Supreme Court of India
M/S. MUNEER ENTERPRISESversusM/S RAMGAD MINERALS AND MINING LTD. & ORS.
- Citation
- 2015 INSC 209
- Decided
- 12 March 2015
- Disposal
- Appeal(s) allowed
Holding
The surrender of M.L. No.2010 by Mis. Dalmia was effective and accepted by the State, making the lease void and invalidating the 2002 transfer and all subsequent approvals.
Summary
The case concerned the mining lease M.L. No.2010 granted to Mis. Dalmia Cements (Bharat) Ltd for forest land in Karnataka. Mis. Dalmia surrendered the lease in stages, culminating in a letter dated 27 March 2001 and the surrender of the lease book on 16 June 2001, which was accepted by the Director of Mines and Geology and confirmed by a no‑dues certificate on 31 January 2002. The State Government later transferred the lease to Ramgad Minerals & Mining Ltd on 16 March 2002, a transfer the appellant (Muneer Enterprises) challenged. The Supreme Court held that the surrender was effective, that acceptance by the State was implied under the lease and Rule 29, and that once surrendered the lease became void, rendering the 2002 transfer and subsequent ex‑post‑facto approvals invalid. The Court also held that non‑compliance with Section 2 of the Forest Act and the conditions of the 1997 in‑principle approval made the lease void ab initio under Section 19 of the MMDR Act. Consequently, the order of transfer and later approvals were set aside and the appeal was allowed.
Issues considered
- Whether Mis. Dalmia validly surrendered mining lease M.L. No.2010 and whether the surrender became final.
- Whether the 12‑month notice period under Rule 29 of the Mineral Concession Rules must be completed before surrender takes effect.
- Whether acceptance of the surrender by the State was required and, if so, whether it was impliedly given.
- Whether delivery of possession of the land was mandatory under Rule 27(2)(1) for surrender to be complete.
- Whether violation of the conditions of the 1997 in‑principle Forest Act approval renders the lease void.
- Whether non‑compliance with Section 2 of the Forest (Conservation) Act, 1980 makes the lease void ab initio.
- Whether the transfer order dated 16 March 2002 was bona‑fide and legally valid.
- Whether subsequent ex‑post‑facto approvals (2006, 2010) can revive the lease.
- Whether Section 19 of the MMDR Act renders a lease void for contravention of statutory provisions.
Legislation cited
- Forest (Conservation) Act, 1980s. 2
- Mineral Concession Ruless. Rule 27(2)(1), s. Rule 29, s. Rule 37(1A), s. Rule 59(1)
- Mines and Minerals Development and Regulation Acts. 10(1), s. 11(second proviso), s. 19, s. 5
Subjects
mining leasesurrenderForest ActMMDR ActMineral Concession Ruleslease transfervoid ab initiopublic interestforest land
Judgment
[2015] 6 S.C.R. 551
M/S. MUNEER ENTERPRISES A
v.
MIS RAMGAD MINERALS AND MINING LTD. & ORS.
(Civil Appeal No.2818 of 2015)
B
MARCH 12, 2015
[FAKKIR MOHAMED IBRAHIM KALIFULLA AND
SHIVA KIRTI SINGH, JJ.]
Mines and Minerals: Mining lease - Transfer of - If C
original lessee surrenders leased area to forest department
of the State Government indicating that notice of
determination of lease is given as required under the terms
of mining lease deed and lease would expire after 12 months
0
or any time earlier if permitted and lease deed book is
surrendered and payment of arrears of mining lease is also
made then subsequently permission to original lessee to
transfer its mining lease to the first respondent was wrongly
allowed by the State Government- There was no scope for E
the lessee to resile from the said surrender and contend that
it still had a right to transact the said licence for any other
purpose including for effecting any transfer in favour of
anyone - Mines and mineral being national wealth, dealing
with the same as the largesse of the State by way of grant of F
lease or in the form of any other right in favour of any party
can only be resorted to strictly in accordance with the
provisions governing disposal of such largesse and could
not have been resorted to as has been done by the State
Government and the Director of Mines and Geology of the G
State of Karnataka - Such a conduct of the State and its
authorities highly condemnable - Forest (Conservation) Act,
1980-s.2- Mineral Concession Rules-r.9(1)-ForestAct,
551 H
552 SUPREME COURT REPORTS [2015] 6 S.C.R.
A 1980.
Mineral Concession Rules: r.27 - Whether the act of
surrender in order to become complete should have been
accepted by the State - Held: Acceptance by the State though
B not a statutory requirement, the provisions contained in the
mining lease, in particular, Part VIII paragraphs 4 and 5
impliedly require such acceptance - Pursuant to the act of
surrender, delivery of possession is not mandatory required
ulr.27(2)(1) of the Rules.
c
Forest Act, 1980: s. 2 - Mining lease - Renewal of lease
- Requirement of prior approval of Central Government at
the time of renewal as prescribed in s.2 of Forest Act not taken
by Mls.Dalmia - By virtue of Godavarman /, the Director of
o Mines and Geology directed Mls.Dalmia to stop all mining
activities - The said order was complied by Mls.Dalmia -
Based on the subsequent judgment of Godavarman II, the
MOEF granted conditional in-principle (Stage-I) approval for
renewal of Mis. Da/mia's mining lease over 201.50 hectares
E of forest land out of 331. 50 hectares - Violation of conditions
of in-principle stage-/ approval - Held: The violation had
occurred at the time of order of first renewal itself striking at
the root of the validity of lease as it was void at that very stage
itself for non-compliance of the prior approval uls.2 of the
F Forest Act and on blatant refusal to comply with the conditions
imposed in the in-principle first stage approval granted -
Therefore, mining lease which was held by Mis Dalmia
became void and inoperative for violation of the mandatory
requirements of the conditions.
G
Allowing the appeal, the Court
HELD: 1. A cumulative consideration of sequence
of events disclose that Mis. Dalmia surrendered major
H part of the land covered by M.L. No.2010 and that by its
MU NEER ENTERPRISES v. RAMGAD MINERALS & 553
MINING LTD.
letter dated 27 .3.2001, it expressed its decision to A
determine the lease of the remaining area of 134.92
hectares and wanted the Director of Mines to accept
such surrender either after the expiry of twelve months'
period or even earlier. The Director of Mines in response
directed it to surrender the lease book of M.L. No.2010 B
as well as the mining plan, and that M/s. Dalmia
surrendered the lease book while stating that mining
plan was not available with it at that point of time. Closely
followed by that, when third parties applied for grant of
lease, the Director of Mines stated in no uncertain terms C
that those.lands were surrendered by M/s. Dalr11ia but
lease cannot be granted based on applications and that
Rule 59 (1) of MCR Rules will have to be followed for
grant of such lease. In fact, subsequent to the above D
development on 26.9.2001, the suit filed by M/s. Dalmia.
against the appellant relating to the boundary dispute
was also dismissed for non-prosecution. On 30.1.2002,
Mis. Dalmia paid a sum of Rs.22,332/- towards the arrears
in respect of its mining lease and claimed that no further E
amount was due and payable in respect of M.L. No.2010.
The Department of Mines and Geology issued a no dues
certificate to M/s. Dalmia. It must, therefore, be held that
in effect the leasehold rights of M/s. Dalmia had come to
an end by 31.1.2002. [paras 68, 69] [602-E-H; 603-A-C, E- F
F]
2. The grant, operation and termination of mining
lease is governed by the MMDR Act and the Mineral
Concession Rules should be carried out strictly in G
accordance with the prescribed stipulations of the
provisions of the above Act and the Rules. Rule 29(1)
provided that not less than 12 calendar months notice
should be issued by the lessee for determining the lease
and such notice should be issued to the State H
554 SUPREME COURT REPORTS [2015] 6 S.C.R.
A Government or to such officer or authority as the State
Government may specify in that behalf. The signatory to
the lease deed was the Director of Mines and Geology.
When the Director of Mines and Geology was authorized
to sign the lease deed on behalf of the Governor of the
B State of Karnataka, it must be taken to mean that he was
the authority who was validly authorized by the State
Government as stipulated in Rule 29(1) of the Rules for
the purpose of the lessee to inform about its decision to
determine the lease while giving 12 months' notice. When
C the State of Karnataka had authorized the Director of
Mines and Geology to sign the very mining lease deed
itself on behalf of the Governor of State, it is futile on the
part of the first respondent to contend that for the
purpose of determination of that very lease, a different
D Authority should be preferred. In fact, M/s. Dalmia itself
having understood the prescribed Authority, sent its
letter of determination of the lease dated 27 .03.2001 only
to the Director of Mines and Geology. The said Authority
also responded to the letter of determination addressed
E to its subordinate officer marking a copy to M/s.Dalmia.
Therefore, it is wrong to say that surrender of the lease
was not forwarded to the authorized officer of the State
Government by M/s. Dalmia. [Paras 75, 76, 78, 79] [606-
8-D; 607-B-D; 608-E; 609-B-C]
F 3. M/s. Dalmia specifically stated in its letter dated
27 .3.2001 that it may even be permitted to determine the
lease prior to 12 months period and that based on such
specific plea made on behalf of M/s. Dalmia, the Director
of Mines and Geology also decided to determine the
G lease without waiting for the expiry of 12 months period
by calling upon M/s. Dalmia to surrender the lease book
which was also duly surrendered by M/s. Dalmia on
16.06.2001 and thereafter by issuing a no due certificate
on 31.2.2002, the said sequence of events had put an
H end to the operation of the lease in M.L.No. 2010 by duly
MU NEER ENTERPRISES v. RAMGAD MINERALS & 555
MINING LTD.
accepting the surrender made on behalf of Mis. Dalmia. A
There is no specific bar in para 4 of Part VIII that while on
the one hand the lessee has to give not less than twelve
calendar months notice, on receipt of such notice the
state government should wait for the expiry of the twelve
months period. The decision made by the Director of B
Mines and Geology in its communication dated 25.5.2001
addressed to the Senior Geologist with a copy marked
to Mis. Dalmia to determine the lease earlier and for that
purpose directed Mis. Dalmia to surrender mining lease
book, namely, M.L. No.2010 along with the mining plan C
was a pointer to the effect that the surrender was decided
to be accepted on behalf of the State Government
instantaneously which was also not prohibited either
under the Rules or under the terms of the lease deed or
0
under any other statutory provision. [Paras 81, 83] [611-
8-F; 612-G-H; 613-A-B]
T.N. Godavarman Thirumulkpad v. Union of India & Ors.
1996 (9) Suppl. SCR 982 : (1997) 2 sec 267; T.N.
Godavarman Thirumulkpad v. Union of India & Ors. 1997 E
(2) SCR 642: (1997) 3 sec 312- relied on.
4. It was held in *Basheshar Nath thatthe provisions
in Part XIII of the Constitution relate to trade, commerce
and intercourse within the territory of India. It also F
impose certain restrictions on the legislative powers of
the Union and of the States with regard to trade and
commerce. As these provisions are for the benefit of the
general public and not for any particular individual, they
cannot be waived, even though they do not find place in G
Part Ill of the Constitution. Therefore, the crucial question
is not whether the rights or restrictions occur in one part
or other of the Constitution. The crucial question is the
nature of the right given: is it for the benefit of individuals H
or is it for the general public. The said well settled
556 SUPREME COURT REPORTS [2015) 6 S.C.R.
A principle of law will have universal application. When
such principle is applied to the case on hand, when the
State of Karnataka chose to accept the surrender made
by M/s. Dalmia immediately thereafter by directing Mis.
Dalmia to surrender the lease book along with mining
B plan, such action of the State Government for the
purpose of ensuring the effective surrender offered by
M/s.Dalmia having been made in the general public
interest, as the leasehold rights of the mining activities
would be in the lands belonging to the State and that
C too Forest Lands, such action taken in accepting the
surrender by waiving the 12 months period should be
taken as having come into effect. When once such
surrender had come into effect, it must be stated that
there was no scope for M/s. Dalmia to resile from the said
0
surrender and contend that it still had a right to transact
with the said M.L. No.2010 for any other purpose
including for effecting any transfer in favour of anyone
much less in favour of the first respondent. [Paras 84,
E 85, 87] [613-B-H; 614-A-C; 615-D-E]
*Basheshar Nath v. Commissioner oflncome Tax, Delhi
and Rajasthan &Anr. AIR 1959 SC 149: 1959 Suppl. SCR
528; A. Chowgu/e and Company Limited v. Goa Foundation
& ors. (2008) 12 sec 646 : 2008 (12) SCR196, Nature
F Lovers Movement v. State of Kera/a and Ors. (2009) 5 sec·
373 : 2009 (4) SCR 687; Rural Liti!fution and Entitlement
Kendra v. State of U.P. 1989 Suppl (1) SCC 504: 1988 (2)
Suppl. SCR 690; Ambica Quarry Works v. State of Gujarat
G & Ors. 1987 (1) SCR 562: (1987) 1sec213- relied on.
Sethi Auto Service Station and Anr. v. Delhi Development
Authority & Ors. (2009) 1 sec 180 : 2008 (14) SCR 598 ;
Smt. Lila Gupta v. Laxmi Narain & Ors. (1978) 3 SCC 258:
H 1978 (3) SCR 922 ; Pankaj Mehra & Anr. v. State of
MUNEER ENTERPRISES v. RAMGAD MINERALS & 557
MINING LTD.
Maharashtra & Ors. (2000) 2 SCC 756 : 2000 (1) SCR 825 - A
held inapplicable.
5. Whether the act of surrender in order to become
complete should have been accepted by the State?
Whether, pursuant to the act of surrender, delivery of B
possession was mandatory under Rule 27(2)(1) of the
Mineral Concession Rules. Acceptance by the State
though not a statutory requirement, the provisions
contained in the mining lease, in particular, Part VIII
paragraphs 4 and 5 impliedly require such acceptance. C
While holding that acceptance of surrender is impliedly
mandated under Rule 29 read along with paragraphs 4
and 5 of Part VIII of the mining lease, there was a factual
acceptance on behalf of the State of Karnataka of the
mining lease. Sub-Rule (2) states that a mining lease D
may contain such other conditions as the State
Government may deem necessary in regard to
conditions (a) to (o). Under the said sub-Rule (2) in clause
(I), it is provided that delivery of possession of lands and
mines on the surrender, expiration or determination of E
lease. What is required under Rule (2) of Rule 27 was
that a mining lease may contain many conditions
including what is specified in Clause (I). There being no
specific provision as specified in Clause (I) of Rule 27(2), F
there was no mandatory requirement of delivery of
possession as stipulated therein. [paras 95, 98, 99, 100]
[618-H; 619-A; 620-G; 621-A-F]
6. When construing Rules 29 and 37(1A) read along
with Section 19 of the MMDR Act, de hors any liberal G
approach offered by the authorities of MOEF under the
provisions of the Forest Act, such relaxation in the matter
of complianc.e of conditions of prior approval would
always be subject to the mining lease granted under the H
provisions of MMDR Act and the Mineral Concession
558 SUPREME COURT REPORTS [2015] 6 S.C.R.
A Rules is in a live stage. In other words, unless the mining
lease granted under the provisions of the MMDR Act read
along with the provisions contained in the Mineral
Concession Rules continue to remain valid and
operative, the question of compliance of the conditions
B for prior approval under Section 2 of the Forest Act even
with whatever relaxation granted by the authorities under
the said Act will be of no use. Thus, Section 19 makes
the position clear that any mining lease granted originally
C or renewed subsequently in contravention o.f the
provisions of the MMDR Act or any Rules or any Order
made thereunder to be void and of no effect. The
expression used in Section 19 is mandatory and
therefore if any contravention of the provisions of MMDR
Act or Rules or Orders found in respect of a mining lease
0
originally granted or subsequently renewed such mining
lease should be treated to be void and inoperative for
operating the said mining lease. Carrying on any non-
forest activity in a Forest Land can only be with the prior
E approval of the Central Government under Section 2 of
the Forest Act of 1980. Therefore, for a mining lease to
remain valid, twin requirements of the approval of the
Central Government under the proviso to Section 5(1)
of MMDR Act and Section 2 of the Forest Act of 1980 have
F to be fulfilled. Therefore, a lessee cannot be heard to
contend that such statutory requirements are to be
thrown overboard and permitted to seek for such
approvals after the expiry of the lease at its own sweat
will and pleasure and the time to be fixed on its own and
G thatthe operation of the mining lease should be allowed
ignoring such mandatory prescription. [Paras 104, 105]
[624-D-F; 625-C-G]
7. Admittedly after the first renewal, there was a
H serious violation of failure to getthe prior approval under
MU NEER ENTERPRISES v. RAMGAD MINERALS & 559
MINING LTD.
Section 2 of the Forest Act, 1980 i.e. when the renewal A
order was passed on 07 .03.1986. Therefore, if Section
19 is strictly applied, it must be stated that even as on
07 .03.1986, for violation of Section 2 of the Forest Act,
1980 it must be stated that, in law, there was no mining
lease at all in existence as it became void on the expiry B
of the initial period ofthe original lease granted in 1953.
As on 16.04.1999, since the lessee viz., M/s.Dalmia
refused to comply with the conditions imposed in the
in-principle first stage approval, it cannot lie in the mouth
of either M/s.Dalmia or anyone who seek to claim any C
right through M/s.Dalmia by contending that any violation
of Section 19 of MMDR Act or any of the Rules of Mineral
(Concession) Rules or orders made therein or Section
2 of the Forest Act of 1980 should be ignored and the
0
plea made on behalf of M/s.Dalmia as well as the first
respondent should be accepted. [Para 106] [626-A-G]
8. The violation had occurred atthe time of the order
offirst renewal viz., 07.03.1986 itself, striking at the very
root of the validity of the lease, as it must be held that it E
was void at that very stage itself for non-compliance of
the prior approval under Section 2 of the Forest Act, 1980
and in any case, on the blatant refusal to comply with
the conditions imposed in the in-principle first stage F
approval granted in the year 24.12.1997. The mining lease
which was held by M/s.Dalmia in M.L.No.2010 became
void and inoperative for violation of the mandatory ·
requirements of the conditions. A reading of the Rule
37(1A) which was introduced by G.S.R. 724(E), dated G
27.09.1994, a substantive condition is imposed while
considering an application for consent for transfer of
mining lease. [Para 107] [627-A,B,D-E]
9. Whether the order of transfer dated 16.3.2002 was H
560 SUPREME COURT REPORTS [2015) 6 S.C.R.
A bona fide taking into account the sequence of events
and whether the transfer of lease can be held to be valid.
There was total lack of bona fides on the part of the State
government in taking a sudden U-turn for passing the
order of transfer in favour of the first respondent. The
B conduct of the Director of Mines and Geology, one Dr.
