transferred and vested to the successful bidder of the mining lease. This will ensure continuity in mining operations even with change of lessee, conservation of mineral and avoid repetitive and redundant process of obtaining clearances again for the same mine;

// 61 //

(iv) to grant short term mining lease to Government companies in situations where the auction of mines pursuant to sub-section (4) of section 8A has failed;

(v) to empower the Central Government to issue directions regarding composition and utilisation of Fund by the District Mineral Foundation;

(vi) to close the pending cases of non-auctioned concession holders which have not resulted in grant of mining leases despite passage of a considerable time of more than five years. The existence of these cases is anachronistic and antagonistic to the auction regime. The closure of pending cases would facilitate the Government to put to auction a large number of mineral blocks in the interest of nation resulting in early operationalisation of such blocks and additional revenue to the State Governments.

(vii) to remove the restrictions on transfer of mineral concessions for non-auctioned mines to attract fresh investment and new technology in the sector;

(viii) to empower the Central Government to notify the area and conduct auction in cases where the State Governments face difficulty in notifying the areas and conducting auction or fails to notify the area or conduct auction in order to ensure auction of more number of mineral blocks on regular basis for continuous supply of minerals in the country;

(ix) to fix a time-frame for grant of leases for the areas reserved for Government companies for expediting grant of leases and production by the Government companies; and // 62 //

(x) to amend section 21 of the Act so as to clarify the expression "without any lawful authority" in order to limit its scope to the violations of the said Act and the rules made thereunder. The said amendment will bring clarity and certainty to the mining sector. 5. The Bill seeks to achieve the above objectives."

Sub-clause (vi) clearly stipulates to close the pending

cases of non-auctioned concession holders which have

not resulted in grant of mining leases despite passage of a

considerable time of more than five years. The existence of

these cases is anachronistic and antagonistic to the

auction regime. The closure of pending cases would

facilitate the Government to put to auction a large

number of mineral blocks in the interest of nation

resulting in early operationalisation of such blocks and

additional revenue to the State Governments.

25. Taking into consideration the object and

reasons of Amendment Act, 2015, the procedure for

obtaining prospecting licence or mining lease in respect of

land in which the minerals vest in the Government was // 63 //

indicated in Section 10, 10A, 10-B, which are quoted

herein below:-

"10. Application for prospecting licences or mining leases.―(1) An application for 1 [a reconnaissance permit, prospecting licence or mining lease] in respect of any land in which the minerals vest in the Government shall be made to the State Government concerned in the prescribed form and shall be accompanied by the prescribed fee.

(2) Where an application is received under sub-section (1), there shall be sent to the applicant an acknowledgment of its receipt within the prescribed time and in the prescribed form.

(3) On receipt of an application under this section, the State Government may, having regard to the provisions of this Act and any rules made thereunder, grant or refuse to grant the permit, licence or lease].

10A. Rights of existing concession holders and applicants.―(1) All applications received prior to the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, shall become ineligible.

(2) Without prejudice to sub-section (1), the following shall remain eligible on and from the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015:―

(a) applications received under section 11A of this Act;

(b) where before the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 a reconnaissance permit or prospecting licence has been granted in respect of any land for // 64 //

any mineral, the permit holder or the licensee shall have a right for obtaining a prospecting licence followed by a mining lease, or a mining lease, as the case may be, in respect of that mineral in that land, if the State Government is satisfied that the permit holder or the licensee, as the case may be,―

(i) has undertaken reconnaissance operations or prospecting operations, as the case may be, to establish the existence of mineral contents in such land in accordance with such parameters as may be prescribed by the Central Government;

(ii) has not committed any breach of the terms and conditions of the reconnaissance permit or the prospecting licence;

(iii) has not become ineligible under the provisions of this Act; and

(iv) has not failed to apply for grant of prospecting licence or mining lease, as the case may be, within a period of three months after the expiry of reconnaissance permit or prospecting licence, as the case may be, or within such further period not exceeding six months as may be extended by the State Government;

(c) where the Central Government has communicated previous approval as required under sub-section (1) of section 5 for grant of a mining lease, or if a letter of intent (by whatever name called) has been issued by the State Government to grant a mining lease, before the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, the mining lease shall be granted subject to fulfilment of the conditions of the previous approval or of the letter of intent within a period of two years from the date of commencement of the said Act:

// 65 //

Provided that in respect of any mineral specified in the First Schedule, no prospecting licence or mining lease shall be granted under clause (b) of this subsection except with the previous approval of the Central Government.

10-B. Grant of mining lease in respect of notified minerals through auction.―(1) The provisions of this section shall not be applicable to cases covered by section 10A or section 17A or to minerals specified in Part A or Part B of the First Schedule or to land in respect of which the minerals do not vest in the Government.

(2) Where there is inadequate evidence to show the existence of mineral contents of any notified mineral in respect of any area, a State Government may, after obtaining the previous approval of the Central Government, grant a prospecting licence-cum-mining lease for the said notified mineral in such area in accordance with the procedure laid down in section 11.

(3) In areas where the existence of mineral contents of any notified mineral is established in the manner prescribed by the Central Government, the State Government shall notify such areas for grant of mining leases for such notified mineral, the terms and conditions subject to which such mining leases shall be granted, and any other relevant conditions, in such manner as may be prescribed by the Central Government.

(4) For the purpose of granting a mining lease in respect of any notified mineral in such notified area, the State Government shall select, through auction by a method of competitive bidding, including e-auction, an applicant who fulfils the eligibility conditions as specified in this Act.

// 66 //

(5) The Central Government shall prescribe the terms and conditions, and procedure, subject to which the auction shall be conducted, including the bidding parameters for the selection, which may include a share in the production of the mineral, or any payment linked to the royalty payable, or any other relevant parameter, or any combination or modification of them.

(6) Without prejudice to the generality of sub-section (5), the Central Government shall, if it is of the opinion that it is necessary and expedient to do so, prescribe terms and conditions, procedure and bidding parameters in respect of categories of minerals, size and area of mineral deposits and a State or States, subject to which the auction shall be conducted: Provided that the terms and conditions may include the reservation of any particular mine or mines for a particular end-use and subject to such condition which allow only such eligible end users to participate in the auction.

(7) The State Government shall grant a mining lease to an applicant selected in accordance with the procedure laid down in this section in respect of such notified mineral in any notified area."

25.1 In view of the aforementioned provisions, it is

apparent that Section 10 deals with application for

prospecting licenses or mining leases, which states about

submission of applications in the prescribed form

accompanied by the prescribed fee. On receipt such

application, the applicant will be sent with an // 67 //

acknowledgement of its receipt within the prescribed time

and the prescribed form and on receipt of an application

under this section, the State Government may, having

regard to the provisions of this Act and the Rules made

thereunder, grant or refuse to grant the permit, licence or

lease. By inserting Section 10A, all applications received

prior to the date of commencement of the Mines and

Minerals (Development and Regulation) Amendment Act,

2015, i.e. 12.01.2015, shall become ineligible.

25.2. Section 10A(2) carves out an exception to

Section 10A(1) holding that without prejudice to sub-

section (1), the following, i.e. clause (a) to clause (c) shall

remain eligible on and from the date of commencement of

the Amendment Act, 2015. Section 10A(2)(a) prescribes

the applications received under Section 11-A of this Act,

which deals with granting reconnaissance permit,

prospecting licence or mining lease in respect of an area

containing coal or lignite, to which the present case is

concerned.

// 68 //

25.3 Coming to Section 10A(2)(b), before

commencement of the Amendment Act 2015, a

reconnaissance permit or prospecting licence has been

granted in respect of any land for any mineral, the permit

holder or the licensee shall have a right for obtaining a

prospecting licence followed by a mining lease, or a

mining lease, as the case may be, in respect of that

mineral in that land, if the State Government is satisfied

that the permit holder or the licensee, as the case may be,

satisfies the requirement as prescribed under sub-clause

(i) to sub-clause (iv) of Section 10A(2)(b).

25.4 Section 10A(2)(c) specifically prescribes that the

mining lease shall be granted subject to fulfilment of the

conditions of the previous approval or of the letter of

intent within a period of two years from the date of

commencement of the said Act. In the proviso, it has been

mentioned that no prospecting licence or mining lease

shall be granted under clause (b) of this sub-section

except with the previous approval of the Central // 69 //

Government. Therefore, the time limit has been prescribed

for two years from the date of commencement of the

Amendment Act, 2015 and that too with prior approval of

the Central Government.

25.5 In view of the aforementioned provisions, the

apex Court in Bhusan Power (supra) reiterated the

intention of Amendment Act 2015 and held that the State

must ensure that it maximizes revenue and "receives

adequate compensation for the allotted resource". Similar

view has also been taken in Goa Foundation v Sesa

Sterlite Ltd., (2018) 4 SCC 218.

