Are you looking for a legal research tool ?
Get Started
Do check other products like LIBIL, a legal due diligence tool to get a litigation check report and Case Management tool to monitor and collaborate on cases.

Hindustan Zinc Ltd v. Union Of India And Ors

Hindustan Zinc Ltd v. Union Of India And Ors

(High Court Of Rajasthan, Jodhpur Bench)

D.B. Civil Writ Petition No. 9884/2020 | 22-09-2021

1. The matter comes up on application (IA No.3/21) preferred by the petitioner seeking leave to amend the writ petition and the second stay petition filed praying for the interim relief.

2. This writ petition is filed by the petitioner, a company involved in the business of exploration, excavation and processing of various minerals, with the following prayer:

" It is, therefore, most respectfully prayed on behalf of petitioner that the writ petition may kindly be allowed and by an appropriate writ, order or direction:- I. That the Section 11 be declared ultra vires to the extent it encroaches on the field covered by Section 10C of the Act of 1957 in relation to deep seated minerals or the rules framed under the proviso to Section 10C of the Act.

II. That the Section 11(2) and Section 11(3) of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, be declared not applicable to the category of deep seated minerals where reconnaissance or prospecting operations are required or alternatively where mineral evidence is below the level of G-3 and to the extent such deep seated minerals fell within the purview of Section 10C of the Act.

III. That the Mineral (Auction) Rules, 2015 be declared as not applicable to the category of deep seated minerals having mineral evidence below G-3 level to the extent falling within the purview Section 10C of the Act and will be subject to the Rules framed in exercise of the powers under Section 10C of the Act by the Central Govt.

IV. That it may kindly be declared that till the rules are framed by the Central Govt under Section 10C of the Act, the existing scheme of the Act under Section 11 and Section 10B of the Act do not regulate the deep seated mineral where mineral evidence in an area is below G-3 and further reconnaissance and prospecting operations is needed.

(V). That it may be declared that Rule 69 of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016, to the extent it is made applicable to deep-seated minerals, is ultra vires the Mines and Minerals (Development and Regulation) Act, 1957, in particular, Section 10C read with Section 13(2)(ac) thereof;

(VI). Set aside the impugned order dated 20.12.2018 Annex.12 passed by the respondent no.2, Joint Secretary, Department of Mines, Government of Rajasthan whereby the application of the petitioner for grant of mining lease and prospecting license has been rejected.

(VII).The respondents may kindly be directed to allow the application for allotment of mining lease and prospecting license in favour of the petitioner. (VIII). Any other appropriate order or direction, which this Hon'ble Court considers just and proper in the facts and circumstances of this case, may kindly be passed in favour of the petitioner.

(IX). Costs of the writ petition may kindly be awarded to the petitioner."