Reddy who dealt with the applications made by one
M.S.P.L. Ltd. through its Executive Director on 21.7.2001"
and another applicant with reference to which Dr. Reddy
made an endorsement in the office note dated 25.8.2001
C which stated that the land covered by M.L. No.201 O was
surrendered by M/s. Dalmia, that certain other
applications were also received for grant of lease in
respect of those lands apart from M.S.P.L. Ltd. and that
there was no scope to consider any of those applications
0
since in respect of surrendered land Rule 59(1) of Mineral
Concession Rules would automatically come into. play
and any future grant of lease can only be done as
specified under the said Rule. When such a clear stand
E was spelt out by Dr. Reddy while making the
endorsement on 25.8.2001, there is no justifiable reason
as to how the very same officer in his capacity as Director
of Mines and Geology could be a signatory to its
recommendation dated 6.2.2002 for effecting the transfer
F and based on his recommendation the State
Government allowed the application for transfer of M.L.
No. 2010. [Para 114] [631-F-H; 632-A-E]
10. When once M.L. No.2010 had come to an end by
G virtue of the surrender effected by Mis. Dalmia and
accepted by the State Government, there was no legal
right or power with the State Government or any authority
acting on behalf of the State Government to consider
the very application for transfer made at the instance of
H M/s. Dalmia and for passing the order of transfer. It can
MU NEER ENTERPRISES v. RAMGAD MINERALS & 561
MINING LTD.
only be stated that such a decision taken and passed in A
the order of transfer was in total violation of the
provisions of the MMDRActand the Mineral Concession
Rules. Once surrender of M.L. No.2010 had come into
effect the only other course open to the State
Government was to invoke Rule 59 by throwing open B
those lands by way of public auction in order to get the
maximum revenue by granting any lease hold rights.
Apart from the act of surrender made by M/s.Dalmia
which became final and conclusive due to non-
compliance of the conditions imposed in the in-principle e
Stage I clearance dated 24.12.1997, M/s.Dalmia lost its
right to retain the lease and the consequence of it
rendered the lease itself void as per Rule 37(1A) and on
this ground as well, there was no scope for the State
0
Government or any other Authority acting on its behalf
to have considered the transfer application of M/s.Dalmia
a
with reference to lease which ceased to exist as from
31.01.2002 due to the act of surrender and in any case
from 24.12.2002 when the 5 year period to comply with E
the conditions imposed in the order dated 24.12.1997
expired. [Para 117] [635-B-G]
11. Mines and mineral being national wealth, dealing
with the same as the largesse of the State by way of grant F
of lease or in the form of any other right in favour of any
party can only be resorted to strictly in accordance with
the provisions governing disposal of such largesse and
could not have been resorted to as has been done by
the State Government and the Director of Mines and G
Geology of the State of Karnataka by passing the order
of transfer dated 16.3.2002. Such a conduct of the State
and its authorities are highly condemnable and,
therefore, calls for stringent action against them. [para
118] [635-H; 636-A-B] H
562 SUPREME COURT REPORTS [2015] 6 S.C.R.
A 13. The subsequent stage-I in-principle approval and
the final approval based on the acceptance of the transfer
of lease in the order dated 16.03.2002 cannot survive and
the same are set aside. Whatever statutory payments
were made in compliance of the said orders are
B refundable to the party who made the payments. The
payments made in pursuance of the in-principle stage-I
approval or final approval of the first renewal granted ex
post facto, covering the period from 1983 to 2003 shall
not be refundable. The Mining as well as Forest
C Authorities are directed to ensure that the entire extent
of 331.44 hectares of land covered by M.L. No.2010 is
surveyed, demarcated and its physical possession by
the State/Forest Authorities be ensured by removing
whatever encroachments, if any, exist in the said land.
0
[para 119] [636-C-G]
Bangalore Development Authority v. Vijaya Leasing
Limited & Ors. (2013) 14 SCC 737 : 2013 (3) SCR 140;
Bhagwati Prasad Pawan Kumar v. Union of India (2006) 5
E SCC 311 : 2006 (2) Suppl. SCR 975 - relied on.
K. Balakrishnan Nambiar v. State of Karnataka and Ors.
(2011) 5 SCC 353: 2011 (5) SCR1143; Janak Lal v. State of
Maharashtra & Ors. (1989) 4 SCC 121 : 1989 (3) SCR 830;
F Ram Preeti Yadav v. UP Board of High School and
Intermediate Education and Ors. (2003) 8 SCC 311 : _2003
(3) Suppl. SCR 352; Bhaurao Dagdu Paralkar v. State of
Maharashtra & Ors. (2005) 7 SCC 605 : 2005 (2) Suppl.
SCR 77 4; Sandur Manganese and Iron Ores Limited v. State
G of Karnatala and Ors. (2010) 13 SCC 1 : 2010 (11) SCR
240; Shanti Sports Club &Anr. v. Union of India &·ors. (2009)
15 SCC 705 : 2009 (13) SCR 710; Commissioner of
Customs, Mumbai v. Virgo Steels, Bombay & Anr. (2002) 4
H SCC 316 : 2002 (2) SCR 934; Vasu P Shetty v. Hotel
•
MU NEER ENTER8RISES v. RAMGAD MINERALS & 563
MINING LTD.
Vandana Palace & Ors. (2014) 5 SCC 660- referred to. A
Case Law Reference
1996 (9) Suppl. SCR 982 relied on Para 6
1997 (2) SCR 642 relied on Para 6 B
2008 (12) SCR 196 relied on Para 24
2009 (4) SCR 687 relied on Para 24
2011 (5) SCR 1143 referred to. Para 24 c
1989 (3) SCR 830 referred to. Para 25
2013 (3) SCR 140 relied on. Para 25
D
2003 (3) Suppl. SCR 352 referred to. Para 25
2005 (2) Suppl. SCR 774 referred to. Para 25
2010 (11) SCR 240 referred to. Para 29
E
2008 (14) SCR 598 held inapplicable.Para 29
2009 (13) SCR 710 referred to. Para 29
1978 (3) SCR 922 held inapplicable.Para 32
F
2000 (1) SCR 825 held inapplicable.Para 32
1959 Suppl. SCR 528 relied on Para 35
2002 (2) SCR 934 referred to. Para 35
G
(2014) 5 sec 660 referred to. Para 35
1987 (1) SCR 562 relied on. Para 40
2006 (2) Suppl. SCR 975 relied on. Para 96
H
1988 (2) Suppl. SCR 690 referred to. Para 111
564 SUPREME COURT REPORTS [2015) 6 S.C.R.
A CIVILAPPELLATE JURISDICTION: Civil Appeal No. 2818
of 2015.
From the Judgment and Order dated 26.08.2009 of the
High Court of Karnataka at Bangalore in WA No. 5377 of 2004.
B
Kapil Sibal, Dr. Abhishek Manu Singhvi, D. L. N. Rao, J.
S. Attri, Krishnan Venugopal, T. V. Ratnam, Gaurav Juneja,
Ashwini Chawla, Sanjeev K. Kapoor, (for Khaitan & Co.),
Manita Verma, Sukhbeer Kaur Bajwa, Munetha Verma,
c Sumeet Prakash, Shrekant N. Terdal, Vishal Gupta, Uday
Tiwari, Kumar Mihir, Udai Rathore, Anitha Shenoy, Vishruti Vijay
for the appearing parties.
The Judgement of the Ccurt was delivered by
D FAKKIR MOHAMED IBRAHIM KALIFULLA, J. 1.
Leave granted.
2. This appeal is directed against the common judgment
dated 26.08.2009, passed in W.A.No.5377 of 2004 and
E W.P.No.23782 of2005.
3. The writ appeal was preferred by the first respondent
herein against the judgment in W.P.No.31690 of 2003.of the
learned Single Judge dated 10.11.2004 in and by which the
F order of transfer of mining lease from the original licencee M/
s. Dalmia Cements (Bharat) Limited (hereinafter called "M/s.
Dalmia") to and in favour of the first respondent herein was set
aside.
G 4. Writ petition in W.P.No.23782 of 2005 was filed by one
Dinesh Kumar Singhi, a mine operator praying for a direction
to the State of Karnataka and Director of Mines and Geology
to dispose of his application dated 03.05.2001 for grant of
licence to operate 819.20 acres of the forest mining area in
H Jaisinghpur village covered by the erstwhile mining le.:-c:<:?
MUNEER ENTERPRISESv.
'. RAMGAD
'
MINERALS
- ,, '
&MINING565
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
No.M.L.No.2010 of M/s. Dalmia. We are not concerned with A
the said writ petition, as the said writ petitioner has not
challenged the order of the Division Bench by which his writ
petition was dismissed. We are only concerned with the
judgment in W.A.No.5377 of 2004.
B
5. Having regard to the chequered history of this case,
the detailed facts pertaining to the grant of mining lease with
reference to M.L.No.2010 over an extent of 331.50 hectares
(819.20 acres) of forest area in Jaisinghpurvillage, RM.Block,
SandurTaluk, Bellary District has to be necessarily stated. The C
said mining lease was originally granted in favour of M/s .
. Dalmia on 25.11.1953. The said lease expired on 24.11.1983.
Based on the application of M/s. Dalmia Cements, the mining
lease was renewed for 20 years with retrospective effect from
25.11.1983 by an order dated 07.03.1986. It is required to be D
noted that though Forest (Conservation) Act, 1980, hereinafter
called "The Forest Act, 1980" came into force w.e.f. from
25.10.1980, the requirement of prior approval of the Central
Government as prescribed in Section 2 of the said Act was
not taken at the time of first renewal. E
6. Be that as it may, the effect of non-compliance of
approval under Section 2 of the Forest Act, 1980 was the
subject matter of consideration of this Court in the decision
reported in T.N. Godavarman Thirumulkpad v. Union of F
India & Ors.-(1997) 2 SCC 267 (Godavarman I). By virtuf"
of the said judgment, the Director of Mines and Geology, the
third respondent herein directed M/s. Dalmia to stop all mining
activities by its order dated 25.01.1997. M/s.Dalmia stopped
its mining activities from January 1997. Based on the G
subsequent judgment of this Court in T.N. Godavarman
Thirumulkpad v. Union of India & Ors. -(1997) 3 SCC 312
(Godavarman II), the Minist;y of Environment and Forest
(MOEF) granted conditional in-principle (Stage-I) approval for H
566 SUPREME COURT REPORTS (2015] 6 S.C.R.
A renewal of M/s. Dalmia's mining lease over 201.50 hectares
of forest land out of 331.50 hectares by an order dated
24.12.1997.
7. By its letter dated 16.04.1999, M/s. Dalmia surrendered
B 196.56 hectares of land out of the leased area of 331.50
hectares to the Forest Department of the State Government.
Subsequently, Mis. Dalmia in its letter dated 27.03.2001,
expressed its desire to surrender the remaining area held by
it indicating that such notice being given for determination of
C the lease as required under the terms of the mining lease deed
and that the lease would expire after 12 months notice period
from 01.04.2001 or any time earlier if permitted by the State
Government. In response to M/s.D:>lrnia's letter dated
27.03.2001 by letter dated 25.05.2001, the office of the
D Director of Mines while communicating to one of its officers
marked a copy of its letter dated 25.05.2001 ca!!ing upon M/
s.Dalmia to surrender its lease deed book and mining plan.
By letter dated 16.06.2001 M/s.Dalmia surrendered the lease
deed book and informed that its mining plan was missing.
E
8. Subsequently, one M.S.P.L. Limited, through its
Executive Director Mr. Rahul Baldota applied for grant of mining
lease of the area held by M/s. Dalmia through its application
dated 21.07.2001. It is necessary to be noted that the said
F Rahul Baldota is the husband of Mrs. Lavine R. Baldota the
Executive Director of the first respondent herein. In the
application of Mis M.S.P.L. limited dated 21.07.2001 it was
noted by the Director of Mines and Geology, namely, one
Dr.Reddy on 25.08.2001, stating among other things that grant
G of mining lease of surrendered lands can only be considered
as specified in Rule 59(1) of the Mineral Concession Rules.
9. Pursuant to such steps taken by M/s.Dalmia in its letter
dated 27.03.2001, th.:; suit bearing O.S.No.53 of 1993 filed
H against the appellant herein relating to boundary dispute of
MUNEER ENTl;F{PRISES v. RAMGAD MINERALS & MINING567
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
the mines held by it was dismissed for non-prosecution on A
26.09.2001. By lefte'r.dated 09.01.2002 , the Director of Mines
and Geology directed its Deputy Director, Hospet to survey
and demark the area·covered by lease deed of the appellant
specifically pointing out the dismissal of O.S.No.53 of 1993
by M/s.Dalmia. B
10. On 30.01.2002, M/s.Dalmia made a payment of
Rs.22,332/- stated to be the arrears in respect of mining lease
held by it in M.L.No.2010. Gn 31.01.2002, the Director of Mines
and Geology issued a no due certificate to M/s.Dalmia C
confirming t11e receipt of a sum of Rs.22,332/- by ·.vay of
Demand DrafUrom M/s.Dalmia. However on 04.02.2002, M/
s.Dalmia applied to the State Government for permission to
transfer its mining lease M.L.No.2010 of 2010 including the
196.58 hectares said to have been surrendered by it in 1999 D
to the first respondent herein. On 06.02.2002 the Director of
Mines and Geology viz. Dr.Reddy wh.o in his earlier
communication dated 25.08.2001 to M/s.M.S.P.L. Limited
informed that Rule 59(1) of Mineral Concession Rules would
apply for grant of licence in M.L.No.1020, this time E
recommended for the transfer of licence from M/s.Dalmia to
the first respondent herein. On 16.03.2002, the State
Government passed orders allowing the application for transfer
of mining lease as applied for by Mis Dalmia in favour of the F
first respondent.
11. It was in the above stated background at the instance
of the appellant, the order dated 16.03.2002, of the State
Government was challenged in W.P.No.31690 of 2003 in the
High Court of Karnataka. The learned Single Judge of the G
Karnataka High Court allowed the said writ petition, by order
dated 10.11.2004. Challenging the same, the first respondent
preferred writ appeal in W.A.No.5377 of 2004. By the order
impugned in this petition, the Division Bench having set aside H
568 SUPREME COURT REPORTS (2015] 6 S.C.R.
A the order of the learned Single Judge and restored the order
of transfer dated 16.03.2002, the appellant has come forward
with this appeal.
12. When the writ appeal was pending, based on the oral
B application of the first respondent herein, the Division Bench
directed the State Government and the Director of Mines and
Geology to process its application for transfer of the renewal
of the lease in favour of the first respondent under the Forest
Act, 1980 within two months and forward its report to the Central
C Government with a further direction to the Central Government
to decide the same within three months. The appellant
challenged the said order dated 19.04.2006 in S.L.P.No.11508
of 2006. By an order dated 26.10.2007, this Court directed
the Division Bench of Karnataka High Court to dispose of Writ
D Appeal No.5377 of 2004 and that the order of the Central
Government dated 13.09.2006 granting its in-principle (Stage
I) ex post facto approval granted in favour of the first
respondent would not create righVequity in favour of the first
respondent. By the impugned order dated 26.08.2009, the
E Division Bench held that renewal of mining lease without
obtaining prior approval under Section 2 of the Forest Act,
1980 would not render such renewal void ab initio and any
such illegality can be cured or regularized by the Central
F Government by passing an order under Section 2 of the Forest
Act, 1980 ex post facto.
13. When this Special Leave Petition was entertained, by
an order dated 16.12.2009, it was directed that processing of
Stage II clearance be continued with a further direction to
G maintain status quo as regards the mining activities. By order
dated 09.09.2010, Stage II clearance has also been granted
in favour of the first respondent and by subsequent order dated
23.09.2010, this Court has directed that the status quo should
H remain operative pending the Special Leave Petition.
MU NEER ENTERPRISES v. RAMGAD MINERl\LS IX MINING569
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
14. In the above stated background, we heard Mr.Kapil A
Sibal, learned senior counsel for the appellant,
Mr.K.K.Venugopal and Mr.Krishnan Venugopal, learned senior
counsel for the first respondent, Dr.Abhishek Manu Singhvi,
learned senior counsel forthe fifth respondent in the writ appeal
who was not added as a party respondent in this Special Leave B
Petition and Ms.Anitha Shenoy, Advocate-on-Record for the
State of Karnataka and the Director of Mines and Geology.
Mr.J.S. Attri, learned senior counsel who appeared for the
Union of India, the fourth respondent.
c
15. Mr. Kap ii Sibal, learned senior counsel appearing for
the appellant contended that once M/s.Dalmia surrendered its
lease in respect of M.L.2010, which surrender has become
final and conclusive, there was no scope for transfer of such
surrendered mining lease in favour of the first respondent D
herein. The learned senior counsel then contended that
assuming the surrender has not come into effect, at the time
of first renewal when in-principle stage-I approval was granted
by the Central Government through MOEF in its order dated
24.12.1997, imposing very many conditions and since Ml E
s. Dalmia failed to comply with those conditions within five years
of the said order viz., 23.12.2002 and that the first renewal so
granted also expired in November 2003, by which time also
the conditions imposed in the in-principle stage-I approval was F
not complied with, there was factually no renewal of the mining
lease which stood expired initially on 24.11.1983 and in any
event after the expiry of the first renewal viz., 24.11.2002.
16. The learned senior counsel further contended that there
should have been no second renewal or grant of in-principle G
stage-I clearance after 23.12.2002 as well as by the present
order dated 13.09.2006. The learned senior counsel
contended that under Rule 59 of Mineral Concession Rules,
when once the mining lease was surrendered by M/s.Dalmia H
570 SUPREME COURT REPORTS (2015] 6 S.C.R.
A and when surrender has come into effect thereafter, for
subsequent grant of mining lease, the procedure prescribed
in the said Rule has to be followed and the order of the State
Government in having passed its order dated 16.03.2002
transferring the mining lease from M/s.Dalmia to the first
B respondent was wholly illegal and void ab initio.
17. The learned senior counsel by referring to Rule 37
and Rule 29 of tlie Mineral Concession Rules, submitted that
in the light of the surrender of the mining lease by Mis .Dalmia,
C there was no right in M/s.Dalmia to apply for transfer in favour
of the first respondent. He further contended that by virtue of
the provision contained in Rule 29 of the Mineral Concession
Rules, the mining lease was determined by M/s.Dalmia and in
such circumstances by virtue of Section 19 of the Mines and
D Minerals Development and Regulations Act any mining lease
in contravention of the Act and Rules would be void ab initio.
