Rajasthan High Court
State Of Rajasthan vs Ultratech Cement Limited on 31 January, 2023
Bench: Manindra Mohan Shrivastava, Shubha Mehta
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
D. B. Special Appeal (Writ) No. 987/2021
In
S. B. Civil Writ Petition No. 356/2017
1. State of Rajasthan, through the Principal Secretary
(Mines), Department of Mines and Petroleum,
Government of Rajasthan, Jaipur.
2. The Director, Department of Mines and Geology, Udaipur.
----Appellants/Respondent No. 2 & 3.
Versus
1. UltraTech Cement Limited, Unit: Kotputli Cement Works
Village Mohanpura, Tehsil Kotputli, District Jaipur through
its Joint Executive President Shri Chandra Shekhar
Pandey.
Respondent/Petitioner
2. Union of India, through Secretary, Ministry of Mines,
Department of Mines, Shastri Bhawan, Dr. Rajendra
Prasad Marg, New Delhi - 110001.
----Respondent/Respondent No. 1
For Appellants : Ms. Sheetal Mirdha Additional
Advocate General assisted by Mr.
Prateek Singh Advocate.
For Respondents : Mr. K.K. Sharma Senior Advocate.
Mr. Vivek Tankha Senior Advocate
through Video Conferencing.
Ms. Alankrita Sharma Advocate, Mr.
Madhusudan Singh Rajpurohit
Advocate.
Mr. Prashant Sivarajan Advocate.
Mr. Rohan Talwar Advocate.
Mr. Tushar Saigal Advocate through
Video Conferencing.
Mr. Molik Purohit Advocate.
Mr. Rahul Yaduvanshi Advocate.
HON'BLE MR. JUSTICE MANINDRA MOHAN SHRIVASTAVA
HON'BLE MRS. JUSTICE SHUBHA MEHTA
(Downloaded on 02/02/2023 at 11:49:12 PM)
(2 of 67) [SAW-987/2021]
Judgment
REPORTABLE
31/01/2023
By the Court:(Per Manindra Mohan Shrivastava,J.)
1. This appeal is directed against order dated 01.09.2021
passed by the learned Single Judge in S.B. Civil Writ Petition No.
356/2017, whereby, writ petition filed by Respondent No. 1-writ
petitioner has been allowed and learned Single Judge has directed
the appellants-State to execute mining lease in favour of
Respondent No. 1-writ petitioner-company and also directed for
handing over the possession to Respondent No.1-writ petitioner,
while issuing ancillary directions.
2. Respondent No. 1-writ petitioner filed writ petition aggrieved
by inaction/refusal on the part of the appellants in the matter of
execution of mining lease in its favour on pleadings inter alia that
Respondent No. 1-writ petitioner is a company incorporated and
registered under the provisions of the Companies Act, 1956
(hereinafter referred to as 'the Companies Act of 1956') and is the
successor of M/s. Grasim Industries Limited. According to
Respondent No.1-writ petitioner, under a scheme of arrangement
(demerger) entered into between M/s. Grasim Industries Limited
and M/s. Samruddhi Cement Limited on 18.05.2010, entire
cement business of M/s. Grasim Industries Limited was transferred
to its fully owned subsidiary M/s. Samruddhi Cement Limited in
terms of Sections 391 and 394 of the Companies Act of 1956.
This scheme of demerger was approved by the High Court of
Madhya Pradesh and the High Court of Gujarat. Subsequently,
(3 of 67) [SAW-987/2021]
scheme of amalgamation was entered into between M/s.
Samruddhi Cement Limited and M/s. UltraTech Cement Limited,
which was approved by the High Court of Gujarat and the High
Court of Bombay. In terms of approved amalgamation scheme, all
the assets including land, mining lease and Letters of Intent
(LoIs), as claimed by Respondent No.1-writ petitioner, stood
transferred and vested in favour of M/s. UltraTech Cement
Limited(writ petitioner).
3. It was further averred that the State Government notified an
area admeasuring 318.78 hectares under the Mineral Concession
Rules, 1960 (hereinafter referred to as 'the Rules of 1960') for
grant of mining lease for setting up of a cement plant with the
capacity of 1.0 MTPA. M/s. Grasim Industries Limited had already
applied for grant of mining lease vide its application dated
05.06.2007, in pursuance whereof, the State Government issued a
Letter of Intent (LoI) on 10.10.2007 containing as many as four
conditions which related to environmental clearance, submission
of mining plan, consent letter from land owner and NOC from
Forest Department. The letter of intent was further extended from
time to time. The Forest Department granted NOC on 11.08.2008
and environmental clearance from Ministry of Environment and
Forest was also granted on 06.05.2010. Respondent No.1-writ
petitioner had already submitted mining plan, which was approved
on 22.12.2008.
According to Respondent No.1-writ petitioner, Letter of Intent
was further extended on 03.12.2010 up to 30.09.2011 on three
conditions, namely, enhancement of capacity of plant from 3 MTPA
to 4 MTPA, deposit of keenness money and payment of stamp
(4 of 67) [SAW-987/2021]
duty for the amalgamation effected between M/s. Grasim
Industries Limited and M/s. UltraTech Cement Limited. Further, in
view of the approval of the scheme of amalgamation, condition
was also imposed in the LoI with regard to change in the name
from M/s. Grasim Industries Limited to M/s. UltraTech Cement
Limited. Respondent No.1-writ petitioner wrote a letter to Director,
Department of Mines and Geology on 07.07.2010 for grant of
mining lease. Since all the compliance had been made, Assistant
Mining Engineer also recommended grant of mining lease in favour
of Respondent No.1-writ petitioner. On the request of Respondent
No.1-writ petitioner, LoI was further extended from time to time.
Lastly, it was extended for a period of six months vide letter dated
11.12.2014. As according to Respondent No.1-writ petitioner, it
had applied for grant of lease with all the formalities and letter
was also being written by the concerned authority for grant of
mining lease, it was illegally withheld without any justifiable
reason.
4. Aggrieved by non-execution of mining lease, Respondent
No.1-writ petitioner approached this Court by filing writ petition
seeking direction for execution of mining lease in its favour in
respect of the area applied for.
5. In the reply filed by the appellants (Respondents No. 2 and 3
in the writ petition), it was stated that in view of amendment in
the Mines and Minerals (Development and Regulation) Act, 1957
(for short 'the MMDR Act') vide Amendment Act No. 10 of 2015,
the application submitted by Respondent No.1-writ petitioner for
grant of mining lease as well as LoI issued to it stood
automatically lapsed in view of the sunset clause under the newly
(5 of 67) [SAW-987/2021]
amended provision. The other main ground to oppose the relief
sought by Respondent No.1-writ petitioner was that a part of the
land admeasuring 1.38 hectares out of total area of 318.78
hectares covered under the LoI and in respect of which,
application for grant of lease was made by Respondent No.1-writ
petitioner, is recorded as charagah (pasture) land in the revenue
records and, therefore, in view of the directions issued by the
Hon'ble Apex Court in the case of Jagpal Singh and Others Vs.
State of Punjab and Others (2011) 11 SCC 396 and policy
decision taken by the State Government in compliance of the
directions of the Hon'ble Apex Court, no mining lease could have
been granted on the land, which was recorded as charagah land.
Various circulars issued by the State Government from time to
time which remained in force till 11.01.2017, on which date, by
operation of sunset clause, the application for grant of mining
lease and LoI allegedly stood lapsed, were also relied upon by the
appellants.
6. It was further case of the appellants that apart from
fulfillment of four conditions enumerated in Letter of Intent,
Respondent No.1-writ petitioner was required to fulfill all other
conditions, particularly condition relating to exclusion of charagah
land from the mining lease area. However, Respondent No.1-writ
petitioner refused to exclude the area of charagah land from the
mining area vide its letter dated 16.05.2016. It was the case of
the appellants that in view of the provisions contained in the
Rajasthan Tenancy (Government) Rules, 1955 (hereinafter
referred to as 'the Rules of 1955'), as amended from time to time,
it was provided in the newly added proviso to Rule 7 of the Rules
(6 of 67) [SAW-987/2021]
of 1955 that pasture land shall not be changed as sawai chak for
mining purposes without prior permission of the State Government
and the permission shall be granted only if the intending applicant
surrenders equal area of khatedari land in favour of the State
Government in the same or nearby village. However, before the
said amendment was brought into effect, the application stood
lapsed in view of provisions contained under Section 10A of the
MMDR Act.
7. Before learned Single Judge, Respondent No.1-writ petitioner
also claimed relief on the ground of parity stating that in identical
cases relating to the matters of application of mining lease
submitted by Wonder Cement and Shree Cement, this Court
allowed their writ petitions, directing grant of mining lease
excluding charagah land and, therefore, Respondent No.1-writ
petitioner was also entitled to the same relief.
8. Vide impugned order dated 01.09.2021, learned Single
Judge allowed the writ petition holding that amendment made
under the MMDR Act vide notification dated 20.03.2021 would not
cover the cases where the applications were also made and LoIs
have been issued much earlier.
Further, the learned Single Judge also took into consideration
that relief was granted to M/s. Wonder Cement by directing that
land admeasuring 40.62 hectares recorded as charagah land be
excluded and lease be granted for the remaining part of the land.
Learned Single Judge also held that similar issue arose for
consideration in the case of Shree Cement Limited and lease was
granted by directing exclusion of charagah land. Learned Single
Judge further noticed that Respondent No.1-writ petitioner has
(7 of 67) [SAW-987/2021]
also deposited stamp duty. Learned Single Judge also held that
the order passed by the High Courts in the matter of
amalgamation specifically mentions regarding LoI as an asset, to
be transferred as right of title, interest and investments, vests
with M/s. UltraTech Cement. Respondent No.1-writ petitioner-
company having informed the Government regarding the change
of name, as per Rule 62 of the Rules of 1960, it was held that
Respondent No.1-writ petitioner was entitled to grant of mining
lease.
9. Learned Additional Advocate General appearing on behalf of
the appellants would submit that Letter of Intent was initially
issued in the name of M/s. Grasim Industries Limited and it could
not be transferred automatically in favour of Respondent No.1-writ
petitioner, M/s. UltraTech Cement Limited, which is successor
company. It is contended that there is no vesting of LoI with
Respondent No.1-writ petitioner as a result of demerger/
amalgamation. According to learned Additional Advocate General,
the provisions contained in the MMDR Act and the Rules framed
thereunder do not envisage transfer of LoI. She would submit
that none of the rules framed under the MMDR Act provides for
transfer of LoI. Therefore, at the time, when application was
made for grant of mining lease, until its automatic rejection in
view of sunset clause, the LoI issued in favour of M/s. Grasim
Industries could not be claimed as LoI issued in favour of
Respondent No.1-writ petitioner. It is further submitted that Rule
62 of the Rules of 1960 does not apply in the case of
demerger/amalgamation of companies and transfer of assets. It
is argued that said Rule applies only in limited circumstances
(8 of 67) [SAW-987/2021]
where an applicant for, or the holder of a reconnaissance permit, a
prospecting licence or a mining lease shall intimate to the State
government within sixty days any change that may take place in
his name, nationality or other particulars mentioned in the
relevant forms and similarly where holder of a reconnaissance
permit or a prospecting licence or a mining lease requires any
change in its name, nationality or other particulars. Present is not
a case of mere change of name, nationality, but it is a case of
transfer of assets of one company into other company through the
process of demerger/amalgamation. It is further submitted that
mere payment of stamp duty will not suffice the purpose. It is
also argued that LoI does not create any relationship as it is not
an asset. Reliance has been placed on the decision of the Delhi
High Court in the case of M/s. Ispat Industries Ltd. Vs. Union
of India & Others, Writ Petition (Civil) No. 17320 of 2006
decided on 04.11.2009.
10. Next submission of learned Additional Advocate General is
that in view of newly inserted Section 10A vide Amendment Act
No. 10 of 2015 amending MMDR Act, all applications prior to the
commencement of the Mining and Mineral (Development and
Regulations) Amendment Act, 2015, shall become ineligible. It is
contended that in the present case, the application remained
pending and Respondent No.1-writ petitioner failed to fulfill the
conditions, therefore, the application and LoI, if any, lapsed.
Thus, by virtue of operation of sunset clause with effect from
11.01.2017, the right of Respondent No.1-writ petitioner, if any, to
seek a direction for grant of mining lease, no longer exists and,
therefore, no mandamus could be issued commanding the State to
(9 of 67) [SAW-987/2021]
execute lease deed on the basis of the application and LoI, which
no longer remained valid and operative in law.
11. Learned Additional Advocate General would next submit that
Respondent No.1-writ petitioner had applied for grant of mining
lease in respect of the area admeasuring 318.78 hectares, which
also included pasture land over an area of 1.38 hectares
comprised in the total area of mining. Respondent No.1-writ
petitioner had submitted an affidavit under which it has stated
that he would produce NOC, but no NOC was produced. In view
the judgment of the Hon'ble Supreme Court in the case of Jagpal
Singh and Others Vs. State of Punjab and Others (supra) as
also various circulars issued by the State authorities from time to
time, which have been annexed with the reply to writ petition and
affidavits, the mining lease could not be granted in favour of
Respondent No.1-writ petitioner in respect of the area comprising
charagah (pasture) land. Respondent No.1-writ petitioner neither
obtained NOC from the State Government, nor excluded the area
of charagah land from the mining area. On the other hand,
Respondent No.1-writ petitioner vide its letter dated 16.05.2016
communicated its refusal to reduce the mining area by excluding
charagah land. Respondent No.1-writ petitioner, even till date,
has failed to produce any offer or application made before the
competent authority for setting apart charagah land under Rule 7A
of the Rules of 1955 by surrendering an equal area of khatedari
land in favour of State in the same village. Therefore, Respondent
No.1-writ petitioner was not entitled to any relief.
