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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

CONTEMPT PETITION (CIVIL) NO. 275 OF 2016 IN

CONTEMPT PETITION (CIVIL) NO. 374 OF 2012 IN

CIVIL APPEAL NO. 2790 OF 2012

BHUSHAN POWER & STEEL LIMITED .....PETITIONER(S)

VERSUS

MR. S.L. SEAL ADDL. SECRETARY (STEEL & MINES) GOVERNMENT OF ODISHA & ORS. .....RESPONDENT(S)

J U D G M E N T A.K. SIKRI, J.

The  erstwhile  Bhushan  Ltd.  (predecessor-in-interest  of  the

petitioner) had proposed setting up of plant in some identified villages in

the  district  of  Sambalpur,  Odisha.  For  this  purpose,  it  had  made  a

request  for  acquisition  of  land,  measuring  1250  acres,  which  was

acquired for Bhushan Ltd.  It had also applied for grant of lease of mining

of  iron  ore  for  use  in  the  proposed  plant.  These  applications  were

favourably considered by the State of Odisha (hereinafter referred to as

the 'State Government') which agreed to accord due priority to Bhushan

Ltd. for grant of suitable iron ore areas and also agreed to recommend

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the proposal to the Government of India for grant of a coal block. Even a

MoU was entered into between the State Government and Bhushan Ltd.

containing the commitment of the State Government to recommend to

the  Central  Government,  grant  of  iron  ore  mines  for  its  use  in  the

proposed plant.  For this purpose, area earmarked for recommendation

were Thakurani area with 96 million tonnes iron ore reserves and Keora

area, District Sundargarh for additional 128 million tonnes of iron ore;

both for 50 years' requirement of the plant. Though various statutory and

other permissions required for setting up of the plant were granted and

the plant was also set up, but due to some in-fight between the family

members who owned Bhushan Ltd.,  it  faced difficulties  in  getting the

grant of iron ore lease.

2) Insofar as granting of mining lease of iron ore reserves in the aforesaid

areas  is  concerned,  it  fell  into  rough  weather.   It  resulted  into

show-cause notice dated January 18,  2006 by the State Government

which  led  to  the  decision  that  mining lease over  the Thakurani  area

could not be allowed on various grounds and the application made by

Bhushan  Ltd.  was  premature.  Thereafter,  the  Government  of  Orissa

made a recommendation to the Central  Government on February 09,

2006 to grant mining lease in favour of one M/s Neepaz Metallics (P)

Ltd. in relaxation of Rule 59(1) of the Mining Rules, for a period of 30

years. Challenging these orders, Bhushan Ltd. filed Writ Petition (Civil)

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No. 6646 of 2006 in the High Court on May 08, 2006. This writ petition

was  dismissed  by  the  High  Court  on  December  14,  2007  and

challenging this decision a special leave petition was filed in which leave

was  granted,  thereby  converting  the  special  leave  petition  into  Civil

Appeal No. 2790 of 2012.  This appeal was allowed by this Court vide

judgment  dated  March  14,  2012,  which  was  reported  as  Bhushan

Power & Steel Ltd. v.  State of Orissa1, with the following directions:

(SCC p. 256, paras 41-42)

“41...Accordingly, we allow the appeal and set aside the judgment and order of the High Court of Orissa and also the  decision  of  the  State  Government  dated  9-2-2006, rejecting the appellant's claim for grant of mining lease.

42. During the course of hearing, we have been informed that Thakurani Block A has large reserves of iron ore, in which  the  appellants  can  also  be  accommodated.  We, accordingly, direct the State of Orissa to take appropriate steps to act in terms of the MoU dated 15-5-2002, as also its  earlier  commitments  to  recommend  the  case  of  the appellants  to  the  Central  Government  for  grant  of adequate iron ore reserves to meet  the requirements of the appellants in their steel plant at Lapanga.”

