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

A survive.

54Copy pinpoint54. Keeping the above material facts relating to the alleged surrender of mining lease in M.L.No. 2010 by Mis. Dalmia, the various submissions relating to the said surrender by the B respective counsel requires to be dealt with.

55Copy pinpoint55. While considering the various questions on surrender, the first question that arise for consideration relates to the surrender of 196.58 hectares of forest land which was made c by Mis. Dalmia on 16.04.1999 out of the total extent of 331.50 hectares and that what remained with it was only 131.44 hectares. To show that Mis. Dalmia earlier surrendered 196.58 hectares, its own letter dated 16.04.1999 was placed before us. When we perused the letter dated 16.04.1999 of Mis. o Dalmia which was addressed to the Principal Chief Conservator of Forest, Bangalore, it is mentioned therein that they have already surrendered 130.1 hectares out of 331.50 hectares and the balance area in their possession was only 201.50 hectares. Even out of the remaining 201.50 hectares, according to Mis. Dalmia, 110 hectare was broken up for mining, 5.75 hectare was used for roads, dams, stores, office etc., 19.17 hectares was broken up but unusable virgin area used for roads and that it was non ore-bearing area and the remaining virgin area which was not yet broken and which was being surrendered was 66.58 hectares. It is also further stated therein that the management decided to surrender even the virgin area of 66.58 hectares and ultimately wanted to retain only 134.⁹² hectares.

56Copy pinpoint56. In fact this letter, dated 16.04.1999 apparently appeared to have been sent in response to the in-principle stage-I approval granted by the Government of India in its letter dated 24.12.1997 wherein certain conditions were imposed. While responding to the said order, Mis. Dalmia in its letter dated 16.04.1999 mentioned that as far as conditions (i) and

fv!UNEER ENTERPRISES v. RAMGAD MINERALS & MININ9ilj,97 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.)

(ii) of the Government of India dated 24.12.1997, no action need be taken since it decided to surrender nearly 196.58 hectares and what was to be retained was only 134. 92 hectares. As regards condition No.(iii), namely, the cost of penal compensatory aforestation charges was concerned, while referring to the demand, twice the area of 201. 50 hectares B i.e. 403 hectares @ Rs.40,7001- per hectare, Mis. Dalmia pointed out that there cannot be a demand by Government of India to that extent and at best the demand ·can only be raised in respect of the broken up area of 134.⁹² hectares. It was further contended that since Mis. Dalmia was carrying mining C operations even in that 134. 92 hectares with the permission of the State Government Authorities from time to time, no penal compensatory aforestation charges can be claimed over that area. D

57Copy pinpoint57. When we consider the said letter of Mis. Dalmia what transpires is that a conscious decision was taken by Mis. Dalmia to surrender 196.58 hectares and its further decision to retain only 134.⁹² hectares in the year 1999 after the earlier surrender of 130 hectares prior to 1999. The said decision of F Mis. Dalmia, which was consciously taken as early as on 16.04.1999 disclose that it possessed as on that date only 134.⁹² hectares out of 331.50 hectares, which it was holding earlier under M.L. No.2010 of 2010. When the said factual position cannot be controverted, having regard to the document which was addressed by Mis. Dalmia to the Principal Chief Conservator of Forest, Bangalore with a copy marked to the Inspector General of Forest, Ministry of Environment and Forest Government of India and other State Level Officers of the Forest Department, Mis. Dalmia cannot later on tum around and state that it continued to retain with it the whole extent of 331.50 hectares covered by M.L. No.2010. -

58Copy pinpoint58. Keeping the said aspect in mind relating to the action H .

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A. of surrender effected by M/s. Dalmia, when we proceed to examine the further development that had taken place after 16.04.1999, what comes next is the letter dated 27.03.2001 which was again a communication written by M/s. Dalmia to the Director of Mines and Geology of its decision to determine B the lease in its favour and to surrender the remaining area under the terms of the mining lease deed. It will be necessary to make a detailed reference to the contents of the said communication dated 27.03.2001.

59Copy pinpoint59. Before referring to the contents of the said letter, it will have to be kept in mind that pursuant to the general directions issued by this Court in Godavarman-1, all mining operations through out the country were directed to be stopped for violation of Section 2 of the Forest Act, 1980. By virtue of the general D directions issued by this Court, the mining operations in respect of M.L.No. 2010 also came to a grinding halt from the last week of January 1997. Thereafter, by virtue of the order passed in Godavarman-11, ex post facto approval under Section 2 of the Forest Act was considered and by order dated E 24.12.1997 the in-principle stage-I clearance was granted by imposing three conditions for M/s. Dalmia to comply. In the said letter dated 24.12.1997 also, it was specifically mentioned that such approval for renewal of mining lease was granted for an extent of only 201.50 hectares of forest land and thereby affirming the earlier surrender of 130.11 hectares of land long prior to 16.4.1999. Condition No.(i) stated that immediate action should be taken for transfer and mutation of non-forest land equivalent in extent to the forest area to be broken up afresh and condition No.(ii) mentioned that user agency will transfer the costs of compensatory aforestation over non-forest land in favour of State Forest Department. Condition No.(iii) further directed that user agency should transfer the cost of penal compensatory aforestation raised as on that date to incorporate existing structure over double the degraded forest

MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING599~ LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

land in favour of the state forest department. A

60Copy pinpoint60. We have earlier noticed that as a sequel to the said letter dated 24.12.1997, when Mis. Dalmia was faced with the requirement of compliance of those three onerous conditions, Mis. Dalmia in its letter dated 16.4.1999, took the stand that it B has decided to retain only 134. 92 hectares and that since even in respect of 134.⁹² hectares, mining operations were carried on with the permission of the State Government authorities, even condition No. (iii) need not be complied with. c

61Copy pinpoint61. In that background, when we now refer to the present letter of Mis. Dalmia dated 27.3.2001 addressed. to the Director of Mines and Geology, we find, that, in the said letter Mis: Dalmia expressed its proposed decision to determine the lease and surrender the same. It also mentioned that it was giving twelve months' notice as required under paragraph 4 of Part VIII of the mining lease deed executed between Mis. Dalmia and Government of Karnataka through the Director of Mines and Geology, that the Director of Mines and Geology should determine the lease on expiration of twelve months period i.e. from 01.04.2001 or earlier if the Director of Mines and Geology permit to do so. In the last para of the said letter, it was reiterated on behalf of Mis. Dalmia that out of 331.50 hectares it had already surrendered an area of 196.58 hectares to the Forest Department through its letter dated 16.4.1999 F which should also be kept in mind by the Director of Mines and Geology.

62Copy pinpoint62. A cumulative consideration of the letter dated 16.4.1999 along with the ex post facto approval order dated G 24.12.1997 and the letter dated 27.3.2001 of Mis. Dalmia, it transpires that as on 27.3.2001 Mis. Dalmia was in possession of only 134.⁹² hectares of the total area of 331.50 hectares covered by mining lease No.2010. As noted by us in the letter dated 27.3.2001, Mis. Dalmia wanted the Director of Mines H

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A and Geology to determine the lease even in respect of 134. 92 hectares which was in its physical possession, either on expiry of the twelve months' period or any earlier date which the concerned authority may permit. To be more precise, M/ s.Dalmia surrendered 130 hectares of land prior to 16.04.1999. B Along with its letter dated 16.04.1999 surrender of 196.58 hectares was effected. The remaining 134.⁹² hectares was surrendered through its letter dated 27.03.2001.

63Copy pinpoint63. In response to the said letter dated 27.3.2001, the office of the Director of Mines and Geology in their letter dated 25.5.2001 addressed to the Senior Geologist of the State Government, Department of Mines and Geology instructed him by stating that M/s. Dalmia had stopped mining operations in the area covered by M.L. No.2010 since 1997, that they wanted to surrender the lease with the Depa'rtment of Mines and Geology and, therefore, intimate as to whether any arrears were due from M/s. Dalmia. A copy of the said letter dated 25.5.2001 was marked to M/s. Dalmia. While marking the said communication, it was stated that it was being forwarded for information and with an instruction to surrender the lease deed book in respect of M.L. No.201 Oalong with the mining plan approved by Indian Bureau of Mines immediately for taking further action.