12. Learned Additional Advocate General, in support of her
submissions, has placed reliance upon the decisions of the Hon'ble
(10 of 67) [SAW-987/2021]
Supreme Court in the cases of South Eastern Coalfields Ltd. &
Others Vs. S. Kumar's Associates AKM (JV), 2021 SCC
OnLine SC 486; Rajasthan Cooperative Dairy Federation
Ltd. Vs. Maha Laxmi Mingrate Marketing Service Pvt. Ltd. &
Others, (1996) 10 SCC 405; Jagpal Singh and Others Vs.
State of Punjab and Others (supra); Maharashtra State
Cooperative Bank Limited Vs. Assistant Provident Fund
Commissioner and Others (2009) 10 SCC 123; Sri
Tarkeshwar Sio Thakur Jiu Vs. Dar Dass Dey & Co. & Others
(1979) 3 SCC 106; State of Karnataka & Others Vs.
Subhash Rukmayya Guttedar & Others 1993 Supp (3) SCC
290; M/s. General Radio and Appliances Co. Ltd. & Others
Vs. M.A. Khader (Dead) by LRs (1986) 2 SCC 656; Delhi
Development Authority Vs. Nalwa Sons Investment Ltd. and
Another, 2019 SCC OnLine SC 586; Miheer H. Mafatlal Vs.
Mafatlal Industries Ltd. (1997) 1 SCC 579; Hindustan
Lever and Another Vs. State of Maharashtra and Another
(2004) 9 SCC 438; Gram Panchayat, Village Kanonda,
Tehsil Bahadurgarh, District Rohtak, through its Sarpanch
Vs. Director, Consolidation of Holdings, Haryana,
Chandigarh and Others 1989 Supp (2) SCC 465; State of
Bihar (Now State of Jharkhand) through the Sub-Divisional
Officer Vs. Tata Iron and Steel Company Limited (2019) 7
SCC 99; The Commissioner of Sales Tax, U.P., Lucknow Vs.
M/s. Parson Tools and Plants, Kanpur (1975) 4 SCC 22;
Assistant Commissioner, Assessment-II, Bangalore and
Others Vs. Velliappa Textiles Ltd. and Another (2003) 11
SCC 405.
(11 of 67) [SAW-987/2021]
13. Lastly, it is submitted that the case of Respondent No.1-writ
petitioner is distinguishable from the decisions of this Court in the
cases of M/s Wonder Cement Limited Vs. State of Rajasthan
& Others (S.B. Civil Writ Petition No. 126/2017 decided on
23.08.2017) and Shree Cement Limited Vs. The State of
Rajasthan & Others (S.B. Civil Writs No. 128/2017 decided
on 26.09.2018). The relief was granted to the petitioners in the
aforesaid cases because they had excluded charagah land from
mining area whereas in the case of Respondent No.1-writ
petitioner, it refused to reduce charagah land from the mining
lease area. Therefore, it is argued, learned Single Judge was not
correct in holding that case of Respondent No.1-writ petitioner
was identical to that of M/s. Wonder Cement and Shree Cement.
14. Per contra, in reply to the submissions made by learned
Additional Advocate General appearing on behalf of the appellants,
learned Senior Counsels appearing on behalf of Respondent No.1-
writ petitioner would submit that insofar as transfer of Letter of
Intent in favour of Respondent No.1-writ petitioner, M/s. UltraTech
Cement Limited is concerned, the State, for the first time, has
come out with an afterthought whereas at no point of time, in any
of the communications till filing of the writ petition, the State ever
denied grant of mining lease on the ground that Letter of Intent
initially issued in favour of demerged company i.e. M/s. Grasim
Industries Limited lapsed after its demerger under the scheme of
arrangement with M/s. Samruddhi Cement Limited followed by
amalgamation of M/s. Samruddhi Cement Limited with
Respondent No.1-writ petitioner, M/s. UltraTech Cement Limited.
Referring to letters issued from time to time, extending the
(12 of 67) [SAW-987/2021]
validity period of Letter of Intent and more particularly, letter
dated 03.12.2010 followed by further extension of Letter of Intent
including letter dated 11.09.2014, it is contended that the
extension of Letter of Intent was being granted with full notice and
knowledge regarding demerger and amalgamation approved by
the jurisdictional High Courts. The communications clearly show
that the appellants had accepted Respondent No.1-writ petitioner-
company as the successor company and has extended Letter of
Intent. Therefore, it lies ill in the mouth of the State, now to raise
such an issue before the Court. He would submit that the State is
estopped from raising any such objection.
15. Further submission of learned Senior Counsels is that neither
any of the provisions of the MMDR Act, as amended from time to
time and in force during the relevant period, nor the provisions
contained in Rule 37 of the Rules of 1960, nor the provisions
contained in the Minerals (Other than Atomic and Hydro Carbons
Energy Minerals) Concession Rules, 2016 (hereinafter referred to
as 'the Rules of 2016') govern or regulate, much less prohibit such
transfer of LoI in favour of Respondent No.1-writ petitioner as a
result of legal proceedings of demerger and amalgamation under
the orders of the jurisdictional High Courts. It is submitted that
the rule regulating transfer of LoI, for the first time, was made in
the year 2021 by introducing Rule 23A in the Rules of 2016 with
effect from 24.03.2021. Therefore, it is contended that in the
absence of special law governing transfer of LoI in respect of grant
of mining leases, the provisions of general application as
contained in the Companies Act of 1956 will hold the field.
Referring to the provisions of Section 391 to 394 of the Companies
(13 of 67) [SAW-987/2021]
Act of 1956 as also demerger order and amalgamation order
passed by the jurisdictional High Courts and various clauses
contained therein, it has been contended that all the assets and
liabilities including applications or any other interest of the
demerged and amalgamated company stood transferred/vested in
favour of Respondent No.1-writ petitioner, which included LoI
issued in favour of M/s. Grasim Industries Limited.
16. In reply to submission regarding application for grant of
mining lease having lapsed and become ineligible by operation of
sunset clause contained in Section 10A introduced vide
Amendment Act No.10 of 2015, it is contended that the case of
Respondent No.1-writ petitioner is saved under clause (c) of sub-
section (2) of Section 10A of the MMDR Act as in the present case,
Letter of Intent was issued by the State Government for grant of
mining lease before the commencement of the Mines and Minerals
(Development and Regulation) Amendment Act, 2015.
17. Replying to the submission of learned Additional Advocate
General regarding failure on the part of Respondent No.1-writ
petitioner to fulfill terms and conditions in the matter of grant of
mining lease, it has been extensively argued that Respondent
No.1-writ petitioner fulfilled all the four conditions of Letter of
Intent and, therefore, it cannot be said that the conditions of
Letter of Intent were not fulfilled. Referring to the scheme of the
Rules of 1960, prescribed performa of application and application
for grant of mining lease, it is contended that there is no
requirement of mining laws and the rules framed thereunder,
which mandates submission of any affidavit or undertaking
regarding charagah (pasture) land. Various conditions enumerated
(14 of 67) [SAW-987/2021]
in Rule 27 of the Rules of 1960 alone are required to be fulfilled.
Sub-rule (h) of Rule 27 of the Rules of 1960 prohibits carrying on
or allowing to be carried on any mining operation in prohibited
areas, however, it does not include charagah land. Learned Senior
Counsel would further submit that Respondent No.1-writ petitioner
gave an undertaking and submitted affidavit that it will not carry
out any mining activities in charagah land unless it gets NOC from
the competent authority.
Learned Senior Counsel would further argue that the
notification inviting applications for grant of mining lease specified
the entire area of 318.78 hectares without excluding charagah
land. He would further submit that even in multiple extensions of
LoI, which were granted, nowhere it was stated that Respondent
No.1-writ petitioner should exclude the charagah land, though it
was within the jurisdiction of the State authorities to direct that
mining lease should be confined to or exclude charagah land.
Referring to material on record, it has been argued that in fact, in
the past, the entire area was already under excavation since 1981
when mining lease was granted in favour of one Rameshwar Bajaj
in the year 1981. That lease was again transferred in the year
1986 in the name of National Limestone Company Private Limited
without excluding any area comprised in 318 hectares. There was
no condition in any of those leases to exclude charagah land and,
therefore, ever since 1981, the then mining lease holders already
exploited the entire mining area including so called charagah land
and as a matter of fact, no charagah land exists in the entire area
and, therefore, it is for this reason that while granting
environmental clearance vide letter dated 06.05.2010, it was
(15 of 67) [SAW-987/2021]
recorded that in the mining lease area of 318.78 hectares, there is
no grazing land involved in the project. It was for this very reason
also that in the mining plan duly approved by the Indian Bureau of
Mines, no charagah land is shown. Learned Senior Counsel would
submit that in fact, a part of the land was already allotted in
favour of KVGSS and the area, which is now claimed as charagah
land, was already exploited as mining area. Despite all this,
Respondent No.1-writ petitioner had clearly given an undertaking
and submitted affidavit that it will not operate any mining activity
over the so called charagah land unless there is NOC granted in its
favour. It is also contended that even though the State was
empowered under the rules to reduce the mining area while
granting mining lease, the State never communicated Respondent
No.1-writ petitioner to either reduce the area applied for mining
by excluding charagah land, nor directed the petitioner to exclude
charagah land from the proposed mining lease area. Learned
Senior Counsel also submitted that in any case, after the
introduction of new rule, i.e. Rule 7A under the Rules of 1955,
Respondent No.1-writ petitioner has already applied to the District
Collector, District Jaipur on 13.06.2017 for surrender of 1.38
hectares of land for charagah purposes in lieu of 1.38 hectares of
charagah land stated to be included in the mining lease area.
There was no legal impediment in granting mining lease in favour
of Respondent No.1-writ petitioner on its clear undertaking that it
will not operate mining activities over the charagah land without
NOC or appropriate orders as may be passed by the competent
revenue authority.
(16 of 67) [SAW-987/2021]
18. In support of their submissions, learned Senior Counsels
have placed reliance on the decisions of the Hon'ble Supreme
Court in the cases of His Holiness Kesavananda Bharati
Sripadagalvaru Vs. State of Kearla & Another (1973) 4 SCC
225; Kusheshwar Prasad Singh Vs. State of Bihar & Others
(2007) 11 SCC 447; Mohammed Gazi Vs. State of M.P. &
Others (2000) 4 SCC 342; State of West Bengal & Others
Vs. Mandira Chatterjee & Others (2012) 13 SCC 582; Beg
Raj Singh Vs. State of U.P. & Others (2003) 1 SCC 726;
Manuelsons Hotels Private Limited Vs. State of Kerala &
Others (2016) 6 SCC 766; State of Bihar & Others Vs.
Kalyanpur Cement Limited (2010) 3 SCC 274; Employees'
State Insurance Corporation Vs. Union of India & Others
AIR 2022 SC 1017; Public Service Commission, Uttaranchal
Vs. Jagdish Chandra Singh Bora and Another (2014) 8 SCC
644; State of U.P. and Others Vs. Daulat Ram Gupta (2002)
4 SCC 98; Bhushan Power and Steel Limited Vs. S.L. Seal,
Additional Secretary (Steel and Mines), State of Odisha and
Others (2017) 2 SCC 125; Hindustan Lever and Another Vs.
State of Maharashtra and Another (2004) 9 SCC 438; M/s.
J.K. (Bombay) Private Ltd. (In all the Appeals) Vs. M/s.
New Kaiser-I-Hind Spinning and Weaving Co. Ltd. & Others,
AIR 1970 SC 1041; Dalmia Power Limited & Another Vs.
Assistant Commissioner of Income Tax Circle 1, Trichy
(2020) 14 SCC 736; Rajendra Prasad Gupta Vs. Prakash
Chandra Mishra & Others (2011) 2 SCC 705; Principal
Commissioner of Income Tax (Central)-2 Vs. Mahagun
Realtors (P) Ltd., AIR 2022 SC 1672; decisions of Bombay
(17 of 67) [SAW-987/2021]
High Court in the cases of Sadanand S. Varde & Others Vs.
State of Maharashtra & Others, 2000 SCC OnLine Bom 341;
Sequent Scientific Ltd., In Re, 2009 SCC OnLine Bom 2182;
In Re: Pmp Auto Industries Ltd. & Others, Company
Petitions Nos. 428 of 1991 and other connected petitions
and applications decided on 12.12.1991; decision of Delhi
High Court in the case of Telesound India Ltd., In re, 1980
SCC OnLine Del 327; decision of Calcutta High Court in the case
of Castron Technologies Ltd. Vs. Castron Mining Ltd., A.O.P.
No. 411 of 2011 and C.P. No. 594 of 2002 decided on
12.07.2013 which was affirmed by the Hon'ble Supreme Court in
Castron Technologies Ltd. Vs. Anup Agarwalla and Another,
Petition for Special Leave to Appeal (Civil) No. 32486/2013
decided on 25.11.2013; M/s. Kusum Marketing Ltd. &
Another Vs. the State of West Bengal & Others 2017 SCC
OnLine Cal 16551; decision of Gujarat High Court in the case of
State of Gujarat & Others Vs. Nirmalaben S. Mehta &
Others, (Letters Patent Appeal No. 683 of 2011 and other
connected matters decided on 13.12.2011); decision of
Madras High Court in Sahayanidhi Virudhunagar Ltd. through
its Managing Director, A. Saminatha Mudaliar Vs. A.S.R.