3) It  would be pertinent to mention that  the State of  Odisha had filed a

review  petition  seeking  review  of  this  judgment  but  the  same  was

rejected  vide  order  dated  September  11,  2012.   Pursuant  to  the

aforesaid directions, though Bhushan Power & Steel Ltd. has been given

Thakurani Block A, the order was not implemented  qua  Keora, District

Sundargarh.  The petitioner treated the aforesaid inaction on the part of

the  State  Government  as  contemptuous  and  filed  Contempt  Petition

1 (2012) 4 SCC 246

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(Civil) No. 374 of 20122.  This petition was contested by the respondents

on various grounds.  Main contention raised was that the direction given

by this Court in its judgment dated March 14, 2012 was incapable of

enforcement.   For  this  purpose,  the  State  Government  had  placed

reliance  upon  the  subsequent  judgment  of  this  Court  in  Sandur

Manganese and Iron Ores Limited v. State of Karnataka & Ors.3 and

submitted that in view of the law laid down in the said judgment, it was

not  possible  to  carry  out  the  directions  contained  in  the  judgment

rendered on March 14, 2012 passed in the case of the petitioner herein.

4) Without going into the niceties by stating the basis of the said plea taken

by the State Government, suffice is to state that the aforesaid stand did

not find favour with this Court.  It was found that the contemnors/officials

of the State Government were in contempt of the orders dated March 14,

2012.  In these circumstances, one more opportunity was given to the

State  Government  to  send  requisite  recommendation  to  the  Central

Government.   However,  for  a  better  understanding  of  the  nature  of

directions which were given, we reproduce following extracts from the

judgment dated April 22, 2014 in the said Contempt Petition:

“21.   We  cannot  lose  sight  of  the  fact  that  there  is  a judgment,  inter  parties,  which  has  become  final. Even when  the  civil  appeal  was  being  heard,  certain  other parties  claiming  their  interest  in  these  very  lands  had moved intervention applications which were dismissed. At that  time  also  it  was  mentioned  that  there  are  195

2 Bhushan Power and Steel Limited & Ors. v. Rajesh Verma & Ors., (2014) 5 SCC 551 3 (2010) 13 SCC 1

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applicants. However, notwithstanding the same, this Court issued  firm  directions  to  the  State  Government  to recommend the case of the petitioners for mining lease in both  the  areas.  In  view  of  such  categorical  and unambiguous directions given in the judgment which has attained  finality,  merely  because  another  judgment  has been delivered by this Court in  Sandur Manganese case, cannot be a ground to undo the directions contained in the judgment  dated  14-3-2012.  Insofar  as  law  laid  down in Sandur Manganese   is concerned, that may be applied and followed  by  the  State  Government  in  respect  of  other applications which are still pending. However, that cannot be pressed into  service qua the petitioner  whose rights have  been  crystallised  by  the  judgment  rendered  in  its favour. It  cannot  be  reopened,  that  too  at  the  stage  of implementation of the said judgment.

22.  We would like to place on record the arguments of the learned Senior Counsel for the petitioner that the total area under notification is 731.67 sq km and out of this 406 sq km is  yet  to  be  allotted.  The area  which  comes  to  the share of the petitioner under MoU is 13.91 sq km which is barely 3% of 406 sq km and, therefore recommendation by the State Government in favour of the petitioner cannot be stalled  or  put  to  naught  only  on  the  basis  of  inchoate applications, fate whereof is yet to be decided. It is also pointed  out  that  insofar  as  the  petitioners  in  other  writ petitions  are  concerned  area  claimed  by  them  is  not overlapping with the petitioner's area. However, it may not even be necessary to go into these contentions in detail. Once  we  hold  that  the  respondents  are  bound  to implement the direction contained in the judgment dated 14-3-2012, insofar as the State Government is concerned, it is obliged to comply therewith and such matters, along with  other  relevant  considerations,  can  be  left  to  the wisdom of the Central Government while taking a decision on the recommendation of the State Government.

xx xx xx

24.   As  a  consequence,  we  hold  that  the respondents/contemnors are in contempt of orders dated 14-3-2012 passed by this Court in not complying with the directions  in  respect  of  Keora  area.  However,  we  are giving one final opportunity to them to purge the contempt by transmitting requisite recommendations to the Central Government.  It  would be for  the Central  Government  to consider the said recommendations on its own merits and in  accordance with  law. In  case the  recommendation  is

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sent within one month from the date of copy of receipt of this order, we propose not to take any further action and the respondents/contemnors shall  stand discharged from this contempt petition. However, in case the respondents do not purge in the manner mentioned above, it would be open to the petitioners to point out the same to this Court by  moving appropriate  application and in that  event  the contemnors shall be proceeded against.”