The learned senior counsel contended that, therefore, the so-
called acquisition of mining lease of M/s.Dalmia by the first
respondent was void.
E
18. Dr. Abhishek Manu Singhvi, learned senior counsel
for the intervenor submitted that since the said applicant was
added as the fifth respondent before the Division Bench by
order dated 08.06.2007, it was entitled to get intervened in
F this appeal. Though the application for intervention was stoutly
opposed on behalf of the first respondent by referring to certain
earlier orders of this Court in the S.L.Ps. filed by the intervenor,
since the said intervenor was added as the fifth respondent by
the first respondent itself in the writ appeal, which was pending
G before the Division Bench, we are of the view that due to failure
of the appellant in not impleading the intervenor as a party
respondent in this appeal, it should not be deprived of its right
to be heard in this appeal. Therefore, without any scope for
H anyone to quote as a binding precedent in any other case,
MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING571
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
having regard to the peculiar facts of this case where the A
intervenor was a party respondent before the Division Bench
in the WritAppeal, the order of which is the subject matter of
challenge in this appeal, we are of the view that the intervenor
can be permitted to make its submissions and the I.A. for
intervention stands allowed. B
19. Dr. Abhishek Manu Singhvi, learned senior counsel in
his submissions contended that by virtue of Rule 29 read along
with Rule 59 of Mineral Concessions Rules the determination
of the lease at the instance of M/s.Dalmia having come into C
effect, nothing would survive thereafter. According to the
learned senior counsel, the period of twelve months prescribed
in Rule 29 cannot enure to the benefit of the lessee and that
such time period was meant for the benefit of the State
Government. D
20. The learned senior counsel by referring to various
dates from 27.03.2001 upto 31.01.2002 submitted that the
Slate Government understood the determination of the lease
correctly as intended by M/s.Dalmia and, therefore, when once E
the mining lease got terminated by virtue of the complete
surrender nothing would survive thereafter'. Dr.Singhvi thus
contended that if the sequence of events after the surrender
had taken place are noted, viz., the application made by M/
s.M.S.P.L. on 21.07.2001 at the instance of Mr.Rahul Baldota F
as the Executive Director of M/s.M.S.P.L. which was rejected
by the Director of Mines and Geology by order dated
25.08.2001, the signatory of which was one Dr.Reddy, the
subsequent application at the instance of M/s.Dalmia for
transfer in favour of the first respondent who was represented G
by its Executive Director Mrs.Baldota who was none other
than the wife of Mr. Rahul Baldota whose earlier application for
'
grant of mining lease was rejected, it would show that all was
not well in the passing of the order of transfer dated 16.03.2002. H
572 SUPREME COURT REPORTS [2015] 6 S.C.R.
A In this connection, the learned senior counsel pointed out that
the very same Director of Mines and Geology, Dr.Reddy who
by his order dated 25.08.2001 rejected the application of M/
s.M.S.P.L. for grant of mining licence on the ground that such
grant can be considered only by following Rule 59, took a
B diametrically opposite stand when he recommended for
transfer of surrendered mining lease in favour of the first
respondent and thereby serious fraud has been committed by
the first respondent in connivance with M/s.Dalmia, the first
respondent and the officers of the State Government. The
C learned senior counsel would contend that such an action of
the parties would amount to collusion between the first
respondent and the officials of the State Government which
should not be allowed to remain.
D 21. Dr.Singhvi, learned senior counsel then contended that
there were serious violations of Forest Act of 1980 on which
ground as well the order of transfer dated 16.03.2002 cannot
be sustained. The learned senior counsel pointed out thatthe
first renewal of the mining lease in M.L.No.2010 of 2010 was
E for the period between 25.11.1983 to 24.11.2003, which was
granted on 07.03.1986 retrospectively from 25.11.1983 and
that no prior approval as prescribed in Section 2 of the Forest
Act, 1980 was obtained. The learned senior counsel further
F contended that the said violation of the Forest Act, 1980 would
strike at the root of the case and in effect the very first renewal
was void.
22. The learned senior counsel then contended that out of
331.50 hectares M/s.Dalmia surrendered 196.58 hectares of
G land as early as on 16.04.1999 and that what remained was
only 134.92 hectares for which there was no ex post facto
approval. The learned senior counsel then contended that
subsequently by an order dated 24.12.1997, MOEF granted
H in-principle stage-I approval imposing conditions in respect
MU NEER ENTERPRISES v. RAMGAD MINERALS &MINING573
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
of 201. 50 hectares to Mis. Dalmia and the conditions not having A
been complied with by M/s.Dalmia, the licence could not have
remained in force any further.
23. The learned senior counsel then contended that grant
of ex post facto approval by the Central Government as per B
the direction of this Court in Godavarman judgments cannot
be granted on every occasion when the violation had taken
place. According to the learned senior counsel, the grant of
such ex post facto approval as per the directions of this Court
having been already considered and granted on 24.12.1997 C
and due to failure of compliance of the conditions imposed in
the said order, the lease had become inoperative, there was
no scope for grant of any further ex post facto approval after
the expiry of the first renewal viz., 23.11.2003.
D
24. The learned senior counsel placed reliaroce upon the
decisions reported in A. Chowgule and Company Limited
v. Goa Foundation & Ors. - (2008) 12 SCC 646,. Nature
Lovers Movement v. State of Kerala and Ors. - (2009) 5
SCC 373 and K. Balakrishnan Nambiar v. State of E
Karnataka and Ors. - (2011) 5 SCC 353 in support of his
submissions.
25. On Rule 59, according to the learned senior counsel
the said Rule provides for common hotchpot for the Government F
and that once the lease was surrendered by M/s.Dalmia, the
State had become the owner of the land and any further grant
of mining lease can only be in accordance with Rule 59( 1) by
way of public auction and, therefore, the acceptance of the
transfer applied for by Mis .Dalmia in favour of the first G
respondent in the order dated 16.03.2002 cannot be approved.
The learned senior counsel also relied upon the decisions
reported in Janak Lal v. State of Maharashtra &Ors. -(1989)
4 SCC 121, Bangalore Development Authority v. Vijaya
Leasing Limited & Ors. - (2013) 14 SCC 737, Ram Preeti H
574 SUPREME COURT REPORTS (2015) 6 S.C.R.
A Yadav v. U.P. Board of High School and Intermediate
Education and Ors. - (2003) 8 SCC 311 and Bhaurao
Dagdu Paralkar v. State of Maharashtra & Ors. - (2005) 7
sec 605 in support of his submissions.
B 26. As against the above submissions, on behalf of the
first respondent Mr. K.K. Venugopal and Mr. Krishnan
Venugopal, learned senior counsel made their submissions.
The submission of Mr. K.K. Venugopal was that the appellant
had committed serious violation of the Mines and Minerals
C Development and Regulations Act and its Rules as well as the
provisions of the ForestAct by indulging in encroachment of
forest land as well as the lands originally held by M/s.Dalmia
now held by the first respondent which amounted to looting of
the wealth of the nation and consequently they had no locus to
D challenge the order of transfer dated 16.03.2002.
27. As far as the intervenor is concerned, the learned
senior counsel by referring to some of the earlier orders of this
Court passed in S.L.Ps. preferred by the intervenor himself
E submitted that having failed in its attempt to get impleaded,
he has come forward with this intervention application and,
therefore, he should not be heard.
28. As far as the question of surrender was concerned,
F according to Mr.K.K.Venugopal, it was a mixed question of
fact and law. According to him, even while examining the factual
surrender at the instance of M/s. Dalmia, when the provisions
of Mines and Minerals Development and Regulations· Act and
the Mineral Concession Rules, in particular Rule 29 read along
G with the terms and conditions in the mining lease are examined,
it would show that such prescriptions were mandatory;
negatively couched, and, therefore, unless twelve months
notice period is completed, there would have been no scope
for anyone to contend thatthe lease had cometo"an end. The
H learned senior counsel contended that if the licencee intends
MU NEER ENTERPRISES v. RAMGAD MINERALS &MINING575
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
to surrender the mining lease, they should have submitted to A
the State Government or such officer or spedfied authority
competent to accept such surrender and when any third party
alleges the surrender to have come into effect, the burden was
heavily upon the said third party to prove the same. In so far as
the alleged surrender of M/s.Dalmia is concerned, the learned B
senior counsel contended that no-surrender had taken place
in the eye of law, in as much as, such surrender was-not carried
out by M/s.Dalmia strictly in accordance with Rule 29 of Mineral
Concession Rules and that 12 months period has also not
expired before the transfer in favour of first respondent was C
effected.
29. Mr.Krishnan Venugopal, learned senior counsel in his
submissions stated that the Director of Mines and Geology
had no power to accept the surrender and, therefore, there D
was no scope to contend that the surrender was accepted
before the expiry of 12 months. After referring to the relevant
Notifications passed under Section 26(2) of the Mines and
Minerals Development and Regulation Act, the learned senior
counsel pointed out that there was no delegation of power E
made in favour of the Director of Mines and Geology in
contemplation of Rule 29 of the Mineral Concession Rules and
therefore he was not the competent authority. It was contended
that if at all the surrender could have been effected, the same F
could have been effected only with the State Government and
that too by passing a positive order by the State accepting
such surrender. The learned senior counsel contended that the
letter'dated 25.05.2001 can never be taken as an order of
acceptance of surrender. The learned senior counsel relied G
upon the decisions reported in Sandur Manganese and Iron
Ores Limited v. State of Karnatala and Ors. - (2010) 13
SCC 1, Sethi Auto Service Station and Anr. v. Delhi
Development Authority & Ors. - (2009) 1 SCC 180 and
Shanti Sports Club &Anr. v. Union of India & Ors. -(2009) H
576 SUPREME COURT REPORTS (2015] 6 S.C.R.
A 15 SCC 705 in support of his submissions.
30. He also contended that after the Forest Conversion
(Amendment) Rules, 2014 in particular Rule 8(3)(a) & (d) old
Rules 6 and 7 were substituted and new Rules 6, 7 and 8
B were brought in and by virtue of the newly amended Rules, the
consequence of non-compliance of Section 2 of the Forest
Act, 1980 would not ipso facto make the lease void ab initio
except that the mining operation will have to be stopped and
after complying with the conditions, the Jessee will have to start
C afresh by getting the clearance under Section 2 of the Forest
Act, 1980. The learned senior counsel also contended that
under the MMDRAct, the only provision under which the lease
will become void is Section 19 and therefore the contention of
the appellant that non-compliance of Section 2 of the Forest
D Conservation Act would render the lease void ab initio cannot
be accepted. He also contended that with the first renewal of
the lease by an order dated 07.03.1986 the lease was renewed
from 25.11.1983 to 24.11.2003, that on 04.02.2002, itself i.e.,
long before 12 months prior to the expiry of the renewed lease,
E application for transfer was made, that on 16.03.2002 itself
the State Government passed an order of transfer of the lease
and in the circumstances by virtue of Rule 24(A)(1) read along
with Rule 26(1) of the Mineral Concessions Rules, the right for
F renewal continued to exist and that no order of rejection of
renewal under Rule 26( 1) was ever passed. It was, therefore,
contended that as on date the right of renewal was subsisting
and it continue to subsist.
31. The learned senior counsel contended that MMDRAct
G and Forest Conversion Act, 1980 function in two different fields
in the sense that the existence and continuance of the lease
and right of renewal are independent of the approval to be
received under the ForestAct, 1980, thatthe consequence of
H violation of Section 2 of the Forest Act, 1980 will not ipso facto
MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING577
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
determine the lease and make it void and that only other A
consequence would be as provided under Section 3(A) of the
Forest Act, 1980. As far as renewal of the lease is concerned,
according to the learned senior counsel, the same is
exclusively under MMDR Act and once the lessee complies
with the requirements under the Forest Act, 1980 the right of B
renewal of the lease would get automatically revived.
32. On the question of voidness, the learned senior
counsel by referring to the decisions in Smt. Lila Gupta v.
Laxmi Narain & Ors. - (1978) 3 SCC 258 and Pankaj Mehra C
& Anr. v. State of Maharashtra & Ors. - (2000) 2 SCC 756
contended that equity is in favour of the first respondent to
sustain the lease and this is a fit case to affirm the Section 2
approval and in the alternative to permit the first respondent to
apply under Section 2 for compliance. D
33. By referring to Rule 29 of the Mineral Concession
Rules, the learned senior counsel would contend that the
prescription of 12 months notice period in the said Rules is
mandatory and has got a purpose and intent and therefore E
unless the 12 months period expires, after the lessee
expressed its desire to surrender the lease and that too such
notice of termination is submitted before the competent
authority as prescribed under Rule 29, it cannot be held that
surrender would take effect the moment such a notice is F
submitted by the lessee to some incompetent authority.
34. The learned senior counsel summarized his
submissions on the question of surrender by contending that
the return of the Lease Book by itself would not confirm the G
case of surrender unless the period of 12 months as prescribed
under Rule 29 expired, that even if it is to be stated that the
State Government waived the 12 months period, unless there
is a specific order accepting the surrender, it canm;>t be held
that the surrender had come into effect. The learned senior H
578 SUPREME COURT REPORTS [2015] 6 S.C.R.
A counsel also submitted that there was no evidence to show
that such acceptance of surrender in the form of an order of
the State Government was issued. It was therefore contended
that there is no scope for inferring any such surrender based
on certain communications addressed to the authorities and
B the copies marked to the lessee. As far as the no due
certificate was concerned, the learned senior counsel
contended that the same was made four days prior to the
application of transfer and the payment was meant for the
purpose of effecting the transfer.
c
35. Countering the submissions of the learned senior
counsel forthe first respondent Mr.Kapil Sibal submitted that
in the decision reported in Basheshar Nath v.
Commissioner of Income Tax, Delhi and Rajasthan &
D Anr. -AIR 1959 SC 149, the Constitutional Bench has held
that the right of waiver can be exercised by the State and
submitted that reading the said judgment in the light of Rule
29 read along with paragraph 4 of the licence conditions
contained in Form K. Waiver exercised by the State while
E accepting the surrender before 12 months under Rule 29 was
valid in law. The learned counsel also relied upon the decisions
reported in Commissioner of Customs, Mumbai v. Virgo
Steels, Bombay & Anr. - (2002) 4 SCC 316 and Vasu P.
F Shetty v. Hotel Vandana Palace & Ors. - (2014) 5 SCC
660.
36.As against the arguments of the learned senior counsel
for the first respondent that any surrender should be made to
the concerned authority and should be accepted only by the
G competent authority, Mr.Sibal submitted that surrender was
made to the State Government as disclosed in the statement
of objections submitted on behalf of the State Government,
wherein, in paragraph 5 the State Government itself has
H accepted that M/s. Dalmia made its application dated
MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING579
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
27 .03.2001 to the State Government proposing to surrender A
the lease held by it w.e.f 01.04.2001 and also subsequently
surrendered the Mining Lease Book to the State Government.
The learned counsel however pointed out that though in the
said paragraph,5, it was stated that the said application was
not considered and the State Government did not pass any B
orders accepting the surrender of the mining lease, the learned
senior counsel pointed out that the grant of lease was by the
Director of Mines as disclosed in Form K of the mining lease
which states that the term lessor included its successors/
assignees and also in the condition for the determination of c
lease, it was the Director of Mines who has affixed his
signature. The learned senior counsel contended that going
by the opening set of expressions in Form K deeming fiction
would operate and the Director of Mines was the authority who D
was c.ompetent to accept the surrender. The learned senior
counsel also contended that this question was never raised at
the instance of the first respondent and in the absence of proper
pleading before the High Court, the first respondent cannot be
permitted to raise the said issue which is a mixed question of E
fact and law.
37. As regards the argument that surrender, whether it was
accepted and that too by a written order, the learned senior
counsel contended that acceptance of such surrender before F
expiry of twelve months can also be gathered from the conduct
of the parties unless there is a statutory requirement. The
learned senior counsel after referring to the sequence of
correspondence which emanated from M/s.Dalmia's letter
dated 27.03.2001, the reply from the office of the Director of G
Mines and Geology dated 25.05.2001, M/s.Dalmia's letter
dated 16.06.2001, the dismissal of the suit by M/s.Dalmia
dated 26.09.2001 and the no dues certificate issued by the
State Government on 31.01.2002 contended that the same
sufficiently disclosed that the lease was not only surrendered H
580 SUPREME COURT REPORTS (2015] 6 S.C.R.
A it was also acted upon by the concerned authority.
38. As regards the contention of the first respondent that
non-compliance of Section 2 of the Forest Act, 1980 can have
no implication insofar as it related to the validity of the lease
B granted under the Mines and Minerals (Development and
Regulations) Act, Mr.Sibal, learned senior counsel would
contend that the said submission cannot be accepted.
According to the learned senior counsel, even before coming
into force of the Forest Act, 1980 under the proviso to Section
C 5 of the Mines and Minerals (Development and Regulations)
Act the requirement of Central Government's approval was
mandatory which came to be imposed as a statutory condition
in respect of the forest land under Section 2 of the Forest Act,
1980. The learned senior counsel therefore contended that
D the requirements of approval to be granted by the Central
Government being a statutory requirement, one made under
the Mines and Minerals (Development and Regulations) Act
as well as under the Forest Act, 1980, the operation of the
mining lease cannot be carried out without the prior approval
E of the Central Government under the ForestAct, 1980. In other
words, according to the learned senior counsel, the requirement
of approval under the Forest Act, 1980 has to synchronize with
the mining lease if the leaseholder wants to carry on mining
F operation in respect of the minerals specified in the first
schedule of the Mines and Minerals (Development and
Regulations)Act. The learned senior counsel contended that
the only exception provided was under the judgments of this
Court in Godavarman I and II (cited supra) which was by
G virtue of the extraordinary Constitutional power vested in this
Court under Article 142 and under no other circumstance the
mining operation can be carried on even if one were to possess
the licence under the Mines and Minerals (Development and
Regulations)Act.
H
MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING581
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.)
39. The learned senior counsel pointed out that after the A
in-principle Stage-I approval granted on 24.12. 1997, when M/
s.Dalmia failed to comply with the conditions imposed till the
expiry of the first' renewal which occurred on 24.11.2003, any
attempt on behalf of the first respondent through its
communication dated 11.05.2004, based on the order of B
transfer dated 16.03.2002, could not have validated the lease
which already got lapsed on its own.
40. Mr.Sibal, learned senior counsel then contended that
when the writ petition was· pending before the High Court, on C
behalf of the Central Government, Ministry of Environment and
Forest raised its objections as disclosed in its objections dated.
03.02.2004, for granting any approval, after the expiry of the
first renewal, due to non-compliance of the conditions imposed
in the in-principle stage-I approval which weighed with the D
learned Judge of the High Court when the renewal itself was
quashed by the learned Judge in the order dated 10.11.2004.
