ASHOK KUMAR LINGALA Vs STATE OF KARNATAKA .
Bench: CYRIAC JOSEPH,T.S. THAKUR
Case number: C.A. No.-008819-008819 / 2011
Diary number: 39179 / 2010
Advocates: PRACHI BAJPAI Vs
A. VENAYAGAM BALAN
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICITION
CIVIL APPEAL NO. 8819 OF 2011 (Arising out of SLP (C) No.35213 of 2010)
Ashok Kumar Lingala …Appellant
Versus
State of Karnataka & Ors. …Respondents
With
CIVIL APPEAL NO. 8820 OF 2011 (Arising out of SLP (C) No. 200 of 2011)
L.V. Ashok Kumar Lingala …Appellant
Versus
M/s. Sandur Maganese & Iron Ore Co. Ltd. & Ors. …Respondents
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. These appeals arise out of an order dated 1st
September, 2010 passed by the High Court of Karnataka -
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whereby Writ Petition No.17281 of 2010 filed by the
appellant has been disposed of with the direction that the
question of identity of the area forming the subject matter
of the mining leases granted to the appellant on the one
hand and respondent M/s Sandur Manganese & Iron Ore
Company Ltd. (‘SIMORE’ for short) on the other, shall be
determined by the Civil Court in the suit pending before it
on the basis of the evidence that the parties may choose to
lead. The High Court has further held that in case the Civil
Court comes to the conclusion that the area over which the
mining leases have been granted to the rival parties does
not overlap then both of them would be entitled to carry
out their mining activities under their respective lease
agreements. In case, however, the Civil Court is of the
opinion that there is an overlapping of the area covered by
the two leases, the lessee who claims under the lease
granted earlier in point of time would have a superior right
to carry out the mining activities in preference to the one
granted later. The facts in brief are as under:
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3. Land measuring 4.42 hectares situated at village
Devagiri, Sandur Taluk, Bellary District falling under
Surveys No. 56/P, 57/P, 58/P and 91/P was according to the
appellant dedicated to Kumaraswamy Devaru Temple. The
entire extent of land which now falls in new Survey No.27
was given to one-Pennaiah S/o Dodda Pennaiah for
cultivation in lieu of the services which he was rendering to
the temple. With the enactment of the Karnataka (Sandur
Area) Inam Abolition Act, 1976 abolishing all rights in inam
lands and permitting the cultivators and tenants of the land
to make applications under Section 10 of the Act for re-
grant and registration, the cultivator-Pennaiah also made
an application to the Land Tribunal, Sandur Taluk, Bellary
District seeking a re-grant. The said application eventually
culminated in the Tribunal passing an order dated 22nd
October, 1981 granting occupancy rights in favour of the
tenant, pursuant whereto the Tehsildar issued a registration
certificate registering his occupancy rights and entering his
name in the record of rights.
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4. The appellant’s further case is that Pennaiah continued
to cultivate the land personally especially when neither the
order of re-grant was challenged before the Land Tribunal
nor his cultivation objected to by anyone including the 3rd
respondent who held a lease in respect of Government and
forest land situate in Sandur Area. The appellant asserts
that the land aforementioned is a piece of private patta
land that was held by Pennaiah during his life time and by
his widow Yellamma after his death. Neither Pennaiah nor
Yellamma had in their capacity as Pattadars in cultivating
possession of the land ever offered the property to SIMORE
or granted any right or any other interest in its favour. On
the contrary Yellamma in her capacity as Pattadar had
permitted the appellant to obtain a mining lease under the
provisions of Minor Mineral (Development and Regulation)
Act, read with Mineral Concessions Rules, 1960 which
application was sent to the Deputy Commissioner, Bellary
District, to verify the status of the land and also to the
Deputy Director of Mining and Geology for conducting an
actual spot inspection. Both the authorities had, according
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to the appellant, submitted their respective reports in which
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the said property was found to be private Patta land. They
had, therefore, offered no objection to the grant of a mining
lease qua the same.
5. It was on the basis of the reports aforementioned that
the State Government had sought the approval of the
Central Government for the grant of a mining lease in
favour of the appellant which approval was upon due and
proper consideration granted by the Central Government.