64Copy pinpoint64. In response to the copy of the letter dated 25.5.2001 of the Director of Mines and Geology, Mis. Dalmia along with its letter dated 16.6.2001 by referring to the instructions mentioned in the letter dated 25.5.2001 stated that it was surrendering the lease deed book in respect of M.L. No.2010 G and that the approved mining plan was not available with it. At the bottom of the said letter, it was stated that mining lease deed book was being enclosed along with the said communication.

65Copy pinpoint65. That apart, in the Writ Petition which was pending

MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING601 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.) .' before the High Court of Karnataka in WP 6304of1998 as between the first respondent and the Director of Mines, as well as, Chief Conservator of Forest where M/s. Dalmia was also a party respondent, namely, third respondent, on its behalf its counsel represented before the High Court that M/s. Dalmia was no longer interested in the working of the mines situated in the land adjoining the writ appellant, namely, the first respondent therein and, therefore, as on that date, no boundary dispute was existing as between them. The said stand of Mis. Dalmia was the main ground which weighed with the learned Single Judge for setting aside the order dated 16.11.1997 C which was impugned before it in the said Writ Petition at the instance of the first respondent. The said stand of M/s. Dalmia was clearly reflected in the order of the Learned Single Judge dated 26.6.2001. D

66Copy pinpoint66. Apart from the above facts, after the forwarding of the letters dated 16.4.1999, 27.3.2001 and 16.6.2001 by M/s. Dalmia whereby the surrender of the lands in its entirety, as well as, the mining lease itself, third parties were aspiring to get the mining lease in respect of the surrendered lands held by M/s. Dalmia. One such application was taken out by one M/ s. M.S.P.L. Ltd. through its Executive Director, Mr. Rahul Baldota. The said application was made on 21. 7.2001 for grant of mining lease in its favour. The said application was considered by the Director of Mines and an endorsement was made on the said application by the Director of Mines on 25.8.2001 which has been placed before this Court. On a perusal of the said document, we find the following endorsements made by the Director of Mines viz: G

"the area in respect of which mining lease is sought for by the applicant in the present application had been already granted by ML 201 Oto M/s. Dalmia Cements (Bharat) Ltd. The area applied falls within the surrendered H

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67Copy pinpoint67. The Director of Mines while referring to the surrender of M.L. No.2010 by M/s. Dalmia noted that the said area falls c within the surrendered area, that two applications 84AML 2001 and 92AML 2001 seeking mining lease were received in respect of that area but since Rule 59(1) of MCR Rules was attracted, consideration of application for grant of lease was not possible and that the area was not available for such a o grant.

68Copy pinpoint68. A cumulative consideration of all the above sequence of events disclose that right from 1999 in fact even prior to that date, M/s. Dalmia surrendered major part of the land covered by M.L. No.2010 and that by its letter dated 27.3.2001, it expressed its decision to determine the lease of the remaining area of 134.⁹² hectares and wanted the Director of Mines to accept such surrender either after the expiry of twelve months' period or even earlier. By 25.5.2001, the Director of Mines in response to M/s. Dalmia's desire to determine the lease, directed it to surrender the lease book of M.L. No.2010 as well as the mining plan, and that Mis. Dalmia surrendered the lease book while stating that mining plan was not available with it at that point of time. Closely followed by that, when third parties applied for grant of lease, the Director of Mines stated in no uncertain terms that those lands were surrendered by M/ s. Dalmia but lease cannot be granted based on applications and that Rule 59 (1) of MCR Rules will have to be followed for grant of such lease. In fact, subsequent to the above development on 26.9.2001, the suit filed by M/s. Dalmia against

MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING603 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

first respondent relating to the boundary dispute was also dismissed for non-prosecution. Yet another factor to be borne in mind is that on 30.1.2002, Mis. Dalmia paid a sum of Rs.22,3321- towards the arrears in respect of its mining lease and claimed that no further amount was due and payable in respect of M.L. No.2010. By a letter dated 31.1.2002, the office of the Deputy Director, Department of Mines and Geology issued a no dues certificate to Mis. Dalmia by acknowledging the receipt of Rs.22,3321- based on the revised audit report and that no other amount was due in respect of the said mining lease. C

69Copy pinpoint69. If we consider the above material evidence placed before us, it can be stated that as on 27.3.2001 Mis. Dalmia tacitly decided to surrender its mining lease M.L. No.2010 and that in pursuance of the said decision, it informed the Director D of Mines and Geology to determine the lease either on expiry of twelve months or on any day earlier to that and in response to the said desire expressed by Mis. Dalmia, the Director of Mines and Geology also responded by directing Mis. Dalmia to surrender the lease book as well as the mining plan and E then subsequently also collected whatever arrears which were due and payable by Mis. Dalmia as on 31.01.2002. It must, therefore, be held that in effect the leasehold rights of Mis. Dalmia had come to an end by 31.1.2002. F

70Copy pinpoint70. Keeping the said factual scenario in mind, when we consider the contentions made on behalf of the respective parties according to the appellants, Mis. Dalmia had surrendered the entirety of the lands held by it under M.L.No. 2010 which surrender had come into effect pursuant to its letter · G dated 27.03.2001 accepted and acknowledged by the Department of Mines and Geology in their letter dated 31.01.2002. We have also noted the various factual aspects of the development that had taken place in regard to the said H

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A surrender of M/s. Dalmia and noted that a conscious decision was taken by M/s. Dalmia to surrender its mining lease in M.L.No. 2010 and factual surrender was also effected in writing to the Director of Mines and Geology and that the Office of Director of Mines and Geology also acknowledged such surrender. However, not to accept the plea of surrender as projected, on behalf of the appellants Mr. K.K.Venugopal and Mr.Krishnan Venugopal relied upon various statutory prescriptions and contended that in reality if the case of surrender pleaded by the appellants is to be accepted, the compliance of such statutory requirements have to be fulfilled.

71Copy pinpoint71. In furtherance of such contention in the first place Mr. Krishnah Venugopal, learned senior counsel contended that as prescribed under Rule 29 of M.C.R. Rules completion of D 12 months period from the date of the intimation of the surrender should have been completed which is mandatory for the surrender to come into effect. In other words, the contention was.that in law for the surrender to take place the mandatory requirement of 12 months period was necessarily E to be fulfilled. It was also contended that under Rule 29, which is negatively coached and it is mandatory for the surrender to come into effect 12 months period should lapse. It was also contended that under the said Rule surrender has to be to the F State Government or such other officer or specified authority. It was further contended that if a third party come forward with a case of surrender, a duty is cast on the third party to satisfy that letter of surrender was sent to such authority and the burden is heavily upon such third party to establish the said fact. In G order to give a thrust to the above submissions, namely, the satisfaction of the compliance of the mandatory prescription contained in Rule 29 reliance was also placed upon Section 11 (A) as well as the schedule and contended that the philosophy underlying the MMDR Act was that every single requirement of Rule 29 should be satisfied in order to accept the theory of

MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING605 . LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

surrender pleaded on behalf of the appellants. It was also contended that minerals other than minor minerals are controlled by the Central Government, power is vested with the Central Government to make rules and the State Government are bound by the rules of the Center and case of .surrender cannot come into effect unless the statutory prescriptions contained in the Rules are strictly adhered to.

72Copy pinpoint72. In support of the above submissions reliance was also placed upon the terms of the lease as specified in Form 'K' in particular paragraph 4 of Part VIII of Form 'K' to contend that notice of termination should be for full 12 calendar months and that too on ratification of the required formalities. It was contended that there was no power with the delegate of State Government to accept or determine the lease instantaneously. D

73Copy pinpoint73. The sum and substance of the contention on this aspect by the learned counsel for the first respondent was that major mineral being under the exclusive control of the Government of India, there should be strict compliance of the statutory requirements both in respect of grant of lease as well as the termination of it either by surrender or by way of termination at the instance of the State and that such requirement is contained in Rule 29 which is negatively couched and, therefore, when such prescription for the purpose of surrender to come into effect has been specifically spelt out in the statutory rule read along with para 4 of Part VIII of the lease document, such surrender propounded on behalf of the appellant can be accepted only if it was satisfactorily demonstrated that those statutory prescriptions were strictly applied and followed. G

74Copy pinpoint74. As against the above submissions, on behalf of the appellant Mr. Kapil Sibal, learned senior counsel contended that there was no lacunae in accepting the surrender offered by M/s. Dalmia, that such surrender had really taken place by virtue of the conduct of the parties, namely, M/s. Dalmia as H

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A well as the Department of Mines and Geology of the State Government and, therefore, it was too late in the day for the first respondent to contend that the surrender made by Mis. Dalmia had not taken place.