The learned senior counsel then referred to the judgment of
the Division Bench in W.A.No.5377 of 2004, the second
renewal application and the in-principle stage-I approval E
subsequently granted on 13.09.2006 and also the order of this
Court dated 26.10.2007 which made it clear that the first
respondent cannot claim any equity based on the order dated
13.09.2006. The learned senior counsel submitted that, F
therefore, both the in-principle stage-I approval dated
13.09.2006 as well as the final approval dated 09.09.2010
will be of no avail to the first respondent for getting the
surrendered lease revived. The learned senior counsel,
therefore, contended that the claim of the first respondent that G
the mining lease would be unaffected by the non grant of
approval under Section 2 of the Forest Act, 1980 cannot be
accepted. The learned senior counsel relied upon the
decisions reported in Ambica Quarry Works v. State of
Gujarat & Ors. - (1987) 1 SCC 213. H
582 SUPREME COURT REPORTS [2015] 6 S.C.R.
A 41. Mr. Sibal, learned senior counsel lastly contended that
Section 10(1) and the second proviso to Section 11 of the
Mines and Minerals (Development and Regulations) Act has
to be read along with Rules 37 and 59 and contended that
the application for transfer under Rules 37(1 )(a) or 1(A) cannot
B be automatically granted. The learned senior counsel
submitted that whatever would apply to a fresh application as
provided under Section 10(1) and second proviso to Section
11 would equally apply even to the transfer and the application
for transfer cannot be granted just for mere asking. The learned
C senior counsel would therefore contend that under Rule 59,
the necessity to notify before the grant of lease is mandatory
and there is no question of subverting the said Rule in a case
where the lease was surrendered. According to the learned
senior counsel in such a case for applying Rule 59, there must
D be a notification to enable all those interested to stake their
claim, which would enable the State to derive the maximum
benefit while permitting mining of minerals, which is a national
wealth.
E 42. Ms. Anitha Shenoy, Advocate-on-Record appearing
for the State of Karnataka submitted that the requirement of
12 months notice for determining the lease at the instance of
a lessee is mandatory. By referring to Rule 27(2)(1), the learned
F counsel submitted that the said sub-Rule mandates delivery
of possession of land and mines on surrender of the lease
and that Clause 4 of Part VI 11 of Form-K viz., the lease deed
specifically states that such determination will take effect after
the expiry of such notice. By referring to the communication
G dated 27.03.2001 of M/s.Dalmia's application for surrender,
letter of the Director of Mines to the Senior Geologist dated
25.05.2001, the M/s. Dalmia's letter dated 16.06.2001,
surrendering the lease deed book as well as no due certificate
issued by the Department of Mines on 31.01.2002, the learned
H counsel submitted that, in spite of all these communications a
MU NEER ENTERPRISE::> v. RAMGAD MINERALS & MINING583
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
specific order of acceptance of surrender was still required A
which was never issued. To support the said submission, the
learned counsel placed reliance upon the earlier
communications in the office of the Mining Department
pertaining to various other mining lease viz., those dated
12.03.1965, certain other orders passed in December, 1988 B
and 11.04.1989 and the Notification dated 19.06.1965 and
contended that those communications disclosed specific order
of acceptance of surrender issued by the State Government.
The learned counsel would therefore contend that in the case
on hand, since such a specific order of acceptance of surrender c
was not issued, it cannot be stated that the surrender as applied
for by M/s.Dalmia had taken place.
43. In his reply, Mr.Krishnan Venugopal, learned senior
counsel for the first respondent contended that going by the D
letter of the State of Karnataka dated 21.02.1986, no lease
could have been granted or renewed except by the State and
not by the Director of Mines. By referring to Section 5 of the
Mines and Minerals (Development and Regulations) Act, the
·learned senior counsel reiterated that the power is vested only E
with the State and in the absence of any delegation, the Director
of Mines will have no jurisdiction or power to issue the lease
or determine the lease. The learned senior counsel further
contended that by virtue of the Constitutional prescription as F
contained in the Entries found in List I and List II read along
with Section 2 of the Mines and Minerals (Development and
Regulations) Act, the subject being controlled by the
Parliament, strict compliance of the provisions of the Act is
warranted and, therefore, in the absence of delegation of power G
with the Director of Mines, it cannot be contended that the
exercise of such power by the Director would validate the
surrender as claimed by the appellant. The learned senior
counsel would therefore contend that the period of 12 months
required for determining the lease by the lessee is mandatory H
584 SUPREME COURT REPORTS [2015] 6 S.C.R.
A and unless and until the said period expires which is for the
benefit of the State, it cannot be held that the surrender had
come to an end even before the expiry of the 12 months period.
44. In this context, the learned senior counsel referred to
B the Government of India/Ministry of Environment and Forest
letter dated 14.09.2001 to the Secretary (Forest) of all the
States and Union Territories, wherein, the Central Government
after making reference to various cases where the in-principle
stage-I clearance was granted by imposing conditions and the
C failure of the States and the user agencies in reporting
compliance after !apse of five years and in some cases after
more than 10 years, the MOEF stated that the Central
Government in respect of those cases took a decision to the
effect that in all those cases the in-principle approvals though
D stood revoked summarily, depending upon the interest shown
by the State or the user agency in the project, they would be
required to submit a fresh proposal which would be considered
de novo. The learned senior counsel further contended that
even the Central Government has understood as to the manner
E in which any fresh proposal to be considered in respect of
cases where the user agencies failed to comply with the
conditions imposed in the in-principle stage-I approval granted.
According to him, such a decision of the Central GovernmenU
F MOEF was subsequently incorporated in the Forest
Conservation Rules by way of amendment to Rules 6, 7 and 8
in the year 2014 and therefore it cannot be held that the non-
compliance of the conditions imposed while granting in-
principle stage-I approval would in any manner efface the lease
G granted under the MM DR Act and Mineral Concession Rules.
45. Mr. Kapil Sibal, learned senior counsel while
responding to the submissions of Ms. Anitha Shenoy,
Advocate-on-Record for the State of Karnataka pointed out
H that in the documents now produced by the learned counsel
MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING585
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
for the State which pertained to the years 1965, 1988 and A
1989, those documents were signed by the Director while
accepting the surrender proposed by the lessees and that such
acceptance had been made not after the expiry of the 12
months period from the date of application but before the expiry
of such 12 months period. The learned senior counsel also B
submitted that the State Government has not come forward
with any affidavit by any responsible officer that surrender was
not accepted by the State Government. The learned counsel
also contended that the lessee viz., Mis. Dalmia wanted to
surrender and the fact remains that the lease had been C
determined. As regards the reference to Rule 27(2)(1) the
learned senior counsel contended that though the Rule states
that on surrender possession should be delivered, there is no
specific expression to the effect that such delivery of D
possession should be byway of handing over.
46. Two questions that arise for consideration:
a. Whether Mis. Dalmia surrendered its mining licence
No.M.L. 2010? E
b. If it was not surrendered, whether violation of
conditions of in-principle stage-I approval dated
24.12.1997 would ipso facto render the mining licence
invalid and inoperative in law? F
47. While attempting to find an answer to the above two
questions, the submissions of counsel for both sides
necessarily postulate consideration and examination oftlie
following factors: G
a. Mining lease in M.L. No.2010 of Mis. Dalmia was
initially issued on 25.11.1953 which expired on
24.11.1983.
b. First renewal of M.L. No.2010 was by order dated H
586 SUPREME COURT REPORTS [2015] 6 S.C.R.
A 07.03.1986 for 20 years with effect from 25.11.1983
ending with 24.11.2003 without any statutory approval of
the Central Government and in particular the prior
approval of Central Government under Section 2 of the
ForestAct, 1980.
B
c.Afterthe judgment of this Court in Godavarman I & II,
mining operations under M.L. 2010 were suspended in
January, 1997 and thereafter in-principle Stage-I approval
was granted in favour of Mis. Dalmia on 24.12.1997 by
C the Central Government imposing conditions to be
complied within five years i.e. on or before 23.12.2002.
d. By letterdatea 16.04.1999 Mis. Dalmia surrendered
196.58 Hectares of land out of 331.50 Hectares to the
o Forest Department of State Government.
e. On 27.03.2001 Mis. Dalmia wrote to Director of Mines
and Geology to determine the lease as it wanted to
surrender. Mis. Dalmia gave 12 months notice from
E 01.04.2001 or earlier if permitted by State Government.
f. On 25.05.2001, the Director of Mines while marking a
copy of its letter addressed to the senior Geologist to Ml
s. Dalmia simultaneously instructed to surrender the lease
book in respect of M. L. No.2010 along with the Mining
F
Plan.
g. In the order dated 26.06.2001 passed in W.P. No.6304
of 1998 learned Single Judge of Karnataka High Court
noted the stand of Mis. Dalmia with reference to M.L.
G No.2010 that Mis. Dalmia was no longer interested in
working of said mines which was adjoining the mines of
the appellant. In fact the said writ petition was disposed
of by noting the said factor also.
H h. On 25.08.2001, the Director of Mines made a note in
MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING587
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.)
the application No. 84AML 2001 and 92AML 2001 for A
grant of mining lease over an area covered by M.L.
No.2010 to the effect that the said area was surrendered
by M/s. Dalmia, that two applications had been received
in respect of the said area, that Rule 59(1) of MCR Rule
was attracted and therefore the applications were not B
considered. The said endorsement was made by Mr.
Reddy, the then Director of Mines and Geology.
i. On 26.09.2001, the suit filed by M/s. Dalmia against
the appellant in O.S. No.53of1993 on the file of Civil C
Judge, Hospet in respect of the boundary dispute was
dismissed for non-prosecution.
j. On 09.01.2002, the Director of Mines ordered the
Deputy Director, Hospet to survey and demark the area D
covered by the appellant's lease, since O.S. No.53 of
1993 was dismissed and M/s. Dalmia surrendered its
lease.
k. On 30.01.2002 M/s. Dalmia paid a sum of E
Rs.22,332.00/- stated to be the arrears in respect of M.L.
N0.2010 and obtained no due certificate dated
31.02.2002.
I. On 04.02.2002 M/s. Dalmia applied to the State F
Government the application for transfer of M.L. No.2010
to the first Respondent.
m. On 06.02.2002, the Director of Mines and Geologist
namely the same Mr.Reddy recommended the
application for transfer. G
n. On 16.03.2002, the State Government allowed the
application of M/s. Dalmia in favour of the first
Respondent.
H
588 SUPREME COURT REPORTS [2015] 6 S.C.R.
A o. On 21.07.2002, the Principal Chief Conservation of
Forest, Bangalore wrote to the Principal Secretary,
Department of Commerce and Industries pointing out the
failure of M/s. Dalmia to fulfill the conditions of in-
principle stage-I approval dated 24.12.1997 and
B requested the State Government to withdraw the order
dated 16.03.2002.
p. In the Order dated 10.11.2004, learned Single Judge
of the Karnataka High Court set aside the order of
C transfer dated 16.03.2002.
q. Pending first Respondent's W.A. No.5377 of 2004,
the Central Government granted in-principle stage-I ex
post facto approval to the first Respondent on
D 13.09.2006.
r. During the pendency of Special Leave Petition, by order
dated 09.09.2010 stage II clearance in favour of the first
Respondent was granted. But by the Supreme Court's
E order dated 23.09.2010 the first Respondent was
directed to maintain status quo.
s. For transfer of M.L. No.2010 in favour of first
Respondent M/s. Dalmia has received a sum of
Rs.74, 11,559/-.
F
t. After the order of transfer, the first respondent paid
Rs.2, 18,42,600/- amount on 11.05.2004 to comply with
the condition imposed in the earlier in-principle stage I
clearance of 1997 pursuant to order dated 16.03.2002.
G
48. Having considered the rival submissions of the
respective counsel, the following questions arise for
consideration:
H i. Whether M/s. Dalmia surrendered the mining lease
MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING589
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
bearing No.M.L.2010 and whether such surrender has A
become final leaving no scope for Mis. Dalmia to transfer
it in favour of the first respondent?
ii. Whether forthe purpose of surrender of a mining lease
to come into effect the expiry of the period of 12 months B
from the alleged date of surrender is mandatory or not?
iii. Whether there was surrender of 196.58 hectares of
forest land made by M/s. Dalmia on 16.04.1999 out of
the total extent of 331.50 hectares and thereby what c
remained with M/s. Dalmia was only 134.92 hectares
for which also there was no ex post facto approval by the
MOEF?
iv. Whether the act of surrender in order to become D
complete should have been accepted by the State?
v. Whether pursuant to the act of surrender, delivery of
possession is mandatory under Rule 27(2)(1) of the
Mineral Concession Rules?
E
vi. Even if surrender has not taken place by reason of the
non-compliance of in-principle stage-I approval granted
in the order dated 24.12.1997 whether the mining lease
stood automatically expired on 24.11.2003?
'~ F
vii. Whether by virtue of Rules 29 and 37"f the Mining
Concession Rules read with Section 19 of the MMDR
Act any mining lease in contravention of the Act become
void ab initio?
G
viii. Whether after the coming into force of the Forest Act
of 1980 when approval under Section 2 of the said Act is ·
mandatory, can it be said that there could be any scope
for ex post facto approval in violation of the said
provision. Whether the order of Godavarman case can H
590 SUPREME COURT REPORTS [2015] 6 S.C.R.
A be relied upon for subsequent renewals?
ix. Whether after the newly amended Forest
Conservation Rules 6, 7 and 8 non-compliance of
Section 2 of the Forest Act would still make the lease
B void ab initio?
x. Whether right of renewal of the lease under MMDR
Act and the action of grant of approval under the Forest
Act are independent and one does not affect the other?
c xi. Whether based on the requirement of Central
Government approval under Section 5 of the MMDRAct
which was existing prior to the coming into force of the
Forest Act, 1980, can it be said that such a requirement
is now made as a mandatory one under Section 2 of the
D
Forest Act for a mining lease to remain valid?
xii. Whether Section 10( 1) and the second proviso to
Section 11 of the MMDR Act as well as Rule 37 and 59
of the Mineral Concession Rule mandatory to the effect
E that any transfer applied for under Section 37 (1)(a)
cannot be automatically granted?
xiii. Whether the order of transfer dated 16.03.2002 was
bonafide taking into account the sequence of events?
F
xiv. Whether the transfer of lease by order dated
16.03.2002 can be held to be valid since such transfer
order came to be passed before the expiry of the first
renewal, namely, before 24.11.2003?
G
xv. Whether the stage-I approval dated 13.09.2006 and
the final approval dated 09.09.2010 can be held to be
valid in the light of the order of this Court dated
26.10.2005?
H
49. In order to consider the first question as to whether M/
MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING591
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.)
s. Dalmia surrendered the mining lease M.L. No.2010 and A
whether such surrender has become final and conclusive, we
have to recapitulate certain basic facts relating to the said
lease. The said lease M.L. No.2010 was granted on
25.11.1953 for 30 years and the extent of land was 331.50
hectares covering 819.20 acres of forest land in Jaisinghpur B
village R.N. Block, SandurTaluk, Bellary District. The said initial
lease period expired on 24.11.1983 and by order dated
07.03.1986 the lease was renewed for another 20 years
retrospectively from 25.11.1983, which was to expire by
24.11.2003. The relevant fact to be noted is that by the time C
the lease expired on 24.11.1983, the Forest Act 1980 had
come into force and under Section 2 of the ForestAct in order
to carry on any further mining activity in the entirety of the 331.50
hectares of land covered by M.L.No. 2010, the prior approval D
of the Central Government was necessary and required. It is
not in dispute that when the mining lease was renewed by order
dated 07.03.1986 by the Department of Mines of the State
Government, Section 2 of the Forest Act of 1980 was not
complied with. It remained unnoticed till the issue came to be E
considered by this Court in the judgment concerned in
Godavarman-1. By virtue of the direction issued by this Court
all the mines, which did not comply with the requirement of
Section 2 of the Forest Act were directed to stop all their mining
activities. Consequently by order dated 25.01.1997 the second F
respondent herein namely Director of Mines and Geology
called upon Mis. Dalmia to 5top all mining activities pertaining
to M.L. No.2010 and the mining activities were stopped by M/
s. Dalmia. Thereafter, by the Godavarman-11 judgment, which
is reported in (1997) 3 SCC 312, the MOEF was directed to G
consider those applications for ex post facto approval.
Pursuant to the said direction of this Court, by order dated
24.12.1997, MOEF granted conditional in-principle stage-I
approval for the renewal of Mis. Dalmia's mining lease for an
extent of 201.50 hectares of forest land. The said stage-I H
592 SUPREME COURT REPORTS [2015] 6 S.C.R.
A approval was subject to fulfillment of specific conditions within
six months from the date of the order. It was also specifically
mentioned that only after receipt of compliance report of the
conditions stipulated in the stage-I approval, consideration for
grant of final approval under Section 2 of the Forest
B Conservation Act would be made and issued. After the receipt
of the order dated 24.12.1997 Mis. Dalmia surrendered 196.58
hectares of land out of 331.50 hectares to the forest department
of the State Government through their letter dated 16.04.1999.
By virtue of the said surrender made by Mis. Dalmia out of
C 331.50 hectares the Mis. Dalmia can be said to have retained
only 134.92 hectares for its mining operations. Be that as it
may, on 27.03.2001 Mis. Dalmia wrote to the Directors of Mines
and Geology expressing its decision to determine the lease
D and surrender the remaining area and gave notice as required
under the terms of the mining lease deed for determination of
the lease. In the said letter Mis. Dalmia mentioned that such
determination of lease would take effect upon expiry of 12
months notice period from 01.04.2001 or earlier if permitted
E by the State Government.
50. In response to the said communication of Mis. Dalmia,
the State Government through the office of the Director of Mines
and Geology in its letter dated 25.05.2001 addressed to the
F Senior Geologist of the State Government stated that Mis.
Dalmia has stopped all its mining activities from 1997 and
that it has now expressed in its letter dated 27.03.2001 to
surrender the lease, namely, M. L.No. 2010 even earlier than
the 12 months period and called upon the said officer to intimate
G as to whether any arrears were due and payable by Mis. Dalmia
fortaking further action. Copy of the said communication dated
25.05.2001 was also sent to Mis. Dalmia for information and
also by way of instructions to surrender the lease deed book
in respect of M.L.No. 2010 along with the mining plan approved
H by Indian Bureau of Mines immediately for taking further action.
MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING593
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
In response to the said letter of Director of Mines and Geology A
Mis. Dalmia forwarded its letter dated 16.06.2001 directly
addressed to the Director of Mines and Geology mentioning
that as instructed by the said authority, they surrender the lease
deed book, namely, M.L.No. 2010. The said letterfurther stated
that the mining plan was not available with them. It was B
specifically mentioned at the bottom of the said letter that
mining lease deed book was being enclosed along with the
said letter.
51. When we make a reference to Mis. Dalmia's earlier C
letter dated 16.04.1999, the intention of Mis. Dalmia of its
decision to surrender 196.58 hectares out of 331.50 hectares
was explicitly stated. If the said decision taken by Mis. Dalmia
is accepted which decision was clearly spelt out in the said
communication dated 16.04.1999 what was really retained by D
it subsequent to the stage-I in-principle approval of MOEF dated
24.12.1997 was only 134.92 hectares. In fact, it is mentioned
therein that originally an area of 130 (331.50-130 = 201.50)
hectares was already surrendered by it prior to 16.04.1999,
that virgin area not broken up in an extent of 66.58 hectares E
was being surrendered as disclosed in the letter dated
16.04.1999 and consequently what was practically retained
by it was only 134.92 hectares. It was also stated in the said
letter that when such was the position relating to the actual F
land area retained by Mis. Dalmia with reference to which any
demand by way of penal compensation aforestation charges
could be claimed, the same could not have been claimed for
201.50 hectares as mentioned in the stage-I in-principle
approval granted in the order dated 24.12.1997. Though the G
said communication dated 16.04.1999 atthe instance of Mis.
Dalmia was addressed to the forest department, in that context,
it was very clearly stated that what was retained by it as on that
date was only 134.92 hectares, out of the total extent of 331.50
hectares. It is necessary to keep the said factor in mind while H
594 SUPREME COURT REPORTS [2015] 6 S.C.R.
•
A considering the issue relating to the surrender raised in these
proceedings.
52. Apart from the above factors, certain other factors
relating to the factum of surrender are also required to be noted.
B At the instance of the appellant herein a writ petition came to
be filed in Writ Petition No.6304 of 1998 in the High Court of
Karnataka as against the Mine Authorities and Chief
Conservator of Forest as well as M/s. Dalmia. In that writ
petition, the issue pertained to a boundary dispute as between
C the appellant and M/s. Dalmia. But the said Writ Petition came
to be disposed of by learned Single Judge by order dated
26.06.2001 by stating as under:
"7. A subsequent development requires to be noticed
o at this stage when the matter came up for consideration
on the last date of hearing Shri B. T. Parthasarthv
appearing for 3rr1. respondent stated that the 3rr1.
respondent is no longer interested in working in the mine
situated in the land adjoining the petitioner's land
E therefore at present no boundary dispute as such exists
between the petitioner and the 3m respondent. This will
have some bearing on the validity of the impugned
order dated 06.11.1997 as the entire order is on the
assumption that a boundary dispute exists between the
F petitioner and the neighboring owner. Be that as it may."
(Emphasis added)
53. The said stand of M/s. Dalmia which was the third
G respondent in that writ petition also disclosed that M/s. Dalmia
categorically made it clear that it was not operating the mines
covered by M.L.No. 2010. After the letter of M/s. Dalmia dated
27 .03.2001 expressing its decision to surrender the lease and
determine the same, the Director of Mines sent its
H communication dated 25.05.2001 pursuant to which Mis.
MU NEER ENTERPRISES v. RAMGAD MINERALS
. - & MINING59.5
.. .
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
Dalmia surrendered the lease deed book of M.L.No. 2010 A
along with its letter dated 16.06.2001. Thereafter, an
application came to be filed at the instance of a company called
'M.S.P.L. Limited' through its Executive Directed Mr. Rahul
Baldota on 21.07.2001 for the grant of mining lease which was
held by Mis. Dalmia and shown as government land in its B
application. In the said application an endorsement was made
on 25.08.2001 by the Director of Mines to the effect that the
area applied for fell within the area surrendered by Mis.
Dalmia, that a prior application was also made for mining
lease over the same area by third parties, that under Rule 59(1) C
of the Mineral Concession Rules grant of mining lease can be
only byway of a notification in the official gazette and therefore
such grant cannot be considered based on individual
applications. In this context it is also relevant to note that on D
30.01.2002 Mis. Dalmia made a payment of Rs.22,3321-
towards arrears payable by it in respect of M.L.No. 2010, which ·
was acknowledged by the Deputy Director of Department of
Mines and Geology in its letter dated 31.01.2002. The said
letter specifically stated that as per the revised audit report E
the arrears were determined in a sum of Rs.223321- and the
same was paid by Mis. Dalmia through DD No.88545 dated
30.01.2002 and thereby no due certificate was being issued.
One other relevant document of the office of the Director of
Mines and Geology is the letter dated 09.01.2002 addressed f
to its own Deputy Director wherein the Director of Mines while
calling upon the Deputy Director to demarcate the area of
mining lease No.2151 of the appellant mentioned therein that
the said survey is required to be made for the purpose of
renewal of M.L.No. 2151 inasmuch as the boundary dispute G
as between the appellant and Mis. Dalmia which was pending
in the Civil Court in O.S. No.53 of 1993 was dismissed for
non-prosecution on 26.09.2001 and the further fact that Mis.
Dalmia surrendered their lease as on that date and therefore
the dispute as between appellant and Mis. Dalmia did not H
596 SUPREME COURT REPORTS [2015) 6 S.C.R.
A survive.
54. Keeping the above material facts relating to the alleged
surrender of mining lease in M.L.No. 2010 by Mis. Dalmia, the
various submissions relating to the said surrender by the
B respective counsel requires to be dealt with.
55. While considering the various questions on surrender,
the first question that arise for consideration relates to the
surrender of 196.58 hectares of forest land which was made
c by Mis. Dalmia on 16.04.1999 out of the total extent of 331.50
hectares and that what remained with it was only 131.44
hectares. To show that Mis. Dalmia earlier surrendered 196.58
hectares, its own letter dated 16.04.1999 was placed before
us. When we perused the letter dated 16.04.1999 of Mis.
o Dalmia which was addressed to the Principal Chief
Conservator of Forest, Bangalore, it is mentioned therein that
they have already surrendered 130.1 hectares out of 331.50
hectares and the balance area in their possession was only
201.50 hectares. Even out of the remaining 201.50 hectares,
E according to Mis. Dalmia, 110 hectare was broken up for
mining, 5.75 hectare was used for roads, dams, stores, office
etc., 19.17 hectares was broken up but unusable virgin area
used for roads and that it was non ore-bearing area and the
remaining virgin area which was not yet broken and which was
F being surrendered was 66.58 hectares. It is also further stated
therein that the management decided to surrender even the
virgin area of 66.58 hectares and ultimately wanted to retain
only 134.92 hectares.
G 56. In fact this letter, dated 16.04.1999 apparently
appeared to have been sent in response to the in-principle
stage-I approval granted by the Government of India in its letter
dated 24.12.1997 wherein certain conditions were imposed.
While responding to the said order, Mis. Dalmia in its letter
H dated 16.04.1999 mentioned that as far as conditions (i) and
fv!UNEER ENTERPRISES v. RAMGAD MINERALS & MININ9ilj,97
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.)
(ii) of the Government of India dated 24.12.1997, no action A
need be taken since it decided to surrender nearly 196.58
hectares and what was to be retained was only 134. 92
hectares. As regards condition No.(iii), namely, the cost of
penal compensatory aforestation charges was concerned,
while referring to the demand, twice the area of 201. 50 hectares B
i.e. 403 hectares @ Rs.40,7001- per hectare, Mis. Dalmia
pointed out that there cannot be a demand by Government of
India to that extent and at best the demand ·can only be raised
in respect of the broken up area of 134.92 hectares. It was
further contended that since Mis. Dalmia was carrying mining C
operations even in that 134. 92 hectares with the permission
of the State Government Authorities from time to time, no penal
compensatory aforestation charges can be claimed over that
area.
D
57. When we consider the said letter of Mis. Dalmia what
transpires is that a conscious decision was taken by Mis.
Dalmia to surrender 196.58 hectares and its further decision
to retain only 134.92 hectares in the year 1999 after the earlier
surrender of 130 hectares prior to 1999. The said decision of F
Mis. Dalmia, which was consciously taken as early as on
16.04.1999 disclose that it possessed as on that date only
134.92 hectares out of 331.50 hectares, which it was holding
earlier under M.L. No.2010 of 2010. When the said factual F
position cannot be controverted, having regard to the document
which was addressed by Mis. Dalmia to the Principal Chief
Conservator of Forest, Bangalore with a copy marked to the
Inspector General of Forest, Ministry of Environment and
Forest Government of India and other State Level Officers of G
the Forest Department, Mis. Dalmia cannot later on tum around
and state that it continued to retain with it the whole extent of
331.50 hectares covered by M.L. No.2010.
-
58. Keeping the said aspect in mind relating to the action H .
598 ,SUPREME COURT REPORTS [2015] 6 S.C.R.
A. of surrender effected by M/s. Dalmia, when we proceed to
examine the further development that had taken place after
16.04.1999, what comes next is the letter dated 27.03.2001
which was again a communication written by M/s. Dalmia to
the Director of Mines and Geology of its decision to determine
B the lease in its favour and to surrender the remaining area
under the terms of the mining lease deed. It will be necessary
to make a detailed reference to the contents of the said
communication dated 27.03.2001.
C 59. Before referring to the contents of the said letter, it will
have to be kept in mind that pursuant to the general directions
issued by this Court in Godavarman-1, all mining operations
through out the country were directed to be stopped for violation
of Section 2 of the Forest Act, 1980. By virtue of the general
D directions issued by this Court, the mining operations in
respect of M.L.No. 2010 also came to a grinding halt from the
last week of January 1997. Thereafter, by virtue of the order
passed in Godavarman-11, ex post facto approval under
Section 2 of the Forest Act was considered and by order dated
E 24.12.1997 the in-principle stage-I clearance was granted by
imposing three conditions for M/s. Dalmia to comply. In the
said letter dated 24.12.1997 also, it was specifically mentioned
that such approval for renewal of mining lease was granted for
F an extent of only 201.50 hectares of forest land and thereby
affirming the earlier surrender of 130.11 hectares of land long
prior to 16.4.1999. Condition No.(i) stated that immediate
action should be taken for transfer and mutation of non-forest
land equivalent in extent to the forest area to be broken up
G afresh and condition No.(ii) mentioned that user agency will
transfer the costs of compensatory aforestation over non-forest
land in favour of State Forest Department. Condition No.(iii)
further directed that user agency should transfer the cost of
penal compensatory aforestation raised as on that date to
H incorporate existing structure over double the degraded forest
MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING599~
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
land in favour of the state forest department. A
60. We have earlier noticed that as a sequel to the said
letter dated 24.12.1997, when Mis. Dalmia was faced with the
requirement of compliance of those three onerous conditions,
Mis. Dalmia in its letter dated 16.4.1999, took the stand that it B
has decided to retain only 134. 92 hectares and that since even
in respect of 134.92 hectares, mining operations were carried
on with the permission of the State Government authorities,
even condition No. (iii) need not be complied with.
c
61. In that background, when we now refer to the present
letter of Mis. Dalmia dated 27.3.2001 addressed. to the
Director of Mines and Geology, we find, that, in the said letter
Mis: Dalmia expressed its proposed decision to determine
the lease and surrender the same. It also mentioned that it D
was giving twelve months' notice as required under paragraph
4 of Part VIII of the mining lease deed executed between Mis.
Dalmia and Government of Karnataka through the Director of
Mines and Geology, that the Director of Mines and Geology
should determine the lease on expiration of twelve months E
period i.e. from 01.04.2001 or earlier if the Director of Mines
and Geology permit to do so. In the last para of the said letter,
it was reiterated on behalf of Mis. Dalmia that out of 331.50
hectares it had already surrendered an area of 196.58 hectares
to the Forest Department through its letter dated 16.4.1999 F
which should also be kept in mind by the Director of Mines
and Geology.
62. A cumulative consideration of the letter dated
16.4.1999 along with the ex post facto approval order dated G
24.12.1997 and the letter dated 27.3.2001 of Mis. Dalmia, it
transpires that as on 27.3.2001 Mis. Dalmia was in possession
of only 134.92 hectares of the total area of 331.50 hectares
covered by mining lease No.2010. As noted by us in the letter
dated 27.3.2001, Mis. Dalmia wanted the Director of Mines H
600 . SUPREME COURT REPORTS [2015) 6 S.C.R.
A and Geology to determine the lease even in respect of 134. 92
hectares which was in its physical possession, either on expiry
of the twelve months' period or any earlier date which the
concerned authority may permit. To be more precise, M/
s.Dalmia surrendered 130 hectares of land prior to 16.04.1999.
B Along with its letter dated 16.04.1999 surrender of 196.58
hectares was effected. The remaining 134.92 hectares was
surrendered through its letter dated 27.03.2001.
63. In response to the said letter dated 27.3.2001, the
C office of the Director of Mines and Geology in their letter dated
25.5.2001 addressed to the Senior Geologist of the State
Government, Department of Mines and Geology instructed him
by stating that M/s. Dalmia had stopped mining operations in
the area covered by M.L. No.2010 since 1997, that they wanted
D to surrender the lease with the Depa'rtment of Mines and
Geology and, therefore, intimate as to whether any arrears were
due from M/s. Dalmia. A copy of the said letter dated 25.5.2001
was marked to M/s. Dalmia. While marking the said
communication, it was stated that it was being forwarded for
E information and with an instruction to surrender the lease deed
book in respect of M.L. No.201 Oalong with the mining plan
approved by Indian Bureau of Mines immediately for taking
further action.
F 64. In response to the copy of the letter dated 25.5.2001
of the Director of Mines and Geology, Mis. Dalmia along with
its letter dated 16.6.2001 by referring to the instructions
mentioned in the letter dated 25.5.2001 stated that it was
surrendering the lease deed book in respect of M.L. No.2010
G and that the approved mining plan was not available with it. At
the bottom of the said letter, it was stated that mining lease
deed book was being enclosed along with the said
communication.
H 65. That apart, in the Writ Petition which was pending
MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING601
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.) .'
before the High Court of Karnataka in WP 6304of1998 as A
between the first respondent and the Director of Mines, as
well as, Chief Conservator of Forest where M/s. Dalmia was
also a party respondent, namely, third respondent, on its behalf
its counsel represented before the High Court that M/s. Dalmia
was no longer interested in the working of the mines situated B
in the land adjoining the writ appellant, namely, the first
respondent therein and, therefore, as on that date, no boundary
dispute was existing as between them. The said stand of Mis.
Dalmia was the main ground which weighed with the learned
Single Judge for setting aside the order dated 16.11.1997 C
which was impugned before it in the said Writ Petition at the
instance of the first respondent. The said stand of M/s. Dalmia
was clearly reflected in the order of the Learned Single Judge
dated 26.6.2001.
D
66. Apart from the above facts, after the forwarding of the
letters dated 16.4.1999, 27.3.2001 and 16.6.2001 by M/s.
Dalmia whereby the surrender of the lands in its entirety, as
well as, the mining lease itself, third parties were aspiring to
get the mining lease in respect of the surrendered lands held E
by M/s. Dalmia. One such application was taken out by one M/
s. M.S.P.L. Ltd. through its Executive Director, Mr. Rahul
Baldota. The said application was made on 21. 7.2001 for grant
of mining lease in its favour. The said application was F
considered by the Director of Mines and an endorsement was
made on the said application by the Director of Mines on
25.8.2001 which has been placed before this Court. On a
perusal of the said document, we find the following
endorsements made by the Director of Mines viz: G
"the area in respect of which mining lease is sought for
by the applicant in the present application had been
already granted by ML 201 Oto M/s. Dalmia Cements
(Bharat) Ltd. The area applied falls within the surrendered H
602 SUPREME COURT REPORTS [2015] 6 S.C.R.
A area by them (M/s. Dalmia Cements). Two applications
84 AML 2001 and 92 AML 2001 seeking mining lease
have been received in respect of this area. Rule 59(1)
of MCR Rules is attracted. At present consideration of
the application is not possible as the area is not available.
B
Sd/-25.8.2001."
67. The Director of Mines while referring to the surrender
of M.L. No.2010 by M/s. Dalmia noted that the said area falls
c within the surrendered area, that two applications 84AML 2001
and 92AML 2001 seeking mining lease were received in
respect of that area but since Rule 59(1) of MCR Rules was
attracted, consideration of application for grant of lease was
not possible and that the area was not available for such a
o grant.
68. A cumulative consideration of all the above sequence
of events disclose that right from 1999 in fact even prior to that
date, M/s. Dalmia surrendered major part of the land covered
E by M.L. No.2010 and that by its letter dated 27.3.2001, it
expressed its decision to determine the lease of the remaining
area of 134.92 hectares and wanted the Director of Mines to
accept such surrender either after the expiry of twelve months'
period or even earlier. By 25.5.2001, the Director of Mines in
F response to M/s. Dalmia's desire to determine the lease,
directed it to surrender the lease book of M.L. No.2010 as
well as the mining plan, and that Mis. Dalmia surrendered the
lease book while stating that mining plan was not available
with it at that point of time. Closely followed by that, when third
G parties applied for grant of lease, the Director of Mines stated
in no uncertain terms that those lands were surrendered by M/
s. Dalmia but lease cannot be granted based on applications
and that Rule 59 (1) of MCR Rules will have to be followed for
grant of such lease. In fact, subsequent to the above
H development on 26.9.2001, the suit filed by M/s. Dalmia against
MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING603
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
first respondent relating to the boundary dispute was also A
dismissed for non-prosecution. Yet another factor to be borne
in mind is that on 30.1.2002, Mis. Dalmia paid a sum of
Rs.22,3321- towards the arrears in respect of its mining lease
and claimed that no further amount was due and payable in
respect of M.L. No.2010. By a letter dated 31.1.2002, the B
office of the Deputy Director, Department of Mines and Geology
issued a no dues certificate to Mis. Dalmia by acknowledging
the receipt of Rs.22,3321- based on the revised audit report
and that no other amount was due in respect of the said mining
lease. C
69. If we consider the above material evidence placed
before us, it can be stated that as on 27.3.2001 Mis. Dalmia
tacitly decided to surrender its mining lease M.L. No.2010 and
that in pursuance of the said decision, it informed the Director D
of Mines and Geology to determine the lease either on expiry
of twelve months or on any day earlier to that and in response
to the said desire expressed by Mis. Dalmia, the Director of
Mines and Geology also responded by directing Mis. Dalmia
to surrender the lease book as well as the mining plan and E
then subsequently also collected whatever arrears which were
due and payable by Mis. Dalmia as on 31.01.2002. It must,
therefore, be held that in effect the leasehold rights of Mis.