3. The facts relevant are that the petitioner company had applied for a Prospecting License (PL) for Lead, Zinc and Associated minerals near village Sindesar Khurd, District *Rajsamand for an area measuring 565.75 hectares, titled as "PL 24/93", which is an area lying in between ML 7/95 and ML 2/89, both mines being operated by the petitioner, since 1.10.93. As a matter of fact, out of aforesaid area measuring 565.75 hectares, the area measuring 424.875 hectares was already being explored by Geological Survey of India (GSI). The petitioner agitated to de-reserve the area, however, the State Government vide order dated 22.7.97 rejected PL application of the petitioner observing that applied area is not available for grant. Aggrieved thereby, the petitioner preferred revision petition before the Revisional Authority. The revision application filed by the petitioner was disposed of by the Revisional Authority vide order dated 5.11.01, whereby the matter was remanded to ascertain the usages of the area by GSI. The State Government vide notice dated 21.11.03 pointed out to the petitioner that out of total area of 565.75 hectares for prospecting, the area of 424.875 was reserved for GSI and the remaining area of 140.80 hectares was available in two parts i.e. 131.95 hectares and 8.93 hectares and accordingly, the petitioner was directed to furnish the consent in this regard if it wanted prospecting license for 131.95 hectares. The petitioner vide communication dated 18.12.03 clarified that it would wait till the area reserved by GSI was vacated so that the prospecting license could be covered by entire area of 565.75 hectares. The Mining Engineer, Rajsamand vide communication dated 20.12.07 recommended that the application of the petitioner herein may be rejected because it has failed to fulfill point No.4 of the notice dated 21.11.03 i.e. consent to get PL for an area of 131.95 hectares. The application of the petitioner was again rejected by the State Government vide order dated 3.6.08. The revision petition preferred by the petitioner aggrieved thereby was decided by the Revisional Authority vide order dated 1.10.10 and the matter was remanded to the State Government for complying with the directions contained in earlier order of the Revisional Authority dated 5.11.01. The State Government again rejected the application of the petitioner vide order dated 23.12.14. The legality of the said order was questioned by the petitioner before the Revisional Authority under Section 30 of Mines & Mineral (Development and Regulation) Act, 1957 ('MMDR Act') and Rule 36 of Minerals (other than Atomic & Hydro Carbons Energy Minerals) Concession Rules, 2016 ('MCR, 2016'). It was inter alia contended on behalf of the petitioner before the Revisional Authority that while passing the order dated 23.12.14, provisions of Section 11 (3) & 11(4) of MMDR Act were not followed. The Revisional Authority vide order dated 18.1.18, while setting aside the order dated 23.12.14, remanded the matter to the State Government to process the case as per the provisions of MMDR Act.

4. The petitioner preferred a writ petition being D.B.Civil Writ Petition No.17553/18 challenging the vires of Section 11 of the MMDR Act as substituted by Mines & Minerals (Development & Regulation) Amendment Act, 2015 ('Amendment Act, 2015') on the ground that the same confers overarching powers on the Central Government to regulate ore bodies relating to deep seated minerals where either development within the meaning of MMDR Rules has already been completed prior to the commencement of the Amendment Act or in completely unexplored virgin areas where preliminary exploration itself is yet to commence by restricting prospecting or reconnaissance operations by private entrepreneurs willing to take investment risk in exploration operation in the interest of mineral development.

5. The petitioner challenged vires of Section 10A of the Amendment Act to the extent it seeks to restrict grant of prospecting license; (i) in case of applications which were subject matter of litigation and litigations having commenced prior to 12-1-2015 and impugned orders being the subject matters of such litigation having been set aside post 12-1- 2015 (ii) in case of application for prospecting licenses where investments have been made prior to 12-1-2015 in the installation and setting up of ore extraction infrastructure and captive use capacity in contemplation and legitimate expectation of grant of prospecting license.

6. It was contended that Section 11 and Section 10B(6) of MMDR Act as amended by Amendment Act, 2015, are violative of constitutional scheme and doctrine of Separation of Powers and therefore, are liable to be struck down as unconstitutional.

7. The petitioner sought directions to the respondents to decide its prospecting license PL 23 application complying with the order dated 1.10.10 as the subsequent order dated 23.12.14 had already been set aside by the Revisional Authority vide order dated 18.1.18.

8. During the pendency of the aforesaid petition, the application moved by the petitioner came to be rejected by the State vide order dated 20.12.18 holding that as per the provisions of the Amendment Act, the allotment of mineral concession can only be made by way of auction and the prospecting license application dated 1.10.93 preferred by the petitioner has rendered ineligible under Section 10A (1).

9. The petitioner questioned the legality of fresh order dated 20.12.18 passed by the State Government by way of yet another writ petition being S.B.Civil Writ Petition No.4233/19 before this Court and sought directions to the respondents to allow the application for allotment of mining lease and prospecting license in its favour.