75Copy pinpoint75. Having considered the respective submissions on this question, there can be no two opinions that when the grant, operation and termination of mining lease is governed by the MMDRActand the Mineral Concession Rules, anyone of those factors viz., either grant of lease, operation of the mines based C on such grant and the termination of it either by way of surrender at the instance of the lessee or by way of termination at the instance of the State should be carried out strictly in accordance with the prescribed stipulations of the provisions of the above Act and the Rules. D

76Copy pinpoint76. Keeping the said legal principles in mind, when we refer to Rule 29, the caption of the said Rule reads as "restriction on determination of lease". The relevant part of the said Rule can be extracted while analyzing its implications E which reads as under:

"29. Restrictions on determination of lease.-(1) The lessee shall not determine the lease except after notice in writing of not less than twelve calendar months to the F State Government or to such officer, or authority as the State Government may specify in this behalf."

Sub-Rule (1) states that the lessee shall not determine the lease after notice in writing of not less than 12 calendar months to the State Government or to such officer or authority as the State Government may specify in this behalf. While referring to sub-Rule (1 ), it will be necessary to refer to Form 'K' which is the model form of mining lease deed. As per M.L.No. 2010, which has been drawn as per Form 'K', it is not in dispute that the said lease deed was as between the State

MU NEER ENTERPRISE5 v. RAMGAD MINERALS & MINING607 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.] '" · .

Government which expression should be deemed to include the successors and assigns who would be the first party as the lessor. Paragraph 4 of Part VIII, which is the provision for determination of the lease by way of surrender as prescribed under Rule 29, stipulates that the lessee may at any time determine the lease by giving not less than 12 calendar months' B notice in writing to the State Government to such office or to such officer or authority as the State Government may specify in that behalf and the rest of the stipulation contained therein refers to the payment of rents, water rates, royalties, compensation for damages etc. Therefore, reading Rule 29(1) C what is provided is that not less than 12 calendar months notice should be issued by the lessee for determining the lease and such notice should be issued to the State Government or to such officer or authority as the State Government may specify in that behalf.

77Copy pinpoint77. In fact, Xerox copy of the mining lease M.L.No. 2010 referring to the date of grant as 07 .03.1986 providing for 20 years from 25.11.1983 duly registered as document No.28 of 1986-87 has been placed before us. On a reference to the said document, we find that while on behalf of M/s. Dalmia, one P.M. Balasubramaniam has affixed his signatures, on behalf of the Governor of Karnataka, the Director of Mines and Geology has put his signature along with one K.R.Nirmala, F Superintendant of DMG, Bangalore. One other relevant fact to be noted from the said document is para 5 falling under Part VIII which reads as under:

"5. On such date as the State Government may elect within 12 calendar months after the determination of G this lease or of any renewal thereof, the amount of the refund of security deposit paid in respect of this /ease and then remaining in deposit with the State Government and not required to be applied to any of the purposes H

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A mentioned in this lease shall be refunded to the lessee/ lessees. No interest shall run on the security deposit. (underlining is ours)

78Copy pinpoint78. When we examine the contention made on behalf of B the first respondent about the statutory requirement to be satisfied under Rule 29 read along with para 4 and 5 of Part VIII of the lease deed, it is clear that on behalf of the lessor, namely, the State Government, the signatory to the lease deed c was the Director of Mines and Geology. Therefore, there can be no controversy as to who can validly represent the State Government with reference to the grant of lease, operation of it as well as its determination who is none other than the Director of Mines and Geology. When the Director of Mines and D Geology was authorized to _sign the lease deed on behalf of the Governor of the State of Karnataka, it must be taken to mean that he was the authority who was validly authorized by the State Government as stipulated in Rule 29(1) of the Rules for the purpose of the lessee to inform about its decision to determine the lease while giving 12 months' notice. It must be stated that the very fact that the Director of Mines and Geology was authorized. to sign the lease deed on behalf of the Governor of State of Karnataka, it was quite explicit that he was the only authority who was competent to authenticate the grant of the lease as well as for its determination. Unless there was any other Authority prescribed to carryout the said task as a statutory requirement.

79Copy pinpoint79. Once we steer clear of the said position as to who is the competent authority for the purpose of operating Rule 29(1 ), any amount of reliance placed upon the Notification No. Cl3MMM95, Bangalore dated 27. 05.1995 issued by the Commerce and Industries Department of the State of Karnataka will be of no avail. The said notification was relied upon to contend that while specific direction was issued to the

1 MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING609 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

effect that the powers exercisable by the State Government in relation to matters with reference to various provisions as conferred by sub-section (2) of Section 26 of the MMDR Act vested with the Director of Mines and Geology, Government of Karnataka, there was no reference to the powers exercisable by the State under Rule 29. When the State of Karnataka had authorized the Director of Mines and Geology to sign the very mining lease deed itself on behalf of the Governor of State as disclosed in the Xerox copy of the mining lease M.L.No. 2010, it is futile on the part of the first respondent to contend that for the purpose of determination of that very lease, a different C Authority should be preferred. In fact, M/s. Dalmia itself having understood the prescribed Authority, sent its letter of determination of the lease dated 27.03.2001 only to the Director of Mines and Geology. The said Authority also D responded to the letter of determination in its letter dated 25.05.2001 addressed to its subordinate officer marking a copy to M/s. Dalmia. Therefore, the said contention raised on behalf of the first respondent that the surrender of the lease not having been forwarded to the authorized officer of the State E Government by M/s. Dalmia, the so-called letter of surrender dated 16.04.1999 and 27.03.2001 cannot be validly construed as the act of M/s. Dalmia to determine the lease is to be stated only to be rejected. We are afraid that it is too late in the day forthe first respondent to come forward with such a contention when M/s. Dalmia having entered into lease deed with the State of Karnataka duly represented by the Director of Mines and Geology exercised its right to determine the lease by addressing its communication on 27.03.2001 to the very same Authority. It must be stated that such a decision taken and communicated by M/s. Dalmia to the Director of Mines and Geology was valid in law and was in consonance with the prescription contained in sub-Rule (1) of Rule 29.

80Copy pinpoint80. What remains to be considered is the question whether H

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A one should wait for the expiry of the 12 months period to lapse from 27.3.2001 for the surrender to come into effect by relying upon para 4 of Part VIII of the lease deed. In the first place, even according to Mis. Dalmia in their letter dated 27.3.2001 Mis. Dalmia themselves while giving 12 months notice as B required under para 4 of Part VIII of the mining lease deed also stated that it may be determined on any earlier date i.e. prior to 1.4.2001 if the Director of Mines and Geology so permit. When such a categorical stand was made on behalf of Mis. Dalmia, acting upon it, the office of Director of Mines C and Geology in their letter dated 25.5.2001 addressed to the Senior Geologist while marking its copy to Mis. Dalmia directed it to surrender the lease deed book along with the mining plan immediately to enable its office to take further action. In fact, in the body of the letter addressed to Senior 0 Geologist, the Director of Mines and Geology specifically mentioned that Mis. Dalmia wanted to surrender the lease M.L. No.2010 earlier than 12 months period. Apart from such specific instructions issued, Mis. Dalmia themselves in their reply dated 16.6.2001 to the Director of Mines and Geology surrendered the lease deed book of M.L. No.2010 and as regards the mining plan it stated that the same was not available with it. Thereafter, as was noticed .earlier, on 30.1.2002, Mis. Dalmia paid a sum of Rs.22,3321- towards arrears in respect of the mining lease which was also acknowledged by the Director of Mines and Geology which was duly communicated to Mis. Dalmia by stating that by issuing such no due certificate, no further amount was due and payable in respect of said mining lease. G

81Copy pinpoint81. When we consider the above correspondence exchanged between Mis. Dalmia and the office of the Director of Mines and Geology, there is no room fordoubtfor anyone to still contend that the surrender had not come into effect. On H the other hand, we find that there was due compliance of Rule

MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING611 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