5) According to the petitioner, the respondent State Government has not

purged the contempt and, therefore, in view of the opportunity granted in

the  judgment  dated  April  22,  2014,  as  contained  in  paragraph  24

extracted above, the petitioner has moved the instant Contempt Petition

in which we have heard M/s. Kapil Sibal and P. Chidambaram, learned

senior  counsel  for  the  petitioner,  and  Mr.  Maninder  Singh,  learned

Additional Solicitor General for the Union of India, and Mr. Ashish Kumar

Sinha, Advocate for the State Government.

6) We may mention at the outset that it is not disputed by the petitioner that

after the directions dated April  22, 2014 given in the earlier Contempt

Petition,  the State Government had sent requisite recommendation to

the Central Government for grant of mining lease in the area in question.

The  Central  Government  has,  however,  taken  the  view  that  having

regard to the amendments in the Mines and Minerals (Development and

Regulation)  Act,  1957  (for  short,  the  'Act'),  vide  Mine  and  Minerals

(Development  and  Regulation)  Amendment  Act,  2015  (hereinafter

referred to as the Amendment Act,  2015)  dated March 26, 2015, the

grant of mining lease has to be dealt with in accordance with the new

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provisions introduced by the Amendment Act, 2015 and under the new

scheme, the petitioner's earlier request stands invalidated. This view of

the Central Government is contained in its letters dated May 13, 2015

and May 29, 2015 addressed to the State Government, with copies to

the petitioner.  The State Government has in turn written to the petitioner

vide letter dated July 09, 2016 on the same lines. The petitioner has,

however, taken the position that the amended sections have a saving

provision, in which category the case of the petitioner falls, and in view

thereof the approval of the Central Government is not even required and,

therefore,  the  State  Government  was  competent  to  grant  the  mining

lease itself.  It is for this reason the petitioner has impleaded Union of

India as well, as respondent in the present proceedings and one of the

prayers is to quash the letters dated May 13, 2015 and May 29, 2015

issued by the Central Government, as well as the communication dated

July 09, 2015 issued by the State Government.   

7) At  this  stage,  we  may  reproduce  the  exact  prayers  made  by  the

petitioner in this Contempt Petition:

“(a)   Initiate  contempt  of  court  proceedings  against  the Respondents/Contemnors and after hearing them, punish them for  willfully  flouting and deliberately disobeying the judgments  and  orders  dated  14.3.2012  and  22.4.2014 passed by this Hon'ble Court in Civil Appeal No. 2790 of 2012  and  Contempt  Petition  (Civil)  No.  374/2012 respectively.

(b)  Hold that the letters dated 13/05/2015 and 29/05/2015 issued by the Central Government (Annexure 9 & 10) and letter dated 09/07/2015 (Annexure 12) issued by the State

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Government  are  in  breach  and  contempt  of  Judgments and Orders of this Hon'ble Court and are thus of no legal consequence and effect.

(c)  Pass appropriate directions, directing the Respondents to  comply  with  and  implement  the  judgments  of  this Hon'ble Court dated 14.3.2012 and 22.4.2014 passed by this Hon'ble Court in Civil  Appeal No. 2790 of 2012 and Contempt  Petition  (Civil)  No.  374/2012  respectively  and within two weeks of  receipt  of  notice,  to execute mining leases as recommended in Annexure Nos. P-5 and P-6.