The State Government had pursuant thereto issued a
Notification dated 15.1.2010 sanctioning a mining lease
over an area of 4.42 hectares situate in Devagiri Village
Sandur Taluk Bellary Distt., as per the sketch furnished by
the Director Department of Mines and Geology. Boundaries
of the area in question were fixed for an extent of 3.36
hectares in terms of letter dated 2.2.2010 issued by the
Deputy Director Mines and Geology, Hospet and a lease
deed executed and registered with the Sub-Registrar under
ML No.2622.
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6. The appellant’s case is that when he started the
mining activities in exercise of his right under the lease -
aforementioned, the Director of Mines and Geology,
Government of Karnataka issued a communication dated 5th
March, 2010 by which the appellant was restrained from
conducting any such activities on the ground that the area
covered by the lease granted to the appellant overlapped
the area stated to have been granted to the SIMORE
respondent no.3 herein. On receipt of the said letter the
appellant filed an application to the Director of Mines and
Geology objecting to the order and pointing out that the
same had been passed without issuing to the appellant any
notice or granting to him any opportunity of being heard in
the matter. The appellant also represented to the State
Government against the direction issued by the Director of
Mines and Geology and asserted that even when 3rd
respondent SIMORE had filed a Civil Suit in the Court of
Civil Judge (Senior Division) Kudligi and prayed for an
injunction no such injunction had been issued by the said
Court. The Director of Mines was not, therefore, justified in
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issuing an injunction which the Civil Court had not issued;
on the very same factual matrix. The restraint order issued
by the Director of Mines and Geology continued to remain
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in force despite the objections raised by the appellant. As a
matter of fact, the Director of Mines wrote a letter dated
25.5.2010 to the appellant saying that order dated
5.3.2010 stopping mining operations could not be vacated
or modified. The appellant was in that backdrop forced to
approach the High Court of Karnataka at Bangalore in Writ
Petition No.17281 of 2010 challenging the said
order/communication on several grounds and praying for a
direction to the respondent to refrain from interfering with
the mining activities of the appellant which the lease deed
authorised him to carry out. Respondent no.3, SIMORE filed
Writ Petition No.18043 of 2010 challenging the very grant
of the mining lease in favour of the appellant. The said two
writ petitions were finally disposed of by the High Court in
terms of a common order dated 1st September, 2010
impugned in the present appeals.
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7. Relying upon the orders passed by the Director,
Department of Mines and Geology dated 5th March, 2010
and 25th May, 2010, the High Court concluded that there
was overlapping of areas held by the appellant and SIMORE
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under their respective lease deeds. The High Court held
that the appellant had not been in a position to produce any
evidence to show that the conclusion drawn by the Director
of Mines regarding overlapping of the areas was erroneous.
The High Court observed:
“We permitted learned counsel for Ashok Kumar Lingala to examine the same. Even therefrom, learned counsel representing Ashok Kumar Lingala could not repudiate the finding of fact recorded in the two impugned orders.
xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx
15. From the two orders issued by the Director, Department of Mines & Geology dated 05.03.2010 and 25.05.2010, we have no other alternative or hesitation but to conclude, that ‘M/s Simore’ had been granted a mining lease, in respect of the same land, well before Ashok Kumar Lingala was awarded the mining lease. That being so, the claim of Ashok Kumar Lingala could not have been considered for grant of a mining lease over the area which comprised of part of the mining lease already granted to ‘M/s Simore’, as the application of Ashok Kumar Lingala was bound to be treated as a premature application. This inference is inevitable from a collective reading of rules 59 and 60 of the Mineral Rules, and Section 24A of the Mines and Minerals Act.”