26. On close scrutiny of the aforementioned

provisions, it has to be held that under the new regime

Section 10A made all pending applications in respect of

major minerals except coal and lignite ineligible. Thus,

pending applications for Prospecting Licence (PL), Mining

Lease (ML) or Reconnaissance Permit (RP) lapsed and the

new auction regime set in. However, Section 10A(2)(b) &

10A(2)(c) of the Amendment Act, 2015 temporarily saved // 70 //

some pending applications from before the 2015

Amendment. These exceptions were applicable to the

cases where an applicant for mining lease had prospected

the area, or in respect of whom a recommendation was

made by the State Government and grant of approval by

the Central Government was pending.

27. It is further clarified that for the applications

saved under Section I0-A(2)(b) & l0-A(2)(c) of the Act,

Central Government's approval was necessary before the

grant of Mining Lease. For pending applications under

Section 10A(2)(b) of the Act, proviso to Section 10A(2)(c) of

the Act mandated the prior approval of the Central

Government before a Mining Lease was granted. Similarly,

for pending applications under Section 10A(2)(c) of the

Act, the Mining Lease shall be granted within two years of

fulfillment of the conditions mentioned in the Letter of

Intent ("LOI" for short), only where prior Central

Government's approval has been communicated.

Therefore, in both the cases, i.e. Section 10A(2)(b) and // 71 //

Section 10A(2)(c), previous approval of the Central

Government is necessary in view of the proviso to Section

10A(2)(c).

28. Further, Section 10A(2)(b) provides that a

Reconnaissance Permit (RP) holder or Prospecting Licence

(PL) holder who was granted RP or PL before 2015

Amendment, i.e. 12.01.2015, had a right to obtain a PL

followed by a Mining Lease (ML), or a Mining Lease, as the

case may be, if the State Government is satisfied that

such RP or PL holder meets the conditions mentioned in

sub-clauses (i) to (iv) of Section 10A(2)(b). The Proviso to

Section 10A(2) provided another condition that previous

approval of the Central Government for grant of PL and

ML was mandatory in respect of any mineral specified in

the First Schedule of the Act.

29. The Amendment Act, 2015 has undergone

further amendment by the Amendment Act, 2021 with

effect from 28.03.2021 by insertion of proviso to Section // 72 //

10A(2) to Section 10A(2)(b). The amended Section

10A(2)(b) incorporating the proviso reads as follows:

"10B. Grant of mining lease in respect of notified minerals through auction. - [(1) The provisions of this section shall not apply to the, -

(a) cases falling under section 17A;

(b) minerals specified in Part A of the First Schedule;

(c) minerals specified in Part B of the First Schedule where the grade of atomic mineral is equal to or greater than such threshold value as may be notified by the Central Government from time to time; or

(d) land in respect of which the minerals do not vest in the Government.

(2) Where there is inadequate evidence to show the existence of mineral contents of any notified mineral in respect of any area, a State Government may, after obtaining the previous approval of the Central Government, grant a [composite licence] for the said notified mineral in such area in accordance with the procedure laid down in section 11.

(3) In areas where the existence of mineral contents of any notified mineral is established in the manner prescribed by the Central Government, the State Government shall notify such areas for grant of mining leases for such notified mineral, the terms and conditions subject to which such mining leases shall be granted, and any other relevant conditions, in such manner as may be prescribed by the Central Government.

                    // 73 //




       Provided    that   where      the   State

Government has not notified such area for grant of mining lease after establishment of existence of mineral contents of any mineral (whether notified mineral or otherwise), the Central Government may require the State Government to notify such area within a period to be fixed in consultation with the State Government and in cases where the notification is not issued within such period, the Central Government may notify such area for grant of mining lease after the expiry of the period so specified.]

(4) For the purpose of granting a mining lease in respect of any notified mineral in such notified area, the State Government shall select, through auction by a method of competitive bidding, including e-auction, an applicant who fulfils the eligibility conditions as specified in this Act.

[Provided that -

(a) where the State Government has not successfully completed auction for the purpose of granting a mining lease in respect of any mineral (whether notified mineral or otherwise) in such notified area; or

(b) upon completion of such auction, the mining lease or letter of intent for grant of mining lease has been terminated or lapsed for any reason whatsoever, the Central Gov ernment may require the State Government to conduct and complete the auction or re-auction process, as the case may be, within a period to be fixed in consultation with the State Government and in cases where such auction or re-auction process is not completed within such period, the Central Government may conduct auction // 74 //

for grant of mining lease for such area after the expiry of the period so specified:

Provided further that upon successful completion of the auction, the Central Government shall intimate the details of the preferred bidder in the auction to the State Government and the State Government shall grant mining lease for such area to such preferred bidder in such manner as may be prescribed by the Central Government.]

(5) The Central Government shall prescribe the terms and conditions, and procedure, subject to which the auction shall be conducted, including the bidding parameters for the selection, which may include a share in the production of the mineral, or any payment linked to the royalty payable, or any other relevant parameter, or any combination or modification of them.

(6) Without prejudice to the generality of sub- section (5), the Central Government shall, if it is of the opinion that it is necessary and expedient to do so, prescribe terms and conditions, procedure and bidding parameters in respect of categories of minerals, size and area of mineral deposits and a State or States, subject to which the auction shall be conducted:

Provided that no mine shall be reserved for captive purpose in the auction.

(7) The State Government shall grant a mining lease to an applicant selected in accordance with the procedure laid down in this section in respect of such notified mineral in any notified area."

// 75 //

The above mentioned amendment has been made with a

view to further reforms in the mining sector to increase

mineral production and creation of employment. To

achieve this, more mineral blocks have to be brought into

auction regime and any method of grant of mineral

concession other than through a competitive, transparent

and non-discriminatory method had to be brought to an

end. Therefore, to resolve the impasse created by the

exception provided in Section 10A(2)(b), the MMDR Act,

1957 was further amended in the year 2021 to remove

any exception to the grant of mineral concession through

auction.

30. In order to appreciate the intention of

legislature, it is apposite to quote and reproduce the

proposal made in the note for public consultation issued

by the Ministry of Mines during the Pre-legislative

Consultation Process (PLCP) on 24.08.2020 before the

introduction of the MMDR Amendment Bill, 2021. The

relevant portion of the note for public consultation // 76 //

regarding proposed reform in Section 10A(2)(b) of the

MMDR Act is reproduced below:-

"2. Resolving legacy issues to move towards an auction only regime for allocation of mineral resources: At present large number of potential leases are blocked in legacy cases. These cases can neither be granted because the time period to grant them is already over, nor can they be brought to auction because of legal impasse. The case coming under section 10A(2)(c) of the Act which stood extinguished on 12th Jan 2017 as per law, but are still litigated or pursued unnecessarily at various levels, need to be brought to a closure to end the policy stalemate. The cases coming under section 10A(2)(b) of the Act are still disputed in the absence of a specific sun set clause in the Act, and they have not reached closure till date. Section 7 of MMDR Act provides for maximum period of five years for completing the prospecting operations. These amendments came in effect on 12th January 2015 and the maximum period of five year for prospecting has also lapsed on 12th January 2020. In both the cases, large number of potential mineral bearing areas are block ed and are not contributing towards mineral production and employment generation. Since continuing with the existing provisions of 10 A(2)(b) and 10A(2)(c), will also cause huge financial loss to the State exchequer, the Amendment Bill seeks to amend the existing provision of Section 1 OA (2) (b) & 1 OA (2) (c) and reallocation of such mineral blocks through transparent method of // 77 //

auction. It is also proposed for appointment of an authority to decide the value of expenditure incurred for exploration in such legacy cases whose rights will be terminated and to reimburse the exploration expenditure from funds under NMET.

Proposals as per the discussion above are listed below:-

(a)Amendment in section 10 A (2)(b)

(b)Amendment in section 10 A (2) (c) ........."

31. Accordingly, the statement of objects and

reasons of MMDR Amendment Bill, 2021 have been

mentioned in extenso while introducing the Bill to achieve

the objectives mentioned therein. As provided in the

statement of objects and reasons of the Bill, the MMDR

Act was amended in 2021 with an objective to fully

harness the potential of the mineral sector, increase

employment and investment in the mining sector

including coal, increase the revenue to the States,

increase the production and time bound

operationalisation of mines, maintain continuity in mining

operations after change of lessee, increase the pace of

exploration and auction of mineral resources and resolve // 78 //

long pending issues that have slowed the growth of the

sector. It is apt to mention that many of the applications

covered under Section 10A(2)(b) of the Act, which were

pending for decision, in the absence of a sun-set clause in

the Pre Amended Act, became an anachronism in the

auction-based regime. Therefore, in order to bring these

pending cases to a closure and to enable auction of these

mineral blocks in national interest, it was proposed to

amend Section 10A(2)(b) of the Act. Accordingly, the

Union Cabinet, on 13.01.2021, approved introduction of

the MMDR Amendment Bill, 2021 in the Parliament

which, inter alia, provides for lapsing of the rights of

concession holders covered under Section 10A(2)(b). It

was also provided in the Bill that the holder of a

reconnaissance permit or prospecting licence (PL), whose

right has lapsed, shall be reimbursed for expenditure

towards reconnaissance or prospecting operations in such

manner as may be prescribed by the Central Government.