(d)  Pass such other or further orders as this Hon'ble Court may  deem  fit,  just  and  proper  in  the  facts  and circumstances of the case.”

8) As  pointed  out  above,  the  petitioner  accepts  the  fact  that  the  State

Government had in fact made the recommendation dated May 24, 2014

to the Central  Government for  grant  of  mining lease over an area of

1063.633 hectares in village Rakma, Marsuan, Tibira and in Khajurdihi

RF (Keora Sector)  in  the districts  of  Keonjhar and Sundergarh.   It  is

further stated that despite this recommendation, the Central Government

did  not  take  any  action  to  grant  the approval.   In  the  meantime,  on

January 12, 2015, the Central Government promulgated an Ordinance

amending the Mines and Minerals (Development and Regulation) Act,

1957.  This Ordinance was made into an Act of Parliament on March 26,

2015 with effect from January 12, 2015.  On May 13, 2015, the Central

Government  has  issued  a  letter  to  the  State  Government,  a  copy

whereof was also marked to the petitioner, stating that:

“3.  As per details available with the Ministry, this proposal for accord of prior approval for grant of mineral concession becomes ineligible as per the provisions of Section 10A(1) of the Amendment Act.  Accordingly, the proposal should

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be treated as closed and necessary order may be isued. The  State  Government  may  also  ascertain  whether  the proposal is saved from ineligibility under the provisions of Section  10A  of  the  Amendment  Act,  2015  before communicating  the  same  to  the  applicant  and  take following action in this matter:

(i)  if the proposal is ineligible, it may be treated as closed and necessary order may be issued; and

(ii)  if the proposal remain eligible, the State Government (sic) bring it to the notice of the Ministry so that necessary action  as  per  provisions  of  the  Amended  Act  may  be taken.”

9) A few days later, the Central Government wrote another letter dated May

29, 2015 regarding proposal for grant of ML for iron ore over an area of

1390.663 hectares in  village Rakma,  Marsuan and Triba of  Keonjhar

district and Khajuridihi of Sundargah district stating as follows:

“As per details available with the Ministry, this proposal for accord of  prior  approval  for  grant of  mineral  concession becomes ineligible as per the provisions of Section 10A(1) of  the  Amendment  Act.   The matter  may  be  treated as closed.   However,  the  State  Government  is  advised  to examine the proposal and in case there is strong case for the  concession  to  be  saved  from  ineligibility  under  the provision of Section 10(a) of the Amendment Act then this Ministry may be informed accordingly for further necessary action.”

10) Letter  dated  July  09,  2015  sent  by  the  State  Government  to  the

petitioner rejecting the application of the petitioner for grant of mining

lease reads as under:

“And  whereas,  as  per  section-10A(1)  of  MMDR Amendment Act, 2015, all applications received prior to the date  of  commencement  of  the  Mines  and  Minerals (Development  and  Regulation)  Amendment  Act,  2015, shall become ineligible.

And  whereas,  both  the  ML  application  No.  775  dated

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04.12.2001 and ML application No. 780 dated 01.03.2002 of  the  applicant  company  are  the  fresh  applications seeking  grant  of  mining  leases,  which  have  been recommended to Government of India prior to the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015.

Therefore,  after  careful  consideration  of  the  facts  & circumstances  and  materials  on  record,  the  State Government  is  pleased to reject  the ML application No. 775 dated 04.12.2001 and ML application No. 780, dated 01.03.2002 of  the applicant  company being ineligible as per  the  provisions  of  section-10A(1)  of  the  Amendment Act, 2015.”

11) It is in the aforesaid background, learned senior counsel appearing for

the  petitioner  argued  that  the  aforesaid  approach  of  the  Central

Government  as  well  as  the  State  Government  contained  in  their

respective communications is totally misconceived inasmuch as direction

of this Court, which is inter parties, still remain binding, notwithstanding

the introduction of Section 10A by the Amendment Act, 2015.  It is also

argued  that  even  if  the  said  Amendment  Act  applies,  case  of  the

petitioner is preserved and protected under Section 10A(2)(c) of the Act.