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(underlined)
8. Having held that there was an overlapping of the areas
covered by the two leases, the High Court interpreted the
rules to record a finding that even when the area leased to
SIMORE may include private land owned by Smt. Yallamma
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and even when Yallamma has not granted any surface
rights to it, SIMORE could undertake mining activity in the
private area by paying compensation to Yallamma before
undertaking such activities. The High Court observed:
“On the issue whether ‘M/s Simore’ could carry out mining activities over the land owned by the private owner Smt. Yallamma, the provisions relied upon by the learned counsel representing ‘M/s Simore’ leave no room for any doubt, that in case mining activity is carried out by ‘M/s Simore’ over private land, compensation will have to be paid by ‘M/s Simore’ to the private land owner under rule 72 of the Mineral Rules. But the submission of this learned counsel representing Ashok Kumar Lingala, also leave no room for any doubt, that ‘M/s Simore’, in spite of the grant of a mining lease covering private owned land, would not be in a position to unilaterally and arbitrarily conduct mining activities thereon without the consent/permission of the land owner Smt. Yallamma. The instant conclusion is based on the second proviso under rule 22(3) (i) (h) of the Mining Rules which mandates, that unless permission/authorization is granted by the land owner, mining activity cannot be carried out. Even if it is assumed, that prior consent of the land owner was not obtained by ‘M/s Simore’ before
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obtaining the lease deed from the State Government, still the second proviso under rule 22(3) (i)(h) of the Mining Rules extracted above, mandates that, prior to entering into private owned land for mining activities, permission from the land owner is a necessary pre- requisite.”
9. What followed the above two findings, one touching
the question of overlapping of the lease areas and the other
dealing with the effect of the overlapping qua privately
owned land, is interesting. The High Court took a -
somersault and held that the question of overlapping could
not be decided by it authoritatively and left the same must
be decided by the Civil Court on the basis of evidence
adduced before it. It observed:
“Thus viewed, it is not possible for us to record any concrete finding on the factual aspect of the matter. We have noticed hereinabove, that a civil suit is pending between the parties. It will be open to the rival parties to lead evidence therein, if they are so advised, to determine the specific identity of the property over which mining leases have been granted to them. In case such evidence leads to the conclusion, that the land over which mining leases have been granted to the rival parties, do not overlap, then both of them would be entitled to carry out mining activities, under the lease agreements executed by the State Government in their favour. In case the factual finding is to the contrary, then on account of the conclusions drawn hereinabove, the earlier licensee will have to be granted the superior right to exclusively carry out mining activities. As such, ‘M/s Simore’ shall have a preferential right over Ashok Kumar Lingala. In such an
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eventuality, no interference will be called for with the impugned orders dated 05.03.2010 and 25.05.2010.”
10. Appearing for the appellant Mr. Dushyant A. Dave,
learned senior counsel strenuously argued that the High
Court had totally misdirected itself both on facts and in law.
He submitted that the High Court had failed to notice that
the lease granted in favour of respondent no.3 SIMORE was
in respect of government and forest land alone. No part of
any private land covered the lease in its favour nor was any
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claim to that effect ever made by respondent no.3 SIMORE.
In support of that submission learned counsel drew our
attention to the application filed before the Government of
Karnataka by respondent no.3 SIMORE seeking renewal of
the lease in the year, 1992. In particular, he relied upon the
answers given by SIMORE to the queries made in paras viii
(a), x-A(a) and (b) of the renewal application to argue that
respondent No.3 SIMORE had unequivocally stated that the
lease sought to be renewed in its favour comprised
government land and no part of it was owned or occupied
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by any private party. Paras viii (a), x-A(a) and (b) of the
renewal application are as under:
viii
a)
Particular of the mining lease of which renewal is desired
ML No. 1179
Area: 16.74 sq. miles
In Sandur Taluk of Bellary District
Karnataka
x-A
a)
Does the applicant continue to have surface rights over the area of the land for which he requires renewal of the mining lease.
Yes (Government land).
b) If not, has he obtained the consent of the owner and occupier for undertaking mining operations. If so, the consent of the owner and occupier of the land obtained in writing, be filed.
Not applicable
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11. He also drew our attention to the report of inspection
dated 22nd February, 1993 submitted by Government of
Karnataka, a copy whereof has been placed on record which
too clearly mentioned that the area covered by the lease
sought to be renewed was forest and government land. He
particularly drew our attention to the following passage in
the said report:
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“The present application for renewal is for third renewal. The whole area of 16.74 sq. miles is bounded on the North by Sandur State Forest on the South by Hospet Taluk on the East by Nauluti forest and on the West by Kudligi Taluk. Area is Government and it is forest land also.”