// 79 //

Thus, the objects of the amendment of Section 10A(2)(b)

can be summarized as follows:-

(i) eliminating discretion;

(ii) improving transparency in the allocation of mineral resources;

(iii) simplifying procedures;

(iv) eliminating delay on administration, to enable expeditious and optimum development of the mineral resources of the country;

(v) obtaining for the government an enhanced share of the value of the mineral resources; and

(vi) attracting private investment and the latest technology.

32. The major concerns resulted in bringing the

amendment to Section 10A(2)(b) in the year 2021 are as

follows:-

(a) No time limit: In some cases, the State Government has forwarded application of PL/ML for prior approval under saving clause i.e. Section 10A(2)(b) of the amended MMDR Act, 2015 after gap of 10 to 15 years from the date of PL/ML application.

(b) Revenue loss: The leases granted though under saving clause will contribute towards statutory payments only i.e. Royalty, District Mineral Foundation (DMF) & National Minerals Exploration Trust (NMET), whereas, leases/blocks granted // 80 //

through auction gives additional revenue through bid/auction premiums.

Furthermore, the Revenue generated through auction is much higher than leases granted through non-auction route i.e. saving clause.

(c) Parallel Regime: If leases are granted under the saving clause, then a parallel regime to auction will be created.

(d) Blocked Area: Huge area is blocked under RP/PL at present. This can be utilized by putting the blocks on auction which will contribute to production and bring revenue to the respective State Governments.

 (e)       General        Deficiencies      in
reconnaissance/prospecting          operations

conducted by the RP/PL holders: It is respectfully submitted that the cases sent by the State Governments for prior approval shows many irregularities which are pointed out by Indian Bureau of Mines during scrutiny at the Central Government level. The common irregularities/deficiencies in the exploration activities found in most of the cases are:

(i) G1 & G2 level exploration has not been conducted by the applicants under Section 10A(2)(b) to establish existence of mineral contents.

(ii) Reconnaissance/prospecting operations have not been done in accordance with the approved scheme of reconnaissance/prospecting.

(iii) The work proposed to be carried out in during reconnaissance/ prospecting operations has not actually been executed.

// 81 //

33. The statement of objects and reasons of the

Amendment Act, 2021 makes it amply clear that the most

important change brought about by the amendment was

to close the pending cases of non-auctioned concessions

holders which have not resulted in grant of mining leases

despite passage of a considerable time of more than five

years (i.e. after 2015 Amendment till 2021). The existence

of these cases is anachronistic and antagonistic to the

auction regime. The closure of the pending cases would

facilitate the Government to put to auction a large

number of mineral blocks in the interest of public at

large/nation resulting in early operationalisation of such

blocks and adding additional revenue to the State

Governments. Therefore, the Amendment Act, 2021

incorporates two major amendments in Section 10A(2).

After Clause 10A(2)(c), a clause (d) was inserted which

reads as follows:-

"(d) in cases where right to obtain licence or lease has lapsed under clauses (b) and (c), such areas shall be put up for auction as per the provisions of this Act".

// 82 //

34. Applying the aforementioned provisions of the

Amendment Act, 2021 to the present case, it has to be

held that when the right of the petitioner to obtain

prospecting licence (PL) or mining lease (ML), as the case

may be, has lapsed as per the MMDR Amendment Act

2021, neither the Central Government nor the Statement

Government can process the case of petitioners herein for

any further grant of PL or ML. As such, the RP or PL

granted to the petitioner herein in the earlier regime has

become inconsequential for grant of ML to the petitioner.

But the right of the petitioner has been protected by the

second proviso to Section 10A(2)(b) of the Amendment Act,

2021 to the extent that the holder of reconnaissance or

prospecting licence, whose rights have lapsed, shall be

reimbursed for the expenditure incurred towards

reconnaissance or prospecting operations in such

manner as may be prescribed by the Central

Government. Accordingly, the Central Government has

notified the Reimbursement of Exploration Expenditure // 83 //

Rules, 2022 on 03.06.2022 providing quantum and the

procedure for reimbursement.

34.1 It has also to be noticed that the applicants

over the period of years have been sitting idle without

taking the requisite steps in accordance with the due

procedures as prescribed under the Act or the Rules. The

applicants, in whose favour RP or PL have been granted

prior to 2015, have been given sufficient time to get the PL

or mining lease. But the applicants challenging the

constitutional validity of the Amendment Act, 2021 have

failed to get all the requisite clearances and, as such, said

p r o te c t i o n a s p r o v i d e d u n d e r t h e p ro v i s i o n s o f

1 0 A ( 2 ) ( b ) h a s lapsed after amendment to the Act. It

is observed that the petitioner has not even challenged

the provisions contained in Section 10A(2), by coming

into force of which the applications received prior to

commencement of the Amendment Act, 2015 have to be

declared ineligible. More so, the petitioner has taken

advantage of Section 10A(2)(b) of the Amendment Act, // 84 //

2015, since its applications were recommended by the

State Government to the Central Government. For in

action on the part of the Central Government, the

petitioner has not moved any forum ventilating its

grievances, rather it was consuming its time to get

approval of the Central Government on the basis of the

recommendation made by the State Government. By this

process more than 5 years have elapsed.

35. It is apt to indicate here that in view of

provisions contained in Section 10A(2)(c) of the

Amendment Act, 2015, the mining lease shall be granted

to those who fulfil all the conditions of previous approval

of LOI within two years of commencement of the said Act.

Even if two years already elapsed thereafter, the

provisions contained in the amendment Act, 2015 were

not challenged by the petitioner at any point of time.

Because of incorporation of the proviso to Section

10A(2)(b), the present application has been filed on

19.02.2021 after commencement of the Amendment Act, // 85 //

2021. Therefore, the petitioner over the period of three

years was sitting idle without taking requisite steps in

accordance with the procedure as prescribed under the

Act or the Rules. The applicants in whose favour RP or PL

had been granted prior to 2015 have been given sufficient

time to get the PL or Mining Lease.

36. Apart from the above, it has to be observed that

mere making of the application for grant of mineral

concessions by the petitioner, does not create any right,

much less a vested right, and the petitioner cannot claim

that it had pre-existing right to such licence or lease. Its

right is only to make an application, which was given by

the policy then existing, and if the policy is changed, may

be by way of an amendment to the Act, one cannot be

stated to have any right on the basis of the earlier

policy, which now does not hold good or find any place

in the Statute. Filing of an application for preferential

allocation under Section 11 or under Section 5(1) of the

MMDR Act, 1957 created a vested right to obtain a // 86 //

prospecting licence or mining lease on the basis of the

provision, which has been substituted by the

Amendment Act. It has to be held that it is the date of

mining lease that is relevant and not the date of the

application. Admittedly, the petitioner was not

granted mining lease till the Amendment Act, 2021

came into force. Merely because the applications were

kept pending for long period or were not considered by

the concerned authorities would not create any right or

an applicant cannot be stated to have a vested right for

seeking mining lease on the basis of the provision which

has been substituted by the Amendment Act. The

Amendment Act, 2021 also made provisions to ensure

continuity of mining operations, even with the

change of the lessee to avoid the repetitive process of

obtaining clearances again for the same mine. Rather

the Amendment Acts, 2015 and 2021 facilitate the early

commencement of the mining operations.

// 87 //

37. Where an applicant had sought direction

to the State Government to dispose of all pending

applications for Mineral Concessions filed by the

applicant in accordance with its vested right to

preferential consideration, the apex Court in Geomin

Minerals and Marketing Private Limited v. State

of Orissa (2013) 7 SCC 571 observed as follows:-

"It is well settled that no applicant has a statutory or fundamental right to obtain prospecting licence or a mining lease. In this connection one may refer to this Court's decision in Monnet Ispat [Monnet Ispat and Energy Ltd. v. Union of India, (2012) 11 SCC 1.

Therefore, the High Court before interfering with the recommendation, ought to have looked into the nature of recommendation".

38. In view of the law laid down by the apex Court, as mentioned above, the following conclusions can be drawn:-

(a) non-compliances of the mandatory conditions by the parties for obtaining PL, ML or as the case may be does not create any right.

// 88 //

(b) No party has a statutory right or fundamental right to obtain PL or ML, as the case may be.

39. In Sanjeev Coke Manufacturing Company

V. Bharat Cooking Coal Ltd., (1983) 1 SCC 147, a

Constitutional Bench of the Supreme Court, testing the

validity of Coking Coal Mines (Nationalisation) Act,

1972, a law directing the policy of the State towards

securing "that the ownership and control of the

material resources of the community are so distributed

as best to subserve the common good", held as follows:

"20. The learned counsel submitted that Article 39(b) would be attracted if the industry as a whole was nationalised and not i f o n l y a p a r t o f t h e i n d u s t r y w a s nationalised. According to him, all the coke oven plants wherever they existed had to be nationalised and no privately owned coke oven plants could be allowed to be set up in the future, if Article 39(b) was to be applied. We are unable to see any force in this submission. The distribution between public, private and joint sectors and the e x t e n t a n d r a n g e o f a n y s c h e m e o f nationalisation are essentially matters of s t a t e p o l i c y w h i c h a r e i n h e r e n t l y inappropriate subjects for judicial review. Scales of // 89 //

justice are just not designed to weigh competing social and economic factors. In such matters legislative wisdom must prevail and judicial review must abstain".