Section 10A makes the following reading:

“10A.   Rights  of  existing  concession-holders  and applicants. – (1)  All applications received prior to the date of  commencement  of  the  Mines  and  Minerals (Development and Regulation) Amendment Act, 2015, shall become ineligible.

(2)  Without prejudice to sub-secion (1), the following shall remain eligible on and from the date of commencement of the  Mines  and  Minerals  (Development  and  Regulation) Amendment Act, 2015 –

(a)   applications received under  section 11A of  this Act;

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(b)  where before the commencement  of  the Mines and  Minerals  (Development  and  Regulation) Amendment  Act,  2015  a  reconnaissance  permit  or prospecting  licence has been granted  in  respect  of any  land  for  any  mineral,  the  permit  holder  or  the licensee shall have a right for obtaining a prospecting licence followed by a mining lease, or a mining lease, as the case may be, in respect of that mineral in that land,  if  the  State  Government  is  satisfied  that  the permit-holder or the licensee, as the case may be, –  

(i)  has undertaken reconnaissance operations or prospecting operations, as the case may be, to establish  the  existence  of  mineral  contents  in such land in accordance with such parameters as may be prescribed by the Central Government;

(ii)  has not committed any breach of the terms and conditions  of  the  reconnaissance permit  or the prospecting licence;

(iii)   has  not  become  ineligible  under  the provisions of this Act; and

(iv)   has  not  failed  to  apply  for  grant  of prospecting licence or mining lease, as the case may be, within a period of three months after the expiry  of  reconnaissance  permit  or  prospecting licence,  as  the  case  may  be,  or  within  such further period not exceeding six months as may be extended by the State Government.

(c)   where  the  Central  Government  has communicated  previous  approval  as  required  under sub-section  (1)  of  section  5  for  grant  of  a  mining lease, or if a letter of intent (by whatever name called) has been issued by the State Government to grant a mining lease, before the commencement of the Mines and  Minerals  (Development  and  Regulation) Amendment  Act,  2015,  the  mining  lease  shall  be granted subject to fulfilment of the conditions of the previous  approval  or  of  the  letter  of  intent  within  a period of two years from the date of commencement of the said Act:

Provided that  in respect  of  any mineral  specified in the First Schedule, no prospecting licence or mining lease  shall  be  granted  under  clause  (b)  of  this

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sub-section except with the previous approval of the Central Government.”

12) It was argued with vehemence that even when under sub-section (1) of

Section  10A,  all  applications  received  prior  to  the  date  of

commencement  of  the  Amendment  Act,  2015  have  been  rendered

ineligible, sub-section (2) saves certain kinds of applications.  Clause (c)

thereof is invoked by the petitioner to submit  that  in the instant  case

since 'Letter of Intent' had been issued by the State Government to grant

a mining lease, the petitioner's application stands protected.  For this

purpose, recommendation dated May 24, 2014 is treated as Letter of

Intent by the petitioner, laying emphasis on the words 'letter of intent (by

whatever name called)'.  It was, thus, argued that form of Letter of Intent

is not necessary and the substance of the letter had to be seen.  It was

argued that since the letter dated May 24, 2014 of the State Government

is in the nature of recommendation for grant of lease, it signifies intention

to grant the mining lease insofar as the State Government is concerned

and,  therefore,  in  substance,  it  is  the  Letter  of  Intent.   It  was,  thus,

argued that under the new regime contained in Section 10A, approval of

the  Central  Government  was  not  even  required  and  the  State

Government could have proceeded further and granted the lease.

13) Mr. Maninder Singh, learned Additional Solicitor General, submitted, on

the other hand, that the view taken by the Central Government in its

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communications dated May 24, 2014 and May 29, 2015 is in accordance

with the provisions of Section 10A of the Act.  It was argued that letter

dated May 24, 2014 cannot be treated as Letter of Intent as on the date

of writing this letter, the State Government had no such power to give

Letter  of  Intent  without the prior  approval  of the Central  Government.