12. Mr. Dave next drew our attention to the plaint filed by
respondent no.3 SIMORE in OS No.9/2010 to buttress his
submission that respondent no.3 SIMORE had not claimed
any private land to be a part of its mining lease area.
Reference in this regard was particularly made to para 11 of
the plaint which is to the following effect:
“11. Further, the Plaintiff hereby submits that the Plaintiff is in physical possession and enjoyment of the Schedule land for more than five decades. The Schedule land is an un- surveyed land and accordingly the NOC issued by the Deputy Commissioner, Bellary on 31.03.1998 refers to the same as blocks and confirms that the same is a Revenue -
Land (Government Land). The claim of the Defendant that he has obtained Mining Lease over an area of 3.36 ha under survey No.27 appears to be dubious or it may be pertaining to some other land. In addition to this, the Plaintiff has paid Rs.104 crore towards Net Present Value Compensatory Afforestation charges on the 1615.64 of forest land and Rs.2,07,79,920/- towards Environmental Protection Fee on the 247.38 ha of Revenue land held by it under Mining Lease Nos. 2580 (Old No.1179).”
13. Mr. Dave vehemently argued that inasmuch as the
High Court had overlooked the material on record it had
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fallen in a palpable error in assuming that the land leased
to the appellant could possibly overlap the area leased to
respondent no.3 M/s SIMORE. So long as the two lessees
were claiming surface rights over their respective lease
areas under different owners the question of overlapping
did not arise argued the learned counsel. At any rate the
area leased to the appellant was not only verified as to its
nature and ownership but was spot inspected and
demarcated, which fact was evidenced from the reports
placed on record. It was, therefore, wholly futile for any
one to suggest that the areas granted to the two lessees
were overlapping, contended Mr. Dave.
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14. On behalf of respondent no.3 SIMORE it was on the
other hand contended by Mr. T.R. Andhyarujina, senior
counsel that the respondent no.3 SIMORE did not claim any
private land to be a part of its lease area. He submitted
that even when that was so the overlapping which the
Director, Mines and Geology had referred to was possible as
according to SIMORE the area leased to appellant ought to
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be treated as a part of government land. Alternatively, it
was contended that while the appellant may claim to have
obtained a lease in respect of privately owned land the fact
of the matter was that the area in which the appellant
intended to conduct his mining activities was a part of the
area leased to respondent no.3.
15. Ms. Anitha Shenoy, counsel appearing for the State
Government and its functionaries argued that the orders
passed by the Director (Mines) suspending mining
operations were on the basis of the conclusion drawn by the
drawing section of the mining department according to
which the two areas forming the subject matter of the two
leases were overlapping. She contended that even when -
the report of the drawing section and the basis on which
this overlapping had been prima facie established had not
been placed on record, the site plans/maps placed on
record supported the conclusion that there was some
overlapping. Learned counsel further submitted that the
orders passed by the Director (Mines) were interim in
nature and the question whether or not there was any
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overlapping had yet to be determined by the competent
authority. She fairly conceded that in the process of any
such determination the rival claimants shall have to be
heard by the competent authority.