10. In view of the subsequent development in rejection of the application of the petitioner by the State Government and the decision of the Supreme Court in Bhushan Power and Steel Limited vs. S.L. Seal & Ors.:2017(2) SCC 125, which dealt with the amendment carried out in MMDR Act in 2015, D.B.Civil Writ Petition No.17553/18 preferred by the petitioner was disposed of by a Bench of this Court vide order dated 9.12.19 as having become infructuous while leaving the issues open, raised by the petitioner in subsequent writ petition preferred before the learned Single Judge as aforesaid. The observations made by the Bench while disposing of the writ petition reads as under:

"Our attention was also drawn to para-5 of the preliminary reply by Union of India pleading that all pending applications are not made per-se ineligible. Sub-section (2) makes several categories of applications eligible. While drawing our attention to the fact that pending disposal of the writ application, the application moved by the petitioner came to be rejected by the State and he further submits on instructions that challenge there to was made before the Tribunal constituted under the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (for short 'MMDR Act' ahead) and having failed therein challenge has been made before this Court and the matter is pending before learned Single Judge.

Learned counsel for the petitioner submits that in this writ application challenge was made to the amendment carried out in 2015 to the MMDR Act. Pending this challenge, the Hon'ble Apex Court in the case of Bhushan Power and Steel Limited v. S.L. Seal and Ors., reported in 2017(2) SCC 125 dealt with the consequences of the amendment and interpretation thereof and have issued necessary directions of the manner in which pending applications were to be treated. Consequently, we are of the view that the question of validity of the amendment act need not be gone into by this Court since the rejection of petitioner's application is separately under adjudication before the learned Single Judge.

In view of the developments noted hereinabove and keeping in mind the directions of Hon'ble Supreme Court in Bhushan Power & Steel Limited (Supra), we find that nothing survives in this writ application at this stage.

Accordingly, we dispose of this writ application as infructuous while at the same time leaving the issues open raised by the petitioner in so far as writ application pending before learned Single Judge. Nothing stated herein shall have any impact or consequence on the rights of the petitioner or of the State or of the Union of India."

11. Whereafter, the petitioner instead of pursuing the writ petition pending before the learned Single Judge sought permission to withdraw the petition, stating that the petitioner is advised to question the validity of Section 10C of MMDR Act. Accordingly, the writ petition was dismissed as withdrawn by learned Single Judge of this Court vide order dated 21.8.20.

12. Now, while filing the present writ petition, the petitioner instead of challenging the vires of Section 10C of MMDR Act as stated before the learned Single Judge, has questioned the vires of provisions of Second Proviso to Section 4 and Sections 10A, 10B(6) & 11 of MMDR Act as amended/inserted/substituted vide Amendment Act, 2015.

13. The vires of Section 11 as substituted by the Amendment Act, 2015, is challenged by the petitioner to the extent it overrides and further encroach upon the field covered by newly inserted proviso to Section 10C by way of Mines and Minerals (Development & Regulation) Amendment Act, 2020 ("Amendment Act, 2020") i.e. area having potential for deep seated minerals with no mineral evidence established under the mineral evidence rules or having no previous exploration at either G-4 or G-3 level under UNFC codes or a virgin area. The proviso to Section 10C inserted vide Amendment Act, 2020, reads as under :

"Provided that the holder of non-exclusive reconnaissance permit who carries out the prescribed level of exploration in respect of deep seated minerals or such minerals as may be notified by the Central Government, may submit an application to the State Government for the grant of any prospecting licence- cum-mining lease as per the procedure laid down under section 11 or a mining lease as per the procedure laid down under section 10B and with a view to increase the reconnaissance and prospecting operations of such minerals, the Central Government shall prescribe such procedure, including the bidding parameters for selection of such holders.

Explanation.- For the purposes of this sub-section, the expression "deep seated minerals" means such minerals which occur at a depth of more than three hundred meters from the surface of land with poor surface manifestations."

14. The petitioner contended that Section 11 and Section 10B are not applicable over the category of deep seated mineral where no exploration has been done till date and for this reason, proviso to Section 10C of MMDR Act has been inserted and therefore, till Central Government frames Rules on procedure with respect to deep seated mineral as defined under Section 10C, in exercise of the powers under Section 13 of the MMDR Act, the provisions of MMDR Act as it stands before 12.01.2015 will continue to apply to deep seated minerals where mineral evidences is below G-3 level. According to the petitioner, by insertion of proviso to Section 10C, a different regime has been introduced for regulation of deep seated minerals and Section 11 and Section 10B as amended by Amendment Act, 2015, shall not apply to the petitioner which is involved in mining of deep seated minerals.