Therefore,  it  was  only  a  request  to  the  Central  Government  for

considering the case of the petitioner favourably.  It is further submitted

that  Letter  of  Intent  mentioned in  clause (c)  deals with the situations

where sanction from the Central Government is received and Letter of

Intent is issued but no formal lease executed.  Only those cases are

protected with.  It was further submitted that after coming into effect the

amended provision, the very methodology of grant of mining lease has

undergone a significant change inasmuch as now the leases are to be

granted  through  auction,  which  is  so  specifically  provided  in  the

amended Section 11 of the Amendment Act, 2015.  It is for this reason,

requirement of prior approval of the Central Government is dispensed

with.  Learned Additional Solicitor General further submitted that there is

no contempt of the orders of this Court inasmuch as the only direction

given in the impugned judgment dated March 14, 2012 was to the State

Government to send the recommendation, which direction was reiterated

in the judgment dated April 22, 2014 passed in the Contempt Petition as

well.   The State  Government  complied with this  direction by sending

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such  a  recommendation  to  the  Central  Government.   Therefore,  the

present contempt petition was not even maintainable.  Counsel for the

State Government supported the aforesaid stand taken by the learned

Additional Solicitor General.

14) We  have  to  bear  in  mind  that  the  matter  is  being  dealt  with  in  a

Contempt  Petition.   Therefore,  what  is  to  be  seen  is  as  to  whether

directions contained in the judgment are complied with or not.  In the

main appeal which was filed by the petitioner against the judgment of the

Orissa High Court, it was allowed vide judgment dated March 14, 2012.

Direction  was  given  to  the  State  Government  to  send  the

recommendation for grant of mining lease to the petitioner.  As per the

law prevailing at that time, the role of the State Government was only to

send the recommendation to the Central Government for allotting mining

areas.   Ultimate  authority/power  was  vested  with  the  Central

Government  to  take  a  decision  on  the  said  request  of  the  State

Government.  Since the State Government had even refused to send

such a request,  this  Court  was of  the view that  the act  of  the State

Government  in  refusing to send recommendation was contrary to the

MoU dated May 15, 2002 and direction was issued to do the needful.  In

the order dated April 22, 2014, passed in Contempt Petition (Civil) No.

374 of 2012, this was made clear by observing that insofar as the State

Government is concerned, it  is  obliged to comply therewith and such

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matters,  along  with  other  relevant  considerations,  can  be  left  to  the

Central Government while taking a decision on the recommendation of

the State Government.  We state at the cost of repetition that since the

Union of India was not a party, no direction was given to it.   On the

contrary, it  was left to the Central Government to take an appropriate

decision on the recommendation of the State Government.  This was

made clear in para 24 of the judgment dated April 22, 2014 by observing

that  it  would  be  for  the  Central  Government  to  consider  the  said

recommendations on its own merits and in accordance with law.

15) Since the State Government had sent the necessary letter of request to

the  Central  Government,  direction  contained  in  the  judgment  dated

March  14,  2012  stands  complied  with.   The  issue  now  raised,  as

reflected and discussed in the earlier portion of this judgment, is whether

the application of the petitioner is rendered ineligible in view of Section

10A of the Act or whether it still survives.   We are examining this issue

as the petitioner's counsel have argued that the petitioner is eligible to

be  considered  as  its  application  falls  in  the  category  carved  out  by

clause (c) of Section 10A(2) and further that since no approval of the

Central Government is required now, the State Government could itself

grant  the  lease.   It  is  argued  that  failure  of  the  State  Government

amounts to contempt of the orders of this Court.

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16) Undoubtedly,  as  per  sub-section  (1)  of  Section  10A,  all  applications

received prior to coming into force of the Amendment Act, 2015, become

ineligible.  Reason for interpreting such a provision is not far to seek.