40. In view of the law laid down by the apex

Court, it has to be held that natural resources are

public property and any change introduced by the

Parliament by way of amendment for the benefit of

public at large shall prevail over personal interest.

Therefore, the argument advanced by the learned

Senior Counsel appearing for the petitioner that

pendency of the application for grant of mining lease

pursuant to recommendation made by the State

Government, a right has been accrued in faovur of the

petitioner for consideration that may be called as

contingent right or may it be called as inchoate right,

but no right is accrued in favour of the petitioner for

obtaining mining lease.

// 90 //

41. In Howrah Municipal Corporation V.

Ganges Rope Company Limited, (2004) 1 SCC 663,

the apex Court held as follows:-

"37. The argument advanced on the basis of so-called creation of vested right for obtaining sanction on the basis of the Building Rules (unamended) as they were on the date of submission of the application and the order of the High Court fixing a p e r i o d f o r d e c i s i o n o f t h e s a m e , i s misconceived. The word "vest" is normally used where an immediate fixed right in present or future enjoyment in respect of a property is created. With the long usage the said word "vest" has also acquired a meaning as "an absolute or indefeasible right" [see K.J. Aiyer's Judicial Dictionary (A Complete Law Lexicon), 13th Edn.) T he c ont ext in w hic h t he r esp o nd e nt Company claims a vested right for sanction and which has been accepted by the Division Bench of the High Court, is not a right in relation to "ownership or possession of any property" for which the expression "vest" is generally used What we can understand from the claim of a "vested right" set up by the respondent Company is that on the basis of the Building Rules, as applicable to their case on the date of making an application for sanction and the fixed period allotted by the Court for its consideration, it had a "legitimate" or "settled expectation" to obtain the sanction. In our considered opinion, such "settled expectation", if any, did not create any vested right to obtain // 91 //

sanction. True it is, that the respondent Company which can have no control over the manner of processing of application for sanction by the Corporation cannot be blamed for delay but during pendency of its ap p lic at ion f or sanc t ion, if t he St at e Government, in exercise of its rule- making power, amended the Building Rules and imposed restrictions on the heights of buildings on G. T. Road and other wards, such "settled expectation" has been rendered impossible of fulfilment due to change in law. The claim based on the alleged "vested right" or "settled expectation" cannot be set up against statutory provisions which were brought into force by the State Government by amending t h e B u i l d i n g R u l e s a n d n o t b y t h e Corporation against whom such "vested right" or "settled expectation" is being sought to be enforced. The "vested right" of "settled expectation" has been nullified not only by the Corporation but also by the State by amending the Byuilding Rules.

Besides this, such a "settled expectation" or the so called "vested right" cannot be countenanced against public interest and convenience which are sought to be served by amendment of the Building Rules and the resolution of the Corporation issued thereupon".

In view of the law laid down by the apex Court, as

mentioned above, it is evident that the benefit of public

at large shall prevail over the individual interest. The // 92 //

process of public auction ensures that ownership and

control of the material resources of the community are

so distributed as best to subserve the common good

which is in consonance with Clause (b) of Article 39 for

being a part of Directive Principle of State Policy. While

introducing transparent and fair procedure for

distribution of State largesse, interest of few individuals

is bound to be affected for taking care of the larger

public interest. It is further clarified that the method of

grant of mineral concessions has been changed after

Amendment Act, 2015 that it will be through auction,

which was earlier on the basis of first come first serve.

Accordingly, sub-section (1) of Section 10A provided

that all applications received prior to the date of

commencement of the Mines and Minerals

(Development and Regulation) Amendment Act, 2015,

shall become ineligible. Prior to the coming into force of

this MMDR Amendment Act, 2015, the process followed

was not based on transparency, giving equal and fair // 93 //

opportunity for all to apply in case they so wanted to.

In such a context, processing such applications on the

basis of the first come first serve principle would have

given an unfair advantage to some applicants and

would have violated Article 14 of the Constitution.

Accordingly, with the changed method of grant of

mineral concessions through auction, such

applications were declared to have become ineligible.

42. An exception to sub-section (1) of Section 10A

was carved out by sub-section (2) of the said section for

two specific classes of cases. One such exception was

under Section 10A(2)(b) where holder of RP

(Reconnaissance Permit) or PL (Prospecting Licence)

were allowed to progress to the next stage of mineral

concession, viz., a prospecting license or a mining lease

as the case may be subject to the fulfillment of the

conditions as laid down in section 10A(2)(b). It is this

exception which has been lapsed through proviso to the

Section 10A(2)(b) as inserted by MMDR Amendment // 94 //

Act, 2021, which is in conformity with MMDR

Amendment Act 2015 which introduced auction as a

mode of grant of mineral concession in compliance of

the various judgment of the apex Court.

43. Applying the above principle to the present

context, an inevitable conclusion would arrive that the

applications of the petitioners were merely under a

processing stage at the time of coming into effect of the

Amendment Act of 2021, i.e., on 28.03.2021, therefore,

the case of the petitioner was not a pending case.

Thereby, by introduction of the newly inserted proviso

in the MMDR Amendment Act, 2021, the applications

of the petitioners have lapsed.

44. Much argument has been advanced by the

learned Senior Counsel appearing for the petitioner that

because of the pending applications before the Central

Government, a vested right has accrued in favour of the

petitioner. But mere making of the application for grant

of mineral concessions by the petitioners, does not create // 95 //

any right, much less a vested right, and the applicants

cannot claim that they had a pre-existing right to such

licence or lease. Their right is only to make an application,

which was given by the policy then existing, and if the

policy is changed by way of an amendment to the law, one

cannot be stated to have any right on the basis of the

earlier policy, which now does not hold good or find any

place in the Statute.

45. Section 10A(2)(b) inserted in MMDR

Amendment Act, 2015 w.e.f. 12.01.2015 does not create

any vested right automatically, it merely saves the

applicants from ineligibility due to introduction of

auction as the only method of obtaining mineral

concession. Even the right to obtain a mining lease is

subject to co m p l i a nce of th e te rm s a nd

c o n d i ti o n s mentioned in Section 10A(2)(b) has also

lapsed on coming into effect of the MMDR Amendment

Act, 2021. Therefore, the petitioner, whose

application(s) for mining lease stood lapsed, does not // 96 //

have a vested right nor has accrued a right, as there

are many steps in between the stage of communicating

the previous approval by the Central Government and

the execution of the deed for mining lease.

46. In exercise of powers conferred by Section 13

of the Mines and Minerals (Development and

Regulation) Act, 1957, the Central Government framed

the Minerals (Other Than Atomic and Hydro Carbons

Energy Minerals) Concession Rules, 2016. Chapter-II

thereof dealt with rights of existing holders of mineral

concessions. Rule-7 thereof stated rights of a holder of

a prospecting licence to obtain a mining lease. The

entire procedure for grant of mining lease was

prescribed under the aforementioned Rules, 2016.

Rule-8 deals with rights under the provisions of Clause

(c) of Sub-section (2) of Section 10A of the Act. Such

procedure was envisaged keeping in view Sections

10A(2)(b) and 10A(2)(c) of the Amendment Act, 2015 to

save some RP and PL which are pending for // 97 //

consideration for grant of mining lease and the period

was also allowed for consideration of the same. But by

virtue of the Amendment Act, 2021, which has come

into force w.e.f. 28.03.2021, Rules-7 & 8 of the Rules,

2016 have been omitted w.e.f. 02.11.2021. Reason

being, in view of the proviso inserted to Section 10A

(2)(b) where the cases covered under this clause

including the pending cases, the right to obtain a

prospecting lincece followed by a mining lease or a

mining lease, as the case may be, shall lapse on the

date of commencement of the Amendment Act, 2021.

Thereby, there was no requirement to follow the

procedure under pre-amended Rules, 2021, as per

Rule-7 and 8. Rules have been framed to give effect to

the provisions of the Act itself. If the Act has taken

away the right to the effect that for the cases covered

under this clause including the pending cases, the

right to obtain a prospecting lincece followed by a

mining lease or a mining lease, as the case may be, // 98 //

shall lapse on the date of commencement of the

Amendment Act, 2021, then automatically, Rule-7 of

Rule 2016 become redundant and there is no need of

such provision. Thereby, the same was omitted with

effect from 02.11.2021. Thereby, whatever right

claimed by the petitioner has lapsed due to the

Amended Act, 2021.

47. In view of such position, no right survives for

the petitioner as the entire proceeding has been

directed to be lapsed and, therefore, when the right of

the petitioner to obtain ML has lapsed, neither the

Central Government nor the State Government can

process the case of petitioner any further for grant of

ML. Therefore, the RP and PL granted to the petitioner

have become inconsequential for granting ML to the

petitioner.