Subrahmanya Nadar and Others, AIR 1951 MAD 209; order
dated 18.03.2011 passed by this Court in the case of Ojaswi
Marbles and Granites Pvt. Ltd. Vs. The State of Rajasthan &
Others (S.B. Civil Writ Petition No. 15114/2016 and one
other connected writ petition); decisions in the cases of The
State of Rajasthan & Others Vs. Ojaswi Marbles and
Granites Pvt. Ltd. & Others (D.B. Special Appeal (Writ) No.
(18 of 67) [SAW-987/2021]
301/2021 decided on 08.07.2021); Shree Cement Limited
Vs. The State of Rajasthan & Others (S.B. Civil Writs No.
128/2017 decided on 26.09.2018); affirmed by Division Bench
of this Court in The State of Rajasthan & Others Vs. Shree
Cement Limited (D.B. Special Appeal Writ No. 26/2019
decided on 22.01.2019); M/s Lafarge India Ltd Vs. State of
Rajasthan & Others (S.B. Civil Writ Petition No. 427/2017
decided on 04.01.2018); M/s Wonder Cement Limited Vs.
State of Rajasthan & Others (S.B. Civil Writ Petition No.
126/2017 decided on 23.08.2017); M/s. NU Vista Limited
Vs. Union of India & Others (S.B. Civil Writ Petition No.
360/2017 decided on 01.09.2021); State of Rajasthan &
Others Vs. M/s. NU Vista Limited & Others. (D.B. Civil
Special Appeal (Writ) No. 998/2021 decided on
04.03.2022).
19. Lastly, it is submitted that Respondent No.1-writ petitioner is
entitled to similar benefit already granted by this Court in the
cases of M/s Wonder Cement Limited Vs. State of Rajasthan
& Others (supra) and Shree Cement Limited Vs. The State of
Rajasthan & Others (supra) and other cases where on facts,
even though it was found that the area applied for mining lease
included charagah land, direction was issued by this Court to grant
mining lease excluding charagah land.
20. The first issue arising for consideration is whether Letter of
Intent issued in favour of M/s. Grasim Industries Limited was
transferred/vested in favour of Respondent No.1-writ petitioner-
successor company. Learned Additional Advocate General has
vehemently contended that LoI could not be transferred as there
(19 of 67) [SAW-987/2021]
exists no provision in the MMDR Act or in the Rules of 1960 or in
the subsequent Rules of 2016 or under any other provisions of the
Act and the rules framed thereunder.
A perusal of the reply to writ petition filed by the appellant-
State reveals that the State did not come out with such a case
that as LoI could not be transferred in favour of Respondent No.1-
writ petitioner, the appellants decided not to grant mining lease.
Even with the reply, no such document has been filed by the State
that at any stage, in the matter of consideration of writ
petitioner's application for grant of mining lease, such a decision
was taken in the files and note sheets to reject the application on
this count. However, during the pendency of the writ petition, in
subsequent additional counter affidavits filed by the appellant-
State, a stand was taken that according to clarification dated
12.02.2018 issued by the Government of India, amalgamation of
the company falls within the ambit of transfer and as there is no
entailing transfer of application for grant of mining lease or Letter
of Intent in MMDR Act and the rules framed thereunder,
Respondent No.1-writ petitioner could not claim any right of grant
of mining lease on the basis of LoI initially issued and thereafter
extended from time to time in the name of transferor company
M/s. Grasim Industries Limited. According to learned Additional
Advocate General, LoI does not create any binding legal
relationship between the parties. It cannot even be considered as
an asset/property of the company and termed as transfer of
assets and liabilities through scheme of amalgamation, if subject
to statutory provisions.
(20 of 67) [SAW-987/2021]
21. One of the arguments on the aforesaid issue is that since
there does not exist any provision in the MMDR Act or under the
rules framed thereunder, LoI is not transferable. It is contented
that it is to be treated as excluded on the application of maxim,
"expressio unius est exclusio alterius" and "casus omissus". The
submission in this regard, is legally misconceived. There is neither
any express, much less, any implied bar on the transfer of LoI
either under the MMDR Act or the Rules of 1960 or even under the
subsequently framed rules, i.e. the Rules of 2016. Section 12A of
the MMDR Act provides for transfer of mineral concessions. The
provisions relating to transfer of mining lease or a composite
licence granted under the MMDR Act requires previous approval of
the State Government. There is nothing in the aforesaid provision,
which deals with Letter of Intent. Section 3, sub-section (ae) of
the MMDR Act defines mining concession to mean either a
reconnaissance permit, prospecting licence, mining lease,
composite licence or a combination of any of the aforesaid and
further provides that the expression "concession" shall be
construed accordingly. Use of the word "means" clearly implies
that the definition of mineral concession is exhaustive and not
inclusive. It does not mention Letter of Intent. Thus, Section 12A
of the MMDR Act does not govern transfer of Letter of Intent. In
fact, under the scheme of the MMDR Act, there is no provision
dealing with Letter of Intent.
22. The Rules of 1960 have been framed by the Central
Government. The provisions contained in Chapter IV of the Rules
of 1960 regulates grant of mining lease in respect of land in which
the mineral vest in the Government. Those provisions also do not
(21 of 67) [SAW-987/2021]
regulate transfer of Letter of Intent. Rule 37 of the Rules of 1960
provides for transfer of lease and obviously, has no application in
relation to Letter of Intent.
23. The Rules of 2016, when framed and at the time when
demerger and amalgamation took place in the year 2010, did not
contain any provision with regard to transfer of Letter of Intent.
Therefore, to say that in the absence of there being any provision
regulating transfer of Letter of Intent, it should be assumed that
there is implied prohibition on transfer of Letter of Intent, cannot
be accepted. Reliance placed on the judgments of the Hon'ble
Supreme Court in the cases of Gram Panchayat, Village
Kanonda, Tehsil Bahadurgarh, District Rohtak, through its
Sarpanch Vs. Director, Consolidation of Holdings, Haryana,
Chandigarh and Others (supra); The Commissioner of Sales
Tax, U.P., Lucknow Vs. M/s. Parson Tools and Plants,
Kanpur (supra) and Rajasthan Cooperative Dairy Federation
Ltd. Vs. Maha Laxmi Mingrate Marketing Service Pvt. Ltd. &
Others, (supra) are misconceived in law. All that can be said is
that there does not exist any provision regulating transfer of
Letter of Intent.
24. The provision for transfer of Letter of Intent, for the first
time, was introduced by inserting Rule 23A vide GSR 209(E) dated
24.03.2021 with effect from 24.03.2021 in the Rules of 2016
which regulates transfer of Letter of Intent for grant of mining
lease or composite licence in certain cases and till then, there was
no provision. In the absence of there being any provision in the
MMDR Act and the rules referred to above regulating transfer of
Letter of Intent for grant of mining lease, all that can be said is
(22 of 67) [SAW-987/2021]
that transfer of Letter of Intent, until insertion of Rule 23A in the
Rules of 2016, there was no provision regulating transfer of Letter
of Intent and it could not be advanced as a proposition of law that
absence of provision for transfer of Letter of Intent implidely
prohibits transfer of Letter of Intent.
25. In the case of Rajasthan Cooperative Dairy Federation
Ltd. Vs. Maha Laxmi Mingrate Marketing Service Pvt. Ltd. &
Others, (supra), it was held that Letter of Intent merely
expresses an intention to enter into a contract and where the
conditions stipulated in the Letter of Intent are not fulfilled, and
the conduct of the party in whose favour LoI has been issued is
otherwise not such as would generate confidence, the party
issuing Letter of Intent is entitled to withdraw the same and there
is no binding legal relationship between the parties at the stage of
issuance of Letter of Intent. It was held that the party issuing
Letter of Intent is entitled to look at the totality of the
circumstances in deciding whether to enter into a binding contract
with the party or not.
26. In one of the recent decisions, in the case of South Eastern
Coalfields Ltd. & Others Vs. S. Kumar's Associates AKM (JV)
(supra), it has been reiterated as settled proposition of law that
LoI merely indicates a party's intention to enter into a contract
with the other party in future and no binding relationship between
the parties at that stage emerges. It has been observed that
Letter of Intent can possibly be construed as a binding contract if
such an intention is evident from its terms but then the intention
to do so must be clear and unambiguous. However, it takes a
deviation from how normally Letter of Intent has to be
(23 of 67) [SAW-987/2021]
understood. Therefore, it is explicitly clear that Letter of Intent,
as such, does not create a binding contractual relationship
between the parties, but it can only be said to be an expression of
an intention to enter into a contract.
27. Demerger/amalgamation of company incorporated under the
Companies Act of 1956 is governed by the Companies Act of 1956
itself. The provisions contained in Sections 391 to 394 of the
Companies Act of 1956 govern demerger and amalgamation
processes in relation to a company incorporated under the
Companies Act of 1956. The Companies Act of 1956 was later on
repealed and substituted by the Companies Act, 2013 (for short
'the Companies Act of 2013'). In the present case, the
proceedings of demerger and amalgamation, to which we shall
deal with in greater details hereafter, were drawn in the year 2010
and orders were passed by the respective jurisdictional High
Courts in those years. Therefore, in the present case, the
provisions of the Companies Act of 1956 were applicable.
28. The scheme of arrangement (demerger) was entered into
between M/s. Grasim Industries Limited and M/s. Samruddhi
Cement Limited on 18.05.2010. The scheme envisaged transfer of
entire cement business of M/s. Grasim Industries Limited to M/s.
Samruddhi Cement Limited (a fully owned subsidiary of M/s.
Grasim Industries Limited). In terms of statutory scheme of
Sections 391, 392, 393 and 394 of the Companies Act of 1956,
the High Court of Madhya Pradesh and the High Court of Gujarat
vide their orders dated 31.03.2010 and 06.05.2010 respectively
approved the scheme of demerger between M/s. Grasim
Industries Limited and M/s. Samruddhi Cement Limited.
(24 of 67) [SAW-987/2021]
Subsequently, scheme of amalgamation was entered into between
M/s. Samruddhi Cement Limited and M/s. UltraTech Cement
Limited (Respondent No.1-writ petitioner). The scheme of
amalgamation was duly approved by the High Court of Bombay
and the High Court of Gujarat vide orders dated 11.06.2010 and
01.07.2010 respectively.
29. In the case of Sadanand S. Varde & Others Vs. State of
Maharashtra & Others (supra), an argument was raised before
the Bombay High Court that the transaction by which two
companies were amalgamated under the scheme of
amalgamation, amounted to a "transfer" within the meaning of
Clause (f) of Section 269UA of the Income Tax Act, 1961 and the
"apparent consideration" for the transfer was the consideration
indicated in the scheme of amalgamation and it being far in excess
of the monetary limit of Rs. 10,00,000/-, there was an obligation
to file a declaration in Form No. 37-I, and by reason of failure to
do so, the consequences of application of Chapter XX-C of the
Income Tax Act, 1961 could not be avoided.
In reply, the argument was that Chapter XX-C of the Income
Tax Act, 1961 was not intended to apply to transfer effected under
the orders of a Court pursuant to Sections 391 to 394 of the
Companies Act of 1956.
It was further contended that the provisions of Chapter XX-C
of the Income Tax Act, 1961 will apply only to the cases of
"transfer" as defined by Clause (f) of Section 269UA of the Income
Tax Act, 1961.
While examining the aforesaid contentions, the
consequences of amalgamation of companies under the
(25 of 67) [SAW-987/2021]
Companies Act of 1956 were also taken into consideration by the
Bombay High Court and it was observed thus:
"106. It is next contended that the provisions of
Chapter XX-C would apply only to cases of
"transfer" as defined by Clause (f) of Section 269-
UA. A scrutiny of the definitions of "apparent
consideration" given in Clause (b) and "transfer"
given in Clause (f) would unmistakably indicate
that the transfers to which the provisions of
Chapter XX-C are intended to apply, are only
transfers under agreement or contractual transfers
and not statutory transfers or transfers effected by
orders of the Court or by operation of law. In a
situation of amalgamation, the transfer is not by
way of sale, exchange, lease or rent so as to fall
within Section 269-UA. Further, the process by
which the land in question stood vested in the
transferee company by virtue of the amalgamation
order, would not answer the description of
"immovable property" within the meaning of Clause
(d)(ii), nor does it answer the description of
"transfer" as defined in Clause (f)(ii) of section
269-UA of the Income Tax Act. See in this
connection (Sailendra Kumar Ray v. The Bank of
Calcutta), 1948 (18) Company Cases 1 and
(Sayananidhi Virudhunagar Ltd. v. A.S.R.
Subramanya Nadar), A.I.R. 1951 Madras 209 and
(Telesound India Ltd. In Re.), 1983 (53) Company
Cases 926. In Sailendra Kumar Ray's case (supra),
the Calcutta High Court held that in a situation of
amalgamation even if it can be said that there was
a transfer of asset, the transfer was not by way of
an assignment but by the order of the Court
backed up by the force of a statutory provision and
by operation of law. In Sayayanidhi's case (supra),
the Madras High Court reiterated this proposition.