16. We have given our careful consideration to the
submissions made at the Bar and perused the record. The
facts emerging from the record place the controversy within
a narrow compass. While the appellant claims that the
lease granted to it is in respect of a privately owned area,
respondent no.3 SIMORE claims that the area leased in its
favour comprises government and forest land only. If that
be so, as indeed are the positions taken by the parties
there is no question of any overlapping of the two areas for
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what is government or forest land cannot be privately
owned and vice-versa. Mr. Andhyarujina all the same made
a valiant attempt to persuade us to hold that the area
falling in Survey No.27 qua which the appellant has
obtained a lease is, in fact, government land and that no
part of it is or was at any stage privately owned. What he
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argued in support of that contention was that the grant of
occupancy rights in favour of Pennaiah was not warranted
in the facts and circumstances of the case, and if that were
so, any such grant could be ignored. We regret our inability
to accept that submission. We say so firstly because, the
validity of the grant of occupancy rights in favour of
Pennaiah by the Statutory Tribunal was not under challenge
before the High Court nor was any challenge ever thrown to
the orders passed by it or the implementation thereof in the
relevant revenue record before any other forum. Even the
State under whom respondent No.3 SIMORE claims the
right to carry out mining operations, never found fault with
the grant of land in favour of Pennaiah. It is, therefore, too
late in the day for any one to question the legality of the
order granting land situate in Survey No. 27 to Pennaiah, or
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to assert that notwithstanding what has happened in the
statutory proceedings, the area falling under Sy. No. 27
must be recognised as government land, hence a part of
area leased to SIMORE. Secondly because in the record of
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rights Survey No.27 is shown to be privately held by
Pennaiah and after his death by Yallamma his widow. The
State Government and Kumaraswamy Devaru Temple to
whom the land was dedicated before its grant to Pennaiah,
have accepted that position; and raised no dispute or
question as to the correctness of the revenue record. The
report submitted by the Deputy Commissioner, the spot
inspection, and the very grant of a lease qua the area in
question, all lend credence to the revenue record that
recognises the land in question to be private land.
17. Such being the case the only question that calls for
determination is whether respondent no.3 SIMORE is right
in insisting that the area in which the appellant proposes to
carry on his mining activity is a part of the area leased to
former. It was argued by Mr. Andhyarujina that the area
sought to be exploited for mining purposes by the appellant
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comprised the workers colony of SIMORE. That assertion
was stoutly denied by the appellant according to whom the
mining operations are confined to the area originally
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demarcated at the time of the grant of the lease. Be that
as it may what needs to be examined is whether the
appellant is mining within his lease area or beyond. This
would in turn require the area leased to the appellant to be
demarcated again assuming that an earlier demarcation
had also taken place, especially because SIMORE denies
any such previous demarcation having been conducted.
According to SIMORE the officer said to have done so was
placed under suspension for dereliction of duties. It is
unnecessary for us to go into the validity of any previous
demarcation. It is obvious that when large areas are
granted for mining purposes, some confusion as to the
boundaries of such areas especially if they are adjacent to
each other is nothing abnormal. What in such cases needs
to be done is to conduct a fresh demarcation and fix
boundaries so that the parties holding such areas stay
within the limits of their respective areas instead of straying
into the adjacent area.
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18. We may at this stage advert to another submission
made by Mr. Dave that the Director (Mines) could not have
stopped the mining operations of the appellant on the basis
of what was according to Mr. Dave a frivolous complaint
filed by SMIORE that alleged overlapping of the lease areas.
He contended that a valid lease having been granted to the
appellant after following the requisite formalities and the
procedure prescribed under the relevant rules and after
proper demarcation of the privately held area that was
available for mining, the Director should not have on a
sketchy report from the Drawing Section of the Department
stopped the mining activities. It was further contented by
Mr. Dave that since the mining activity had been stopped
under the orders of the Director (Mines), the High Court
was in error in not only upholding the said direction but
extending their efficacy till such time the dispute between
the parties was resolved by the Civil Court.
19. The mere pendency of a suit in a Civil Court could not
be an impediment for the appellant to start or continue his
mining activity, unless there was an injunction restraining -
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him from doing so. No such injunction has been issued by
the Civil Court. That does not, however, mean that the
Government or the Director (Mines) for that matter could
not in the event of any dispute between the appellant and
SIMORE regarding the identity and demarcation of the area
leased to both of them direct the appellant to refrain from
carrying on the mining activity as an interim measure till
such time the issue was sorted out. But once such an
interim direction was issued, the authority doing so had to
take steps to resolve the dispute. It could not let the
dispute fester and result in a stalemate. So also the
restraint order could not be continued by the High Court till
the dispute was adjudicated upon by the Civil Court. Doing
so would amount to one authority making an interim order
pending a final order to be made by another. The power to
make an interim order is, except where it is specifically
taken away by the statute, implicit in the power to make a
final order. It is exercised by the authority who has to
make the final order or an authority exercising appellate or
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revisional jurisdiction, against an order granting or refusing
an interim order. The exercise of the power implies that -
the authority seized of the proceedings in which such an
order is made will eventually pass a final order; the interim
order serving only as a step in aid of such final order. The
law, in our view, does not permit the making of an interim
order by one authority or Court pending adjudication of the
dispute by another except in the situation mentioned
above. Ms. Shenoy was, therefore, right in her submission
that the order of restraining mining operation was meant to
be a temporary and interim arrangement meant to remain
in force only till such time the Director (Mines) examined
the issue regarding the alleged overlapping of the area and
passed a final order on the subject.