48. In Commissioner of Municipal

Corporation, Shimla V. Prem Lata, (2007) 11 SCC

40, the apex Court held as follows:

// 99 //

"36. It is now well-settled that where a statute provides for a right, but enforcement thereof is in several stages, unless and until the conditions precedent laid down therein are satisfied, no right can be said to have been vested in the person concerned. The law operating operating in this behalf, in our opinion is no longer res integra."

49. In State of Tamil Nadu V. M/s. Hind Stone,

AIR 1981 SC 711, the apex Court has held as under:-

"It is true that such applications should be dealt with within a reasonable time, it cannot on that account be said that the right to have an application disposed of in a reasonable time clothes an applicant for a lease with a right to have an application disposed of on the basis of rules in force at that time of the making of the application. No one has a vested right to the grant or renewal of a lease and none can claim a vested right to have an application for the grant or renewal of a lease dealt with in a particular way, by applying particular provisions. In the absence of any vested rights in anyone, an application for a lease has necessarily to be dealt with according to the rules in force on the date of the disposal of the application despite the fact that there is a long delay since the making of the application."

In view of the settled position of law, as discussed above,

and as per the Amendment Act, 2021, the right of the

petitioner to obtain ML followed by RP or PL, as the case // 100 //

may be, has lapsed on 28.03.2021, i.e., on the date of

commencement of MMDR (Amendment) Act, 2021.

50. In the above eventuality, a question would

arise if the petitioner invested a huge amount of time,

energy and also money for grant of PL and ultimately

by operation of law if the same is taken away, then in

that case what measure can be taken to substantiate

the same. The answer is obvious and clear in view of

second proviso to Section 10A(2)(b) of the Amendment

Act, 2021, which states as follows:

"holder of a reconnaissance permit or prospecting license whose rights lapsed under the first proviso of 10A (2) (b), shall be reimbursed the expenditure incurred towards reconnaissance or prospecting operations in such manner as may be prescribed by the Central Government".

Therefore, the Act & the Rules provide for adequate

and fair compensation to the parties, whose rights

have lapsed. Accordingly, the Central Government

has notified the Reimbursement of Exploration // 101 //

Expenditure Rules, 2022 on 03.06.2022 providing

quantum and the procedure for reimbursement of the

expenditure incurred by such parties in

reconnaissance or prospecting operations.

51. Much argument was advanced before this

Court to declare the proviso to Section 10A(2)(b) as

ultra vires being inconsistent to Articles14 and 19 of

the Constitution of India. If such contention is

accepted for any reason, then Article 31A of the

Constitution, which was inserted with retrospective

effect by the Constitution (first Amendment) Act,

1954 Section-4, saves certain laws from attack on

grounds of inconsistency with Articles 14 and 19 of

the Constitution of India. Clause (e) of Article 31A

deals with saving of laws made for extinguishment of

any rights accruing by virtue of any lease or licence

for the purpose of searching for or winning any

mineral. Such extinguishment of any right etc. for

the purpose of searching for or winning of mineral by // 102 //

any law cannot be challenged on the grounds of

inconsistence with Articles 14 and 19. Article 31A is

reproduced below:

"31A. (1) Notwithstanding anything contained in article 13, no law providing for--

(a) the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights, or

(b) the taking over the management of nay property by the State for a limited period either in the public interest or in order to secure the proper management of the property, or

(c) the amalgamation of two or more corporation either in the public interest or in order to secure the proper management of any of the corporations, or

(d) the extinguishment or modification of any rights of any rights of managing agents, secretaries and treasurers, managing directors, directors or managers of corporations, or of any voting rights of shareholders thereof, or

(e) the extinguishment or modification of any rights accruing by virtue of any agreement, lease or licence for the purpose of searching for, or winning, any mineral or mineral oil, or the premature termination or cancellation of any such agreement, lease or licence, shall be deemed to be void on the ground that it is inconsistent with, or takes away // 103 //

or abridges any of the rights conferred by article 14 or article 19:

Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent:

Provided further that where any law makes any provision for the acquisition by the State of any estate and where any land comprised therein is held by a person under his personal cultivation, it shall not be lawful for the State to acquire any portion of such land as is within the ceiling limit applicable to him under any law for the time being in force or any building or structure standing thereon or appurtenant thereto, unless the law relating to the acquisition of such land, building or structure, provides for payment of compensation at a rate which shall not be less than the market value thereof. "

52. The Mines and Minerals (Development and

Regulation) Act, 1957 is specified at entry ninety in the

Ninth Schedule to the Constitution and, as such, it is

protected by the provisions of Article 31B of the

Constitution to the effect that none of the provisions of

the MMDR Act, 1957 being specified in the Ninth

Schedule shall be deemed to be void, or ever to have // 104 //

become void, on the ground that its provisions are

inconsistent with, or takes away or abridges any of the

rights conferred by any provisions of Part III of the

Constitution. For better appreciation, Article 31B of the

Constitution is reproduced below:-

"31B. Without prejudice to the generality of the provisions contained in article 31A, none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part, and notwithstanding any judgment, decree or order of any court or Tribunal to the contrary, each of the said Acts and Regulations shall, subject to the power of any competent Legislature to repeal or amend it, continue in force. "

53. Above apart, the Amendment Act, 2021 is also

protected under Article 31C of the Constitution of

India, inasmuch as, it is a law towards securing that

the ownership and control of the material resources of

the community ('minerals' in the present case) are so

distributed to best subserve the common good, as has

been referred to Article 39(b) of the Constitution of // 105 //

India. Sanjeev Coke Manufacturing Company v.

Bharat Coking Coal Limited, 1983 (1) SCC 147 is to

be referred to reach at the conclusion.

54. In view of the fact and law, as discussed

above, it is held that the provisions contained in

Section 10A(2)(b) of the Amendment Act, 2021 cannot

be declared as ultra vires rather it is intra vires of

Constitution of India. As it appears, under Sub-section

(1) of Section 5 of the MMDR Act, of 1957, prior

approval of the Central Government is essential and

that itself cannot be construed to be an empty

formality rather the recommendation made by the State

Government is not binding on the Central Government.

The saving clause, i.e., Section 10A(2)(b), which has

been inserted vide MMDR Amendment Act 2015, w.e.f.

12.01.2015 does not create vested right automatically,

it merely saves the applicants from ineligibility due to

introduction of auction as the only method of obtaining

mineral concession. Even the right to obtain a mining // 106 //

lease is subject to compliance of the terms and

conditions mentioned in Section 10A(2)(b), which has

also lapsed on coming into effect of the MMDR

Amendment Act, 2021.

55. In view of the provisions contained in Clause

(c) of Section 10A(2), it is mandated that mining lease

cannot, without the previous approval of the Central

Government, be granted. Therefore, the proviso to

Section 10A(2)(c) is very clear. The recommendation of

the State Government for grant of previous approval of

the Central Government for granting mining lease is

the statutory requirement for grant of mining lease by

the State Government, which is mandatory.

56. The Amendment Act, 2021 falls within the

parameters of the policy decision which was taken by

the Parliament by way of amendment to law and there

is no violation of the fundamental rights so conferred

under the Constitution of India, or violation of any // 107 //

Statutory provisions of the Act or the Rules framed

there under. As such, an interference with the policy

decision would not be warranted unless it is found that

the policy decision is palpably arbitrary, mala fide,

irrational or violative of the statutory provisions. The

Parliament to close all the non-auctioned cases, which

have not resulted in mining lease, as these cases were

exception to auction-only regime adopted after 2015

amendment in the Act. The statement of objects and

reasons of the MMDR Amendment Bill, 2021 clearly

mentioned that "The existence of these cases is

anachronistic and antagonistic to the auction regime".

Therefore, the Amendment Act, 2021 has to be

interpreted keeping in view the principles laid down by

the apex Court in Essar Steel Ltd. v. Union of

India, (2016) 11 SCC I, wherein it is observed as

follows:-

"44. In DDA v. Allottee of SFS Flats, (2008) 2 SCC 672 : (2008) 1 SCC (Civ) 684] on issue of judicial review of policy // 108 //

decisions, the power of the Court is examined and observed as under: (SCC pp. 697-98, paras 64-65)

"64. An executive order termed as a policy decision is not beyond the pale of judicial review. Whereas the superior courts may not interfere with the nitty-gritty of the policy, or substitute one by the other but it will not be correct to contend that the court shall lay its judicial hands off when a plea is raised that the impugned decision is a policy decision. Interference therewith on the part of the superior court would not be without jurisdiction as it is subject to judicial review.

65. Broadly, a policy decision is subject to judicial review on the following grounds:

(a) if it is unconstitutional;

(b) if it is dehors the provisions of the Act and the Regulations;

(c) if the delegatee has acted beyond its power of delegation;

(d) if the executive policy is contrary to the statutory or a larger policy."