In Telesound's case (supra), it is held that as
amalgamation has its origin in statute and is
statutory in character, the transfer and vesting is
by operation of law and not an act of the transferor
company, nor an assignment by it, but is the result
of a statutory instrument. In J.K. (Bom.) Pvt. Ltd.
v. New Kaiser J. Hind Spinning and Weaving Co.
Ltd., 1967 (2) Company Law Journal 272, this
Court cited with approval the decision of the
English Court in (Re Garner Motors Ltd.), 1937 (1)
All. E.R. 671 and held that a scheme of
amalgamation has statutory operation when
sanctioned by the Company Court under the
relevant provisions of the Companies Act and is
distinct and different from a mere agreement
signed by the necessary parties. Even if the
scheme is approved by all concerned parties by
(26 of 67) [SAW-987/2021]
consensus, merely because it is so agreed upon,
the Court is not obliged to put its imprimatur on it.
The Court has the discretion and power to reject a
scheme even if all the shareholders and creditors
have agreed to it. But, once the scheme is
scrutinised by the Company Court and sanctioned
by an order made by it under section 391 of the
Companies Act, it ceases to retain the character of
contract and operates by force of the statute. This
judgment was considered by the Supreme Court in
appeal in (J.K. (Bom.) Pvt. Ltd. v. New Kaiser J.
Hind Spinning and Weaving Co. Ltd.), 1970 (40)
Company Cases 689, and the Supreme Court
reiterated that once a scheme becomes sanctioned
by the Court, it ceases to operate as a mere
agreement between the parties and becomes
binding on the company, the creditors and
shareholders and has statutory operation by virtue
of the provisions of section 391 of the Companies
Act. Such a scheme sanctioned by the Company
Court is statutorily binding even on the creditors
and shareholders who might have dissented from it
or who might have opposed its being sanctioned.
It, therefore, has the statutory sanction in that
sense. The Supreme Court also approved the
observations in Re Garner Motors Ltd. (supra) while
coming to this conclusion. The observations of the
Calcutta High Court in (House of Labourers Ltd. v.
Comilla Baking), A.I.R. 1937 Cal. 381 are to similar
effect.
107. There is overwhelming authority of
precedents suggesting that when an amalgamation
takes place, the transfer of assets takes place by
the force of the Company Court's order and/or by
operation of law; it ceases to be a contractual or a
consensual transfer. The contention, therefore, is
that Chapter XX-C is not attracted to such a
transfer by operation of law. This contention has
substance and needs to be upheld."
30. In another decision in the case of Sequent Scientific Ltd.,
In Re (supra), Bombay High Court, relying upon decisions of the
Hon'ble Supreme Court and different High Courts, observed thus:
"18. ............ The question is whether the transferee
company would be the successor of the transferor
company in the context of the supply agreement.
While giving the description of the intervenor
company in the recital, the same agreement
mentions that the expression unless it be repugnant
to the context or meaning thereof, be deemed to
mean and include its successors and assigns. In
other words, both parties clearly understood that in
(27 of 67) [SAW-987/2021]
so far as the successors of any of the party would
be bound by the terms and conditions of the supply
agreement. In the entire agreement, nowhere it is
provided that before allowing succession, the
concerned party should take prior written consent
of the other. Unlike, in the case of transfer or
assignment it is expressly provided that prior
written consent of the intervenor company should
be obtained. In the present case, the transferee
company would become successor in interest as a
consequence of the scheme of amalgamation as the
transferor company would stand dissolved without
winding up. The petitioners has justly relied on the
decision of the apex court in the case of
Bhagwandas Chopra v. United Bank of India
reported in 1987 Supp SCC 536 : AIR 1988 SC 215,
wherein the court considered the argument about
the effect of scheme of amalgamation and the
status of the transferee company as a result of such
amalgamation. In paragraph 5, the apex court
observed thus (page 218 of AIR 1988):
"It is, however, necessary to evolve a
reasonable procedure to deal with cases
where a devolution of interest takes place
during the pendency of a proceeding arising
under the Industrial Disputes Act, 1947. In
the circumstances it is reasonable to hold that
in every case of transfer, devolution, merger,
takeover or a scheme of amalgamation under
which the rights and liabilities of one
company or corporation stand transferred to
or devolve upon another company or
corporation either under a private treaty, or a
judicial order or under a law the transferee
company or corporation as a successor-in-
interest becomes subject to all the liabilities
of the transferor company, or corporation and
becomes entitled to all the rights of the
transferor company or corporation subject to
the terms and conditions of the contract of
transfer or merger, the scheme of
amalgamation and the legal provisions, as the
case may be, under which such transfer,
devolution, merger, takeover or
amalgamation, as the case may be, may have
taken place. It follows that subject to such
terms it becomes liable to be impleaded or
becomes entitled to be impleaded in the place
of or in addition to the transferor company or
corporation in any action, suit or proceeding
filed against the transferor company or
corporation by a third party or filed by the
transferor company or corporation against a
third party and that whatever steps have
already taken place in those proceedings will
(28 of 67) [SAW-987/2021]
continue to operate against and be binding on
the transferee company or corporation in the
same way in which they operate against a
person on whom any interest has devolved in
any of the ways mentioned in rule 10 of
Order 22 of the Code of Civil Procedure,
1908, subject of course to any terms in the
contract of transfer or merger, scheme of
amalgamation or other relevant legal
provisions governing the transaction under
which the transferee company or corporation
has become the successor-in-interest of the
transferor company or corporation."
In the aforesaid case, Full Bench judgment of the Madras
High Court in the case of Sahayanidhi (Virudhunagar) Ltd. v.
A.R.S. Subrahmanya Nadar (1950) 20 Comp Cas 214,
dealing with the effect of order of the Court sanctioning the
scheme of arrangement, was also considered by the Bombay High
Court as below:
"19. It may be useful to advert to the
decision of the Full Bench of the Madras High
Court in the case of Sahayanidhi
(Virudhunagar) Ltd. v. A.S.R. Subrahmanya
Nadar reported in [1950] 20 Comp Cas 214 :
AIR 1951 Mad 209. In Paragraph 4, the court
dealing with the effect of order of court
sanctioning the arrangement observed thus
(page 217):
"Before considering the terms and
stipulations in the two deeds of transfer
referred to as A-2 and A-3, we would like to
refer to section 153A of the Companies Act
which has been enacted with a view to
facilitate arrangements and compromises
between a company and its creditors or
shareholders which involve a transfer of its
assets and liabilities to other companies as
part of such arrangement. If any such
scheme or arrangement is sanctioned by
court, the court is empowered by the
section to make provision by its order
sanctioning the arrangement or any
subsequent order, for the transfer of the
assets and liabilities of a company in
liquidation to another company, styled in
the section as the transferee company.
Where an order of court made under the
section provides for the transfer of the
(29 of 67) [SAW-987/2021]
assets and liabilities of a company in
liquidation to another company, the assets
are, by virtue of that order, without more,
transferred to and vest in the transferee
company and the liabilities of the former
company are also cast upon the transferee
company."
The legal consequences flowing as a result of scheme of
arrangement approved by the High Court under the provisions of
the Companies Act, 1956 were considered on the factual premise
of that case that the supply agreement provided that the
transferor company shall, unless it be repugnant to the context
and meaning thereof, be deemed to mean and include its
successors and permitted assigns and it was held as below:
"21. A priori, the transferee company would
step in the shoes of successor in interest of
the transferor company and would be bound
by the terms and conditions of the supply
agreement and is obliged to comply with the
same in its letter and spirit in all respects.
.............."
31. In another decision in the case of Telesound India Ltd., In
re (supra), Delhi High Court while dealing with legal
consequences flowing from the scheme of arrangement under the
Companies Act of 1956 in the matter of amalgamation of two
companies, held as below:
"12. Amalgamation of a company with another
or an amalgamation of two companies to form
a third is brought about by two parallel
schemes of arrangements entered into
between one company and its members and
the other company and its members and the
two separate arrangements bind all the
members of the companies and the companies
when sanctioned by the court. Amalgamation
is, therefore, an absorption of one company
into another or merger of both to form a third,
which is not a mere act of the two companies
or their members but is brought about by
virtue of a statutory instrument and to that
extent has statutory genesis and character,
(30 of 67) [SAW-987/2021]
and to that extent it is distinguishable from a
mere bilateral arrangement to merge or join in
a common endeavour, an undertaking or
enterprise J.K. (Bombay) P. Ltd. v. New Kaiser-
I-Hind Spg. & Wvg. Co. Ltd., [1970] 40 Comp
Cas 689 (SC). Once the court sanctions the
amalgamation, the amalgamation is made
effective and binding by virtue of statutory
power, inter alia, by the transferor to the
transferee-company of the whole or any part
of the undertaking, property rights and
liabilities of the transferor-company by virtue
of the provisions of s. 394 of the Act, which
are intended to facilitate the process of
amalgamation : Sailendra Kumar Ray v. Bank
of Calcutta Ltd., [1948] 18 Comp Cas 1 (Cal).
The expression "property" and "liabilities",
which can be transferred on amalgamation,
under s. 394(1) have been defined in very
wide terms by sub-s. (4)(a) of that section, so
as to include "rights and powers of every
description" and "duties of every description"
respectively. The expression "property" would,
therefore, be wide enough to include rights
under a contract, including a contract of
tenancy. These are co-extensive with the
property and right which the transferor-
company has in relation to its assets, but
could not be wider than what the transferor-
company was entitled to enjoy. The rights,
property, as indeed the liabilities of the
transferor-company, become the rights,
property and liabilities of the transferee-
company by virtue of the order of vesting
made by the court consequent on
amalgamation. It is neither an assignment of
right or property, nor an assignment of
property by the company. It is the transfer of
rights, property and liabilities along with the
company itself and it is only as a result of
confusion of thought that it could be described
as an assignment by the company to another
person, which is independent and distinct from
the company. Such a notion ignores the
peculiar position of amalgamation in company
law and its true legal incident. It is for
historical reasons that the device of
amalgamation was built into the company law
for facilitating the merger of companies, inter
alia, with a view to help restoration of sick
units to health, better, more effective and
economical management of the corporate
sector to ensure continued production,
increased employment avenues and
generation of revenues. Section 72A of the I.T.
(31 of 67) [SAW-987/2021]
Act is one of the incentives for this kind of
absorption of one company into another. On
amalgamation the transferor-company merges
into the transferee-company shedding its
corporate shell, but for all purposes remaining
alive and thriving as part of the larger whole.
In that sense the transferor-company does not
die either on amalgamation or on dissolution
without winding-up under sub-s. (1) of s. 394.
It is not wound up because it has merged into
another. Winding-up is unnecessary. It is
dissolved not because it has died, or ceased to
exist, but because for all practical purposes, it
has merged into another forming part of one
corporate shell; The dissolution is the death of
its independent corporate shell, because a
company cannot have two shells. It is,
therefore, dissolved because the independent
shell or corporate name is superfluous. The
company in its essence means its members,
who compose it, the assets, property and
rights that it had, its liabilities, its undertaking,
business or other activity. It is not
synonymous with the shell or name. On
amalgamation and consequential dissolution
all these attributes continue to live as part of a
larger entity. The only part that dies is the
shell and the name. It is unlike the death of a
natural person and yet in a larger and deeper
sense the same. It is unlike it, because a
natural person, as ordinarily understood, does
not survive the death in any physical form.
The transferor-company, however, does
survive, in that there is a continuity even after
dissolution of its members, its assets,
undertaking, etc. The estate of a natural
person continues in the hands of the successor
for a limited period. In a larger and a deeper
sense even a natural person survives his
physical death in the continuation of a being,
which is supposed to merge in the wider
cosmic whole. That, however, is an area of
study of life after death, or what is sometimes
described as life after life, where the process
is of a different dimension and defies
description and is, in any event, too deep and
wide for the narrow compass of this judgment.
The analogy, therefore, between the death of
a natural person and dissolution without
winding-up is inappropriate."
32. A Division Bench of Calcutta High Court in the case of
Castron Technologies Ltd. Vs. Castron Mining Ltd. (supra)
(32 of 67) [SAW-987/2021]
dealt with legal consequences flowing from scheme of
arrangement under the provisions of the Companies Act of 1956
and held as below:
"29. In the present case the scheme of
arrangement was jointly submitted before the
company court for necessary orders in March,
2002. Under the scheme the parties agreed that
the C.M.L. would be entitled to pursue and
derive the benefit of applications submitted by
C.T.L. for the grant of a mining lease upon the
scheme being made effective. The mining lease
was granted in favour of C.T.L. on June 18, 2002
and was registered in favour of C.T.L. on July 1,
2002. Notices were addressed to the Ministry of
Coal, Government of India as also to the
Government of Jharkhand in January 2003,
indicating that an application had been filed in
this court for confirming the scheme of
arrangement between the parties herein
whereby the mining division of C.T.L. was being
transferred to C.M.L. On April 28, 2003, the
Central Government informed the Court that it
had no objection to the scheme. The scheme
was sanctioned by this court only thereafter, on
May 13, 2003. A deed of rectification has also
been executed in June, 2009 changing the name
of the lessee on the mining lease to C.M.L.
30. We are of the view that the application for
the mining lease was transferred and not the
mining lease itself. Such a transfer did not
require the sanction of the Government. It is
only if a mining lease is to be transferred that a
prior sanction is required. Admittedly, the
scheme was sanctioned with effect from October
31, 2001, when there was no mining lease in
favour of C.T.L. Therefore the inevitable
inference is that the application for the mining
lease was transferred under the scheme."
