Heard learned advocate for the parties.
This matter was argued at length by all the concerned. Learned AGP has an assistance of concerned officer from the secretariat as well as office of Collector and Geologist with all files and records. It transpires during the course of hearing whether this could be treated as final disposal to which Shri Vakil, learned advocate appearing for petitioner was ready but learned AGP could not agree for final disposal. Hence, the order is confined to admission and grant of interim relief.
The petitioner, the lease holder under the provisions of the Mines and Minerals (Development and Regulation) Act, 1957, hereinafter referred to as 'the Act' for short) for mining of bauxite in the area of his lease, has approached this court with following relief:
"7 Prayer: The petitioner therefore prays that this Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction and be further pleased -
(A) to declare illegal and quash the appointment of the Respondent no.5 - Gujarat Mineral Research and Development Society, made by the Respondent no.2 - Commissioner and consequently declare illegal and quash the System Audit Report dated 21.06.2010 (Annexure -
1) prepared by Pipara & Company, Chartered Accountants;
(B) to declare illegal and quash the notice dated 16.09.2010 (Annexure
-3) issued by the Respondent no.4 - Collector;
(C) to declare illegal and quash the Circular dated 20.07.2010 (Annexure
-2) of the Office of Respondent No. 2- Commissioner;
(D) to restrain, pending the hearing and final disposal of the present Special Civil Application the Respondents from implementing and/or enforcing in any manner whatsoever the System Audit Report dated 21.06.2010 and the notice dated 16.09.2010 against the Petitioner and to direct the Respondent No.3 - Geologist to issue to the Petitioner the royalty passbooks;
(E) To pass such other and further orders as this Hon'ble Court deems fit and proper in the facts and circumstances of the case;
(F) To provide for the costs of the present Special Civil Application;"
Learned advocate appearing for the petitioner has contended that the circular dated 20.07.2010 issued by the Additional Director, Geologist and Minings laying down the conditions for operating lease are amounting to violation of principles of natural justice and subjecting the petitioner and other similarly situated to sale deed amount on the specious ground of outstanding, hearing whereof is yet to take place. In other words, the conditions mentioned in this circular is so arbitrary and without application of mind, that it has resulted into subjecting the lease holders to succumb to the illegality and arbitrary demand of dues, which are yet to be finalized after affording an opportunity to the lease holders. Pending that process of being heard or attempt upon the notices for recovery, the recovery is ordered and till the conditions mentioned thereunder are not complied, the mining operations are brought to grinding hold.
Learned advocate appearing for the petitioner invited this court's attention to the fact that petitioner is enjoying the mining lease since 1984 and till 09.02.2010 all alone, the petitioner has been permitted to carry out the mining activities without any infirmity or disruption. Unfortunately it is on the part of the State Government that an attempt is made to administered jolt to all such lease holders in the form of various circulars and circular dated 20.07.2010 is one, so of the nature on which the clear attempt is indicated of the fact that authorities are for one reason or others, interested in terminating the lease deeds and the entire attempt under the name of breach of conditions of lease deed and/or so called illegality, the lease which has been operated since three decades without any disruption for the reasons best known to the authorities is being brought to grind hold.
Learned advocate appearing for the petitioner has also invited this court's attention to the fact that lease, which was granted originally in favour of the petitioner was to expire in the year 2003. As per the Rules called MCA Rules, the petitioner applied for renewal within one year from the date of expiry i.e. petitioner applied for renewal on 31.01.2002. The acknowledgment of the receipt of renewal application is produced on the record at page-97, which indicated that the petitioner's renewal application is received on 20.02.2002. As per provisions of Rule 24A (1)(6) of the MCA Rules, during pendency of the renewal application, if the same is made within stipulated time, and if there is no action taken, or till further orders that may be passed by the State, the lease is deemed to have been renewed. Accordingly, the petitioner carried out mining operations smoothly and without any interference till the notice came to be issued to him on 16.09.2010, which is purported to have been issued under Circular dated 20.07.2010. Now, it is required to be noted that the petitioner has challenged various steps leading to issuance of notice of their im-permissibility.