20. Ms. Shenoy was, however, unable to justify the
restraint order passed by the Director (Mines) in the
absence of the report of the Drawing Section which was the
sole basis for the order passed by the Director (Mines). If
the Drawing Section had indeed undertaken an exercise the
same ought to have been disclosed to the High Court and
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to this Court so that the validity of any such exercise could
be examined. Absence of the report said to have been -
made by the Drawing Section and non-production of any
material indicating the process by which the Drawing
Section came to the conclusion that there was overlapping
of the two areas, one privately owned and the other
belonging to the State, lend support to the submission
made by Mr. Dave that the order of restraint passed by the
Director was made in haste. We do not, however, propose
to dwell any further on this aspect nor do we propose to
vacate the interim restraint order issued by the Director on
the ground that it was based on material that was tenuous
and remained un-substantiated before us. In our opinion
the real problem lies in the demarcation of the two areas
leased to the appellant on the one hand and SIMORE on the
other. As observed earlier the ownership of the areas
claimed by both the lessees vests in different owners. So
long as the areas leased to them are identifiable on spot by
different survey numbers and boundaries, there is no
question of any overlapping. The confusion regarding
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boundaries in turn is a matter the answer to which lies only
in a proper demarcation of the areas.
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21. It was submitted by Mr. Dave that dispute between the
appellant and SIMORE has considerably delayed the mining
activity of the appellant, and that a direction ought to be
issued to the authorities to expedite the process of
demarcation. He urged that keeping in view the bad blood
generated between the parties it would be more
appropriate to entrust the entire process of demarcation
and identification of the leased areas to the Geological
Survey of India. We, however, see no reason to issue any
such direction at this stage. While the appellant may have
some apprehensions about the fairness of the officers of the
concerned department we do not consider them to be
sufficient for us to mistrust the State functionaries in the
absence of any material to suggest that there is any real
likelihood of bias. That does not mean that the process of
identification and demarcation of the area leased to the
appellant should not be undertaken by senior level officers
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of the State Government to ensure that there is no scope
for any mischief or miscarriage of justice.
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22. In the result we allow these appeals, set aside the
impugned order passed by the High Court and allow Writ
Petition No. 17281 of 2010 filed by the appellant in part
and to the following extent:
(1) The Secretary, Department of Industries and
Commerce, Government of Karnataka, shall constitute a
Committee of officers for conduct of the demarcation and
identification of the boundaries of the area leased to the
appellant in terms of Mining Lease No.2622. The Committee
so constituted shall include the Deputy Commissioner of the
District concerned, the Chief Conservator of Forests or his
nominee who shall be an officer not below the rank of
Assistant Conservator of Forests, the Director of Survey and
a Senior Officer of the Mines Department to be nominated
by the Secretary. The Secretary shall be free to nominate
any other official or officials whom he considers suitable for
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the purpose of identification and demarcation of boundaries
of the areas covered by the mine held by the appellant.
(2) The Secretary shall monitor the progress made by the
Committee from time to time. A suitable order based on the
-
report and other material, if any, placed before the
Secretary shall then be passed by him after affording to
each party an opportunity of being heard in the matter. The
order so passed shall supersede the order dated 5.3.2010
passed by the Director (Mines).
(3) The above directions shall be carried out by the
Secretary expeditiously but not later than six months from
the date a copy of this order is received/served upon the
Secretary to Government by the parties.
(4) The parties shall bear their own costs.
……………………..………J. (CYRIAC JOSEPH)
……………………..………J.
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(T.S. THAKUR) New Delhi October 18, 2011
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