33. In the aforesaid decision, it was held that application for
grant of mining lease was transferred under the scheme of
arrangement. That was not a case where it required sanction of
the Government for such transfer, it being not a case of transfer of
mining lease but only an application for grant of mining lease.
34. In the case of Principal Commissioner of Income Tax
(Central)-2 Vs. Mahagun Realtors (P) Ltd., (supra), the
(33 of 67) [SAW-987/2021]
Hon'ble Supreme Court considered in detail the statutory scheme
and legal consequences flowing upon amalgamation of the
companies under the scheme of the Companies Act of 1956 and
held as below:
"18. Amalgamation, thus, is unlike the winding
up of a corporate entity. In the case of
amalgamation, the outer shell of the corporate
entity is undoubtedly destroyed; it ceases to
exist. Yet, in every other sense of the term, the
corporate venture continues - enfolded within
the new or the existing transferee entity. In
other words, the business and the adventure
lives on but within a new corporate residence,
i.e., the transferee company. It is, therefore,
essential to look beyond the mere concept of
destruction of corporate entity which brings to
an end or terminates any assessment
proceedings. There are analogies in civil law and
procedure where upon amalgamation, the cause
of action or the complaint does not per se cease
- depending of course, upon the structure and
objective of enactment. Broadly, the quest of
legal systems and courts has been to locate if a
successor or representative exists in relation to
the particular cause or action, upon whom the
assets might have devolved or upon whom the
liability in the event it is adjudicated, would fall.
20. In Saraswati Industrial Syndicate v.
Commissioner of Income Tax Haryana, Himachal
Pradesh, (1990) Supp (1) SCR 332, the facts
were that after amalgamation, the transferee
company claimed exemption from tax, of a sum
which had been allowed as a trading liability-on
accrual basis, in the hands of the transferee
company which had ceased to exist. The
revenue disallowed that claim; that view was
upheld. This court stated that:
"In amalgamation two or more companies are
fused into one by merger or by taking over by
another. Reconstruction or 'amalgamation' has
no precise legal meaning. The amalgamation is
a blending of two or more existing undertakings
into one undertaking, the share holders of each
blending company become substantially the
share-holders in the company which is to carry
on the blended undertakings. There may be
amalgamation either by the transfer of two or
more undertakings to a new company, or by the
transfer of one or more undertakings to an
existing company. Strictly 'amalgamation' does
not cover the mere acquisition by a company of
(34 of 67) [SAW-987/2021]
the share capital of other company which
remains in existence and continues its
undertaking but the context in which the term is
used may show that it is intended to include
such an acquisition. See: Halsbury's Laws of
England, 4th Edition Vol. 7 Para 1539. Two
companies may join to form a new company,
but there may be absorption or blending of one
by the other, both amount to amalgamation.
When two companies are merged and are so
joined, as to form a third company or one is
absorbed into one or blended with another, the
amalgamating company loses its entity.
In M/s General Radio and Appliances Co Ltd v
M.A.. Khader (dead) by Lrs., [1986] 2 S.C.C.
656 : (AIR 1986 SC 1218), the effect of
amalgamation of two companies was
considered. M/s. General Radio and Appliances
Co. Ltd. was tenant of a premises under an
agreement providing that the tenant shall not
sub-let the premises or any portion thereof to
anyone without the consent of the landlord. M/s.
General Radio and Appliances Co. Ltd. was
amalgamated with M/s. National Ekco Radio and
Engineering Co. Ltd. under a scheme of
amalgamation and order of the High Court
under Sections 391 and 394 of Companies Act,
1956. Under the amalgamation scheme, the
transferee company, namely, M/s. National Ekco
Radio and Engineering Company had acquired
all the interest, rights including leasehold and
tenancy rights of the transferor company and
the same vested in the transferee company.
Pursuant to the amalgamation scheme the
transferee company continued to occupy the
premises which had been let out to the
transferor company. The landlord initiated
proceedings for the eviction on the ground of
unauthorised sub-letting of the premises by the
transferor company. The transferee company set
up a defence that by amalgamation of the two
companies under the order of the Bombay High
Court all interest, rights including leasehold and
tenancy rights held by the transferor company
blended with the transferee company, therefore
the transferee company was legal tenant and
there was no question of any sub-letting. The
Rent Controller and the High Court both decreed
the landlord's suit. This Court in appeal held
that under the order of amalgamation made on
the basis of the High Court's order, the
transferor company ceased to be in existence in
the eye of law and it effaced itself for all
practical purposes. This decision lays down that
after the amalgamation of the two companies
(35 of 67) [SAW-987/2021]
the transferor company ceased to have any
entity and the amalgamated company acquired
a new status and it was not possible to treat the
two companies as partners or jointly liable in
respect of their liabilities and assets. In the
instant case the Tribunal rightly held that the
appellant company was a separate entity and a
different assessee, therefore, the allowance
made to Indian Sugar Company, which was a
different assessee, could not be held to be the
income of the amalgamated company for
purposes of Section 41(1) of the Act. The High
Court was in error in holding that even after
amalgamation of two companies, the transferor
company did not become non-existent instead it
continued its entity in a blended form with the
appellant company. The High Court's view that
on amalgamation 'there is no complete
destruction of corporate personality of the
transferor company instead there is a blending
of the corporate personality of one with another
corporate body and it continues as such with the
other is not sustainable in law. The true effect
and character of the amalgamation largely
depends on the terms of the scheme of merger.
But there cannot be any doubt that when two
companies amalgamate and merge into one the
transferor company loses its entity as it ceases
to have its business. However, their respective
rights of liabilities are determined under scheme
of amalgamation but the corporate entity of the
transferor company ceases to exist with effect
from the date the amalgamation is made
effective."
35. Keeping in view the aforesaid legal position adumbrated in
series of decisions referred to hereinabove, dealing with the
consequences flowing upon the scheme of arrangement or in the
case of amalgamation, we shall now consider the facts of the
present case and the consequences flowing upon the scheme of
arrangement between M/s. Grasim Industries Limited and M/s.
Samruddhi Cement Limited followed by the scheme of
amalgamation entered into M/s. Samruddhi Cement Limited and
M/s. UltraTech Cement Limited (Respondent No.1-writ petitioner).
(36 of 67) [SAW-987/2021]
Scheme of arrangement between M/s. Grasim Industries
Limited and M/s. Samruddhi Cement Limited was approved by the
High Court of Madhya Pradesh vide order dated 31.03.2010.
Clause (e) of Section 3, Transfer and Vesting of the Demerged
Undertaking in Part II, "Demerger" provided as below:
"(e) Without prejudice to the generality of the
foregoing, upon the coming into effect of the
Scheme, all the rights, title, interest and claims
of the Demerged Company in any leasehold
properties, including the mining leases (including
those set out in Schedule III hereof) and the
prospecting licenses (including in each case, any
applications made therefor) of the Demerged
Company in relation to the Demerged
Undertaking, shall, pursuant to Section 394(2)
of the Act, without any further act or deed, be
transferred to and vested in or be deemed to
have been transferred to and vested in the
Resulting Company with effect from the
Appointed Date."
Importantly, in the Schedule III, "Details of the mining
leases pertaining to the Demerged Undertaking", in relation to the
State of Rajasthan, under Clause 6.h, it was clearly recorded as
below:
"h. Letter of Intent No. P.2(185) Mines/Group-
2/07 dated October 10, 2007 from Government
of Rajasthan for allotting Mining Lease No. 19/06
covering area of 318.78 hectares to Grasim
Industries Limited, villages of Ajeetpura,
Bhainslana, Kujota & Mehrampur (Nawab), Tehsil
Kotputli, Jaipur, Rajasthan."
In the order dated 06.05.2010 passed by the Gujarat High
Court, approving the scheme of arrangement, in the Schedule III,
"Details of the mining leases pertaining to the Demerged
Undertaking", in relation to the State of Rajasthan, under Clause
6.h, it was clearly recorded as below:
"h. Letter of Intent No. P.2(185) Mines/Group-
2/07 dated October 10, 2007 from Government
of Rajasthan for allotting Mining Lease No. 19/06
(37 of 67) [SAW-987/2021]
covering area of 318.78 hectares to Grasim
Industries Limited, villages of Ajeetpura,
Bhainslana, Kujota & Mehrampur (Nawab), Tehsil
Kotputli, Jaipur, Rajasthan."
It is, thus, clear that Letter of Intent, which was issued to
M/s. Grasim Industries Limited was transferred in favour of M/s.
Samruddhi Cement Limited by virtue of scheme of arrangement
approved by the High Court of Madhya Pradesh and the High Court
of Gujarat. It is relevant to note that it was Letter of Intent dated
10.10.2007 issued by the Government of Rajasthan in favour of
M/s. Grasim Industries Limited for allotting Mining Lease No.
19/06 covering area of 318.78 hectares situated in the villages
Ajeetpura, Bhainslana, Kujota & Mehrampur (Nawab), Tehsil
Kotputli, Jaipur, Rajasthan which is subject matter of the present
appeal.
36. Similarly, later on, scheme of amalgamation of M/s.
Samruddhi Cement Limited and M/s. UltraTech Cement Limited
(Respondent No.1-writ petitioner) was approved by the High Court
of Bombay vide order dated 11.06.2010. Heading "Undertaking"
for the purpose of amalgamation as defined under Clause (b) of
the scheme of amalgamation clearly provided as below:
"(b) all permits, quotas, rights, entitlements,
industrial and other licences, bids, tenders,
letters of intent, .................."
Sub-clause (a) of Clause 4, "Transfer of Assets" under Part
II, "Amalgamation of the transferor company with the transferee
company" provided as below:
"(a) Without prejudice to the generality of Clause
3 above, upon the coming into effect of the
Scheme and with effect from the Appointed Date,
all the estate, assets, properties, rights, claims,
title, interest and authorities including accretions
and appurtenances comprised in the Undertaking
(38 of 67) [SAW-987/2021]
of whatsoever nature and wheresoever situate
shall, under the provisions of Sections 391 to 394
and all other applicable provisions, if any, of the
Act, without any further act or deed, be and stand
transferred to and vested in the Transferee
Company and/or be deemed to be transferred to
and vested in the Transferee Company as a going
concern so as to become, as and from the
Appointed Date, the estate, assets, properties,
rights, claims, title, interest and authorities of the
Transferee Company."
Order dated 01.07.2010 passed by the Gujarat High Court
approving the scheme of amalgamation of M/s. Samruddhi
Cement Limited with M/s. UltraTech Cement Limited (Respondent
No.1-writ petitioner), amongst other things, provided as below:
"2. That with effect from the Appointed Date, the
entire business and the whole of the undertaking of
the Petitioner Company as set out in the Scheme
being Annexure "F" to the Petition shall without any
further act or deed is transferred to and vested in
and/or deemed to be transferred to and vested in
the Transferee Company."
Under the heading "(B) Mining Leases pertaining to
Samruddhi Cement Limited, the Transferor Company" in relation
to State of Rajasthan, in Clause 6.h it was provided as below:
"h. Letter of Intent No. P.2(185) Mines/Group-
2/07 dated October 10, 2007 from Government of
Rajasthan for allotting Mining Lease No. 19/06
covering area of 318.78 hectares to Samruddhi
Cement Limited, villages of Ajeetpura, Bhaislana,
Kujota & Mehrampur (Nawab), Tehsil Kotputli,
Jaipur, Rajasthan."
37. Present is not a case where the scheme of arrangement
(demerger) between M/s. Grasim Industries Limited and M/s.
Samruddhi Cement Limited followed by the scheme of
amalgamation between M/s. Samruddhi Cement Limited and M/s.
UltraTech Cement Limited, specifically providing for transfer of
Letter of Intent dated 10.10.2007 initially issued in favour of M/s.
(39 of 67) [SAW-987/2021]
Grasim Industries Limited, was in contravention of any law in force
or opposed to public policy. As has been referred to hereinabove,
under the scheme of arrangement (demerger) and scheme of
amalgamation, Letter of Intent stood automatically
transferred/vested in favour of transferee company and approved
by the orders passed by the jurisdictional High Courts from time to
time, there was no statutory bar operating under the law against
such transfer/vesting of Letter of Intent.
38. Learned Additional Advocate General appearing for the
appellants has relied upon the decision of the Hon'ble Supreme
Court in the case of M/s. General Radio and Appliances Co.
Ltd. & Others Vs. M.A. Khader (Dead) by LRs (supra). On
facts, it was found in that case that there was contravention of
statutory scheme of Andhra Pradesh Buildings (Lease, Rent and
Eviction) Control Act, 1960 regarding restriction on subletting
and/or transfer and assignment of interest as well as of rent
agreement.
39. In another case, in Delhi Development Authority Vs.
Nalwa Sons Investment Ltd. and Another (supra), on facts,
it was held that transfer of any asset, right or interest through
scheme of amalgamation is subject to other statutory provisions
which govern the said asset, right or interest.
As has been held hereinabove that the provisions of the
MMDR Act and the rules framed thereunder do not create any bar
or legal impediment for transfer/vesting of Letter of Intent under
the scheme of arrangement (demerger) and the scheme of
amalgamation, it has to be held that there was valid
transfer/vesting of Letter of Intent, issued in favour of M/s.