29(1) when Mis. Dalmia expressed its desire to determine A the lease in its letter dated 27.3.2001 addressed to Director of Mines and Geology. Then by specifically stating in the said communication that it may even be permitted to determine the lease prior to 12 months period and that based on such specific plea made on behalf of Mis. Dalmia, the Director of Mines B and Geology also decided to determine the lease without waiting for the expiry of 12 months period by calling upon Mis. Dalmia to surrender the lease book which was also duly surrendered by Mis. Dalmia on 16.06.2001 and thereafter by issuing a no due certificate on 31.2.2002, the said sequence of events had put an end to the operation of the lease in M.L.No. 2010 by duly accepting the surrender made on behalf of Mis. Dalmia. The contention that there was no scope for such surrender to come into effect before the expiry of twelve months is concerned, it will also be relevant to make a reference to para 5 of the lease deed M.L.No. 2010 in Part VIII which has been extracted above. The said paragraph 5 empowers the State Government to elect within 12 calendar months after the determination of lease for the purpose of refunding the security deposit made by the lessee. We do not find any specific bar in para 4 of Part VIII that while on the one hand the lessee has to give not less than twelve calendar months notice, on receipt of such notice the state government should wait for the expiry of the twelve months period. F

82Copy pinpoint82. The contention that only on expiry of the twelve months period, the surrender will come into effect does not stand to reason also. In fact, we do not see any sound basis in making such a contention on behalf of the first respondent. On the G other hand, para 5 of the lease deed itself gives ample right to the lessor, namely the Director of Mines and Geology to refund the security deposit, if any, to make the determination of lease within the 12 months period of notice. The said clause provides clear indication for such earlier acceptance of the H

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A determination of the lease. We have noted extensively that long prior to 16.04.1999 as well as from 16.4.1999 onwards till Ml s. Dalmia by its communication dated 27.3.2001 positively expressed its decision to determine the lease, Mis. Dalmia themselves were only referring to the mining operations to the extent of 130.4 hectares which remained with them as on 27.03.2001. Even in respect of the said extent of lands by virtue of the general directions issued by this Court in Godavarman I no mining operation was being carried on from January 1997. Subsequently, based on Godavarman II order of this Court, when the Ministry of Environment and Forest was directed to consider issuance of ex post facto approval, one such order was issued in favour of Mis. Dalmia on 24.12.1997 by way of in principle stage-1 c.pproval uy imposing three conditions. Even as on 16.4.1999, Mis. Dalmia in writing 0 categorically stated and took the stand that it need not comply with the conditions imposed in the order dated 24.12.1997. In effect Mis. Dalmia was llOI operating its right of carrying out any mining activity in respect of the entirety of 334.40 hectares after the first renewal effected in the year 1983. Ultimately, in its letter dated 27.03.2001, it made explicitly clear that ii was not operating the mines and, therefore, it wanted to surrender either after expiry of twelve months period from the date of issuance of such notice or any day earlier that may be acceptable to the State Government.

83Copy pinpoint83. In the light of such a clear stand disclosed by Mis. Dalmia, we fail to understand as to for what reason the State Government should wait for the expiry of the twelve months period for the surrender to come into effect. On the other hand, the decision made by the Director of Mines and Geology in its communication dated 25.5.2001 addressed to the Senior Geologist with a copy marked to Mis. Dalmia to determine the lease earlier and for that purpose directed Mis. Dalmia to surrender mining lease book, namely, M.L. No.2010 along with

MU NEER ENTERPRISES v. RAMGAD MINERALS &MINING613 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.)

the mining plan was a pointer to the effect that the surrender was decided to be accepted on behalf of the State Government instantaneously which was also not prohibited either under the Rules or under the terms of the lease deed or under any other statutory provision. B

84Copy pinpoint84. In this context, the reliance placed upon some of the decisions of this Court by Mr. Kapil Sibal, learned senior counsel appearing for the appellant needs to be considered. The learned senior counsel relied upon the earliest judgment of this Court reported as Basheshar Nath (supra) for the C proposition that the principle of waiver will have different shades when it comes to the question of such waiver being opted depending upon the nature of right as to whether it would be forthe benefit of individual or for the general public. This Court has held as under in paragraph 66: D

"66 ..... .... I may refer in this connection to the provisions in Part XIII which relate to trade, commerce and intercourse within the territory of India. These provisions also impose certain restrictions on the legislative E powers of the Union and of the States with regard to trade and commerce. As these provisions are for the benefit of the general public and not for any particular individual, they can not be waived, even though they do not find place in Part Ill of the Constitution. Therefore, F the crucial question is not whether the rights or restrictions occur in one part or other of the Constitution. The crucial question is the nature of the right given: is it for the benefit of individuals or is it for the general public?" G

85Copy pinpoint85. The said well settled principle of law set down by this Court will have universal application. When such principle is applied to the case on hand, as rightly pointed out by Mr.Sibal, learned senior counsel when the State of Karnataka chose to H

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A accept the surrender made by Mis. Dalmia in its letter dated 27.03.2001, immediately thereafter by directing Mis. Dalmia to surrender the lease book of M.L.2010 along with mining plan such action of the State Government for the purpose of ensuring the effective surrender offered by Mls.Dalmia having been made in the general public interest. as the leasehold rights of the mining activities would be in the lands belonging to the State and that too Forest Lands, such action taken in accepting the surrender by waiving the 12 months period should be taken as having come into effect. We find force in the said submission of the learned senior counsel for the appellant.

86Copy pinpoint86. In this context, the various orders relied upon and placed before this Court by Mrs. /\.r.:!~:: S:;enoy, Advocate-on- Record appearing on behalf of the State Government, namely, the orders dated December 1988, 11.4.1989, Notification dated 12.3.1965 and Notification dated 19.6. i 96!5 require to be examined. The order dated December, 1988 relates to the acceptance of full surrender of M.L. No.994 in Sankalapuram village, Haspel Taluk, Bellary district. The said document has been signed by the Director of Mines and Geology, Bangalore on behalf of Government of Karnataka stating that full surrender of mining lease No.994 was accepted with effect from 1.7.1986. The order dated 11.4.1989 is another order in respect of mining lease No.1759. Here again the said order was signed by Director of Mines and Geology, Bangalore on behalf of the State Government for accepting the surrender. The earlier notification dated 12.3.1965 states that as provided under proviso to Rule 29, one Shri GR Thiruvengadam Chetty, G the lessee of M .L. No.419 was permitted to surrender some part of the lease hold lands which was notified in the name of the Governor of Mysore. Similar is the Notification dated 19.6.1965 in respect of mining lease No.414 held by one Shri M.B. Jhaveri. While those notifications were of the years 1965, H 1988 and 1989, we find that surrender of mining lease was

MU NEER ENTERPRISES v. RAMGAD MINERALS &:v11NING615 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

duly acknowledged by the Director of Mines and Geology on A behalf of the state of Karnataka. Therefore, even going by the earlier orders pertaining to acceptance of surrender issued by the State of Karnataka read along with the orders dated 25.5.2001 and 31.1.2002 issued in the case of Mis. Dalmia and for the various reasons referred to above, we hold that M/ B s. Dalmia surrendered its mining lease M.L. No.2010 in respect of the entire extent of 331.50 hectares in Jaisinghpur village, R.M. Block, SandurTaluk, Bellary, State of Karnataka which surrender was duly accepted by and on behalf of State of Karnataka which had come into effect on acknowledgment of the receipt of the sum of Rs.22,332/-towards arrears in respect ofthe said mining lease in the acknowledgment letter dated 31.1.2002.

87Copy pinpoint87. 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 surrender and contend that it still had a right to transact with the said M. L. No.2010 for any other purpose including for effecting any transfer in favour of anyone much less in favour of the first respondent. E

88Copy pinpoint88. In this context, the reliance placed upon some of the decisions of this Court by Mr. Krishnan Venugopal learned senior counsel appearing for the first respondent needs to be considered. The learned senior counsel for the first respondent relied upon the decisions reported in Sethi Auto Service Station (supra) and Shanti Sports Club (supra) for the proposition that 'noting' in the department files do not have sanction of law to be an effective order unless it culminate into an executable order affecting the rights of the parties and only when it reaches the final decision making authority in the department get his approval and the final order is communicated to the person concerned. There can be no dispute with regard to the said principle stated in the above H

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A referred to two decisions. But in the case on hand, we have extensively noted the various sequence of events relating to the factum of surrender effected by Mis. Dalmia to the extent of 130 hectares long prior to 16.04.1999 and an extent of 196.58 hectares in its letter dated 16.04.1999 itself and B subsequently by its letter dated 27.03.2001, its desire to sanction the whole of the mining lease covered by M.L.No.2010. We also referred to various communications which emanated from the office of the Director of Mines and Geology confirming acceptance of surrender proposed by M/ C s. Dalmia which came to an end on 31.01.2002. In the light of the said voluminous correspondence between Mis. Dalmia end the Department of Mines and Geology of the State Government available on record the reference to file noting dated D 28.05.2001, by the Director of Mines and Geology, was only an additional supporting material to confirm the act of surrender effected by M/s. Dalmia and its final conclusions as recorded in the proceedings of the Director of Mines and Geology. We therefore do not find any support for the first respondent by referring to the above two decisions.