Learned advocate for the petitioner has contended that the bauxite, which is a mineral excavated by the petitioner is admittedly a major mineral and as such the State does not have any role to play but assuming for the sake of arguments without admitting that State has controlling power, then also, this fact cannot be so stretched as to interfering with the mining activities, which amount to violation of principle of natural justice as well as petitioner's fundamental right to carry out the business without any interruption or hindrance. The State unfortunately has undertaken a task of illegal review of all mining leases on the specious presumption that there exists some illegality which has resulted into losses of revenue to the State. The State has appointed an agency namely The Gujarat Mineral Research and Development Society - respondent no. 5. Now, this appointment of the authority is also not in consultation with the provisions of the Act and Rules and task assigned to it for which the Chartered Accountant agency is taken is also uncalled for, for interference in day to day business of mining activities and/or sale of mineral. The lease document and rules and regulations of the Act have sufficient safeguard to prevent and protect illegal use of mining and mineral of nation. Therefore, omnibus belief, which is not founded on a justification could not have prompted the State to undertake detailed examination with the help of Chartered Accountant agency, which is in addition to regular auditing and/or examining and/or subjecting the lease holder to this rules and regulations and when such agency have filed reports, those reports have been accepted, wherein, the lease holders have not been made party nor have they been made aware about it for the basis of their conclusion and on that report, recovery notices are issued as if those reports are sacrosanct and straightway accepted. When the recovery notices are issued based upon those reports and hearing is going on, then, non-issuance of royalty passes and insistence of 25% of the so called outstanding and 25% of the Bank guarantee and undertaking for the balance amount to rendering the entire license to be more formality and it does not inspire any confidence whatsoever. Therefore, this petition is required to be allowed.
Learned advocate appearing for the petitioner thereafter invited this courts attention to the fact that notice dated 16.9.2010 is yet not decided and his renewal application is pending and on account of operations of Rule 24A(1)(6) of the Rules, the lease is deemed to have been renewed. The petitioner was issued notice on 31.07.2009 indicating various breaches in terms of lease deed while operating the lease. This notice dated 31.07.2009 was replied by the petitioner on 31.08.2009. Both the documents are placed on record at page-232 and 234 of the compilation. Thereafter, the petitioner was informed nothing nor was his mining operations affected in any manner. Of-course in between, there was an allegation with regard to his illegal mining activities in the forest area, for which there was some litigation and ultimately the petitioner paid up an amount of Rs.3.52 Crore. as could be seen from the Challan produced on record. All this things did not affect the petitioner's mining operation as the last book of royalty passes containing 100 passes was issued only on February, 2010 but thereafter, no royalty pases are issued, which has resulted into illegality and providing the petitioner from dealing in bauxite, which has not been excavated and lying on the site. This also created hazardous situation. The petitioner is in receipt of two communications dated 12.11.2011 and 24.1.2012 affording an opportunity of being heard on renewal aspect and hearing was also on 23.12.2011 and 6.2.2012 and thereafter, nothing is heard and ultimately the petition was filed on 05.03.2012.
Learned AGP under instructions contended that the notice dated 31.07.2009 was not based upon the circular dated 20.07.2010 of Additional Director and in that notice, number of breaches were mentioned, which entitled the respondents in stopping issuance of royalty passes to the petitioner and lease holders like petitioner. Reply of the petitioner dated 31.08.2009 was of no avail to him as it was not acceptable for the reasons stated in the communication dated 26.11.2010, which is produced at Page-238 of the petition. This is a communication between two departments and petitioner has not been informed about the same but the process of deciding his application for renewal is ongoing and therefore, in view of this facts and circumstances, the court may not pass any order or else it would amount to permitting the petitioner lease holder to continue the mining activities. Learned AGP thereafter invited this court's attention to page-243 and submitted that rules are amended and as per the amended rules, the lease holders who is in breach of the lease conditions, is not to be issued royalty passes.
This court has heard learned advocates for the parties as stated hereinabove.