(40 of 67) [SAW-987/2021]
Grasim Industries Limited, in favour of Respondent No.1-writ
petitioner, M/s. UltraTech Cement Limited.
40. Learned Additional Advocate General has placed heavy
reliance upon the decision of Delhi High Court in the case of M/s.
Ispat Industries Ltd. Vs. Union of India & Others (supra).
On facts, that was a case where fourth respondent therein
made application to the Government for grant of permission to
change name in the Letter of Intent or transfer the same in favour
of its subsidiary company, which request was accepted by the
State Government. Such transfer having been challenged in
revision by a third party, revision petition was disposed off holding
that Letter of Intent could not be transferred by the State as
under the Mineral Concession Rules, only mining lease could be
transferred. That was not a case where the legal consequences
flowing from the scheme of arrangement (demerger) and the
scheme of amalgamation, approved by the jurisdictional High
Courts, were examined and held that transfer of Letter of Intent
was not permissible. The aforesaid case turns more on its own
facts. The aforesaid decision is not an authority for the proposition
that in the absence of provisions in the Rules of 1960, transfer of
Letter of Intent was impliedly prohibited under the law.
Therefore, the first contention of learned Additional Advocate
General deserves to be rejected and is, accordingly, rejected.
41. It is to be noted that no material has been produced before
this Court to show that the operative reason for non-grant of
mining lease was based on an opinion formed that Letter of Intent
was not transferable under the law. On the contrary, the conduct
of the appellant-State shows that the appellants being fully aware
(41 of 67) [SAW-987/2021]
of demerger and amalgamation kept on issuing Letter of Intent.
Vide letter dated 03.12.2010 addressed in the name of M/s.
Grasim Industries Limited, it was informed that the validity of
Letter of Intent was extended for a period upto 30.09.2011 on
certain conditions. Condition (x) clearly provided that as a result
of demerger of the cement business of M/s. Grasim Industries
Limited with M/s. Samruddhi Cement Limited followed by
amalgamation of M/s. Samruddhi Cement Limited with M/s.
UltraTech Cement Limited (Respondent No.1-writ petitioner),
necessary stamp and registration fee shall be payable by the
company before change of the name of the applicant company. It
is, thus, clear that the State was fully aware of the demerger and
amalgamation proceedings and that all the assets, rights and
liabilities stood transferred in the name of Respondent No.1-writ
petitioner-company and it was required to fulfill certain conditions
before change of name of the applicant from M/s. Grasim
Industries Limited to M/s. UltraTech Cement Limited. It, therefore,
lies ill in the mouth of the appellant-State to say that the
provisions with regard to change of name as contained in Rule 62
of the Rules of 1960 will not be applicable in the present case.
The State clearly gave representation to Respondent No.1-writ
petitioner that it was prepared to transfer application for grant of
mining lease and had also extended validity of Letter of Intent and
Respondent No.1-writ petitioner company was required to pay
registration fee and stamp duty. Not only this, Respondent No.1-
writ petitioner was required to enhance its production capacity
from 3 million tonnes per annum to 4 million tonnes per annum
within a period of 18 months. Further, Respondent No.1-writ
(42 of 67) [SAW-987/2021]
petitioner was required to submit bank guarantee towards
keenness money valid for a period of two years with the forfeiture
clause that if the production capacity is not enhanced from 3
million tonnes per annum to 4 million tonnes per annum,
keenness money would be forfeited and the lease would be
revoked.
We are at complete loss as to how the State could take such
a stand in the Court against its own conduct, particularly when the
other party has acted on its representation because it is matter of
record and not under dispute that Respondent No.1-writ petitioner
had fulfilled the condition of enhancement of its production
capacity from 3 million tonnes per annum to 4 million tonnes per
annum and also fulfilled the condition of furnishing bank
guarantee towards keenness money. The period under which
Letter of Intent was further extended vide letter dated
11.12.2014, being fully aware of demerger and amalgamation
proceedings. In fact, vide letter dated 24.06.2016, Assistant
Mining Engineer, Kotputli itself recommended to the Director,
Mines and Geology, Rajasthan for grant of lease/extension of
Letter of Intent in favour of Respondent No.1-writ petitioner. The
Superintendent Mining Engineer vide its letter dated 27.06.2016
required the Assistant Mining Engineer, Kotputli to submit relevant
information. It is, therefore, clear that at no point of time, there
was any decision taken to reject the application for grant of
mining lease on the ground that Letter of Intent was not
transferable upon demerger and amalgamation proceedings. On
the contrary, Respondent No.1-writ petitioner was required to
fulfill the terms and conditions of Letter of Intent also.
(43 of 67) [SAW-987/2021]
Respondent No.1-writ petitioner has placed on record letter
dated 25.01.2017 of the State by which Letter of Intent for grant
of mining lease earlier issued in the name of M/s. Vedanta
Industries Limited has been permitted to be changed in the name
of M/s. Marwar Cement Limited. The aforesaid document has
been filed by Respondent No.1-writ petitioner along with additional
affidavit in the appeal. In its counter, this position is sought to be
justified by the State that Rule 62 of the Rules of 2016 permit
change of name and in case of demerger and amalgamation, such
change of name is not permissible in law. It is not the case of the
State that M/s. Vedanta Industries Limited itself changed the
name of the company to M/s. Marwar Cement Limited requiring
change in name under Rule 62 of the Rules of 2016. Therefore, it
is clearly a case of transfer of Letter of Intent whereas in the
present case, Letter of Intent issued in favour of M/s. Grasim
Industries Limited stood vested in Respondent No.1-writ petitioner
by operation of law, as has been elaborately dealt with by us
hereinabove.
42. The second ground, on which the order passed by the
learned Single Judge, allowing writ petition of Respondent No. 1,
is assailed is that application for grant of mining lease which was
made to the State Government by the transferor company i.e.
M/s. Grasim Industries Limited attained its natural demise in view
of operation of sunset clause with effect from 11.01.2017 upon
coming into force of Section 10A inserted in the MMDR Act vide
the Mines and Minerals (Development and Regulation) Amendment
Act, 2015 (No. 10 of 2015). Learned Additional Advocate General
vehemently contended that the application for grant of mining
(44 of 67) [SAW-987/2021]
lease became automatically ineligible in view of the provisions
contained in sub-section (1) of Section 10A of the MMDR Act. It is
argued that even though earlier Letter of Intent was issued in
favour of the transferor company, i.e. M/s. Grasim Industries
Limited, extended from time to time, the same could not get
crystallised as Respondent No.1-writ petitioner failed to fulfill the
terms and conditions of Letter of Intent. Therefore, right to get
the mining lease executed on the fulfillment of the terms and
conditions of Letter of Intent did not exist and, therefore, in such
a case, it is argued, Clause (c) of sub-section (2) of Section 10A of
the MMDR Act has no application in the present case.
The MMDR Act was extensively amended vide the Mines and
Minerals (Development and Regulation) Amendment Act, 2015
(No. 10 of 2015). A new section, namely, Section 10A was
inserted which dealt with the rights of existing concession
holders/applicants. As the submissions of learned Additional
Advocate General are primarily based on the construction of the
provisions contained in newly inserted Section 10A of the MMDR
Act, it would be appropriate to extract the provisions of Section
10A of the MMDR Act as below:
"[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
(45 of 67) [SAW-987/2021]
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,―
(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;
[Provided that for the cases covered under
this clause including the pending cases, the right
to obtain a prospecting licence followed by a
mining lease or a mining lease, as the case may
be, shall lapse on the date of commencement of
the Mines and Minerals (Development and
Regulation) Amendment Act, 2021:
Provided further that the holder of a
reconnaissance permit or prospecting licence
whose rights lapsed under the first proviso, shall
be reimbursed the expenditure incurred towards
reconnaissance or prospecting operations in such
manner as may be prescribed by the Central
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:
Provided that in respect of any mineral
specified in the First Schedule, no prospecting
licence or mining lease shall be granted under
(46 of 67) [SAW-987/2021]
clause (b) of this sub-section except with the
previous approval of the Central Government.]
[(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:
Provided that in respect of the minerals
specified in Part B of the First Schedule where the
grade of atomic mineral is equal to or greater than
the threshold value, the mineral concession for
such areas shall be granted in accordance with the
rules made under section 11B.]"
43. The newly inserted Section 10A of the MMDR Act is in two
parts. First part is contained in sub-section (1) which provides
that all applications received prior to the date of commencement
of the Mining and Minerals (Development and Regulation)
Amendment Act, 2015 shall become ineligible. Thus, by operation
of law, it is vividly clear that applications received prior to the
appointed date stood rejected/rendered automatically
ineligible/attained natural demise.
The second part of Section 10A of the MMDR Act as
contained in sub-section (2), however, carves out exceptions to
sub-section (1). Categories (a), (b) and (c) of sub-section (2) of
Section 10A, exhaustively enumerated therein, save certain
applications from being rendered ineligible by operation of law.
Apparently, case of Respondent No.1-writ petitioner is not covered
either under clause (a) and (b) of sub-section (2) of Section 10A
of the MMDR Act. However, clause (c) of sub-section (2) of
Section 10A of the MMDR Act is relevant because that deals with a
situation where the Central Government has communicated
previous approval as required under sub-section (1) of Section 5
for grant of mining lease, or if a Letter of Intent (by whatever
name called) has been issued by the State Government to grant a
(47 of 67) [SAW-987/2021]
mining lease, before the commencement of the Mines and
Minerals (Development and Regulation) Amendment Act, 2015.
Present is not a case covered under sub-section (1) of Section 5 of
the MMDR Act. However, second part of clause (c) of sub-section
(2) of Section 10A of the MMDR Act saves those applications
where Letter of Intent has been issued by the State Government
prior to commencement of the Mines and Minerals (Development
and Regulation) Amendment Act, 2015. Thus, in a case where
Letter of Intent has been issued by the State Government to grant
a mining lease prior to commencement of the Mines and Minerals
(Development and Regulation) Amendment Act, 2015, operation
of sub-section (1) of Section 10A of the MMDR Act stands
excluded and the consequences provided therein would not follow.
Thus, by operation of law, application would not become ineligible.
It may be a different thing altogether that for some other reason,
the application is not found acceptable and the same is liable to be
rejected. It is important to note that clause (c) of sub-section (2)
of Section 10A of the MMDR Act not only excludes application of
sub-section (1), but at the same time, creates an obligation on the
State and a corresponding right on the applicant for grant of
mining lease, subject to fulfillment 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 Act.
It may be a different thing altogether that an application for
grant of mining lease is liable to be rejected for any other reason
viz., failure to fulfill the terms and conditions of Letter of Intent,
but the application remains pending until it is rejected and is not
rendered ineligible by operation of sunset clause. It is not in
(48 of 67) [SAW-987/2021]
dispute between the parties that sunset clause rendering pending
applications ineligible by operation of law, came into force with
effect from 11.01.2017.
In taking the aforesaid view on the interpretation of the
provisions contained in Section 10A of the MMDR Act, this Court
relies upon the judgment of the Hon'ble Supreme Court in the
case of Bhushan Power and Steel Limited Vs. S.L. Seal,
Additional Secretary (Steel and Mines), State of Odisha and
Others (supra) as also order passed by Calcutta High Court in
the case of M/s. Kusum Marketing Ltd. & Another Vs. the
State of West Bengal & Others (supra).
44. What is not in dispute in view of the respective pleadings,
affidavits and counter affidavits of the parties is that M/s. Grasim
Industries Limited had applied for grant of mining lease on
05.06.2007 and first Letter of Intent was issued in its favour on
10.10.2007. The pleadings in the writ petition further show that
Letter of Intent was extended from time to time. Therefore,
present case is covered by clause (c) of sub-section (2) of
Section10A of the MMDR Act and not by sub-section (1) of Section
10A of the MMDR Act. As we shall deal, little later, with another
aspect of the matter that main operative reason for not granting
mining lease was that the proposed mining area included certain
charagah (pasture) land and not for any other reason, much less
those, which have been now invented while opposing the relief
sought by Respondent No.1-writ petitioner, the second argument
of learned Additional Advocate General that the application for
grant of mining lease was rendered ineligible by operation of law
(49 of 67) [SAW-987/2021]
in view of sunset clause cannot be accepted and liable to be
rejected and the same, is accordingly, rejected.
45. It is an admitted position on record that vide notification
dated 06.05.2006, an area ad-measuring 318.78 hectares near
Village Mohanpura, Jodhpura, Tehsil Kotputali, District Jaipur was
notified by the State Government as open and vacant for grant of
lease for mining of limestone. The said notification was issued in
view of the provisions contained in Rule 59 of the Rajasthan Minor
Mineral Concession Rules, 1986. Rule 59 of the Rules of 1960
provides for availability of area for regrant to be notified. Having
so declared regarding availability of an area of 318.78 hectares,
applications were invited vide notification dated 26.05.2007 for
grant of mining lease of cement grade limestone in respect of the
entire area of 318.78 hectares. It would, thus, be clear that the
State itself declared the entire area open for grant of mining lease
and having invited applications, it was expected of all the
intending applicants to apply for grant of mining lease. Letter of
Intent was issued in favour of M/s. Grasim Industries Limited on
10.10.2007. Letter of Intent contained following four conditions:
(i) Obtaining environmental clearance as per notification dated
14.09.2006 issued by the Ministry of Environment and Forest,
Government of India;
(ii) Production of mining lease plan as well as mining closure plan
approved by Indian Bureau of Mining;
(iii) Submission of statement with regard to khatedari land in
terms of Rule 22(3)(h) of the Rules of 1960; and
(iv) Submission of NOC from the Forest Department.