89Copy pinpoint89. Mr. Krishnan Venugopal, learned senior counsel further relied upon the decisions in Lila Gupta (supra) and Pankaj Mehra (supra) for the proposition that all acts in violation of the lease which do not provide for consequence of the breach would be void.

90Copy pinpoint90. In the decision reported in Lila Gupta (supra), the said principle has been set out in paragraph 10 and while stating so, this Court has explained as to how such a principle would vary when it comes to the question of affecting the public at large. In that case, it was stated so in paragraph 10 while dealing with the claim of a woman while ascertaining her status as the wife and it was in that context, the principle was stated. H This Court further in paragraph 11 explained as to how the

MUNEER ENTERPRISES v. RAMGAD MINERALS &MINING617 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

said principle cannot have universal application. A

91Copy pinpoint91. As far as the decision reported in Pankaj Mehra (supra) is concerned, the statement of law set out in paragraph 14 itself is clear in its term and states that the word 'void' has different nuances in different connotation and one of them is B to the effect that it should be construed as having no legal force or binding effect while in another circumstances, it should be construed as 'unable in law to support the purpose for which it was intended'. The relevant paragraph for our purpose reads as follows: C

"14 .............. The word 'void' in its strictest sense, means that which has no force and effect, is without legal efficacy, is incapable of being enforced by law, or has no legal or binding force, but frequently the word is used and construed as having the more liberal meaning of 'voidable.

The word 'void' is used in statutes in the sense of utterly void so as to be incapable of ratification. and also in the sense of voidable and resort must be had to the rules of construction in many cases to determine in which sense the Legislature intended to use it. An act or contract neither wrong in itself nor against public policy, which has been declared void by statute for the protection or benefit of a certain party, or class of parties, is voidable only" (underlining is ours)

92Copy pinpoint92. Therefore, if such a different connotation is followed for the expression 'void' and when we apply the said principle to the case on hand with particular reference to Rule 37(1A) we have explained in detail as to how the voidness of the leasehold right would result in by virtue of the serious violations committed by Mis. Dalmia while dealing with the mining lease H

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A in M.L.No.2010 while carrying out the first renewal in the year 1983 when the violation of Section 2 of the Forest Act, 1980 occurred and subsequently when Stage I ex post facto approval was granted on 24.12.1997 by imposing conditions which were flagrantly violated by Mis. Dalmia and thereby made the lease void ab initio.

93Copy pinpoint93. In the light of the above circumstances, pertaining to the case on hand, we do not find any scope to apply the above decisions relied upon by the learned senior counsel for the first respondent.

94Copy pinpoint94. It will be useful to refer to paragraphs 10 and 11 of the decision reported in Lila Gupta (supra) to highlight the distinctions stated above as to how those decisions can be of o no application to the facts of this case.

"(10) ........... .. the interdict of law is that it shall not be lawful for a certain party to do a certain thing which would mean that if that act is done it would be unlawful. But E whenever a statute prohibits a certain thing being done thereby making it unlawful without providing for consequence of the breach, it is not legitimate to say that such a thing when done is void because that would tantamount to saying that every unlawful act is void. F (11) Undoubtedlv. where a prohibition is enacted in public interest. its violation should not be treated lightly ... '.""' ...... " G (Emphasis added)

95Copy pinpoint95. Our above conclusion as regards the surrender effected by M/s. Dalmia answers question Nos.(i) to (iii) framed in paragraph 48. With that we come to the next question as to whether the act of surrender in order to become complete

MUNEER ENTERPRISES v. RAMGAD MINERA1-S & MINING619 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

should have been accepted by the State. It must be stated that acceptance by the State though not a statutory requirement, the provisions contained in the mining lease, in particular, Part VIII paragraphs 4 and 5 impliedly require such acceptance. While answering question Nos.(i) to (iii}, we have elaborately 'noted as to the manner in which Mis. Dalmia's proposal to determine the lease as initiated in its communication dated 27.3.2001 ultimately resulted in the surrender of the lease by acknowledging the sum of Rs.22,3321- towards final dues payable by it under the said lease. We have also held that the Director of Mines and Geology was the competent authority to receive a proposal for determination of lease by Mis. Dalmia. The subsequent correspondence exchanged between Mis. Dalmia and the Director of Mines and Geology also confirm that the proposal of Mis. Dalmia was considered and subsequent directions were issued for the purpose of accepting the surrender proposed and ultimately by acknowledging the payment of arrears and issuance of no due certificate the surrender was finally accepted on behalf of the State Government by the Director of Mines and Geology. E Therefore, while holding that acceptance of surrender is impliedly mandated under Rule 29 read along with paragraphs 4 and 5 of Part VIII of the mining lease, there was a factual acceptance on behalf of the State of Karnataka of the mining lease M.L. No.2010. F

96Copy pinpoint96. Reliance was placed upon the decision reported as Bhagwati Prasad Pawan Kumar v. Union of India - (2006) 5 SCC 311 wherein this Court held that the Courts must examine the evidence to find out whether in the facts and G circumstances of the case the conduct of the "offeree" was such as amounted to an unequivocal acceptance of the offer made. Paragraph No.19 is relevant for our purpose which reads as under: H "19. It is well settled that an offer may be accepted by

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A conduct. But conduct would only amount to acceptance if it is clear thet the offeree did the act with the intention (actual or apparent) of accepting the offer. The decisions which we have noticed above also proceed on this principle. Each case must rest on its own facts. The B courts must examine the evidence to find out whether in the facts and circumstances of the case the conduct of the "offeree" was such as amounted to an unequivocal acceptance of the offer made. If the facts of the case disclose that there was no reservation in siqnifvinq c acceptance by conduct. it must follow that the offer has been accepted by conduct. On the other hand, if the evidence disclose that the "offeree" had reservation in accepting the offer, his conduct may not amount to acceptance of the offer in terms of Section 8 of the D Contract Act." (underlining is ours)

97Copy pinpoint97. In the case on hand, we have considered various documents by way of correspondence exchanged between E M/s.Dalmia and the said authorities prior to 1999 and after 16.04.1999, ending witr 31.01.2002 to hold that there was an unequitable acceptance of the surrender offered by M/ s.Dalmia. Having regard to our said conclusions, it is no longer F open for anyone to contend that the surrender had not come into effect.

98Copy pinpoint98. Having answered the said question, when we come to the next question as to whether pursuant to tr.a 2ct ol surrender, delivery of possession was mandatory under Rule G 27 (2) (I) of the Mineral Concession Rules, it would be necessary to make a reference to the said Rule which reads as under:

"(/) The delivery of possession of lands and mines on the surrender expiration or determination of the lease;"

MU NEER ENTERPRISES v. RAMGAD MINERALS &MINING621 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J .]

99Copy pinpoint99. Under Rule 27, it is stated that every mining lease shall be subject to certain conditions. Sub-Rule (2) states that a mining lease may contain such other conditions as the State Government may deem necessary in regard to conditions (a) to (o). Under the said sub-Rule (2) in clause (1), it is provided that delivery of possession of lands and mines on the surrender, expiration or determination of lease. What is required under Rule (2) of Rule 27 was that a mining lease may contain many conditions including what is specified in Clause (I). The reference to Rule 27 (2)(1) was relied upon by learned counsel for the State. Except merely drawing our attention to the said sub-clause (I) of Rule 27 (2), we were not drawn to any of the clause contained in the mining lease in M.L. No.2010 to state that such a condition was specifically incorporated in the mining lease. It is not even the case of the first respondent or the 0 respondent State that such a condition for physical possession of the lands on surrender was specified in the mining lease.

100Copy pinpoint100. In such circumstances, we do not find any, need or necessity to delve deep into the said contention in order to find out whether or not such a condition should have been fulfilled by M/s. Dalmia or by the State Government for the purpose of surrender to come into effect. We, therefore, hold that insofar M.L. No.2010 was concerned, there being no specific provision as specified in Clause (I) of Rule 27 (2) there was no mandatory requirement of delivery of possession as stipulated therein.