15. By way of reply to the writ petition, it is pointed out by the respondent-State of Rajasthan that vide Section 15 of Mines and Minerals (Development and Regulation) Amendment Act, 2021 ("the Amendment Act, 2021"), Section 10C of the MMDR Act stands omitted and thus, the challenge of the petitioner to Sections 11 and 10B does not survive and therefore, the writ petition has rendered infructuous.

16. At this stage, the petitioner has preferred the application seeking leave to amend the writ petition so as to take the stand that deep seated mineral fall in a separate category then surficial minerals and will be governed by the rules framed by the Central Government under Section 13(2) (ac) of the MMDR Act and such rules will be applicable prospectively. It is sought to be contended that a separate legal regime is contemplated in Section 13 of the MMDR Act for deep seated minerals and till such time the rules on deep seated minerals are framed, the pending cases would continue to be governed by the law as it stood prior to the Amendment Act, 2015.

17. Section 13 deals with power of the Central Government to make rules in respect of minerals. By inserting clause (ac) in Section 13(2) of MMDR Act vide Section 8 of Amendment Act, 2020, the power was conferred upon Central Government to frame rules in respect of inter alia deep seated minerals under the proviso to sub-section (2) of Section 10C. The clause inserted reads as under :

"(ac) the level of exploration in respect of deep seated minerals or such minerals and the procedure, including the bidding parameters for selection of the holders under the proviso to sub-section (2) of Section 10C."

18. It is noticed that in the first instance, by way of writ petition being D.B.C.Writ Petition No.17553/18, while questioning the legality of order dated 18.1.18 passed by the Revisional Authority, the petitioner had challenged the vires of Sections 10B(6) & 11 on the ground that the said sections as amended by Amendment Act, 2015, allows the center to travel in the territory to which it is not otherwise empowered to do and thus, the same are violative of constitutional scheme and doctrine of separation of powers. It is contended that the petitioner company's case fall outside the purview of Section 11 of the MMDR Act as the area in question is completely unexplored.

19. During the pendency of the aforesaid writ petition, pursuant to the order passed by the Revisional Authority, the application preferred by the petitioner was considered by the State Government and same was rejected vide order dated 20.12.18 keeping in view the provisions of Section 10A (1) of the MMDR Act. The legality of the order was challenged by the petitioner by way of fresh writ petition before the learned Single Judge.

20. In view of the subsequent event, D.B.C.Writ Petition No.17553/18 was disposed of by this Court as having become infructuous while leaving the issues open raised by the petitioner insofar as writ application pending before the learned Single Judge.

21. Admittedly, the petitioner did not pursue the writ petition before the learned Single Judge and the same was withdrawn stating that the petitioner intends to challenge vires of Section 10C of MMDR Act, obviously, keeping in view the insertion of proviso to Section 10C by way of Amendment Act, 2020.

22. Contrary to the statement made before the learned Single Judge as aforesaid, instead of challenging the vires of Section 10C of MMDR Act, by way of the present petition, the petitioner has again questioned the legality of Section 11 of the MMDR Act, taking the stand that Section 11 to the extent it overrides and encroach upon the field covered by newly inserted proviso to Section 10C by Amendment Act, 2020 in relation to deep seated minerals is unconstitutional. It is contended that till the rules are framed by the Central Government under Section 10C, the existing scheme of MMDR Act under Sections 11 & 10B do not regulate the deep seated minerals where mineral evidence is in area below G3 and further reconnaissance and prospecting operation is needed.