(50 of 67) [SAW-987/2021]
46. It is not in dispute that when the Letter of Intent was
extended, NOC was granted by the Forest Department on
11.08.2008; approval of mining plan had taken place on
22.12.2008; environmental clearance was granted on 06.05.2010.
Thereafter, a letter of compliance dated 07.07.2010 was submitted
by M/s. Samruddhi Cement Limited to the effect that all conditions
as per LoI dated 10.10.2007 had been fulfilled. On 07.10.2010,
Assistant Mining Engineer sent recommendations to the Director,
Mines and Geology Department stating that the company had
complied with all the conditions of LoI and, therefore, mining lease
could be granted in its favour. Thereafter, LoI was further
extended on 03.12.2010 with following three additional
conditions:
(i) Increasing capacity of plant from 3 MT per annum to 4 MT per
annum;
(ii) Keenness money to be deposited @ Rs. 2 crores per MT per
annum towards establishment of cement plant; and
(iii) The Company would deposit stamp and registration fee
towards change of name upon demerger of cement business of
M/s. Grasim Cement Limited into M/s. Samruddhi Cement Limited
and also regarding amalgamation of M/s. Samruddhi Cement
Limited into M/s. UltraTech Cement Limited (Respondent No. 1-
writ petitioner).
Though there was some dispute with regard to leviability of
stamp duty and cases were filed by Respondent No. 1-writ
petitioner in the High Court and interim orders were also passed in
its favour, later on a letter of all compliances was submitted on
06.06.2014 stating that all conditions of LoI extension dated
(51 of 67) [SAW-987/2021]
03.12.2010 had been complied with. However, since with regard
to condition (x), interim order was passed in favour of Respondent
No.1-writ petitioner, request was made for grant of mining lease.
Thereafter, a letter along with an affidavit was submitted on
06.09.2014 before the Government undertaking that as the issue
with regard to payment of stamp duty is pending consideration
before the High Court and Respondent No.1-writ petitioner is
enjoying interim order, the Company shall abide by the directions
issued by the Court and it also undertook to pay the stamp duty
as per the final decision that may be taken by the Court in the
pending matters. On 11.12.2014, the Government extended the
period of Letter of Intent for another six months, during which
period, Respondent No.1-writ petitioner deposited stamp duty with
regard to demerger and amalgamation, taking benefit of Amnesty
Scheme and thus, all the writ petitions were accordingly
withdrawn.
47. On 17.01.2015, Respondent No.1-writ petitioner submitted
letter to the effect that it had made all compliance and also
enclosed certificates of the Collector (Stamps), Jaipur showing
payment of complete stamp duty with regard to demerger and
amalgamation. On 16.05.2016, Respondent No.1-writ petitioner
submitted letter of compliance clearly stating that the mining
lease area was consisting of 1.38 hectares of charagah land
spread all over the mining lease area and, therefore, it was not
possible to reduce the charagah land from the mining lease area.
However, an undertaking was given by Respondent No.1-writ
petitioner on affidavit that it will not start mining activities in the
aforesaid charagah land till permission is granted from the State
(52 of 67) [SAW-987/2021]
Government. The said affidavit has been annexed as Annexure-21
with the writ petition. The affidavit clearly stated that no mining
operation would be done in the area of charagah land without
prior permission of the State Government. It is relevant to note
that vide letter dated 24.06.2016, the Assistant Mining Engineer
recommended to the Director, Mines and Geology Department for
grant of mining lease in favour of Respondent No.1-writ petitioner.
The Director, Mines and Geology Department sought certain
details vide letter dated 27.06.2016 to which the Assistant Mining
Engineer replied on 19.07.2016 stating that a portion of charagah
land existed in the proposed mining lease area. It also clearly
stated that an affidavit was submitted that no mining activities
would be carried out in the charagah land without prior permission
of the State Government.
48. The provisions of the MMDR Act or the Rules of 1960
nowhere deals with charagah land. Conditions incorporated in
Rule 27 of the Rules of 1960 also do not include any condition with
regard to charagah land, though under clause (h) thereof, certain
prohibited areas out of the mining area have been carved out
where law prohibits lessee from carrying or allowing to be carried
on, any mining operation at any point within a distance of fifty
metres from any prohibited area like railway line, except under
and in accordance with the written permission of the railway
administration concerned or under or beneath any ropeway or any
ropeway trestle or station, except under and in accordance with
the written permission of the authority owning the ropeway or
from any reservoir, canal or other public works, or buildings,
(53 of 67) [SAW-987/2021]
except under and in accordance with the previous permission of
the State Government.
49. The statutory performa of application for grant of mining
lease (Form-I) referable to Rule 22 of the Rules of 1960 also does
not contain any stipulation with regard to charagah land (pasture
land).
On 14.09.1981, a mining lease for mineral limestone and
marble was granted in favour of one Rameshwar Bajaj for an area
of 415.03 hectares and that was subsequently transferred in the
name of National Limestone Company Private Limited vide transfer
deed dated 24.02.1986. Copy of the transfer deed dated
24.02.1986 has also been placed on record along with the counter
affidavit as Annexure-RA-2. It has also been stated that National
Limestone Company Private Limited subsequently surrendered
approximately 318.78 hectares of land to the State Government in
the year 2005, which was subsequently notified by the State
Government for which notification dated 06.05.2006 was issued
which was followed by notification dated 26.05.2007, referred to
above, inviting applications for mining of limestone over the area
of 318.78 hectares. By disclosing these facts, it has been firmly
asserted by Respondent No.1-writ petitioner that the entire area
without exclusion of any charagah land was thoroughly excavated
and completely exploited since 1981 by more than one lease
holders and, therefore, there is hardly any grazing land available.
In support of this submission, google maps of the year 2016 as
well as 2017 have also been annexed with the same counter
affidavit. According to Respondent No.1-writ petitioner, the stated
(54 of 67) [SAW-987/2021]
area on the site is no more charagah land and the same cannot be
used for charagah purposes in any case.
It is worthwhile to note that in the environmental clearance
granted vide letter dated 06.05.2010 by the Ministry of
Environment and Forests (Annexure-8 of the writ petition) it was
stated that the total mining lease area of the project is 318.78
hectares, out of which 311.4 hectares is agriculture land, 1.5
hectares is wasteland and 5.88 hectares is others (Charnot land).
It also states that no forest land and no grazing land is involved in
the project. It further states that the area proposed for mining is
only 73.62 hectares and an area of 4.7 hectares is kept for
storage of topsoil, 2.44 hectares for waste dumps, 3.2 hectares
for infrastructure, 50 hectares for green belt and 184.82 hectares
is for other purposes. It has also been stated therein that Sota
River (2.25 Km NW) and Sabi River (5.25 Km S) are flowing in the
buffer zone of the mine and the drainage pattern of the study area
is controlled by both the seasonal rivers. This, however, is
disputed question of fact because in letter dated 07.10.2010 of
the Assistant Mining Engineer addressed to the Director, Mines and
Geology Department, it has been stated that khasra verification
was got conducted through surveyor and according to spot
inspection conducted by the surveyor, the area contains charagah
land also. The statement of fact in the affidavit regarding
allotment of 0.47 hectares of land for establishment of a grid
station by KVGSS is not in dispute.
50. The mining plan shows that the mining operations are to be
undertaken only on a part of the area comprised within the mining
lease and not on the entire area. Provisions contained in Rules 22
(55 of 67) [SAW-987/2021]
and 27(1)(h) of the Rules of 1960 clearly show that even if the
land is included in the mining lease or there is prohibited area
where mining operations cannot be undertaken, even then such
area is included in the mining lease or the mining plan, which
excludes many areas within the lease area where no mining
operations could be allowed. Furthermore, Rule 27(2), clause (d)
of the Rules of 1960 provides that a mining lease may contain a
condition in the form of restriction of surface operations in any
area prohibited by any authority. Therefore, under the scheme of
MMDR Act and the Rules of 1960, while granting mining lease over
an area, the lease may contain various conditions, restrictions
with regard to mining operations over certain parts of the mining
lease area. Respondent No.1-writ petitioner's case has been that
once the area of 318.78 hectares was notified and notification for
grant of mining lease was notified, Respondent No.1-writ
petitioner had no option but to submit its application for grant of
mining lease in respect of the area and get mining plan approved
from the competent authority in accordance with the statutory
scheme. The power to increase or decrease the area of mining
does not rest with the applicant, but that power vests with the
competent authority, as is clear from the provisions contained in
Rule 26 of the Rules of 1960. Moreover, Rule 22A of the Rules of
1960 clearly provides that mining operations have to be in
accordance with the mining plan. The mining plan may exclude
many areas as would be clear from letter of environmental
clearance dated 06.05.2010 (Annexure-8 of the writ petition). It
is pertinent to mention here that when the State in its additional
affidavit came out with the case that the mining plan of
(56 of 67) [SAW-987/2021]
Respondent No.1-writ petitioner does not exclude charagah land of
1.38 hectares from mining operations, Respondent No.1-writ
petitioner has stated in its additional affidavit that the area of
charagah land has not been included in the mining plan and in
support of this contention, approved map of the mining plan has
been filed as Annexure-RA-7. It appears that initially at the time
of submitting application for grant of mining lease, M/s. Grasim
Industries Limited had filed an affidavit on 26.05.2006. Clause 6
of the said affidavit stated that in the applied area, there was no
charagah land. It was further stated that if there was any
charagah land in the applied area, the applicant would submit NOC
from the State Government. Referring to Circular dated
21.07.2008, it has been the case of the State that since no NOC
was submitted by Respondent No.1-writ petitioner and it also did
not exclude charagah land ad-measuring 1.38 hectares from the
mining lease area applied by it, the lease was not granted. We
have perused circular dated 21.07.2008 which shows that if there
is a charagah land existing in the applied area then no objection
certificate is to be obtained from the District
Collector/Government. This was reiteration of earlier instructions
dated 29.12.1994.
51. The provisions contained in Rule 7 of the Rules of 1955
provides for allotment or setting apart of pasture land. It provides
that the Collector may, in consultation with the Panchayat, change
the classification of any pasture land, as defined in sub-section
(28) of Section 5 of the Rajasthan Tenancy Act, 1955 or any
pasture land set apart under Section 92 of the Rajasthan Land
Revenue Act, 1956, as unoccupied culturable Government land
(57 of 67) [SAW-987/2021]
(Sawai Chak), for allotment for agricultural or any non-agricultural
purposes. As it is the stand of Respondent No.1-writ petitioner
and is also permissible under the scheme of the Rules of 1960 that
no pasture area is being included for the purpose of mining
operation, in such an eventuality, grant of mining lease could be
considered by imposing appropriate conditions including
restrictions on mining operations over pasture areas as a whole,
even though it is included within the larger mining lease area.
Respondent No. 1-writ petitioner expressed its inability to exclude
charagah land ad-measuring 1.38 hectares spread within the
mining lease area vide letter dated 16.05.2016 attaching
therewith an undertaking that it shall not start mining activities in
the charagah land till permission is granted from the State
Government.
52. Thus, where the environmental clearance itself allows mining
operations on a limited area and Respondent No.1-writ petitioner
also gave undertaking on affidavit not to undertake any mining
operations over the charagah land which was only 1.38 hectares
out of total lease area of 318.78 hectares, inaction on the part of
the appellants on the ground that charagah land has not been
excluded from the mining area appears to be arbitrary and
unwarranted. The entire area was notified and applications were
invited for grant of mining lease. Therefore, keeping the
application for grant of mining lease pending without any order
passed on it on the ground of there being charagah land included
in the lease area and non-submission of NOC, does not appear to
be fair, particularly when charagah land was not included for the
purposes of mining operations. The requirement of NOC from the
(58 of 67) [SAW-987/2021]
authority would be necessary only when the charagah land is
included for the purpose of mining operations. If there is no
prohibition of inclusion of charagah land in the entire mining lease
area which comprises of many other parts where no mining
operation is carried out under the mining plan, non-grant of NOC
could not be made a basis to deny execution of mining lease.
53. It is quite apparent that though Respondent No.1-writ
petitioner had complied with all the conditions of Letter of Intent
and many other conditions included subsequently while extending
Letter of Intent, the appellants developed cold feet on the basis
that the law prohibited grant of mining over an area which
comprises of charagah land ignoring that Respondent No.1-writ
petitioner had given undertaking along with an affidavit not to
carry out any mining operations over charagah land without grant
of NOC. Ultimately after passing of the sunset clause with effect
from 11.01.2017, the State did not proceed further on an
erroneous assumption of law that after passing of sunset clause
with effect from 11.01.2017, the application for grant of mining
lease attained natural demise. This aspect has already been
considered by us hereinabove and it has been held in favour of
Respondent No.1-writ petitioner and against the appellant-State.