101Copy pinpoint101. When we come to question Nos. (vi), (vii), (viii), (ix) and (x) the said questions would arise if at all the surrender had not taken place and thereby assuming the lease continued for non-compliance of the conditions imposed in the in principle stage-I approval in the order dated 24.12.1997, did the mining lease stood automatically expired on 24.11.2003. Question No.(vii) again pertains to the lease becoming void ab initio by H

622 SUPREME COURT REPORTS [2015] 6 S.C.R.

A virtue of contravention of Rules 29 and 37 of Mining Concession Rules read with Section 19 of the MMDRAct. The next question pertains to the prior approval for any mining lease to come into operation as stipulated in Section 2 of the Forest Act of 1980. In fact, the said question was required to be considered in the light of the contention raised on behalf of the appellants that ex post facto approval is not provided for under the Forest Act of 1980 and that such a course was adopted only by this Court in Godavarman I and II as a one time measure. Whereas on behalf of the first respondent, it was contended that there was a clear distinction as regards the grant of mining lease on the one hand under the provisions of MMDR Act and the Mining Concession Rules and the requirement of approval under Section 2 of the Forest Act 1980 and the one does not overlap the other. In the first instance, in 0 support of the said stand made on behalf of the first respondent, reliance was placed upon amended Forest Conservation Rules, in particular Rules 6, 7 and 8 and state that non- compliance of Section 2 of the Forest Act will not ipso facto make the lease void ab initio. The consideration of the said questions would become relevant for the purpose of considering the subsequent claim of Mis. Dalmia as well as the first respondent that mining lease M.L. No.2010 stood transferred by Mis. Dalmia in favour of the first respondent pursuant to the application of transfer dated 4.2.2002 made by Mis. Dalmia and the order dated 16.3.2002 of the State Government by which such a transfer of lease ofM.L. No. 2010 was granted in favour of the first respondent.

102Copy pinpoint102. When we consider question Nos.(vi), (vii), (viii), (ix) and (x) as far as question No.(vi) is concerned, we have found that when during the operation of the first renewal viz., between 25.11.1983 and 24.11.2003, there was a statutory violation in as much as the mandatory requirement of approval under H Section 2 of the Forest Act, 1980was not secured on the date

MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING623 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

when the first renewal was granted viz., 07.06.1986. However, A fortunately for M/s.Dalmia, Godavarman I and Godavarman II judgments of this Court came for its rescue by way of a general direction while all mining operations were directed to be stopped in Godavarman I, subsequently in Godavarman II direction was issued to the Central Government to consider ex post facto approval under Section 2 of the Act as a one time measure. Pursuant to the said direction, in the case of M/s.Dalmia, an order came to be passed on 24.12.1997, granting in-principle first stage approval by inwosing three conditions. The said order further directed that while granting in-principle first stage approval, to enable Mis. Dalmia to carry on its mining operations, the requirement of fulfillment of three conditions were mandated to be complied within a period of five years from the date of the said order i.e. on or before D 24.12.2002. Admittedly, M/s.Dalmia did not comply with those conditions. The stand of M/s.Dalmia was that as on that date it was in possession of only 134.⁹² hectares and that even in respect of those areas since it was carrying on mining operations with the permission of the Forest Department of E the State Government, no further compliance was required.

103Copy pinpoint103. As far as the surrender of land and afforestation compensation was concerned, M/s. Dalmia took a categorical stand that it was not liable to comply with those directions. F Therefore, the outcome of such a stand taken on by M/s.Dalmia was to the effect that in-principle stage I approval granted by MOEF was not carried out. Of course, Mr.Krishnan Venugopal, learned senior counsel in his submissions contended that having regard to the subsequent amendment of the Forest G (Conservation) Rules in particular Rules 6, 7 and 8 and also a communication of the MOEF dated 14.9.2001, the non- compliance of the conditions will not have any impact on the validity of the lease as the amended Rules and the communication of the MOEF made it clear that the compliance H

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A of such conditions imposed can always be carried out even after the expiry of the initial period of five years and the MOEF came forward to give extension of time for compliance of whatever conditions which were imposed at the time of grant of the first renewal to enable the lessee to continue to retain its mining lease and thereby seek for further renewal.

104Copy pinpoint104. It is true that a reference to the amended Rules 6, 7 and 8 as well as the earlier communication of MOEF did to some extent support the stand of the learned senior counsel for the first respondent. However, persuasive such a contention may be as raised on behalf of the first respondent, we find it extremely difficult to accept such a contention. As rightly pointed out by Mr.Kapil Sibal, learned senior counsel when we construe Rules 29 and 37(1A) read along with Section 19 D of the MMDRAct, de hors any liberal approach offered by the authorities of MOEF under the provisions of the Forest Act, such relaxation in the matter of compliance of conditions of prior approval would always be subject to the mining lease granted under the provisions of MMDR Act and the Mineral E Concession Rules is in a live stage. In other words, unless the mining lease granted under the provisions of the MMDR Act read along with the provisions contained in the Mineral Concession Rules continue to remain valid and operative, the F question of compliance of the conditions for prior approval under Section 2 of the Forest Act even with whatever relaxation granted by the authorities under the said Act will be of no use. In this context, when we apply Section 19 of the MMDRAct. Section 19 of the MMDRAct reads as follows: G "19. Prospecting licences and mining leases to be void if in contravention ofAct:- Any reconnaissance permit, prospecting licence or mining lease granted, renewed or acquired in contravention of the provisions of this Act or any rules or orders made thereunder shall H

MU NEER ENTERPRISES v. RAMGAD MINERALS &MINING625 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

be void and of no effect. A

Explanation:- Where a person has acquired more than one reconnaissance permit, prospecting licence or mining lease and the aggregate area covered by such permits, licences or leases, as the case may be, B exceeds the maximum area permissible under section 6, only that reconnaissance permit, prospecting licence or mining lease the acquisition of which has resulted in such maximum area being exceeded shall be deemed to be void." C

105Copy pinpoint105. Thus, Section 19 makes the position clear that any mining lease granted originally or renewed subsequently in contravention of the provisions of the MMDRAct or any Rules or any Order made thereunder to be void and of no effect. The D expression used in Section 19 is mandatory and therefore if any contravention of the provisions of MMDR Act or Rules or Orders found in respect of a mining lease originally granted or subsequently renewed such mining lease should be treated to be void and inoperative for operating the said mining lease. It E must also be kept in mind that carrying on any non-forest activity in a Forest Land can only be with the prior approval of the Central Government under Section 2 of the Forest Act of

1980. Therefore, for a mining lease to remain valid, twin requirements of the approval of the Central Government under the proviso to Section 5(1) of MMDRAct and Section 2 of the Forest Act of 1980 have to be fulfilled. Therefore, a lessee cannot be heard to contend that such statutory requirements are to be thrown overboard and permitted to seek for such approvals after the expiry of the lease at its own sweet will and pleasure and the time to be fixed on its own and that the operation of the mining lease should be allowed ignoring such mandatory prescription.

106Copy pinpoint106. Keeping the above said mandatory prescription in H

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A Section 19 in mind, when we analysis the case on hand, in the first place, admittedly after the first renewal, there was a serious violation of failure to get the prior approval under Section 2 of the ForestAct, 1980 i.e. when the renewal order was passed on 07.03.1986. Therefore, if we strictly apply Section 19, it must be stated that even as on 07.03.1986, for violation of Section 2 of the Forest Act, 1980 it must be stated that, in law, there was no mining lease at all in existence as it became void on the expiry of the initial period of the original lease granted in 1953. It may be contended that such violation get cured by virtue of the judgments in Godavarman I and Godavarman II, though for argument sake, such a contention putforth on behalf of M/s.Dalmia and the first respondent can be taken to be available, as pointed out by us earlier, based on the said judgments of this Court when the in-principle first 0 stage approval was granted by imposing conditions in the order dated 24.12.1997, such conditions were blatantly violated by M/s.Dalmia by taking a stand that it was not bound to comply with those conditions. The reply of M/s.Dalmia dated E 16.04.1999, was sufficient to confirm the said stand of M/ s.Dalmia. Therefore, as on 16.04.1999, since the lessee viz., M/s.Dalmia refused to comply with the conditions imposed in the in-principle first stage approval, it cannot lie in the mouth of either M/s.Dalmia or anyone who seek to claim any right F through M/s.Dalmia by contending that any violation of Section 19 of MM DR Act or any of the Rules of Mineral (Concession) Rules or orders made therein or Section 2 of the Forest Act of 1980 should be ignored and the plea made on behalf of M/ s.Dalmia as well as the first respondent should be accepted. G