23. When the respondent by way of reply to the writ petition brought on record that Section 10C of MMDR Act stands deleted by Section 15 of Amendment Act, 2021, now by way of amendment, the petitioner while changing the stand has attempted to question the vires of Section 11 on the ground that the deep seated mineral fall in a separate category than surficial minerals and will be governed by the rules framed by the Central Government under Section 13(2) (ac) of MMDR Act and such rules will be applicable prospectively. The prayer is sought to be amended in terms that Section 11 deserves to be declared ultra vires to the extent it encroaches on the field of deep seated mineral for which a different legal regime is provided under Section 13(2) of MMDR Act.

24. It is pertinent to note that Section 13(2)(ac) confers power on Central Government to frame the rules regarding the level of exploration in respect of the deep seated minerals or such minerals and procedure including bidding para meters for selection of holders under proviso to sub- section (2) of Section 10C. Now, when Section 10C itself stands deleted, the question of the Central Government framing the rules in respect of the reconnaissance and prospecting operation of deep seated mineral in terms of proviso to Section 10C of MMDR Act, does not arise and thus, as a matter of fact, the provisions of Section 13(2)(ac) has rendered redundant. To put in other words, the separate regime for exploration of deep seated minerals contemplated by the petitioner under the scheme of the Act with the deletion of Section 10C, also does not survive.

25. The attempts made by the petitioner in challenging the vires of Section 11 & 10B of MMDR Act, time and again by taking a different stand, so as to keeping the issue alive, is abuse of the process of the Court.

26. In this view of the matter, this Court is not inclined to grant the amendment sought for by the petitioner, keeping in view, the subsequent event in deletion of Section 10C of MMDR Act by Amendment Act, 2021.

27. The application seeking leave to amend the writ petition is therefore, dismissed.

28. D.B.CIVIL SECOND STAY PETITION NO.6747/21 It is noticed that in the first instance the present writ petition was filed by the petitioner accompanied by a stay petition (No.9725/20) praying the interim relief in terms that the effect and operation of the impugned order dated 18.12.18 passed by the State Government, whereby the application dated 1.10.93 preferred by the petitioner for prospecting license was held to be ineligible under Section 10A (1) of MMDR Act, may be stayed.

During the pendency of the first stay petition preferred as aforesaid, the petitioner preferred second stay petition with the prayer in the following terms:

"That in view of the submissions made hereinabove, the petitioner respectfully prays that the present second stay application may kindly be allowed, and during the pendency of present writ petition, the Petitioner may kindly be permitted to continue ongoing mining operations as far as is practicable in the entire width of the mineral ore body till such time the Policy/Rules for deep-seated minerals are framed by the Respondents.

Any other appropriate or consequential order or direction, which this Hon'ble Court considers just and proper in the facts and circumstances of the case, may kindly be passed in favour of the Petitioner."

On 4.5.21, a coordinate Bench of this Court passed an interim order in favour of the petitioner in the following terms:

"In view of such circumstances and considering the fact that discontinuance of mining activities would result in huge revenue shortfall as well as deprivation of livelihood of thousands of people said to have been employed by the petitioner, we direct, as an interim measure, that status quo viz-a-viz mining be maintained, subject to the petitioner's complying with all requirements of law including deposit of royalty etc. with the appropriate authority and we also record the statement made by Mr. Jain, learned Senior Advocate for the petitioner that the petitioner undertakes to comply with any rules which the Union of India may frame in this regard.

In the aforesaid circumstances and undertaking, subject to complying with the necessary requirement of law, we direct that the staus quo viz-a-viz mining be maintained and the petitioner be allowed to continue with the ongoing mining operation on the site in question till further orders."

Whereafter, the petitioner preferred an application for modification/correction in order dated 4.5.21 passed by this Court as aforesaid, which was allowed by a coordinate Bench and a clarification was made in the following terms:

"It is clarified that "ongoing mining operation on the site in question" will mean "ongoing mining operation as far as is practicable in the entire width of the mining ore body on the side in question" in the concluding part of the order dated 04.05.2021."

29. The interim order dated 4.5.21 as aforesaid, was passed by the coordinate Bench of this Court noticing the submission of the counsel for the Union of India that Central Government is under process of framing necessary rules for mining of deep seated minerals.