45. Thus, we will test the impugned policy on the above grounds to determine whether it warrants our interference under Article 136 or not. Further, this Court neither has the jurisdiction nor the // 109 //

competence to judge the viability of such policy decisions of the Government in exercise of its appellate jurisdiction under Article 136 of the Constitution of India. In Arun Kumar Agrawal v. Union of India [Arun Kumar Agrawal v. Union of India, (2013) 7 SCC 1], this Court has further held as under: (SCC p. 17, para 41) "41. ... This Court sitting in the jurisdiction cannot sit in judgment over the commercial or business decision taken by parties to the agreement, after evaluating and assessing its monetary and financial implications, unless the decision is in clear violation of any statutory provisions or perverse or taken for extraneous considerations or improper motives. States and its instrumentalities can enter into various contracts which may involve complex economic factors. State or the State undertaking being a party to a contract, have to make various decisions which they deem just and proper. There is always an element of risk in such decisions, ultimately it may turn out to be a correct decision or a wrong one. But if the decision is taken bona fide and in public interest, the mere fact that decision has ultimately proved to be wrong, that itself is not a ground to hold that the decision was mala fide or taken with ulterior motives."

(emphasis supplied)

57. In Peerless General Finance & Investment

Co. Ltd. v. RBI, (1992) 2 SCC 343, a Constitution

Bench of the apex Court observed as under:

// 110 //

"31. The function of the Court is to see that lawful authority is not abused but not to appropriate to itself the task entrusted to that authority. It is well settled that a public body invested with statutory powers must take care not to exceed or abuse its power. It must keep within the limits of the authority committed to it. It must act in good faith and it must act reasonably. Courts are not to interfere with economic policy which is the function of experts. It is not the function of the courts to sit in judgment over matters of economic policy and it must necessarily be left to the expert bodies. In such matters even experts can seriously and doubtlessly differ. Courts cannot be expected to decide them without even the aid of experts".

58. Much reliance was placed on the judgment of

the apex Court in Bhushan Power (supra) which

considered the issue whether in absence of a prior

approval of the Central Government and only where a

recommendation has been made by the State Government

to grant the mining lease, can a mandamus be issued

directing the grant of the mining lease and accordingly at

paragraph 26 of the said judgment, the apex Court held

as follows:-

// 111 //

"26. ..... to enable the State Government to enter into any lease agreement/contract with the prospecting licensee. 'previous approval' of the Central Government was essential. Unless such approval came, the State Government could not communicate to the prospecting licensee/lessee its intention to enter into any contract as the pre-requisite prior approval would be lacking. Therefore, no promise could be held by the State Government to any applicant showing its intention to enter into a contract in the future."

Paragraph 22.2 of the Judgment is quoted below:-

"22.2 Second category of applications, which are kept eligible under the new provision, are those where the reconnaissance, permit or prospecting license had been granted and the permit holder or the licensee, as the case may be.

had undertaken reconnaissance operations or prospecting operations. The reason for protecting this class of applicants, it appears, is that such applicants. with hope to get the license, had altered their position by spending lot of money on reconnaissance operations or prospecting operations. This category, therefore, respects the principle of legitimate expectation."

59. Thereby, it is contended that legitimate

expectation" may have accrued in favour of an applicant, // 112 //

whose application was saved under Section I0-A(2)(b) of

the Act. But on perusal of the provisions of law, makes it

abundantly clear that Amendment Act, 2015, where

Section 10A (2)(b) has been inserted, requires for

consideration of pending applications, but subsequently

by Amendment Act, 2021 to achieve a complete transition

to the auction regime, the 1st proviso to Section 10A(2)(b)

has been introduced, by which all pending applications of

non-auctioned mines lapsed. Therefore, the temporary

savings carve-out under Section 10A(2) has now closed

and all pending applications have become ineligible.

60. As discussed above, by way of Mineral

Concession Rules Fourth Amendment Rules, 2021, the

Central Government also omitted Rule 7 and Rule 8 of the

Mineral Concession Rules, 2016, by which the modalities

for saved applications under Section 10A(2)(b) and Section

10A(2)(c) of the Amendment Act, 2015 were wiped out.

Needless to say, prior to the 2015 Amendment, for all

minerals under First Schedule (major mineral) of the Act, // 113 //

the State Government only had the authority to

recommend to the Central Government for grant or

mining lease. Such authority was governed by the then

existing Section 11 of the Act. The State was only a

recommendatory authority. The ultimate authority for

approving the grant of mining lease for all First Schedule

(major mineral) of the Act lay with the Central

Government under Section 5(1) of the then prevailing

MMDR Act, 1957. After the 2015 Amendment, Section

10A(2)(b) of the Act and the proviso to Section 10A(2)(c)

mandate the Central Government's approval for grant of

mining lease. Therefore, Section 10A(2)(b) does not vest

any right on the petitioner to obtain a mining lease

without the prior approval of the Central Government.

61. Much argument was advanced by the learned

Senior Advocates appearing on behalf of the petitioner

that the delay caused in Central Government's approval

entitles the petitioner to get the mining lease. But on

perusal of the record, it appears that the Central // 114 //

Government had issued letters and made

correspondences dated 10.07.2015. 08.02.2016

06.05.2016 and 06.07.2017 on the following points:-

a. Explanation for delay of about 22 years in granting the lease

b. Copy of the MOI. with VAL:

c. Details of use of bauxite ore for captive use in Alumina Refineries:

d. Reasons for the State Government to not auction the Bauxite ores;

e. Legal basis for granting the Mining Lease on captive use;

f. Whether the condition imposed for granting PL to L&T has been satisfied.

g. Reasons for the State Government to not auction the Bauxite ores.

Therefore, the mining leases cannot be granted to the

applicants completely bypassing the Central

Government's approval in contravention of law on the

grounds of equity alone. The provisions of the MMDR Act

make the Central Government's approval mandatory and

equity stands excluded by statute, as has been laid down // 115 //

in the case of Geomin Minerals (supra). Thereby, the

first proviso is not inequitable because the second proviso

reimburses the applicants for their expenditure.

62. Learned Senior Advocates appearing for the

petitioner lay emphasis on the judgment of the High Court

of Karnataka in the case of Indocil Silicons Pvt. Ltd.

(supra). At the outset, it can be construed that each case

has to be decided on its own facts and circumstances of

the case, in view of the law laid down by the apex Court

in the case of State of Orissa v. Sudhansu Sekhar

Mishra, AIR 1968 SC 647, that a decision is only an

authority for what it actually decides. What is of the

essence in a decision is its ratio and not every observation

found therein nor what logically follows from the various

observations made in it.

63. In Indocil (supra), the High Court of Karnataka

interpreted that the first proviso to not apply to the

applications that have been already recommended by the

State Government and held that the applicants of such // 116 //

cases have a right to grant of Central Government's

approval to the applications that have been already

recommended by the State Government. It held that the

applicants in such cases have a right to grant of Central

Government's approval and the recommendation of the

State Government creates a vested right, and the first

proviso must be interpreted to preserve such vested

rights. While observing so, the High Court of Karnataka

has not taken into consideration the mandatory

requirement of an approval by the Central Government

under proviso to Section 10A (2) (c) of the Act for grant of

a mining lease. As such, the interpretation is not in

consonance with the principles of statutory interpretation

which require that statutory provisions should he

interpreted contextually in view of the judgment of the

apex Court in Quarry Owners' Association v. State of

Bihar & Ors., (2000) 8 SCC 655, wherein at paragraphs-

30 and 31, the apex Court held as follows:-

// 117 //

"30 Now, we may proceed to examine another perceivable guideline to the State Government. It is significant, both Entry 54 List I of the Seventh Schedule of the Constitution and Entry 23 List II refer to the Regulation of mines and minerals development. This Entry has been reiterated both in the Preamble and the Statement of Objects and Reasons of this Act. This regulation of mines and minerals development clearly indicates the guidelines which the Parliament is projecting. Every word in a language is impregnated with and is flexible to connote different meaning, when used in context. That is why it is said, words are not static but dynamic and courts must adopt it that dynamic meaning which uphold the validity of any provision. This dynamism is the cause of saving many statutes of it being declared void, it dissolves the onslaught of any rigid and literal interpretation, it gives full thrust and satisfaction to achieve the objectivity which the legislature intended. Whenever there are two possible interpretations its true meaning and legislature intended has to be gathered, from the Preamble, Statement of Objects and Reasons and other provisions of the same statute. In order to find true meaning of any or what the legislature intended one has to go to the principle enunciated in the Heydons case, which laid down the following principle as early in the sixteenth century.

(1) What was the law before making of the Act;

(2) What was the mischief or defect for which the law did not provide;

// 118 //

(3) What is the remedy that the Act has provided; and

(4) What is the reason of the remedy.