107Copy pinpoint107. We are unable to accept such an extreme proposition canvassed on behalf of M/s.Dalmia and the first respondent, as in our considered opinion, the violation had occurred at the time of the order of first renewal viz., 07.03.1986 itself, striking at the very root of the validity of the lease, as it must be held

MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING627 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

that it was void at that very stage itself for non-compliance of the prior approval under Section 2 of the Forest Act, 1980 and in any case, O(l the blatant refusal to comply with the conditions imposed in the in-principle first stage approval granted in the year 24.12.1997. Once we are able to come to the said conclusion, we hold that the mining lease which was held by B M/s.Dalmia in M.L.No.2010 became void and inoperative for violation of the mandatory requirements of the conditions. In this context, it will also be relevant to refer to Rule 37(1A). The said Rule reads as under: c "Rule 37(1A): The State Government shall not give its consent to transfer of mining lease unless the transferee has accepted all the conditions and liabilities which the transferor was having in respect of such mining lease." D

A reading of the said sub-Rule which was introduced by GS.R. 724(E), dated 27.09.1994, a substantive condition is imposed while considering an application for consent for transfer of mining lease. E

108Copy pinpoint108. In the first blush it may appear that what all required is the acceptance by the transferee to comply with all the conditions and liabilities which the transferor was obliged to fulfill in respect of the mining lease. But on a deeper scrutiny of the said Rule, it will have to be stated that if there was a total violation of mandatory statutory conditions under the MMDR Act and by virtue of the requirements in this case of the fulfillment of Section 2 of the Forest Act, 1980 as well as the proviso to Section 5 of the MMDR Act, the question of considering the very application for consent to transfer should be held to be not available at all. As we have held in the earlier part of this order that M/s.Dalmia committed serious violation in regard to the compliance of Section 2 of the Forest Act, 1980 at the time of first renewal in the year 1983/86 itself and H

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A in any event, by refusing to comply with the conditions imposed in the order dated 24.12.1997, the said violation would strike at the very root of the claim for transfer of the dead lease as stipulated ih Section 19 of the MM DR Act. Therefore, on this ground as well, it must be held that there was no scope at all for the State Government to consider the application made by M/s.Dalmia for transferring of its mining lease in favour of the first respondent. When we go little further and examine Rule 29, as we have held that M/s.Dalmia had surrendered its mining lease M.L.No.2010 once and for all, based on its proposal made on 27.03.2001 and accepted by the Director of Mines and Geology on behalf of the State Government which became conclusive as on 31.01.2002, there was no live lease for the purpose of considering any application for transfer under Rule D 37 of the Mineral (Concession) Rules. When that be the legal consequence in respect of the lease, which was void and inoperative, it must be held that there was no scope for holding that there was a valid transfer made by M/s.Dalmia in favour of the first respondent on 16.03.2002.

109Copy pinpoint109. We find that the reliance placed upon by Dr. Singhvi, learned senior counsel on the decisions of this Court needs to be mentioned, which fully supports his submissions. He placed reliance upon the decision reported in A. Chowgule (supra) F for the proposition that the requirement of approval under Section 2 of the Forest Act has got greater significance and that non-compliance of the said provision would result in serious consequences. In the said decision, this Court while referring to Rules 4, 6, 2A and 5 read along with Section 2 of G the Forest Act held that prior approval cannot be granted unless the procedure prescribed in the said Rules were duly complied with and that such approval under Section 2 is sine qua non for the State Government and the other authorities before taking any steps in respect of the Forest land. The relevant paragraph H No.18 of the said decision reads as under:

MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING629 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.)

"18 ............... A bare perusal of the aforesaid A provisions would show that prior approval is reauired for the diversion of anv forest land and its use for some other purpose. This is further fortified by a look at Rule 4 which provides that every State Government or other authority seeking prior approval under Section 2 of the B Act shall submit a proposal to the Central Government in the prescribed form and Rule 6 stipulates that the proposals would be examined by a committee appointed under Rule 2-A within the parameters and guidelines postulated in Rule 5 ............................. " C (Underlining is ours)

110Copy pinpoint110. Similar view has been expressed in the decision reported in Nature Lovers Movement (supra). Paragraph D Nos. 47 and 48 are relevant for our purpose which read as under:

"47. The ratio of the above noted judgments is that the 1980 Act is applicable to all forests irrespective of the ownership or classification thereof and after 25. 10. 1980, E i.e., date of enforcement of the 1980 Act, no State Government or other authority can pass an order or give a direction for de-reservation of reserved forest or any portion thereof or permit use of any forest land or any F portion thereoffor any non-forest purpose or grant any lease, etc. in respect of forestland to any private person or any authority, corporation, agency or organization which is not owned, managed or controlled by the Government. G

48. Another principle which emerges from these judgments is that even if any forest land or any portion thereof has been used for non-forest purpose, like undertaking of mining activity for a particular length of time, prior to the H

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A enforcement of the 1980 Act, the tenure of such activity cannot be extended by way of renewal of lease or otherwise after 25.10.1980 with'out obtaining prior approval of the Central Government."

111Copy pinpoint111. It is relevant to note that to the same effect is the decision reported in Rural Litigation and Entitlement Kendra vs. State of U.P. -1989 Supl. (1) SCC 504.

112Copy pinpoint112. Mr. Sibal, learned senior counsel then relied upon c the decision reported in Ambica Quarry Works (supra) to repel the submission made on behalf of the first respondent that the non-grant of approval under Section 2 of the Forest Act, 1980 will be of no consequence as the continued existence of the lease which was granted prior to coming into force of o the Forest Act, 1980 and it came to be renewed in the year 1983 after the ForestAct came into force. In the said decision in paragraph 15 is relevant which reads as under:

"15. The rules dealt with a situation prior to the coming into operation of 1980 Act. '1980 Act' was an Act in recognition of the awareness that deforestation and ecological imbalances as a result of deforestation have become social menaces and further deforestation and ecological imbalances should be prevented. That was the primary purpose writ large in the Act of 1980. Therefore the concept that power coupled with the duty enjoined upon the respondents to renew the lease stands eroded by the mandate of the legislation as manifest in 1980 Act in the facts and circumstances of these cases. The primarv dutv was to the communitv and that duty took precedence. in our opinion. in these cases. The obligation to the society must predominate over the obligation to the individuals. "

H (underlining is ours)

MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING631 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

Consequently, the question Nos.vi, vii, viii, ix and x are answered to the said effect.

113Copy pinpoint113. With that when we come to the next question No.(xi), namely, the requirement of Central Government under Section 5 of MM DR Act for grant of approval which was again stipulated in Section 2 of the Forest Act and whether compliance of the said provision are mandatory for a mining lease to remain valid. Similarly, question No.(xii) whether Section 10 (1) and the second proviso to Section 11 of the MMDR Act as well as Rules 37 and 59 of Mineral Concession Rules mandate to the effect that any transfer applied for under Rule 37 (1 )(a) cannot be automatically granted. That question would arise only if the lease hold right of M/s. Dalmia under M.L. No.2010 was available with it for the purpose of effecting any transfer. Inasmuch as we have held that the said lease was duly surrendered by M/s. Dalmia and accepted by the State Government, we do not find any necessity to examine those questions and we leave it open for consideration as and when any need arises for deciding those questions. E

114Copy pinpoint114. As far as the question Nos.(xiii) and (xiv) are concerned, as to whether the order of transfer dated 16.3.2002 was bona fide taking into account the sequence of events and whether the transfer of lease dated 16.3.2002 can be held to be valid, we wish to recapitulate the various sequence of F events as from 16.4.1999 till 30.1.2002 pertaining to the surrender of lease made by Mis. Dalmia. Since we have extensively dealt with the said issue in the earlier part of our order, we merely state that our conclusion as regards the coming into force of the surrender made on behalf of the M/s. G Dalmia and its acceptance by the State Government from 31.01.2002 would be sufficient to hold that there was total lack of bona fides on the part of the State government in taking a sudden U-turn for passing the order of transfer dated 16.3.2002 H

632 SUPREME COURT REPORTS [2015) 6 S.C.R.

A in favour of the first respondent. In this context, as rightly contended on behalf of the appellant, the conduct of the Director of Mines and Geology, one Dr. Reddy who dealt with the applications made by one M.S.P.L. Ltd. through its Executive Director Mr. Rahul Baldota on 21.7.2001 and another applicant with reference to which Dr. Reddy made an endorsement in the office note dated 25.8.2001 which stated thatthe land covered by M.L. No.2010 was surrendered by M/ s. Dalmia, that certain other applications were also received for grant of lease in respect of those lands apart from M. S. P. L. Ltd. and that there was no scope to consider any of those applications since in respect of surrendered land Rule 59(1) of Mineral Concession Rules would automatically come into play and any future grant of lease can only be done as specified under the said Rule. When such a clear stand was spelt out by the said officer, namely, Dr. Reddy while making the endorsement on 25.8.2001, we fail to see any justifiable reason as to how the very same officer in his capacity as Director of Mines and Geology could be a signatory to its recommendation dated 6.2.2002 for effecting the transfer and based on his recommendation the State Government allowed the application fortransferofM.L. No. 2010.