30. As discussed hereinabove, while deciding the application preferred by the petitioner seeking leave to amend the petition, the stand sought to be taken by the petitioner that exploration of the deep seated minerals is governed a separate regime under Section 10C read with Section 13 (2)(ac) of MMDR Act, does not survive for consideration of this Court inasmuch as, Section 10C already stands deleted by Amendment Act, 2021, which has come into force w.e.f. 28.3.2021. Admittedly, the factum of deletion of Section 10C was not brought to the notice of the Court while passing the order dated 4.5.21. As discussed above, now, in view of deletion of Section 10C, the question of framing the rules for dealing with the matter covered by Section 10C does not arise. Thus, the contention raised by the petitioner that by virtue of Section 10C, a separate regime is created to deal with the exploration of deep seated minerals, also does not survive for consideration of this Court.

31. There is yet another important aspect of the matter. In the instant case, the petitioner has challenged the legality of order dated 20.12.18 passed by the State Government, whereby the application preferred by the petitioner seeking prospecting license in respect of the area in question is held to be ineligible by virtue of provisions of Section 10A (1) of the MMDR Act. It goes without saying that if petitioner succeeds and the petitioner's application is held to be eligible for consideration, obviously, the matter shall be liable to be remanded to the State Government for consideration of the application preferred by the petitioner seeking prospecting license, afresh on merits. In any case, on the strength of the mining lease already existing in favour of the petitioner for a different area, the petitioner cannot be permitted to undertake the mining beyond the scope of the mining lease. The issue with regard to the petitioner's mining operation in respect of the mining lease existing in its favour is not subject matter of the present writ petition. Suffice it to say that the interim relief prayed for by the petitioner by way of second stay petition, is apparently beyond the ambit and scope of the present writ petition and travels beyond the main relief prayed therein.

32. For the aforementioned reasons, in the considered opinion of this Court, the petitioner has no prima facie case in its favour for grant of interim relief as prayed for.

33. The second stay petition is therefore, dismissed. The interim order dated 4.5.21 passed by this Court, as modified vide order dated 7.5.21, is vacated.

34. Let, the writ petition be listed for admission after two weeks.

Advocate List
  • Mr. Gopal Jain, Senior Advocate assisted by Mr. Uday Narayan Tiwari, through VC Mr. Akhilesh Rajpurohit

  • Mr.Sandeep Shah, AAG with Ms. Akshiti Singhvi Mr.Mukesh Rajpurohit, ASG assisted by Mr. Uttam Singh.

Bench
  • HON'BLE MR. JUSTICE SANGEET LODHA
  • HON'BLE MR. JUSTICE VINIT KUMAR MATHUR
Eq Citations
  • 2022 (12) FLT 132
  • LQ/RajHC/2021/11729
Head Note

Mines and Minerals (Development and Regulation) Act, 1957 — Amendment Act, 2015 — Amendment Act, 2020 — Amendment Act, 2021 — Ss. 10A, 10B(6), 10C, 11, 13(2)(ac) — Constitution of India, 1950 — Art. 13(2), 226 — Amendments in Ss. 10A, 10B(6), 11 of Act, 1957 by Amendment Act, 2015 challenged — Petitioner also challenged vires of S. 10C inserted by Amendment Act, 2020 to the extent it sought to restrict grant of prospecting license in certain cases — S. 10C was subsequently deleted by Amendment Act, 2021 — Challenge to vires of Ss. 10A, 10B(6), 11, 10C rendered infructuous — Petitioner sought leave to amend writ petition to challenge vires of S. 11, 10B(6) on the ground that deep seated minerals fall in a separate category than surficial minerals and will be governed by rules framed by Central Govt. under S. 13(2)(ac) of Act, 1957 — Held, petitioner was merely attempting to keep issue alive by taking different stands time and again and such conduct amounted to abuse of process of court and hence amendment not allowed — Also observing that interim orders dated 4.5.2021 and 7.5.2021 passed by the court while considering the stay application were passed under erroneous impression of compliance with S. 10C of Act, 1957, those orders were also vacated — Writ petition dismissed along with stay application.