54. The objection with regard to grant of mining lease over an
area of charagah land is essentially based on the judgment of the
Hon'ble Supreme Court in the case of Jagpal Singh and Others
Vs. State of Punjab and Others (supra). The State proceeded
to issue various circulars on 25.04.2011, 13.12.2011 and
17.09.2013. Circular issued on 21.07.2008 required that NOC will
have to be obtained from the competent authority. These
(59 of 67) [SAW-987/2021]
circulars, issued in view of the judgment of the Hon'ble Supreme
Court in the case of Jagpal Singh and Others Vs. State of
Punjab and Others (supra), restricted use of charagah land
(pasture land) for private or commercial purposes. In circular
dated 25.04.2011, it was stated that allotment of charagah land
for private and commercial purposes shall not be made and where
allotment of charagah land for public purposes or in public interest
become necessary, State's approval through the District Collector
shall be obtained. In a subsequent circular dated 13.12.2011, it
was clarified that in respect of applications for grant of mining
lease submitted before 25.04.2011, mining lease would be
granted only after approval of the revenue department and in case
NOC is not issued, the area comprising charagah land shall be
excluded.
55. Subsequently, another circular was issued on 17.04.2013
followed by circular dated 17.09.2013 in continuation of earlier
circulars. Circular dated 17.09.2013 sought to clarify that as per
the opinion of the Law Department, grant of mining operations by
declaring another land in place of pasture land is against the
directions of the Hon'ble Supreme Court. It also clarified that in
future, such a course of action of getting another parcel of land
declared as charagah land in place of charagah land for grant of
mining activities should not be permitted.
56. The Hon'ble Supreme Court in the case of Jagpal Singh and
Others Vs. State of Punjab and Others (supra), held as
below:
"23. Before parting with this case we give directions to
all the State Governments in the country that they
should prepare schemes for eviction of
(60 of 67) [SAW-987/2021]
illegal/unauthorized occupants of the Gram
Sabha/Gram Panchayat/poramboke/shamlat land and
these must be restored to the Gram Sabha/Gram
Panchayat for the common use of villagers of the
village. For this purpose the Chief Secretaries of all
State Governments/Union Territories in India are
directed to do the needful, taking the help of other
senior officers of the Governments. The said scheme
should provide for the speedy eviction of such illegal
occupant, after giving him a show-cause notice and a
brief hearing. Long duration of such illegal occupation
or huge expenditure in making constructions thereon or
political connections must not be treated as a
justification for condoning this illegal act or for
regularising the illegal possession. Regularisation
should only be permitted in exceptional cases e.g.
where lease has been granted under some government
notification to landless labourers or members of the
Scheduled Castes/Scheduled Tribes, or where there is
already a school, dispensary or other public utility on
the land."
57. The first affidavit submitted by M/s. Grasim Industries
Limited at the time of submitting its application was to the effect
that if charagah land is existing in the mining lease area, NOC
would be obtained from the competent authority. That would only
mean that if the applicant intends to carry out mining operations
and exploits charagah land, NOC would be required. However, as
the transferee company has clearly given undertaking supported
by its affidavit on 16.05.2016 that it shall not start mining
activities in the area comprised of charagah land until
NOC/permission from concerned authority is obtained, there was
no legal impediment in grant of mining lease after imposing
appropriate conditions. It is worthwhile to mention that in order
dated 03.04.2018 passed in favour of M/s. Wonder Cement
Limited and order dated 12.04.2019 passed in favour of M/s.
Shree Cement Limited (both the orders filed in the appellate
proceedings), there is clear condition imposed that no mining
activities would be permitted in the leased area. Thus, in view of
(61 of 67) [SAW-987/2021]
the undertaking given by Respondent No.1-writ petitioner, there
was no legal impediment in granting mining lease by incorporating
similar condition in respect of Respondent No.1-writ petitioner as
well.
58. On the aspect as to whether there existed charagah land at
the time of inviting applications for grant of mining lease over the
entire stretch of land admeasuring 318.78 hectares, as we have
observed hereinabove, there exists a dispute. While Respondent
No.1-writ petitioner has come out with a case that the land was
under excavation and exploitation since 1981 with different lease
holders until it was surrendered in the year 2005, supported by
certain google maps and this fact also stated in environmental
clearance letter dated 06.05.2010, it has been stand of the State
that there exists charagah land to the extent of 1.38 hectares as
is reflected from letter dated 07.10.2010 of the Assistant Mining
Engineer, Kotputli. According to this letter, the applied area
includes charagah land. Though not impossible, it is highly
improbable that while carrying out mining operations and
exploiting the mining lease area since 1981 till 2005, earlier lease
holders would have left the area of 1.38 hectares as charagah
land. This is more so when State has not come out with any
material to show that while granting leases to previous lease
holders since 1981, a condition was imposed not to carry out
mining operations on charagah land. On the other hand, it
appears that there was no such restriction imposed earlier at least
till 2005 and it was only thereafter that it was decided not to allow
mining operations on charagah land. Moreover, Respondent No.1-
writ petitioner has submitted google maps also, which cannot be
(62 of 67) [SAW-987/2021]
easily brushed aside. Over and above all, letter dated 06.05.2010
granting environmental clearance also records the same fact that
there is no grazing land involved in the project. Therefore, a fresh
survey of a team comprising of officials of Revenue and Mining
Departments is necessary.
59. Yet another aspect of the matter is that there exists a
dispute as to whether Respondent No.1-writ petitioner had
included charagah land of 1.38 hectares in its mining plan.
Respondent No.1-writ petitioner has given an affidavit that
charagah land is not included in the mining plan. However, the
State has taken a stand that charagah land is included in the
approved mining plan. In para no. 6 of the counter to affidavit
submitted by Respondent No.1-writ petitioner, it has been
vehemently contended that the area of charagah has not been
included in the mining plan, referring to mining plan (Annexure
RA-7). It has also been averred that charagah area has already
been exploited by previous lessees. Therefore, it is argued that
the said area now comes under the broken up area and there is no
question of existence of pasture land. We do not find the mining
plan submitted by Respondent No.1-writ petitioner. However, the
State has submitted the mining plan of Respondent No.1-writ
petitioner in appellate proceedings. In that mining plan, Khasra
No. 318 is stated to be charagah land. As per survey field report
dated 06.07.2016 annexed with letter dated 19.07.2016
(Annexure-25), prepared by Patwari of Panchayat Samiti
Bhainslana, 1.01 hectares of Khasra No. 318, 0.05 hectares of
Khasra No. 316 and 0.32 hectares of Khasra No. 192, total
admeasuring 1.38 hectares is charagah land. Though Khasra No.
(63 of 67) [SAW-987/2021]
318 has been shown in Respondent No.1-writ petitioner's mining
plan annexed by the State along with the appeal, all other Khasra
numbers, are not indicated within mining plan. Thus, the
statement made by Respondent No.1-writ petitioner as well as
State are partially correct and partially incorrect. It appears that
only 1.01 hectares of land in Khasra No. 318 is included in the
mining plan. It is clear from the mining plan that this is not
contiguous area or to say that it is scattered all over, but only at
the corner of the area included in mining plan.
60. The Rules of 1955 were amended vide notification dated
31.05.2017 by the amendment carried out in sub-rule (1) of Rule
7 of the Rules of 1955. After the existing first proviso and before
the existing second proviso to sub-rule (1), a new proviso was
inserted as below:
"Provided further that the classification of pasture land
shall not be changed as unoccupied culturable
government land (Sawai Chak) for mining purposes
without the prior permission of the State Government.
The permission by the State Government shall be
granted only if applicant has surrendered equal area of
khatedari land in favour of the State Government in
the same village or nearby village within the same
Panchayat and has deposited development charges for
the development of such surrendered land as pasture
land. The development charges for the year 2017-2018
shall be rupees fifty thousand per bigha or part thereof
and for subsequent year it shall be increased by five
percent every year. The Development charges so
deposited may also be used for the welfare of the
cattle of the village by the village Panchayat with prior
approval of the District Collector. The land so classified
as unoccupied culturable government land (Sawai
Chak) shall always remain and treated as government
land for all purposes."; and"
61. Thus, in any case, even if there existed charagah land, the
new proviso added to Rule 7(1) of the Rules of 1955 allowed
classification of pasture land to be changed as unoccupied land for
(64 of 67) [SAW-987/2021]
mining purposes. The condition, however, is that such a change
would not be permissible without prior permission of the State
Government. Moreover, the proviso further states that such
permission could be granted by the State Government only if the
applicant has surrendered equal area of khatedari land in favour of
the State Government in the same village or nearby village within
the same Panchayat and has deposited development charges for
development of such surrendered land as pasture land.
Respondent No.1-writ petitioner has placed on record an
application submitted by it on 13.06.2017 to the District Collector,
District Jaipur surrendering equivalent area of 1.38 hectares of
land in village Bhainslana seeking change in classification of the
pasture land in terms of newly added proviso to Rule 7(1) of the
Rules of 1955. Letter dated 04.09.2017 of Sub Divisional Officer
Kotputli, District Jaipur has also been annexed by which Tehsildar,
Kotputli was directed to complete the enquiry and submit the
report. According to Respondent No.1-writ petitioner, after change
in law by addition of new proviso to Rule 7(1) of the Rules of
1955, it having surrendered equivalent area of land, there was no
impediment in allowing change of classification, but the District
Collector has not passed any order. On this aspect, the State has
not come out with any stand, nor has disclosed in any of its
affidavits, the fate of Respondent No.1-writ petitioner's application
dated 13.06.2017. It appears that on an erroneous assumption of
law that after passing of sunset clause, Respondent No.1-writ
petitioner's application for grant of mining lease attained natural
demise, the District Collector and the State presumably have not
proceeded with the aforesaid application.
(65 of 67) [SAW-987/2021]
62. Since we have held that on account of Letter of Intent having
been issued in favour of Respondent No.1-writ petitioner, its
application fell outside the mischief of sub-section (1) of Section
10A of the MMDR Act, in view of provision contained in clause (c)
of sub-section (2) of Section 10A of the MMDR Act, keeping aside
all other disputes, Respondent No.1-writ petitioner's application in
terms of newly added proviso to Rule 7(1) of the Rules of 1955,
ought to be processed and appropriate order ought to be passed,
which has also not been done.
63. In para no. 6 of the counter to affidavit, Respondent No.1-
writ petitioner has categorically stated that earlier in tender for
grant of mining lease for limestone block 4GII-A, near Village
Tadas-Bairas, Tehsil Nagaur, issued for the year 2017-18, the
offered land included charagah land also and tender document
also dealt with charagah land stating that mining in charagah land
will be carried out as per Government's notification dated
31.05.2017. Relevant pages of the tender document have also
been annexed with the counter to affidavit filed by Respondent
No.1-writ petitioner. In the absence of any denial to this statement
of fact by the State in its subsequent affidavits, it is clear that in
cases where the area proposed to be covered under the lease
include charagah land, subject to compliance of newly added
proviso to Rule 7(1) of the Rules of 1955, mining would be
permissible. Along with the counter to affidavit, Respondent No.1-
writ petitioner has placed on record letter dated 05.12.2016 of the
Director, Mines and Geology Department, Government of
Rajasthan, addressed to the Secretary, Department of Mines and
Petroleum, Government of Rajasthan, wherein it has been clearly
(66 of 67) [SAW-987/2021]
stated regarding compliance of all conditions of Letter of Intent by
Respondent No.1-writ petitioner. That memo clearly states that
Respondent No.1-writ petitioner has already submitted an
undertaking that it will not carry out any mining activities unless
permission is granted by the State Government. By the said
letter, recommendation was made for grant of mining lease in
favour of Respondent No.1-writ petitioner. However, no decision
was taken in the matter by the State Government.
64. We, thus, find that though a part of the land was included in
the mining plan, i.e. 1.01 hectares of land comprised in Khasra
No. 318 as charagah land, Respondent No.1-writ petitioner gave
clear undertaking on affidavit that it will not carry out any mining
operations over the said land. Further, we have also held that
NOC would be required in a case where charagah land is proposed
to be included for mining activities. Therefore, there was
otherwise no impediment in grant of mining lease in favour of
Respondent No.1-writ petitioner as it was granted in favour of M/s.
Wonder Cement Limited and M/s. Shree Cement Limited by
excluding charagah land from mining operation area.
It is also pertinent to mention at this stage that similar relief
has been granted in the case of M/s. NU Vista Limited Vs.
Union of India & Others (supra) by the Single Judge of this
Court. In the appeal preferred by the State also, order has been
passed by the Division Bench of this Court on 04.03.2022 in D.B.
Civil Special Appeal (Writ) No. 998/2021 regarding undertaking of
the petitioner in that case that it shall not carry out any mining
activities in the charagah land which may fall in mining area.
(67 of 67) [SAW-987/2021]
65. In view of above considerations, the direction of the learned
Single Judge for grant of mining lease in favour of Respondent
No.1-writ petitioner by excluding the area covered under charagah
for mining activities on the basis of the undertaking given by
Respondent No.1-writ petitioner does not warrant any interference
by this Court. It is, however, made clear that Respondent No.1-
writ petitioner shall not be allowed to carry out mining operation
over the land identified as charagah land and condition to that
effect would be inserted in the grant of mining lease, as has been
inserted in the leases granted in favour of M/s. Wonder Cement
Limited, M/s. Shree Cement Limited and M/s. NU Vista Limited.
We also clarify that this judgment shall not come in the way of the
State Government/District Collector in deciding Respondent No.1-
writ petitioner's application dated 13.06.2017 for change of
classification under newly added proviso to Rule 7 of the Rules of
1955, on its own merits and in accordance with law.
66. The appeal is, accordingly, dismissed.
67. No order as to costs.
(SHUBHA MEHTA),J (MANINDRA MOHAN SHRIVASTAVA),J
MANOJ NARWANI /(c)
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