115Copy pinpoint115. Reliance was placed upon the decision reported in F Bangalore Development Authority (supra), certain facts noted in that judgment in paragraph 15 and based on such facts the order passed by the learned Single Judge and reversal of the order of the learned Single Judge by the Division Bench which was found to be correct have been stated in G paragraphs 15 and 18 which are relevant for our purpose and the said paragraph reads as under: "15. We are of the view that the above principles when applied to the case on hand, it can be safely concluded that the order of the learned Single Judge in the light of H

MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING633 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

the peculiar facts noted therein cannot be faulted. We A also wonder as to why the Hon'ble Minister concerned should have taken upon himself the extraordinary effort of making an inspection for which no special reasons were adduced in the report. That apart none of the reasons which weighed in the report of the Hon'ble B Minister reflected the true facts. The conclusion of the Hon'ble Minister that the possession continued to remain with the owner was contrary to what was found on records. The Mahazar dated 09. 12. 1983 as noted by learned Single Judge from the original file reveal c that the conclusion of the Hon'ble Minister was ex facie illegal and untrue. The said conclusion obviously appeared to have been made with some ulterior motive and pumose and with a view to show some undue favour to the first respondent herein. The acquisition became final and conclusive as far back as on 15. 7.1971 when Section 6 declaration came to be issued. At no point of time was there any challenge to either preliminary notification dated 21. 9. 1967 or the final declaration notified on 15. 7.1971. Even the award dated 21.11.1983 approved on 29.11.1983 was not the subject matter of challenge in any proceedings.

16. xxx xxx xxx F

17. xxx xxx xxx

18. In our considered opinion. the Division Bench failed to take note of the above gross illegality committed by the Hon'ble Minister while directing the issuance of the G de-notification dated 05. 10. 1999 in spite of the factthat possession had already been handed over to the State as early as on 09. 12. 1983 and that the decree of the Civil Court did not in any way create any fetters on the authorities concerned to take steps for possession by H

634 SUPREME COURT REPORTS [2015] 6 S.C.R.

A resorting to appropriate legal means. At the risk of repetition, it will have to be stated that the Civil Court decree to that effect was dated 15. 12. 1981 and that the possession was taken by taking necessary steps under the provisions of the Land Acquisition Act under the B Mahazar dated 09. 12. 1983 which was never challenged by any party much less the first respondent herein. The Division Bench unfortunately completely omitted to take note of the relevant facts while interfenilg with the order of the learned Single Judge. The appeals, therefore, c stand allowed. The order of the Division Benr;h is set aside and the order of the learned Single Judge dated 26.8.2002 passed in Vijaya Leasing Ltd. v. State of Karnataka stands restored by this common judgment."

D (underlining is ours)

116Copy pinpoint116. The above judgment throws some light as to how certain excess role played on behalf of the State without any justifiable reasons were brought to the notice of the Court, the E Court should not hesitate to set aside such orders in the interest of Rule of Law. When we compare the facts set out in paragraph 15 of the said judgment, when we refer to the facts dealt with by us in this case, we have noted as to how after surrender made by M/s.Dalmia had become conclusive as on F 31.01.2002, on behalf of the State Government the very same officer who held the post of Director of Mines an'd Geology as on 25.08.2001 came forward to recommend for the transfer applied for by M/s.Dalmia on 04.02.2002, in the recommendation order dated 06.02.2002 and by simply G glossing over the gross violations of the Forest Act, 1980, the order came to be passed on 16.03.2002 approving of the transfer applied for by M/s.Dalmia in favour of the first respondent. In the said circumstances, the order of the learned Single Judge in setting aside the said order dated 16.03.2002, H was perfectly justified and the interference with the same by

MUNEER ENTERPRISES v. RAMGAD MINERALS & MINING635 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

the Division Bench by the order impugned is required to be set aside, in view of the various incongruities which were prevalent in the case on hand.

117Copy pinpoint117. We are, therefore, convinced that when once M.L. No.201.0 had come to an end by virtue of the surrender effected by M/s. Dalmia and accepted by the State Government, there was no legal right or power with the State Government or any authority acting on behalf of the State Government to consider the very application for transfer made at the instance of Mis. Dalmia on 4.2.2002 and for passing the order of transfer dated C 16.3.2002. It can only be stated that such a decision taken and passed in the order dated 16.3.2002 was in total violation of the provisions of the MMDRAct and the Mineral Concession Rules. It will have to be stated that once surrender of M.L. No.201 O had come into effect the only other course open to D the State Government was to invoke Rule 59 by throwing open those lands by way of public auction in order to get the maximum revenue by granting any lease hold rights. Here again, it must be stated that apart from the act of surrender made by M/ s.Dalmia which became final and conclusive due to non- E compliance of the conditions imposed in the in-principle Stage I clearance dated 24.12.1997, fy'l/s.Dalmia lost its right to retain the lease and the consequence of it rendered the lease itself void as per Rule 37(1A) and on this ground as well, there was no scope for the State Government or any other Authority acting on its behalf to have considered the transfer application of M/ s.Dalmia with reference to a lease which ceased to exist as from 31.01.2002 due to the act of surrender and in any case from 24.12.2002 when the 5 year period to comply with the conditions imposed in the order dated 24.12.1997 expired.

118Copy pinpoint118. In this context, it will be more relevant to state that mines and mineral being national wealth, dealing with the same as the largesse of the State by way of grant of lease or in the H

636 SUPREME COURT REPORTS [2015] 6 S.C.R.

A form of any other right in favour of any party can only be resorted to strictly in accordance with the provisions governing disposal of such largesse and could not have been resorted to as has been done by the State Government and the Director of Mines and Geology of the State of Karnataka by passing the order of transfer dated 16.3.2002. Such a conductoftheStateand its authorities are highly condemnable and, therefore, calls for stringent action against them.

119Copy pinpoint119. In the light of our above answers to the various questions posed for consideration, we hold that the subsequent stage-I in-principle approval dated 13.09.2006 and the final approval dated 09.09.2010 based on the acceptance of the transfer of lease in the order dated 16.03.2002 cannot survive and the same are set aside. As we have set aside the stage-I in-principle approval dated 13.09.2006 and the final approval dated 09.09.2010 which were not allowed to operate, we observe that whatever statutory payments made in compliance of the said orders are refundable to the party who made the payments. We, however, make it clear that the payments made in pursuance of the in-principle stage-I approval or final approval of the first renewal granted ex post facto, covering the period from 1983 to 2003 shall not be refundable. Further, as serious allegations were raised by M/ F s. Dalmia when the lease was in force that there were encroachments into the lands held by it, at the instance of the first respondent, we direct the Mining as well as Forest Authorities to ensure that the entire extent of 331.44 hectares of land covered by M.L. No.2010 is surveyed, demarcated and G its physical possession by the State/Forest Authorities be ensured by removing whatever encroachments, if any, exist in the said land. We also direct that in order to ensure that no further encroachments take place into the said land, necessary steps as required under Rule 59 of Mineral Concession Rules H are taken for leasing out the lands in accordance with law and

MU NEER ENTERPRISES v. RAMGAD MINERALS & MINING637 LTD. [FAKKIR MOHAMED IBRAHIM KALIFULLA, J.]

by following the required statutory procedure. The appeal is A allowed and the order of the Division Bench is set aside with the above directions. No costs. Devika Gujral Appeal allowed.