# M/S. MUNEER ENTERPRISES v. MIS RAMGAD MINERALS AND MINING LTD. & ORS

- **Citation:** [2015] 6 S.C.R. 551
- **Court:** Supreme Court of India
- **Decided:** 2015-03-12
- **Case number:** Civil Appeal No.2818 of 2015
- **Bench:** Fakkir Mohamed Ibrahim Kalifulla, Shiva Kirti Singh
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-muneer-enterprises-v-mis-ramgad-minerals-and-mining-ltd-ors-30769
- **Pages:** 87

## Headnote

A
B
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 s

## Text

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[2015] 6 S.C.R. 551
M/S. MUNEER ENTERPRISES
v.
MIS RAMGAD MINERALS AND MINING LTD. & ORS.
(Civil Appeal No.2818 of 2015)
MARCH 12, 2015
[FAKKIR MOHAMED IBRAHIM KALIFULLA AND
SHIVA KIRTI SINGH, JJ.]
A
B
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, EF
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.
F
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] [6068-D; 607-B-D; 608-E; 609-B-C]
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] [6118-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
0
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. [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
0
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. Carrying on any nonforest 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
0
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 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- e
compliance of the conditions imposed in the in-principle
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
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 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
0
whatever encroachments, if any, exist in the said land.
[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
2003 (3) Suppl. SCR 352 referred to.
Para 25
D
2005 (2) Suppl. SCR 774 referred to.
Para 25
2010 (11) SCR 240
referred to.
Para 29
2008 (14) SCR 598
held inapplicable.Para 29
E
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
B
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.
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 socalled 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.