The Court must adopt that construction which suppresses the mischief and advances the remedy. This Court has followed this principle in Bengal Immunity Co. Ltd. Vs. State of Bihar & Ors., AIR 1955 SC 661 (674); The Commissioner of Income tax, Patiala Vs. M/s Shahzada Nand & Sons, AIR 1966 SC 1342 (1347); Sanghvi Jeevraj Ghewar Chand & Ors. Vs. Secretary, Madras Chillies, Grains and Kirana Mercants Workers Union & Anr., AIR 1969 SC 530 (533); Union of India Vs. Sankalachand Himatlal Sheth & Anr., AIR 1977 SC 2328 (2358) and K.P. Varghese Vs. Income Tax Officer, Ernakulam & Anr., AIR 1981 SC 1922 (1929).

31. Returning to the present case we find the words regulation of mines and mineral development are incorporated both in the Preamble and Objects and Reasons of this Act. Before that we find Preamble of our Constitution in unequivocal words expresses for securing for our citizen, social, economical and political justice. It is in this background and in the context of the provisions of the Act we have to give meaning of the word regulation. The word regulation may have different meaning in different context but considering it in relation to the economic and social activities including the development and excavation of mines, ecological and environmental factors including States contribution in developing, manning and controlling such activities including parting with its wealth, viz., the minerals, the // 119 //

fixation of the rate of royalties would also be included within its meaning. This Court in State of Tamil Nadu Vs. M/s Hind Stone and Ors. 1981 (2) SCC 205 held:-

Word regulation has not got that rigidity of meaning as never to take in prohibition. In modern statutes concerned as they are with economic and social activities, regulation must of necessity, receive so wide an interpretation that in certain situations, it must exclude competition to the public sector from the private sector. More so in a welfare State. Must depends on the context in which the expression is used in the statute and the object sought to be achieved by the contemplated legislation. Each case must be judged on its own facts and in its own setting of time and circumstances and it may be that in regard to some economic activities and at some state of social development, prohibition with a view to State monopoly is the only practical and reasonable manner of regulation. The Mines and Minerals (Development and Regulation) Act aims at the conservation and the prudent and discriminating exploitation of minerals and prohibiting of leases in certain cases is part of the regulation contemplated by Section 15 of the Act.

So in regulating mineral development, the royalty/dead rent is the inherent part of it. State has thus before it number of factors which would guide it to fix, enhance or modify the royalty/dead rent payable by a lessee. The conservation and regulation of mines and mineral development includes // 120 //

wide activity of the State including parting with its wealth, are all relevant factors to be taken into consideration as a guiding force for fixing such royalty/dead rent. For interpretation of a Statute with reference to Preamble we may usefully refer the case of Bhatnagar & Co. Ltd. Vs. Union of India & Ors., AIR 1957 SC 478 where Constitution Bench held:

"In other words, in considering the question as to whether guidance was afforded to the delegate in bringing into operation the material provisions of the Act by laying down principles in that behalf, the Court considered the statement of the principles contained in the preamble to the Act as well as in the material provisions of s.3 itself. This decision shows that if we can find a reasonably clear statement of policy underlying the provisions of the Act either in the provisions of the Act or in the preamble, then any part of the Act cannot be attacked on the ground of delegated legislation by suggesting that questions of policy have been left to the delegate."

With reference to the regulation of mineral development, with reference to the minor minerals the policy of the Act is communicating loudly from its roof top, that let it be done by the delegatees State who is fully aware of the local conditions as such mineral is also used for the local purposes and on whom this larges falls. What delegatee should do what it should not do is also enshrined in the Act. Section 18 is also not excluded from its application to the minor mineral development. Under it duty is cast // 121 //

duty on the Central Government to take all necessary steps for the conservation and systemic development of minerals in India. Its sub-section (2) focuses the periphery within which it has to do and what not to do. This itself is a guidance which State may take note of while framing its own rules. Similarly Section 23-C gives detail guidance what State should provide to check illegal, mining, storage and transportation.

64. Looking into the provisions, it has to be held

that the first proviso, interpreted contextually, favours

lapse of all 'pending' applications because of the

underlying objectives of the 2015 and 2021 Amendments

and Section 10A read as a whole to enforce the auction

regime and render all 'pending' applications for a period

greater than 5 years to be ineligible. The transitional

savings carved out under Section 10A of the Act, being a

code in itself, must be interpreted strictly in accordance

with its context and background. The proviso to Section

10A(2)(c) expressly states that a PL holder's application for

ML under Section 10A(2)(b) shall not be granted without

prior approval of the Central Government. In the pre-2015

MMDR Act, no mining lease of Schedule I minerals could // 122 //

be granted without Central Government's approval.

Central Government's approval is granted only after its

satisfaction based on policy consideration and the same is

not a ministerial act. Therefore, construed contextually,

an application is to be treated as 'pending' until Central

Government has considered the application and granted

it's approval and the petitioner's application is to be

construed as a 'pending case' as the Central

Government's approval was awaited. Therefore, the first

proviso cannot be read to vest any right before Central

Government's approval is granted. The amendment

brought in 2021 must necessarily be interpreted to wipe

out all pending applications where Central Government's

approval has not been granted. Therefore, application of

Bhushan Power & Steel Ltd (supra) to hold that

applicants under Section 10A(2)(b) have a vested right to a

ML may not be the correct interpretation as held in

Indocil (supra), for which this Court respectfully differs // 123 //

from the interpretation given by the High Court of

Karnataka.

65. The judgment of the apex Court in Bhusan

Power & Steel Ltd. (supra), must be understood within

its context, meaning thereby, it arose out of contempt

petition wherein the Contemnor-State Government had

disregarded the Court's direction to recommend the case

for grant of a mining lease to the Central Government.

Based on this direction and Section 10A (2)(c) of the Act,

the petitioners therein claimed their rights to a ML. The

apex Court, however, did not grant any relief for the

reason that no prior approval had been granted by the

Central Government to the State Government's

recommendation. Therefore, this Court is of the view that

the judgment of Bhusan Power & Steel Ltd. (supra) has

not been correctly interpreted in the case of Indocil

(supra), which is distinguishable indicating that the

Central Government's approval is not a vested right in an

applicant while holding that "the Central Government // 124 //

might have accorded its approval. However, whether it

could have done so or not would be in the realm

conjectures." Therefore, the judgment of the apex Court in

Bhusan Power & Steel Ltd. (supra) would be of no avail

to the petitioner to argue that State Government's

recommendation created a vested right. Secondly, unlike

for Section 10A (2) (c) of the Act (where Bhushan uses the

word 'some kind of right came to be vested') Section

10A(2)(b) at best, gives the applicant a "legitimate

expectation". Therefore, in our considered view judgment

of Indocil (supra) delivered by the High Court of

Karnataka, not applicable to the present case. It is

respectfully observed that the said case has failed to

notice the fact that the Parliament has placed the

applicants coming under Section 10A(2)(c) at a higher

pedestal as compared to cases covered under Section 10A

(2)(b) because all cases covered under 10A(2)(c) is

preceded by a prior approval of the Central Government.

The said aspect is very much clear from the language // 125 //

employed in both the provisions. While dealing with the

right of an applicant under Section 10A (2)(b), it has been

provided that the permit holder or licensee shall have a

right for obtaining a mining lease whereas in the case of

Section 10A(2)(c), it has been provided that the mining

lease shall be granted subject to the fulfillment of the

conditions of the previous approval. The usage or the

word 'shall' signifies the intention of the legislature to

accord legitimacy to the rights of applicant under Section

10A (2)(c) as opposed to applicants under Section

10A(2)(b). Therefore, any semblance of claim made by the

petitioner on the ground of legitimate

expectation/promissory estoppel stand extinguished by

operation of law in view of insertion of the first proviso to

Section 10A(2)(b).

66. In Monnet Ispat and Energy Limited v.

Union of India and others, (2012) 11 SCC 1, at

paragraphs-185 and 188.3, it has been observed as

follows:-

// 126 //

"185. A three-Judge Bench of this Court in P.T.R. Exports (Madras) Pvt. Ltd. & Ors. v. Union of India & Ors. while dealing with the doctrine of legitimate expectation in paras 3, 4 and 5 (Pages. 272-273) stated as follows :

"3.........The doctrine of legitimate expectation plays no role when the appropriate authority is empowered to take a decision by an executive policy or under law. The court leaves the authority to decide its full range of choice within the executive or legislative power. In matters of economic policy, it is a settled law that the court gives a large leeway to the executive and the legislature. Granting licences for import or export is by executive or legislative policy. Government would take diverse factors for formulating the policy for import or export of the goods granting relatively greater priorities to various items in the overall larger interest of the economy of the country. It is, therefore, by exercise of the power given to the executive or as the case may be, the legislature is at liberty to evolve such policies.

4. An applicant has no vested right to have export or import licences in terms of the policies in force at the date of his making application. For obvious reasons, granting of licences depends upon the policy prevailing on the date of the grant of the licence or permit. The authority concerned may be in a better position to have the overall picture of diverse factors to grant permit or refuse to grant permission to import or export goods. The decision, therefore, would be taken from diverse economic // 127 //

perspectives which the executive is in a better informed position unless, as we have stated earlier, the refusal is mala fide or is an abuse of the power in which event it is for the applicant to plead and prove to the satisfaction of the court that the refusal was vitiated by the above factors.

