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

p. 551 Copy page pinpoint

(Civil Appeal No.2818 of 2015) 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 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 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,

p. 552 Copy page pinpoint

MU NEER ENTERPRISES v. RAMGAD MINERALS & 553 MINING LTD.

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. 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 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 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 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]

2Copy pinpoint2. 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

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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]

3Copy pinpoint3. 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 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 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.

4Copy pinpoint4. 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

p. 556 Copy page pinpoint

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 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 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.

5Copy pinpoint5. 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 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 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]

6Copy pinpoint6. When construing Rules 29 and 37(1A) read along with Section 19 of the MMDR Act, de hors any liberal 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 provisions of MMDR Act and the Mineral Concession

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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 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 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 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 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 thatthe operation of the mining lease should be allowed ignoring such mandatory prescription. [Paras 104, 105] [624-D-F; 625-C-G]

7Copy pinpoint7. 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 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 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 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]

8Copy pinpoint8. 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 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 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]

9Copy pinpoint9. Whether the order of transfer dated 16.3.2002 was H

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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 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 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]

10Copy pinpoint10. When once M.L. No.2010 had come to an end by 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 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 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 the conditions imposed in the order dated 24.12.1997 expired. [Para 117] [635-B-G]

11Copy pinpoint11. 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 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

p. 562 Copy page pinpoint

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

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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

p. 566 Copy page pinpoint

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 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 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 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 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

p. 568 Copy page pinpoint

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.

12Copy pinpoint12. 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.

13Copy pinpoint13. 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 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 remain operative pending the Special Leave Petition.

MU NEER ENTERPRISES v. RAMGAD MINERl\LS IX MINING569 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

14Copy pinpoint14. 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

15Copy pinpoint15. 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 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.

16Copy pinpoint16. The learned senior counsel further contended that there should have been no second renewal or grant of in-principle 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

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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.

17Copy pinpoint17. 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

18Copy pinpoint18. 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 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 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 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 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

19Copy pinpoint19. 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

20Copy pinpoint20. 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

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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.

21Copy pinpoint21. 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 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 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.

22Copy pinpoint22. The learned senior counsel then contended that out of 331.50 hectares M/s.Dalmia surrendered 196.58 hectares of 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 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 been complied with by M/s.Dalmia, the licence could not have remained in force any further.

23Copy pinpoint23. The learned senior counsel then contended that grant of ex post facto approval by the Central Government as per 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

24Copy pinpoint24. 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.

25Copy pinpoint25. 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

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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.

26Copy pinpoint26. 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 challenge the order of transfer dated 16.03.2002.

27Copy pinpoint27. 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 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.

28Copy pinpoint28. As far as the question of surrender was concerned, 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 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 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 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 effected.

29Copy pinpoint29. 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 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 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 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 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

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A 15 SCC 705 in support of his submissions.

30Copy pinpoint30. 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, 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 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.

31Copy pinpoint31. 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 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 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 renewal of the lease would get automatically revived.

32Copy pinpoint32. 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

33Copy pinpoint33. 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 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 submitted by the lessee to some incompetent authority.

34Copy pinpoint34. 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 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

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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

35Copy pinpoint35. 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 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 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 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 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 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 fact and law.

37Copy pinpoint37. 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 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

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A it was also acted upon by the concerned authority.

38Copy pinpoint38. 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 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 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 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 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.)

39Copy pinpoint39. The learned senior counsel pointed out that after the 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 transfer dated 16.03.2002, could not have validated the lease which already got lapsed on its own.

40Copy pinpoint40. Mr.Sibal, learned senior counsel then contended that when the writ petition was· pending before the High Court, on 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 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 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, 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 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

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41Copy pinpoint41. 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 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 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 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.

42Copy pinpoint42. 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 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 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 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 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.

43Copy pinpoint43. In his reply, Mr.Krishnan Venugopal, learned senior counsel for the first respondent contended that going by the 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 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 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 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

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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.

44Copy pinpoint44. In this context, the learned senior counsel referred to 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 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 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 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 granted under the MM DR Act and Mineral Concession Rules.

45Copy pinpoint45. 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 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 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 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 possession should be byway of handing over.

46Copy pinpoint46. 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

47Copy pinpoint47. 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

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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 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 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

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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 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 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

48Copy pinpoint48. 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 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 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

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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

49Copy pinpoint49. 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 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 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 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 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 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

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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 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 by the State Government.

50Copy pinpoint50. 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 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 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 specifically mentioned at the bottom of the said letter that mining lease deed book was being enclosed along with the said letter.

51Copy pinpoint51. When we make a reference to Mis. Dalmia's earlier 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 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 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 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 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

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• A considering the issue relating to the surrender raised in these proceedings.

52Copy pinpoint52. 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 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 petitioner and the neighboring owner. Be that as it may."

(Emphasis added)

53Copy pinpoint53. The said stand of M/s. Dalmia which was the third 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 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

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