Dalmia had come to an end by 31.1.2002.
F
70. Keeping the said factual scenario in mind, when we
consider the contentions made on behalf of the respective
parties according to the appellants, Mis. Dalmia had
surrendered the entirety of the lands held by it under M.L.No.
2010 which surrender had come into effect pursuant to its letter · G
dated 27.03.2001 accepted and acknowledged by the
Department of Mines and Geology in their letter dated
31.01.2002. We have also noted the various factual aspects
of the development that had taken place in regard to the said H
604 SUPREME COURT REPORTS [2015] 6 S.C.R.
A surrender of M/s. Dalmia and noted that a conscious decision
was taken by M/s. Dalmia to surrender its mining lease in
M.L.No. 2010 and factual surrender was also effected in writing
to the Director of Mines and Geology and that the Office of
Director of Mines and Geology also acknowledged such
B surrender. However, not to accept the plea of surrender as
projected, on behalf of the appellants Mr. K.K.Venugopal and
Mr.Krishnan Venugopal relied upon various statutory
prescriptions and contended that in reality if the case of
surrender pleaded by the appellants is to be accepted, the
C compliance of such statutory requirements have to be fulfilled.
71. In furtherance of such contention in the first place Mr.
Krishnah Venugopal, learned senior counsel contended that
as prescribed under Rule 29 of M.C.R. Rules completion of
D 12 months period from the date of the intimation of the
surrender should have been completed which is mandatory
for the surrender to come into effect. In other words, the
contention was.that in law for the surrender to take place the
mandatory requirement of 12 months period was necessarily
E to be fulfilled. It was also contended that under Rule 29, which
is negatively coached and it is mandatory for the surrender to
come into effect 12 months period should lapse. It was also
contended that under the said Rule surrender has to be to the
F State Government or such other officer or specified authority.
It was further contended that if a third party come forward with
a case of surrender, a duty is cast on the third party to satisfy
that letter of surrender was sent to such authority and the burden
is heavily upon such third party to establish the said fact. In
G order to give a thrust to the above submissions, namely, the
satisfaction of the compliance of the mandatory prescription
contained in Rule 29 reliance was also placed upon Section
11 (A) as well as the schedule and contended that the philosophy
underlying the MMDR Act was that every single requirement
H of Rule 29 should be satisfied in order to accept the theory of
MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING605 .
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
surrender pleaded on behalf of the appellants. It was also A
contended that minerals other than minor minerals are
controlled by the Central Government, power is vested with
the Central Government to make rules and the State
Government are bound by the rules of the Center and case of
.surrender cannot come into effect unless the statutory B
prescriptions contained in the Rules are strictly adhered to.
72. In support of the above submissions reliance was also
placed upon the terms of the lease as specified in Form 'K' in
particular paragraph 4 of Part VIII of Form 'K' to contend that C
notice of termination should be for full 12 calendar months and
that too on ratification of the required formalities. It was
contended that there was no power with the delegate of State
Government to accept or determine the lease instantaneously.
D
73. The sum and substance of the contention on this aspect
by the learned counsel for the first respondent was that major
mineral being under the exclusive control of the Government
of India, there should be strict compliance of the statutory
requirements both in respect of grant of lease as well as the E
termination of it either by surrender or by way of termination at
the instance of the State and that such requirement is contained
in Rule 29 which is negatively couched and, therefore, when
such prescription for the purpose of surrender to come into
effect has been specifically spelt out in the statutory rule read F
along with para 4 of Part VIII of the lease document, such
surrender propounded on behalf of the appellant can be
accepted only if it was satisfactorily demonstrated that those
statutory prescriptions were strictly applied and followed.
G
74. As against the above submissions, on behalf of the
appellant Mr. Kapil Sibal, learned senior counsel contended
that there was no lacunae in accepting the surrender offered
by M/s. Dalmia, that such surrender had really taken place by
virtue of the conduct of the parties, namely, M/s. Dalmia as H
606 SUPREME COURT REPORTS (2015) 6 S.C.R.
A well as the Department of Mines and Geology of the State
Government and, therefore, it was too late in the day for the
first respondent to contend that the surrender made by Mis.
Dalmia had not taken place.
B 75. Having considered the respective submissions on this
question, there can be no two opinions that when the grant,
operation and termination of mining lease is governed by the
MMDRActand the Mineral Concession Rules, anyone of those
factors viz., either grant of lease, operation of the mines based
C on such grant and the termination of it either by way of surrender
at the instance of the lessee or by way of termination at the
instance of the State should be carried out strictly in accordance
with the prescribed stipulations of the provisions of the above
Act and the Rules.
D
76. Keeping the said legal principles in mind, when we
refer to Rule 29, the caption of the said Rule reads as
"restriction on determination of lease". The relevant part of the
said Rule can be extracted while analyzing its implications
E which reads as under:
"29. Restrictions on determination of lease.-(1) The
lessee shall not determine the lease except after notice
in writing of not less than twelve calendar months to the
F State Government or to such officer, or authority as the
State Government may specify in this behalf."
Sub-Rule (1) states that the lessee shall not determine
the lease after notice in writing of not less than 12 calendar
G months to the State Government or to such officer or authority
as the State Government may specify in this behalf. While
referring to sub-Rule (1 ), it will be necessary to refer to Form
'K' which is the model form of mining lease deed. As per
M.L.No. 2010, which has been drawn as per Form 'K', it is not
H in dispute that the said lease deed was as between the State
MU NEER ENTERPRISE5 v. RAMGAD MINERALS & MINING607
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] '" · .
Government which expression should be deemed to include A
the successors and assigns who would be the first party as
the lessor. Paragraph 4 of Part VIII, which is the provision for
determination of the lease by way of surrender as prescribed
under Rule 29, stipulates that the lessee may at any time
determine the lease by giving not less than 12 calendar months' B
notice in writing to the State Government to such office or to
such officer or authority as the State Government may specify
in that behalf and the rest of the stipulation contained therein
refers to the payment of rents, water rates, royalties,
compensation for damages etc. Therefore, reading Rule 29(1) C
what is provided is that not less than 12 calendar months notice
should be issued by the lessee for determining the lease and
such notice should be issued to the State Government or to
such officer or authority as the State Government may specify D
in that behalf.
77. In fact, Xerox copy of the mining lease M.L.No. 2010
referring to the date of grant as 07 .03.1986 providing for 20
years from 25.11.1983 duly registered as document No.28 of
1986-87 has been placed before us. On a reference to the E
said document, we find that while on behalf of M/s. Dalmia,
one P.M. Balasubramaniam has affixed his signatures, on
behalf of the Governor of Karnataka, the Director of Mines and
Geology has put his signature along with one K.R.Nirmala, F
Superintendant of DMG, Bangalore. One other relevant fact to
be noted from the said document is para 5 falling under Part
VIII which reads as under:
"5. On such date as the State Government may elect
within 12 calendar months after the determination of G
this lease or of any renewal thereof, the amount of the
refund of security deposit paid in respect of this /ease
and then remaining in deposit with the State Government
and not required to be applied to any of the purposes H
608 SUPREME COURT REPORTS [2015) 6 S.C.R.
A mentioned in this lease shall be refunded to the lessee/
lessees. No interest shall run on the security deposit.
(underlining is ours)
78. When we examine the contention made on behalf of
B
the first respondent about the statutory requirement to be
satisfied under Rule 29 read along with para 4 and 5 of Part
VIII of the lease deed, it is clear that on behalf of the lessor,
namely, the State Government, the signatory to the lease deed
c was the Director of Mines and Geology. Therefore, there can
be no controversy as to who can validly represent the State
Government with reference to the grant of lease, operation of
it as well as its determination who is none other than the Director
of Mines and Geology. When the Director of Mines and
D Geology was authorized to _sign the lease deed on behalf of
the Governor of the State of Karnataka, it must be taken to
mean that he was the authority who was validly authorized by
the State Government as stipulated in Rule 29(1) of the Rules
for the purpose of the lessee to inform about its decision to
E determine the lease while giving 12 months' notice. It must be
stated that the very fact that the Director of Mines and Geology
was authorized. to sign the lease deed on behalf of the
Governor of State of Karnataka, it was quite explicit that he
was the only authority who was competent to authenticate the
F grant of the lease as well as for its determination. Unless there
was any other Authority prescribed to carryout the said task
as a statutory requirement.
79. Once we steer clear of the said position as to who is
G the competent authority for the purpose of operating Rule 29(1 ),
any amount of reliance placed upon the Notification
No. Cl3MMM95, Bangalore dated 27. 05.1995 issued by the
Commerce and Industries Department of the State of
Karnataka will be of no avail. The said notification was relied
H upon to contend that while specific direction was issued to the
1
MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING609
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
effect that the powers exercisable by the State Government in A
relation to matters with reference to various provisions as
conferred by sub-section (2) of Section 26 of the MMDR Act
vested with the Director of Mines and Geology, Government
of Karnataka, there was no reference to the powers exercisable
by the State under Rule 29. When the State of Karnataka had B
authorized the Director of Mines and Geology to sign the very
mining lease deed itself on behalf of the Governor of State as
disclosed in the Xerox copy of the mining lease M.L.No. 2010,
it is futile on the part of the first respondent to contend that for
the purpose of determination of that very lease, a different C
Authority should be preferred. In fact, M/s. Dalmia itself having
understood the prescribed Authority, sent its letter of
determination of the lease dated 27.03.2001 only to the
Director of Mines and Geology. The said Authority also D
responded to the letter of determination in its letter dated
25.05.2001 addressed to its subordinate officer marking a
copy to M/s. Dalmia. Therefore, the said contention raised on
behalf of the first respondent that the surrender of the lease
not having been forwarded to the authorized officer of the State E
Government by M/s. Dalmia, the so-called letter of surrender
dated 16.04.1999 and 27.03.2001 cannot be validly construed
as the act of M/s. Dalmia to determine the lease is to be stated
only to be rejected. We are afraid that it is too late in the day
forthe first respondent to come forward with such a contention F
when M/s. Dalmia having entered into lease deed with the
State of Karnataka duly represented by the Director of Mines
and Geology exercised its right to determine the lease by
addressing its communication on 27.03.2001 to the very same
Authority. It must be stated that such a decision taken and G
communicated by M/s. Dalmia to the Director of Mines and
Geology was valid in law and was in consonance with the
prescription contained in sub-Rule (1) of Rule 29.
80. What remains to be considered is the question whether H
610 SUPREME COURT REPORTS [2015] 6 S.C.R.
A one should wait for the expiry of the 12 months period to lapse
from 27.3.2001 for the surrender to come into effect by relying
upon para 4 of Part VIII of the lease deed. In the first place,
even according to Mis. Dalmia in their letter dated 27.3.2001
Mis. Dalmia themselves while giving 12 months notice as
B required under para 4 of Part VIII of the mining lease deed
also stated that it may be determined on any earlier date i.e.
prior to 1.4.2001 if the Director of Mines and Geology so
permit. When such a categorical stand was made on behalf
of Mis. Dalmia, acting upon it, the office of Director of Mines
C and Geology in their letter dated 25.5.2001 addressed to the
Senior Geologist while marking its copy to Mis. Dalmia
directed it to surrender the lease deed book along with the
mining plan immediately to enable its office to take further
action. In fact, in the body of the letter addressed to Senior
0
Geologist, the Director of Mines and Geology specifically
mentioned that Mis. Dalmia wanted to surrender the lease M.L.
No.2010 earlier than 12 months period. Apart from such
specific instructions issued, Mis. Dalmia themselves in their
E reply dated 16.6.2001 to the Director of Mines and Geology
surrendered the lease deed book of M.L. No.2010 and as
regards the mining plan it stated that the same was not
available with it. Thereafter, as was noticed .earlier, on
30.1.2002, Mis. Dalmia paid a sum of Rs.22,3321- towards
F arrears in respect of the mining lease which was also
acknowledged by the Director of Mines and Geology which
was duly communicated to Mis. Dalmia by stating that by
issuing such no due certificate, no further amount was due and
payable in respect of said mining lease.
G
81. When we consider the above correspondence
exchanged between Mis. Dalmia and the office of the Director
of Mines and Geology, there is no room fordoubtfor anyone
to still contend that the surrender had not come into effect. On
H the other hand, we find that there was due compliance of Rule
MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING611
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
29(1) when Mis. Dalmia expressed its desire to determine A
the lease in its letter dated 27.3.2001 addressed to Director
of Mines and Geology. Then by specifically stating in the said
communication that it may even be permitted to determine the
lease prior to 12 months period and that based on such specific
plea made on behalf of Mis. Dalmia, the Director of Mines B
and Geology also decided to determine the lease without
waiting for the expiry of 12 months period by calling upon Mis.
Dalmia to surrender the lease book which was also duly
surrendered by Mis. Dalmia on 16.06.2001 and thereafter by
issuing a no due certificate on 31.2.2002, the said sequence C
of events had put an end to the operation of the lease in M.L.No.
2010 by duly accepting the surrender made on behalf of Mis.
Dalmia. The contention that there was no scope for such
surrender to come into effect before the expiry of twelve D
months is concerned, it will also be relevant to make a reference
to para 5 of the lease deed M.L.No. 2010 in Part VIII which
has been extracted above. The said paragraph 5 empowers
the State Government to elect within 12 calendar months after
the determination of lease for the purpose of refunding the E
security deposit made by the lessee. We do not find any
specific bar in para 4 of Part VIII that while on the one hand the
lessee has to give not less than twelve calendar months notice,
on receipt of such notice the state government should wait for
the expiry of the twelve months period. F
82. The contention that only on expiry of the twelve months
period, the surrender will come into effect does not stand to
reason also. In fact, we do not see any sound basis in making
such a contention on behalf of the first respondent. On the G
other hand, para 5 of the lease deed itself gives ample right to
the lessor, namely the Director of Mines and Geology to refund
the security deposit, if any, to make the determination of lease
within the 12 months period of notice. The said clause provides
clear indication for such earlier acceptance of the H
612 SUPREME COURT REPORTS [2015] 6 S.C.R.
A determination of the lease. We have noted extensively that long
prior to 16.04.1999 as well as from 16.4.1999 onwards till Ml
s. Dalmia by its communication dated 27.3.2001 positively
expressed its decision to determine the lease, Mis. Dalmia
themselves were only referring to the mining operations to the
B extent of 130.4 hectares which remained with them as on
27.03.2001. Even in respect of the said extent of lands by
virtue of the general directions issued by this Court in
Godavarman I no mining operation was being carried on from
January 1997. Subsequently, based on Godavarman II order
C of this Court, when the Ministry of Environment and Forest was
directed to consider issuance of ex post facto approval, one
such order was issued in favour of Mis. Dalmia on 24.12.1997
by way of in principle stage-1 c.pproval uy imposing three
conditions. Even as on 16.4.1999, Mis. Dalmia in writing
0
categorically stated and took the stand that it need not comply
with the conditions imposed in the order dated 24.12.1997. In
effect Mis. Dalmia was llOI operating its right of carrying out
any mining activity in respect of the entirety of 334.40 hectares
E after the first renewal effected in the year 1983. Ultimately, in
its letter dated 27.03.2001, it made explicitly clear that ii was
not operating the mines and, therefore, it wanted to surrender
either after expiry of twelve months period from the date of
issuance of such notice or any day earlier that may be
F acceptable to the State Government.
83. In the light of such a clear stand disclosed by Mis.
Dalmia, we fail to understand as to for what reason the State
Government should wait for the expiry of the twelve months
G period for the surrender to come into effect. On the other hand,
the decision made by the Director of Mines and Geology in its
communication dated 25.5.2001 addressed to the Senior
Geologist with a copy marked to Mis. Dalmia to determine the
lease earlier and for that purpose directed Mis. Dalmia to
H surrender mining lease book, namely, M.L. No.2010 along with
MU NEER ENTERPRISES v. RAMGAD MINERALS &MINING613
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.)
the mining plan was a pointer to the effect that the surrender A
was decided to be accepted on behalf of the State Government
instantaneously which was also not prohibited either under the
Rules or under the terms of the lease deed or under any other
statutory provision.
B
84. In this context, the reliance placed upon some of the
decisions of this Court by Mr. Kapil Sibal, learned senior
counsel appearing for the appellant needs to be considered.
The learned senior counsel relied upon the earliest judgment
of this Court reported as Basheshar Nath (supra) for the C
proposition that the principle of waiver will have different shades
when it comes to the question of such waiver being opted
depending upon the nature of right as to whether it would be
forthe benefit of individual or for the general public. This Court
has held as under in paragraph 66: D
"66 ..... .... I may refer in this connection to the provisions
in Part XIII which relate to trade, commerce and
intercourse within the territory of India. These provisions
also impose certain restrictions on the legislative E
powers of the Union and of the States with regard to
trade and commerce. As these provisions are for the
benefit of the general public and not for any particular
individual, they can not be waived, even though they
do not find place in Part Ill of the Constitution. Therefore, F
the crucial question is not whether the rights or
restrictions occur in one part or other of the Constitution.
The crucial question is the nature of the right given: is it
for the benefit of individuals or is it for the general
public?" G
85. The said well settled principle of law set down by this
Court will have universal application. When such principle is
applied to the case on hand, as rightly pointed out by Mr.Sibal,
learned senior counsel when the State of Karnataka chose to H
614 SUPREME COURT REPORTS [2015] 6 S.C.R.
A accept the surrender made by Mis. Dalmia in its letter dated
27.03.2001, immediately thereafter by directing Mis. Dalmia
to surrender the lease book of M.L.2010 along with mining
plan such action of the State Government for the purpose of
ensuring the effective surrender offered by Mls.Dalmia having
B been made in the general public interest. as the leasehold rights
of the mining activities would be in the lands belonging to the
State and that too Forest Lands, such action taken in accepting
the surrender by waiving the 12 months period should be taken
as having come into effect. We find force in the said submission
C of the learned senior counsel for the appellant.
86. In this context, the various orders relied upon and
placed before this Court by Mrs. /\.r.:!~:: S:;enoy, Advocate-on-
Record appearing on behalf of the State Government, namely,
D the orders dated December 1988, 11.4.1989, Notification
dated 12.3.1965 and Notification dated 19.6. i 96!5 require to
be examined. The order dated December, 1988 relates to the
acceptance of full surrender of M.L. No.994 in Sankalapuram
village, Haspel Taluk, Bellary district. The said document has
E been signed by the Director of Mines and Geology, Bangalore
on behalf of Government of Karnataka stating that full surrender
of mining lease No.994 was accepted with effect from
1.7.1986. The order dated 11.4.1989 is another order in
F respect of mining lease No.1759. Here again the said order
was signed by Director of Mines and Geology, Bangalore on
behalf of the State Government for accepting the surrender.