5. It would, therefore, be clear that grant of licence depends upon the policy prevailing as on the date of the grant of the licence. The court, therefore, would not bind the Government with a policy which was existing on the date of application as per previous policy. A prior decision would not bind the Government for all times to come. When the Government is satisfied that change in the policy was necessary in the public interest, it would be entitled to revise the policy and lay down new policy. The court, therefore, would prefer to allow free play to the Government to evolve fiscal policy in the public interest and to act upon the same. Equally, the Government is left free to determine priorities in the matters of allocations or allotments or utilisation of its finances in the public interest. It is equally entitled, therefore, to issue or withdraw or modify the export or import policy in accordance with the scheme evolved. We, therefore, hold that the petitioners have no vested or accrued right for the issuance of permits on the MEE or NQE, nor is the Government bound by its previous policy. It would be open to the Government to evolve the new schemes and the petitioners would get their legitimate expectations accomplished in accordance with either of the two // 128 //

schemes subject to their satisfying the conditions required in the scheme. The High Court, therefore, was right in its conclusion that the Government is not barred by the promises or legitimate expectations from evolving new policy in the impugned notification."

188.3 Where the decision of an authority is founded in public interest as per executive policy or law, the court would be reluctant to interfere with such decision by invoking doctrine of legitimate expectation. The legitimate expectation doctrine cannot be invoked to fetter changes in administrative policy if it is in the public interest to do so."

Applying the aforementioned principle, it is construed

that once the first proviso has lapsed an applicant has no

basis to claim a legitimate expectation of approval by the

Central Government for a mining lease, merely because

State Government had made recommendation in its

favour.

67. If considered from another angle, the petitioner

does not have any prior approval under Section 6(1) of the

MMDR Act, 1957 and Rule 12(4) of the Mineral

Concession Rules, 2016. On perusal of the said // 129 //

provisions, it is abundantly clear that Section 6 (1) of the

MMDR Act, 1957 prohibits any person from acquiring

"one or more mining leases covering a total area of more

than ten square kilometers" unless the Central

Government's approval is granted relaxing such

prohibition. The petitioner has made three numbers of

applications covering an area greater than ten square

kilometres. As such, the Central Government's approval is

mandatory for mining lease to be granted in favour of the

petitioner. Further, the Central Government's approval

was mandatory before a mining lease can be granted to

the petitioner under Rule 27 (3) of the Mineral Concession

Rules, 1960 (now, Rule 12(4) of the M.C. Rules. 2016)

because the State Government's recommendation dated

18.05.2015 for an mining lease was subject to the

following additional conditions of the "captive use"

"The Bauxite excavated from the mine will be utilized exclusively for the Alumina Refinery set up by the lessee, provided that until commissioning of the Refinery by the lessee company, such Bauxite may be sold to the Alumina Refineries located // 130 //

within the State for their use within the State."

However, the Central Government has not granted its

approval under any of the above provisions. The approval

for all the three applications of the petitioner was pending

with the Central Government and, therefore, mining lease

cannot be granted without Central Government's approval

under Section 6( 1)(b) of the MMDR Act, 1957 or Rule

12(4) of the Mineral Concession Rules 2016, by way of

mandamus.

68. In A.P. Christian Medical Education Society

v. Government of A.P., (1986) 2 SCC 667, the apex Court

at paragraph-10 held as follows:-

"Shri K.K. Venugopal, learned counsel for the students who have been admitted into the MBBS course of this institution, pleaded that the interests of the students should not be sacrificed because of the conduct or folly of the management and that they should be permitted to appear at the University examination notwithstanding the circumstance that permission and affiliation had not been granted to the institution. He invited our attention to the circumstance that students of the Medical college established by the Daru-Salaam Educational Trust were // 131 //

permitted to appear at the examination notwithstanding the fact that affiliation had not by then been granted by the University.

Shri Venugopal suggested that we might issue appropriate directions to the University to protect the interests of the students. We do not think that we can possibly acceed to the request made by Shri Venugopal on behalf of the students. Any direction of the nature sought by Shri Venugopal would be in clear transgression of the provisions of the University Act and the regulations of the University. We cannot by our fiat direct the University to disobey the statute to which it owes its existence and the regulations made by the University itself. We cannot imagine anything more destructive of the rule of law than a direction by the court to disobey the laws. The case of the medical college started by the Daru-Salaam Trust appears to stand on a different footing as we find from the record placed before us that permission had been granted by the State Government to the Trust to start the medical college and on that account, the University had granted provisional affiliation. We also find that the Medical Council of India took strong and serious exception to the grant of provisional affiliation whereupon the University withdrew the affiliation granted to the college. We are unable to treat what the University did in the case of the Daru-Salaam Medical College as a precedent in the present case to direct the University to do something which it is forbidden from doing by the University Act and the regulations of the University. We regret that the students who have been admitted into the college have not only lost the money which they must have spent to gain admission into the college, but have also lost one or two years of precious // 132 //

time virtually jeopardising their future careers. But that is a situation which they have brought upon themselves as they sought and obtained admission in the college despite the warnings issued by the University from time to time. We are happy to note that the University acted watchfully and wakefully, issuing timely warnings to those seeking admission to the institution. We are sure many must have taken heed of the warnings issued by the university and refrained from seeking admission to the institution. If some did not heed the warnings issued by the university, they are themselves to blame. Even so if they can be compensated in some manner, there is no reason why that may not be done. We are told that the assets of the institutions, which have sprung out of the funds collected from the students, have been frozen. It is up to the State Government to devise suitable ways, legislative and administrative, to compensate the students at least monetarily. The appeal filed by the society is dismissed with costs which we quantify at Rs. 10,000. The writ petition filed by the students is dismissed but, in the circumstances, without costs."

In view of the above, the settled position of law laid down

by the apex Court is that no mandamus can be granted

for an act which is forbidden by law. Thereby, the

petitioner is estopped in law from seeking a mandamus

for a direction to grant of a mining lease without Central

Government's approval.

// 133 //

69. It has to be noted that Section 10A(2)(b)

requires the following compliances on the part of the

applicant before any legitimate expectation of a mining

lease vests in them:-

(i) The PL holder has undertaken operations in accordance with the parameters prescribed by the Central Government

(ii) The PL holder has not breached the terms and conditions of the PL.

(iii) The ML application has not become ineligible under the Act;

(iv) The PL holder has not failed to apply for the ML within a period of 3 months of the expiry of PL.

70. On the factual matrix, as discussed above, it is

made clear that the petitioner has breached the terms

and conditions of the PL as it had made three PL

applications for bauxite deposits on 31.10.1990 for use in

its captive plant. In its applications, the petitioner stated

that it is proposing to set up alumina plant. The Central

Government communicated its approval on 22.05.1992

under Section 5(1) (b) of the MMDR Act, 1957 to grant PL // 134 //

for all the 3 applications for a period of 2 years subject to

the condition, inter alia, that in case the petitioner failed

to get the LOI for the plant within a year or if such LOI is

issued to any other party for a project, the PL will be

prematurely determined under Rule 14 (3) of the M.C.

Rules, 1960. If the petitioner seeks to take benefit of its

status as PL holder under Section 10A(2)(b) of the Act

despite the fact that its PL had expired in 1993, it should

have complied with its terms and conditions. But the

petitioner is in continuing breach of the terms and

conditions of the PLs all along as it failed to establish an

alumina plant and extended its LOI with the Central

Government.

71. During the year 2020-2021, the State of

Odisha received revenue to the tune of approximately

Rs.20,600/- crores from 140 working mines whereas

auction premium from 23 auctioned mines alone was Rs

19,250/- crores. Similarly, during the same period

Karanataka had earned royalty revenue of Rs.649/-

// 135 //

crores from 131 working mines whereas the auction

premium from 11 auctioned mines alone was Rs.1883.8

crores. Therefore, the amended Acts 2015 and 2021,

because of the introduction of the auction regime not only

got well established in last 7 years, but also gave

encouraging results to the State Governments in terms of

participation of bidders. Therefore, the augmentation of

revenue being encouraging one, which will be utilized for

greater public interest, the amendment cannot be said to

be arbitrary, unreasonable and contrary to the provisions

of law.

72. Though a large number of judgments were

cited on behalf of the parties, but the judgments, which

are apt for the just and proper adjudication of the case,

have been taken into consideration.

73. In view of the facts and law, as discussed

above, this Court is of the considered view that the

provisions contained in Section 10A(2)(b) in the

Amendment Act, 2021 is intra vires. Thereby, the // 136 //

application of the petitioner under Section 10A(2)(b) for

grant of mining lease has lapsed by operation of law and

the petitioner is not entitled to get any relief in this writ

petition.

74. As a consequence thereof, the writ petition

merits no consideration and the same stands dismissed.

However, there shall be no order as to costs.

..............................

                                          DR. B.R. SARANGI,
                                               JUDGE
M.S. SAHOO, J.        I agree.

..............................

M.S. SAHOO, JUDGE

Orissa High Court, Cuttack The 2nd March, 2023, Arun/Alok/Ashok/GDS