This court is of the view that the matter deserves to be admitted. Hence Rule returnable on 23.07.2012. Ms. Raval, learned AGP waives service of notice of Rule on behalf of respondent Nos. 1 to 4. In the meantime and till the returnable date for final disposal of this writ petition, the following interim relief is required to be granted namely-
The petitioner shall not be prevented from carrying out his mining activities till final outcome of the notice dated 16.09.2010 as well as dated 31.07.2009 provided the petitioner fulfills all the conditions of the original lease deed and in case if the authorities concerned is of the opinion that petitioner is not complying with any of the conditions, then, it would be open to them to approach this court with specific application with a copy to other side for modification/alteration of this order of interim relief.
The following are the reasons for passing the aforesaid interim relief in favour of the petitioner during the pendency and final disposal of this petition, namely-
The petitioner is holding lease since 1982 and till 09.02.2010 his mining activities were not disrupted and/or jeopardized in any manner by the concerned authority. This would require to be considered in light of the fact that some of the conditions breached, whereof are complaint in notice dated 31.07.2009 are conditions or breaches existing since the inception and sudden invocation upon breaches appears to be for the purpose of justifying non-issuance of passes only,. Therefore, in my view, when the notice itself is yet not culminated into any order, abrupt discontinuing of issuance of royalty passes amount to depriving the petitioner of his legitimate right of hearing on notice and so called provisions of the Act. The notice dated 31.07.2009 is yet to culminate into any order, whereunder the authority is to take any order whether there is any justification in passing any order or notice itself is required to be dropped pending the order thereof, it is not open for the respondent authority to discontinue of issuance of royalty passes to the petitioner.
The circular dated 20.07.2010 is a circulatory instructions issued to all, in my opinion, cannot have been issued as in the first instance, it is not the case of respondent anywhere that rules and regulations and provisions of the Act and rules are inadequate to safeguard the interest of the State and royalty and revenue. The court hastened to add here that the court is of the opinion that the State is not entitled to aid of chartered accountant or any other agency but ultimate decision is required to be that of State only. Therefore, when the State has decided to undertake review or re-examining all the accounts with the help of chartered accountant, then, those reports cannot be straightway acted so as to compel the lease holder to submit to the requirement of paying 25% of the so called outstanding and paying bank guarantee of 25% and undertaking as envisaged thereunder, which would amount to bringing the judgment and order and adjudicate without affording an opportunity to the concerned to show how and in what manner the report of Chartered Accountant is not applicable or required to be discarded. Thus, the show cause notice of recovery, in my view, when pending, no coercive steps of asking or recovering 25% of the outstanding or 25 % in form of bank guarantee and undertaking, could be called from, from the lease holders or else it would amount to depriving them of their right to be heard and therefore, right to point out the infirmity in the report of the Chartered Accountant and therefore, it is purely on principles of natural justice that recovery notices were when they are not culminated into any order, after affording an opportunity to all the concerned, those who are in receipt of the notice, no insistence for payment of any amount be made.
The petitioner has not challenged the amended rules, which is produced at page-243, therefore, this court is at this stage not opining thereon, otherwise also, the absurdity in the rules becomes amply clear that no rules can permit the state to violate principles of natural justice i.e without affording an opportunity of hearing to the concerned whose case/report is submitted.
In view of the aforesaid facts and circumstances, the court is of the opinion that the royalty passes cannot be denied to the petitioner and therefore, the court grants the aforesaid interim relief and it is directed to the respondent to issue royalty passes immediately to the petitioner for the bauxite excavated and lying on the premises of the petitioner and the petitioner will file an undertaking within one week from today indicating that the petitioner will abide by the outcome of both the notices and subject to petitioner's right to prefer an appeal or any other remedy available under law and shall excavate the mine in accordance with provisions of the Act and Rules made thereunder and terms of lease. Direct service permitted.
At this stage, learned AGP submitted that let there be a joint inspection and measurement by the Geologist and petitioner of the bauxite, which is already excavated for issuance of royalty passes within one week from today.
(S.R.BRAHMBHATT, J.) pallav Top