The earlier notification dated 12.3.1965 states that as provided
under proviso to Rule 29, one Shri GR Thiruvengadam Chetty,
G the lessee of M .L. No.419 was permitted to surrender some
part of the lease hold lands which was notified in the name of
the Governor of Mysore. Similar is the Notification dated
19.6.1965 in respect of mining lease No.414 held by one Shri
M.B. Jhaveri. While those notifications were of the years 1965,
H 1988 and 1989, we find that surrender of mining lease was
MU NEER ENTERPRISES v. RAMGAD MINERALS &:v11NING615
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
duly acknowledged by the Director of Mines and Geology on A
behalf of the state of Karnataka. Therefore, even going by the
earlier orders pertaining to acceptance of surrender issued
by the State of Karnataka read along with the orders dated
25.5.2001 and 31.1.2002 issued in the case of Mis. Dalmia
and for the various reasons referred to above, we hold that M/ B
s. Dalmia surrendered its mining lease M.L. No.2010 in respect
of the entire extent of 331.50 hectares in Jaisinghpur village,
R.M. Block, SandurTaluk, Bellary, State of Karnataka which
surrender was duly accepted by and on behalf of State of
Karnataka which had come into effect on acknowledgment of C
the receipt of the sum of Rs.22,332/-towards arrears in respect
ofthe said mining lease in the acknowledgment letter dated
31.1.2002.
87. When once such surrender had come into effect, it D
must be stated that there was no scope for M/s. Dalmia to
resile from the said surrender and contend that it still had a
right to transact with the said M. L. No.2010 for any other
purpose including for effecting any transfer in favour of anyone
much less in favour of the first respondent. E
88. In this context, the reliance placed upon some of the
decisions of this Court by Mr. Krishnan Venugopal learned
senior counsel appearing for the first respondent needs to be
considered. The learned senior counsel for the first respondent F
relied upon the decisions reported in Sethi Auto Service
Station (supra) and Shanti Sports Club (supra) for the
proposition that 'noting' in the department files do not have
sanction of law to be an effective order unless it culminate into
an executable order affecting the rights of the parties and only G
when it reaches the final decision making authority in the
department get his approval and the final order is
communicated to the person concerned. There can be no
dispute with regard to the said principle stated in the above H
616 SUPREME COURT REPORTS [2015) 6 S.C.R.
A referred to two decisions. But in the case on hand, we have
extensively noted the various sequence of events relating to
the factum of surrender effected by Mis. Dalmia to the extent
of 130 hectares long prior to 16.04.1999 and an extent of
196.58 hectares in its letter dated 16.04.1999 itself and
B subsequently by its letter dated 27.03.2001, its desire to
sanction the whole of the mining lease covered by
M.L.No.2010. We also referred to various communications
which emanated from the office of the Director of Mines and
Geology confirming acceptance of surrender proposed by M/
C s. Dalmia which came to an end on 31.01.2002. In the light of
the said voluminous correspondence between Mis. Dalmia end
the Department of Mines and Geology of the State Government
available on record the reference to file noting dated
D 28.05.2001, by the Director of Mines and Geology, was only
an additional supporting material to confirm the act of surrender
effected by M/s. Dalmia and its final conclusions as recorded
in the proceedings of the Director of Mines and Geology. We
therefore do not find any support for the first respondent by
E referring to the above two decisions.
89. Mr. Krishnan Venugopal, learned senior counsel further
relied upon the decisions in Lila Gupta (supra) and Pankaj
Mehra (supra) for the proposition that all acts in violation of
F the lease which do not provide for consequence of the breach
would be void.
90. In the decision reported in Lila Gupta (supra), the
said principle has been set out in paragraph 10 and while
stating so, this Court has explained as to how such a principle
G would vary when it comes to the question of affecting the public
at large. In that case, it was stated so in paragraph 10 while
dealing with the claim of a woman while ascertaining her status
as the wife and it was in that context, the principle was stated.
H This Court further in paragraph 11 explained as to how the
MUNEER ENTERPRISES v. RAMGAD MINERALS &MINING617
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
said principle cannot have universal application. A
91. As far as the decision reported in Pankaj Mehra
(supra) is concerned, the statement of law set out in paragraph
14 itself is clear in its term and states that the word 'void' has
different nuances in different connotation and one of them is B
to the effect that it should be construed as having no legal force
or binding effect while in another circumstances, it should be
construed as 'unable in law to support the purpose for which it
was intended'. The relevant paragraph for our purpose reads
as follows: C
"14 .............. The word 'void' in its strictest sense,
means that which has no force and effect, is without legal
efficacy, is incapable of being enforced by law, or has
no legal or binding force, but frequently the word is used D
and construed as having the more liberal meaning of
'voidable.
The word 'void' is used in statutes in the sense of utterly
void so as to be incapable of ratification. and also in E
the sense of voidable and resort must be had to the
rules of construction in many cases to determine in
which sense the Legislature intended to use it. An act
or contract neither wrong in itself nor against public
policy, which has been declared void by statute for the F
protection or benefit of a certain party, or class of parties,
is voidable only"
(underlining is ours)
92. Therefore, if such a different connotation is followed G
for the expression 'void' and when we apply the said principle
to the case on hand with particular reference to Rule 37(1A)
we have explained in detail as to how the voidness of the
leasehold right would result in by virtue of the serious violations
committed by Mis. Dalmia while dealing with the mining lease H
618 SUPREME COURT REPORTS (2015] 6 S.C.R.
A in M.L.No.2010 while carrying out the first renewal in the year
1983 when the violation of Section 2 of the Forest Act, 1980
occurred and subsequently when Stage I ex post facto approval
was granted on 24.12.1997 by imposing conditions which were
flagrantly violated by Mis. Dalmia and thereby made the lease
B void ab initio.
93. In the light of the above circumstances, pertaining to
the case on hand, we do not find any scope to apply the above
decisions relied upon by the learned senior counsel for the
C first respondent.
94. It will be useful to refer to paragraphs 10 and 11 of the
decision reported in Lila Gupta (supra) to highlight the
distinctions stated above as to how those decisions can be of
o no application to the facts of this case.
"(10) ........... .. the interdict of law is that it shall not be
lawful for a certain party to do a certain thing which would
mean that if that act is done it would be unlawful. But
E whenever a statute prohibits a certain thing being done
thereby making it unlawful without providing for
consequence of the breach, it is not legitimate to say
that such a thing when done is void because that would
tantamount to saying that every unlawful act is void.
F
(11) Undoubtedlv. where a prohibition is enacted in
public interest. its violation should not be treated
lightly ... '.""' ...... "
G (Emphasis added)
95. Our above conclusion as regards the surrender
effected by M/s. Dalmia answers question Nos.(i) to (iii) framed
in paragraph 48. With that we come to the next question as to
H whether the act of surrender in order to become complete
MUNEER ENTERPRISES v. RAMGAD MINERA1-S & MINING619
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
should have been accepted by the State. It must be stated A
that acceptance by the State though not a statutory requirement,
the provisions contained in the mining lease, in particular, Part
VIII paragraphs 4 and 5 impliedly require such acceptance.
While answering question Nos.(i) to (iii}, we have elaborately
'noted as to the manner in which Mis. Dalmia's proposal to B
determine the lease as initiated in its communication dated
27.3.2001 ultimately resulted in the surrender of the lease by
acknowledging the sum of Rs.22,3321- towards final dues
payable by it under the said lease. We have also held that the
Director of Mines and Geology was the competent authority to C
receive a proposal for determination of lease by Mis. Dalmia.
The subsequent correspondence exchanged between Mis.
Dalmia and the Director of Mines and Geology also confirm
that the proposal of Mis. Dalmia was considered and D
subsequent directions were issued for the purpose of
accepting the surrender proposed and ultimately by
acknowledging the payment of arrears and issuance of no due
certificate the surrender was finally accepted on behalf of the
State Government by the Director of Mines and Geology. E
Therefore, while holding that acceptance of surrender is
impliedly mandated under Rule 29 read along with paragraphs
4 and 5 of Part VIII of the mining lease, there was a factual
acceptance on behalf of the State of Karnataka of the mining
lease M.L. No.2010. F
96. Reliance was placed upon the decision reported as
Bhagwati Prasad Pawan Kumar v. Union of India - (2006)
5 SCC 311 wherein this Court held that the Courts must
examine the evidence to find out whether in the facts and G
circumstances of the case the conduct of the "offeree" was
such as amounted to an unequivocal acceptance of the offer
made. Paragraph No.19 is relevant for our purpose which
reads as under:
H
"19. It is well settled that an offer may be accepted by
620 SUPREME COURT REPORTS [2015) 6 S.C.R.
A conduct. But conduct would only amount to acceptance
if it is clear thet the offeree did the act with the intention
(actual or apparent) of accepting the offer. The decisions
which we have noticed above also proceed on this
principle. Each case must rest on its own facts. The
B courts must examine the evidence to find out whether
in the facts and circumstances of the case the conduct
of the "offeree" was such as amounted to an unequivocal
acceptance of the offer made. If the facts of the case
disclose that there was no reservation in siqnifvinq
c acceptance by conduct. it must follow that the offer has
been accepted by conduct. On the other hand, if the
evidence disclose that the "offeree" had reservation in
accepting the offer, his conduct may not amount to
acceptance of the offer in terms of Section 8 of the
D
Contract Act."
(underlining is ours)
97. In the case on hand, we have considered various
documents by way of correspondence exchanged between
E M/s.Dalmia and the said authorities prior to 1999 and after
16.04.1999, ending witr 31.01.2002 to hold that there was an
unequitable acceptance of the surrender offered by M/
s.Dalmia. Having regard to our said conclusions, it is no longer
F open for anyone to contend that the surrender had not come
into effect.
98. Having answered the said question, when we come
to the next question as to whether pursuant to tr.a 2ct ol
surrender, delivery of possession was mandatory under Rule
G 27 (2) (I) of the Mineral Concession Rules, it would be
necessary to make a reference to the said Rule which reads
as under:
"(/) The delivery of possession of lands and mines on
H the surrender expiration or determination of the lease;"
MU NEER ENTERPRISES v. RAMGAD MINERALS &MINING621
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J .]
99. Under Rule 27, it is stated that every mining lease A
shall be subject to certain conditions. Sub-Rule (2) states that
a mining lease may contain such other conditions as the State
Government may deem necessary in regard to conditions (a)
to (o). Under the said sub-Rule (2) in clause (1), it is provided
that delivery of possession of lands and mines on the surrender, B
expiration or determination of lease. What is required under
Rule (2) of Rule 27 was that a mining lease may contain many
conditions including what is specified in Clause (I). The
reference to Rule 27 (2)(1) was relied upon by learned counsel
for the State. Except merely drawing our attention to the said C
sub-clause (I) of Rule 27 (2), we were not drawn to any of the
clause contained in the mining lease in M.L. No.2010 to state
that such a condition was specifically incorporated in the mining
lease. It is not even the case of the first respondent or the
0
respondent State that such a condition for physical possession
of the lands on surrender was specified in the mining lease.
100. In such circumstances, we do not find any, need or
necessity to delve deep into the said contention in order to
find out whether or not such a condition should have been E
fulfilled by M/s. Dalmia or by the State Government for the
purpose of surrender to come into effect. We, therefore, hold
that insofar M.L. No.2010 was concerned, there being no
specific provision as specified in Clause (I) of Rule 27 (2) there F
was no mandatory requirement of delivery of possession as
stipulated therein.
101. When we come to question Nos. (vi), (vii), (viii), (ix)
and (x) the said questions would arise if at all the surrender
had not taken place and thereby assuming the lease continued G
for non-compliance of the conditions imposed in the in principle
stage-I approval in the order dated 24.12.1997, did the mining
lease stood automatically expired on 24.11.2003. Question
No.(vii) again pertains to the lease becoming void ab initio by H
622 SUPREME COURT REPORTS [2015] 6 S.C.R.
A virtue of contravention of Rules 29 and 37 of Mining
Concession Rules read with Section 19 of the MMDRAct. The
next question pertains to the prior approval for any mining lease
to come into operation as stipulated in Section 2 of the Forest
Act of 1980. In fact, the said question was required to be
B considered in the light of the contention raised on behalf of the
appellants that ex post facto approval is not provided for under
the Forest Act of 1980 and that such a course was adopted
only by this Court in Godavarman I and II as a one time
measure. Whereas on behalf of the first respondent, it was
C contended that there was a clear distinction as regards the
grant of mining lease on the one hand under the provisions of
MMDR Act and the Mining Concession Rules and the
requirement of approval under Section 2 of the Forest Act 1980
and the one does not overlap the other. In the first instance, in
0
support of the said stand made on behalf of the first respondent,
reliance was placed upon amended Forest Conservation
Rules, in particular Rules 6, 7 and 8 and state that non-
compliance of Section 2 of the Forest Act will not ipso facto
E make the lease void ab initio. The consideration of the said
questions would become relevant for the purpose of
considering the subsequent claim of Mis. Dalmia as well as
the first respondent that mining lease M.L. No.2010 stood
transferred by Mis. Dalmia in favour of the first respondent
F pursuant to the application of transfer dated 4.2.2002 made
by Mis. Dalmia and the order dated 16.3.2002 of the State
Government by which such a transfer of lease ofM.L. No. 2010
was granted in favour of the first respondent.
G 102. When we consider question Nos.(vi), (vii), (viii), (ix)
and (x) as far as question No.(vi) is concerned, we have found
that when during the operation of the first renewal viz., between
25.11.1983 and 24.11.2003, there was a statutory violation in
as much as the mandatory requirement of approval under
H Section 2 of the Forest Act, 1980was not secured on the date
MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING623
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
when the first renewal was granted viz., 07.06.1986. However, A
fortunately for M/s.Dalmia, Godavarman I and Godavarman
II judgments of this Court came for its rescue by way of a
general direction while all mining operations were directed to
be stopped in Godavarman I, subsequently in Godavarman
II direction was issued to the Central Government to consider B
ex post facto approval under Section 2 of the Act as a one
time measure. Pursuant to the said direction, in the case of
M/s.Dalmia, an order came to be passed on 24.12.1997,
granting in-principle first stage approval by inwosing three
conditions. The said order further directed that while granting C
in-principle first stage approval, to enable Mis. Dalmia to carry
on its mining operations, the requirement of fulfillment of three
conditions were mandated to be complied within a period of
five years from the date of the said order i.e. on or before D
24.12.2002. Admittedly, M/s.Dalmia did not comply with those
conditions. The stand of M/s.Dalmia was that as on that date
it was in possession of only 134.92 hectares and that even in
respect of those areas since it was carrying on mining
operations with the permission of the Forest Department of E
the State Government, no further compliance was required.
103. As far as the surrender of land and afforestation
compensation was concerned, M/s. Dalmia took a categorical
stand that it was not liable to comply with those directions. F
Therefore, the outcome of such a stand taken on by M/s.Dalmia
was to the effect that in-principle stage I approval granted by
MOEF was not carried out. Of course, Mr.Krishnan Venugopal,
learned senior counsel in his submissions contended that
having regard to the subsequent amendment of the Forest G
(Conservation) Rules in particular Rules 6, 7 and 8 and also a
communication of the MOEF dated 14.9.2001, the non-
compliance of the conditions will not have any impact on the
validity of the lease as the amended Rules and the
communication of the MOEF made it clear that the compliance H
624 SUPREME COURT REPORTS [2015) 6 S.C.R.
A of such conditions imposed can always be carried out even
after the expiry of the initial period of five years and the MOEF
came forward to give extension of time for compliance of
whatever conditions which were imposed at the time of grant
of the first renewal to enable the lessee to continue to retain its
B mining lease and thereby seek for further renewal.
104. It is true that a reference to the amended Rules 6, 7
and 8 as well as the earlier communication of MOEF did to
some extent support the stand of the learned senior counsel
C for the first respondent. However, persuasive such a contention
may be as raised on behalf of the first respondent, we find it
extremely difficult to accept such a contention. As rightly
pointed out by Mr.Kapil Sibal, learned senior counsel when
we construe Rules 29 and 37(1A) read along with Section 19
D of the MMDRAct, de hors any liberal approach offered by the
authorities of MOEF under the provisions of the Forest Act,
such relaxation in the matter of compliance of conditions of
prior approval would always be subject to the mining lease
granted under the provisions of MMDR Act and the Mineral
E Concession Rules is in a live stage. In other words, unless the
mining lease granted under the provisions of the MMDR Act
read along with the provisions contained in the Mineral
Concession Rules continue to remain valid and operative, the
F question of compliance of the conditions for prior approval
under Section 2 of the Forest Act even with whatever relaxation
granted by the authorities under the said Act will be of no use.
In this context, when we apply Section 19 of the MMDRAct.
Section 19 of the MMDRAct reads as follows:
G "19. Prospecting licences and mining leases to be
void if in contravention ofAct:- Any reconnaissance
permit, prospecting licence or mining lease granted,
renewed or acquired in contravention of the provisions
of this Act or any rules or orders made thereunder shall
H
MU NEER ENTERPRISES v. RAMGAD MINERALS &MINING625
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
be void and of no effect. A
Explanation:- Where a person has acquired more than
one reconnaissance permit, prospecting licence or
mining lease and the aggregate area covered by such
permits, licences or leases, as the case may be, B
exceeds the maximum area permissible under section
6, only that reconnaissance permit, prospecting licence
or mining lease the acquisition of which has resulted in
such maximum area being exceeded shall be deemed
to be void." C
105. Thus, Section 19 makes the position clear that any
mining lease granted originally or renewed subsequently in
contravention of the provisions of the MMDRAct or any Rules
or any Order made thereunder to be void and of no effect. The D
expression used in Section 19 is mandatory and therefore if
any contravention of the provisions of MMDR Act or Rules or
Orders found in respect of a mining lease originally granted or
subsequently renewed such mining lease should be treated to
be void and inoperative for operating the said mining lease. It E
must also be kept in mind that carrying on any non-forest
activity in a Forest Land can only be with the prior approval of
the Central Government under Section 2 of the Forest Act of
1980. Therefore, for a mining lease to remain valid, twin
requirements of the approval of the Central Government under F
the proviso to Section 5(1) of MMDRAct and Section 2 of the
Forest Act of 1980 have to be fulfilled. Therefore, a lessee
cannot be heard to contend that such statutory requirements
are to be thrown overboard and permitted to seek for such
approvals after the expiry of the lease at its own sweet will and G
pleasure and the time to be fixed on its own and that the
operation of the mining lease should be allowed ignoring such
mandatory prescription.
106. Keeping the above said mandatory prescription in H
626 SUPREME COURT REPORTS [2015) 6 S.C.R.
A Section 19 in mind, when we analysis the case on hand, in the
first place, admittedly after the first renewal, there was a serious
violation of failure to get the prior approval under Section 2 of
the ForestAct, 1980 i.e. when the renewal order was passed
on 07.03.1986. Therefore, if we strictly apply Section 19, it
B must be stated that even as on 07.03.1986, for violation of
Section 2 of the Forest Act, 1980 it must be stated that, in law,
there was no mining lease at all in existence as it became
void on the expiry of the initial period of the original lease
granted in 1953. It may be contended that such violation get
C cured by virtue of the judgments in Godavarman I and
Godavarman II, though for argument sake, such a contention
putforth on behalf of M/s.Dalmia and the first respondent can
be taken to be available, as pointed out by us earlier, based
on the said judgments of this Court when the in-principle first
0
stage approval was granted by imposing conditions in the order
dated 24.12.1997, such conditions were blatantly violated by
M/s.Dalmia by taking a stand that it was not bound to comply
with those conditions. The reply of M/s.Dalmia dated
E 16.04.1999, was sufficient to confirm the said stand of M/
s.Dalmia. Therefore, as on 16.04.1999, since the lessee viz.,
M/s.Dalmia refused to comply with the conditions imposed in
the in-principle first stage approval, it cannot lie in the mouth
of either M/s.Dalmia or anyone who seek to claim any right
F through M/s.Dalmia by contending that any violation of Section
19 of MM DR Act or any of the Rules of Mineral (Concession)
Rules or orders made therein or Section 2 of the Forest Act of
1980 should be ignored and the plea made on behalf of M/
s.Dalmia as well as the first respondent should be accepted.
G
107. We are unable to accept such an extreme proposition
canvassed on behalf of M/s.Dalmia and the first respondent,
as in our considered opinion, the violation had occurred at the
time of the order of first renewal viz., 07.03.1986 itself, striking
H at the very root of the validity of the lease, as it must be held
MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING627
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
that it was void at that very stage itself for non-compliance of A
the prior approval under Section 2 of the Forest Act, 1980 and
in any case, O(l the blatant refusal to comply with the conditions
imposed in the in-principle first stage approval granted in the
year 24.12.1997. Once we are able to come to the said
conclusion, we hold that the mining lease which was held by B
M/s.Dalmia in M.L.No.2010 became void and inoperative for
violation of the mandatory requirements of the conditions. In
this context, it will also be relevant to refer to Rule 37(1A). The
said Rule reads as under:
c
"Rule 37(1A): The State Government shall not give its
consent to transfer of mining lease unless the
transferee has accepted all the conditions and liabilities
which the transferor was having in respect of such
mining lease." D
A reading of the said sub-Rule which was introduced
by GS.R. 724(E), dated 27.09.1994, a substantive condition
is imposed while considering an application for consent for
transfer of mining lease. E
108. In the first blush it may appear that what all required
is the acceptance by the transferee to comply with all the
conditions and liabilities which the transferor was obliged to
fulfill in respect of the mining lease. But on a deeper scrutiny F
of the said Rule, it will have to be stated that if there was a total
violation of mandatory statutory conditions under the MMDR
Act and by virtue of the requirements in this case of the
fulfillment of Section 2 of the Forest Act, 1980 as well as the
proviso to Section 5 of the MMDR Act, the question of G
considering the very application for consent to transfer should
be held to be not available at all. As we have held in the earlier
part of this order that M/s.Dalmia committed serious violation
in regard to the compliance of Section 2 of the Forest Act,
1980 at the time of first renewal in the year 1983/86 itself and H
628 SUPREME COURT REPORTS [2015] 6 S.C.R.
A in any event, by refusing to comply with the conditions imposed
in the order dated 24.12.1997, the said violation would strike
at the very root of the claim for transfer of the dead lease as
stipulated ih Section 19 of the MM DR Act. Therefore, on this
ground as well, it must be held that there was no scope at all
B for the State Government to consider the application made by
M/s.Dalmia for transferring of its mining lease in favour of the
first respondent. When we go little further and examine Rule
29, as we have held that M/s.Dalmia had surrendered its mining
lease M.L.No.2010 once and for all, based on its proposal
C made on 27.03.2001 and accepted by the Director of Mines
and Geology on behalf of the State Government which became
conclusive as on 31.01.2002, there was no live lease for the
purpose of considering any application for transfer under Rule
D 37 of the Mineral (Concession) Rules. When that be the legal
consequence in respect of the lease, which was void and
inoperative, it must be held that there was no scope for holding
that there was a valid transfer made by M/s.Dalmia in favour
of the first respondent on 16.03.2002.
E 109. We find that the reliance placed upon by Dr. Singhvi,
learned senior counsel on the decisions of this Court needs to
be mentioned, which fully supports his submissions. He placed
reliance upon the decision reported in A. Chowgule (supra)
F for the proposition that the requirement of approval under
Section 2 of the Forest Act has got greater significance and
that non-compliance of the said provision would result in
serious consequences. In the said decision, this Court while
referring to Rules 4, 6, 2A and 5 read along with Section 2 of
G the Forest Act held that prior approval cannot be granted unless
the procedure prescribed in the said Rules were duly complied
with and that such approval under Section 2 is sine qua non
for the State Government and the other authorities before taking
any steps in respect of the Forest land. The relevant paragraph
H No.18 of the said decision reads as under:
MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING629
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.)
"18 ............... A bare perusal of the aforesaid A
provisions would show that prior approval is reauired
for the diversion of anv forest land and its use for some
other purpose. This is further fortified by a look at Rule
4 which provides that every State Government or other
authority seeking prior approval under Section 2 of the B
Act shall submit a proposal to the Central Government
in the prescribed form and Rule 6 stipulates that the
proposals would be examined by a committee
appointed under Rule 2-A within the parameters and
guidelines postulated in Rule 5 ............................. " C
(Underlining is ours)
110. Similar view has been expressed in the decision
reported in Nature Lovers Movement (supra). Paragraph D
Nos. 47 and 48 are relevant for our purpose which read as
under:
"47. The ratio of the above noted judgments is that the
1980 Act is applicable to all forests irrespective of the
ownership or classification thereof and after 25. 10. 1980, E
i.e., date of enforcement of the 1980 Act, no State
Government or other authority can pass an order or give
a direction for de-reservation of reserved forest or any
portion thereof or permit use of any forest land or any F
portion thereoffor any non-forest purpose or grant any
lease, etc. in respect of forestland to any private person
or any authority, corporation, agency or organization
which is not owned, managed or controlled by the
Government. G
48. Another principle which emerges from these
judgments is that even if any forest land or any portion thereof
has been used for non-forest purpose, like undertaking of
mining activity for a particular length of time, prior to the H
630 SUPREME COURT REPORTS (2015) 6 S.C.R.
A enforcement of the 1980 Act, the tenure of such activity cannot
be extended by way of renewal of lease or otherwise after
25.10.1980 with'out obtaining prior approval of the Central
Government."
B 111. It is relevant to note that to the same effect is the
decision reported in Rural Litigation and Entitlement
Kendra vs. State of U.P. -1989 Supl. (1) SCC 504.
112. Mr. Sibal, learned senior counsel then relied upon
c the decision reported in Ambica Quarry Works (supra) to
repel the submission made on behalf of the first respondent
that the non-grant of approval under Section 2 of the Forest
Act, 1980 will be of no consequence as the continued existence
of the lease which was granted prior to coming into force of
o the Forest Act, 1980 and it came to be renewed in the year
1983 after the ForestAct came into force. In the said decision
in paragraph 15 is relevant which reads as under:
"15. The rules dealt with a situation prior to the coming
E into operation of 1980 Act. '1980 Act' was an Act in
recognition of the awareness that deforestation and
ecological imbalances as a result of deforestation have
become social menaces and further deforestation and
ecological imbalances should be prevented. That was
F the primary purpose writ large in the Act of 1980.
Therefore the concept that power coupled with the duty
enjoined upon the respondents to renew the lease
stands eroded by the mandate of the legislation as
manifest in 1980 Act in the facts and circumstances of
G these cases. The primarv dutv was to the communitv
and that duty took precedence. in our opinion. in these
cases. The obligation to the society must predominate
over the obligation to the individuals. "
H (underlining is ours)
MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING631
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
Consequently, the question Nos.vi, vii, viii, ix and x are A
answered to the said effect.
113. With that when we come to the next question No.(xi),
namely, the requirement of Central Government under Section
5 of MM DR Act for grant of approval which was again stipulated B
in Section 2 of the Forest Act and whether compliance of the
said provision are mandatory for a mining lease to remain valid.
Similarly, question No.(xii) whether Section 10 (1) and the
second proviso to Section 11 of the MMDR Act as well as
Rules 37 and 59 of Mineral Concession Rules mandate to the C
effect that any transfer applied for under Rule 37 (1 )(a) cannot
be automatically granted. That question would arise only if the
lease hold right of M/s. Dalmia under M.L. No.2010 was
available with it for the purpose of effecting any transfer.
Inasmuch as we have held that the said lease was duly D
surrendered by M/s. Dalmia and accepted by the State
Government, we do not find any necessity to examine those
questions and we leave it open for consideration as and when
any need arises for deciding those questions.
E
114. As far as the question Nos.(xiii) and (xiv) are
concerned, as to whether the order of transfer dated 16.3.2002
was bona fide taking into account the sequence of events and
whether the transfer of lease dated 16.3.2002 can be held to
be valid, we wish to recapitulate the various sequence of F
events as from 16.4.1999 till 30.1.2002 pertaining to the
surrender of lease made by Mis. Dalmia. Since we have
extensively dealt with the said issue in the earlier part of our
order, we merely state that our conclusion as regards the
coming into force of the surrender made on behalf of the M/s. G
Dalmia and its acceptance by the State Government from
31.01.2002 would be sufficient to hold that there was total lack
of bona fides on the part of the State government in taking a
sudden U-turn for passing the order of transfer dated 16.3.2002 H
632 SUPREME COURT REPORTS [2015) 6 S.C.R.
A in favour of the first respondent. In this context, as rightly
contended on behalf of the appellant, the conduct of the
Director of Mines and Geology, one Dr. Reddy who dealt with
the applications made by one M.S.P.L. Ltd. through its
Executive Director Mr. Rahul Baldota on 21.7.2001 and another
B applicant with reference to which Dr. Reddy made an
endorsement in the office note dated 25.8.2001 which stated
thatthe land covered by M.L. No.2010 was surrendered by M/
s. Dalmia, that certain other applications were also received
C for grant of lease in respect of those lands apart from M. S. P. L.
Ltd. and that there was no scope to consider any of those
applications since in respect of surrendered land Rule 59(1)
of Mineral Concession Rules would automatically come into
play and any future grant of lease can only be done as specified
D under the said Rule. When such a clear stand was spelt out by
the said officer, namely, Dr. Reddy while making the
endorsement on 25.8.2001, we fail to see any justifiable reason
as to how the very same officer in his capacity as Director of
Mines and Geology could be a signatory to its recommendation
E dated 6.2.2002 for effecting the transfer and based on his
recommendation the State Government allowed the application
fortransferofM.L. No. 2010.
115. Reliance was placed upon the decision reported in
F Bangalore Development Authority (supra), certain facts
noted in that judgment in paragraph 15 and based on such
facts the order passed by the learned Single Judge and
reversal of the order of the learned Single Judge by the Division
Bench which was found to be correct have been stated in
G paragraphs 15 and 18 which are relevant for our purpose and
the said paragraph reads as under:
"15. We are of the view that the above principles when
applied to the case on hand, it can be safely concluded
that the order of the learned Single Judge in the light of
H
MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING633
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
the peculiar facts noted therein cannot be faulted. We A
also wonder as to why the Hon'ble Minister concerned
should have taken upon himself the extraordinary effort
of making an inspection for which no special reasons
were adduced in the report. That apart none of the
reasons which weighed in the report of the Hon'ble B
Minister reflected the true facts. The conclusion of the
Hon'ble Minister that the possession continued to
remain with the owner was contrary to what was found
on records. The Mahazar dated 09. 12. 1983 as noted
by learned Single Judge from the original file reveal c
that the conclusion of the Hon'ble Minister was ex facie
illegal and untrue. The said conclusion obviously
appeared to have been made with some ulterior motive
and pumose and with a view to show some undue favour D
to the first respondent herein. The acquisition became
final and conclusive as far back as on 15. 7.1971 when
Section 6 declaration came to be issued. At no point of
time was there any challenge to either preliminary
notification dated 21. 9. 1967 or the final declaration E
notified on 15. 7.1971. Even the award dated 21.11.1983
approved on 29.11.1983 was not the subject matter of
challenge in any proceedings.
16. xxx xxx xxx
F
17. xxx xxx xxx
18. In our considered opinion. the Division Bench failed
to take note of the above gross illegality committed by
the Hon'ble Minister while directing the issuance of the G
de-notification dated 05. 10. 1999 in spite of the factthat
possession had already been handed over to the State
as early as on 09. 12. 1983 and that the decree of the
Civil Court did not in any way create any fetters on the
authorities concerned to take steps for possession by H
634 SUPREME COURT REPORTS [2015] 6 S.C.R.
A resorting to appropriate legal means. At the risk of
repetition, it will have to be stated that the Civil Court
decree to that effect was dated 15. 12. 1981 and that the
possession was taken by taking necessary steps under
the provisions of the Land Acquisition Act under the
B Mahazar dated 09. 12. 1983 which was never challenged
by any party much less the first respondent herein. The
Division Bench unfortunately completely omitted to take
note of the relevant facts while interfenilg with the order
of the learned Single Judge. The appeals, therefore,
c stand allowed. The order of the Division Benr;h is set
aside and the order of the learned Single Judge dated
26.8.2002 passed in Vijaya Leasing Ltd. v. State of
Karnataka stands restored by this common judgment."
D (underlining is ours)
116. The above judgment throws some light as to how
certain excess role played on behalf of the State without any
justifiable reasons were brought to the notice of the Court, the
E Court should not hesitate to set aside such orders in the interest
of Rule of Law. When we compare the facts set out in
paragraph 15 of the said judgment, when we refer to the facts
dealt with by us in this case, we have noted as to how after
surrender made by M/s.Dalmia had become conclusive as on
F 31.01.2002, on behalf of the State Government the very same
officer who held the post of Director of Mines an'd Geology as
on 25.08.2001 came forward to recommend for the transfer
applied for by M/s.Dalmia on 04.02.2002, in the
recommendation order dated 06.02.2002 and by simply
G glossing over the gross violations of the Forest Act, 1980, the
order came to be passed on 16.03.2002 approving of the
transfer applied for by M/s.Dalmia in favour of the first
respondent. In the said circumstances, the order of the learned
Single Judge in setting aside the said order dated 16.03.2002,
H was perfectly justified and the interference with the same by
MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING635
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
the Division Bench by the order impugned is required to be A
set aside, in view of the various incongruities which were
prevalent in the case on hand.
117. We are, therefore, convinced that when once M.L.
No.201.0 had come to an end by virtue of the surrender effected B
by M/s. Dalmia and accepted by the State Government, there
was no legal right or power with the State Government or any
authority acting on behalf of the State Government to consider
the very application for transfer made at the instance of Mis.
Dalmia on 4.2.2002 and for passing the order of transfer dated C
16.3.2002. It can only be stated that such a decision taken
and passed in the order dated 16.3.2002 was in total violation
of the provisions of the MMDRAct and the Mineral Concession
Rules. It will have to be stated that once surrender of M.L.
No.201 O had come into effect the only other course open to D
the State Government was to invoke Rule 59 by throwing open
those lands by way of public auction in order to get the maximum
revenue by granting any lease hold rights. Here again, it must
be stated that apart from the act of surrender made by M/
s.Dalmia which became final and conclusive due to non- E
compliance of the conditions imposed in the in-principle Stage
I clearance dated 24.12.1997, fy'l/s.Dalmia lost its right to retain
the lease and the consequence of it rendered the lease itself
void as per Rule 37(1A) and on this ground as well, there was F
no scope for the State Government or any other Authority acting
on its behalf to have considered the transfer application of M/
s.Dalmia with reference to a lease which ceased to exist as
from 31.01.2002 due to the act of surrender and in any case
from 24.12.2002 when the 5 year period to comply with the G
conditions imposed in the order dated 24.12.1997 expired.
118. In this context, it will be more relevant to state that
mines and mineral being national wealth, dealing with the same
as the largesse of the State by way of grant of lease or in the H
636 SUPREME COURT REPORTS [2015] 6 S.C.R.
A form of any other right in favour of any party can only be resorted
to strictly in accordance with the provisions governing disposal
of such largesse and could not have been resorted to as has
been done by the State Government and the Director of Mines
and Geology of the State of Karnataka by passing the order of
B transfer dated 16.3.2002. Such a conductoftheStateand its
authorities are highly condemnable and, therefore, calls for
stringent action against them.
119. In the light of our above answers to the various
C questions posed for consideration, we hold that the
subsequent stage-I in-principle approval dated 13.09.2006 and
the final approval dated 09.09.2010 based on the acceptance
of the transfer of lease in the order dated 16.03.2002 cannot
survive and the same are set aside. As we have set aside the
D stage-I in-principle approval dated 13.09.2006 and the final
approval dated 09.09.2010 which were not allowed to operate,
we observe that whatever statutory payments made in
compliance of the said orders are refundable to the party who
made the payments. We, however, make it clear that the
E payments made in pursuance of the in-principle stage-I
approval or final approval of the first renewal granted ex post
facto, covering the period from 1983 to 2003 shall not be
refundable. Further, as serious allegations were raised by M/
F s. Dalmia when the lease was in force that there were
encroachments into the lands held by it, at the instance of the
first respondent, we direct the Mining as well as Forest
Authorities to ensure that the entire extent of 331.44 hectares
of land covered by M.L. No.2010 is surveyed, demarcated and
G its physical possession by the State/Forest Authorities be
ensured by removing whatever encroachments, if any, exist in
the said land. We also direct that in order to ensure that no
further encroachments take place into the said land, necessary
steps as required under Rule 59 of Mineral Concession Rules
H are taken for leasing out the lands in accordance with law and
MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING637
LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]
by following the required statutory procedure. The appeal is A
allowed and the order of the Division Bench is set aside with
the above directions. No costs.
Devika Gujral Appeal allowed.
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