Before  the  passing  of  the  Amendment  Act,  2015,  it  was  the  Central

Government which had the ultimate control over the grant of licenses

insofar as mining of major minerals is concerned.  As per the procedure

then  existing,  State  Government  could  recommend  the  application

submitted  by  any  applicant  for  grant  of  mining  lease  to  the  Central

Government and the Central Government was given the power to grant

or  refuse to  grant  the approval.    Thus,  'previous approval' from the

Central Government was essential for grant of lease, without which the

State Government could not enter into any such lease agreement with

the applicant.  Shortcomings of this procedure were noticed by this Court

in its judgment rendered in  Centre for Public Interest Litigation Vs.

Union of India4 (for short, 'CPIL case') and also in Re.: Spl. Ref. No. 1

of 20125.  In these judgments, this Court expressed that allocation of

natural  resources should normally  be by auction.   Judgment  in  CPIL

case had a direct relevance to the grant of mineral concessions as the

Government found that it was resulting in multipurpose litigation which

was becoming counter productive. Mining Ordinance, 2015 was passed

on January 12, 2015 which was ultimately replaced when the Parliament

4 (2012) 3 SCC 1 5    (2012) 10 SCC 1

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enacted the Amendment Act, 2015.

17) The  exhaustive  Statement  of  Objects  and  Reasons  reveals  that  the

extensive  amendment  in  the  Act  were  effected  after  extensive

consultations and intensive scrutiny by the Standing Committee on Coal

and Steel, who gave their Report in May, 2013. As is evident from the

Statement  that  difficulties  were experienced because the existing Act

does not permit the auctioning of mineral concessions. It was observed

that with auctioning of mineral concessions, transparency in allocation

will  improve;  Government  will  get  an increased share of  the value of

mineral resources; and  that it will alleviate the procedural delay, which in

turn  would  check  slowdown  which  adversely  affected  the  growth  of

mining sector.

18) The Amendment Act, 2015, as is evident from the objects, aims at: (i)

eliminating  discretion;  (ii)  improving  transparency  in  the  allocation  of

mineral resources; (iii) simplifying procedures; (iv) eliminating delay on

administration, so as to enable expeditious and optimum development of

the mineral resources of the country; (v) obtaining for the Government

an  enhanced  share  of  the  value  of  the  mineral  resources;  and  (vi)

attracting private investment and the latest technology.

19) The Amendment Act, 2015 ushered in the amendment of Sections 3, 4,

4A, 5, 6, 13, 15, 21 and First Schedule; substitution of new sections for

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Sections 8, 11 and 13; and, insertion of new sections 8A, 9B, 9C, 10A,

10C, 11B, 11C, 12A, 15A, 17A, 20A, 30B, 30C and Fourth Schedule.

20) These amendments brought in vogue: (i) auction to be the sole method

of allotment; (ii) extension of tenure of existing lease from the date of

their last renewal to March 31, 2030 (in the case of captive mines) and

till  March 31, 2020 (for the merchant miners)  or  till  the completion of

renewal already granted, if any, or a period of 50 years from the date of

grant of such lease; (iii) establishment of District Mineral Foundation for

safeguarding interest of persons affected by mining related activities; (iv)

setting  up  of  a  National  Mineral  Exploration  Trust  created  out  of

contributions from the mining lease holders, in order to have a dedicated

fund  for  encouraging  exploration  and  investment;  (v)  removal  of  the

provisions requiring 'previous approval' from the Central Government for

grant of mineral concessions in case of important minerals like iron ore,

bauxite,  manganese  etc.  thereby  making  the  process  simpler  and

quicker;  (vi)  introduction of  stringent  penal  provisions to  check illegal

mining  prescribing  higher  penalties  up  to  ₹5  lakhs  per  hectare  and

imprisonment  up  to  5  years;  and  (vii)  further  empowering  the  State

Government to set up Special Courts for trial of offences under the Act.

21) Newly  inserted  provisions  of  the  Amendment  Act,  2015  are  to  be

examined  and  interpreted  keeping  in  view  the  aforesaid  method  of

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allocation  of  mineral  resources  through  auctioning,  that  has  been

introduced by  the  Amendment  Act,  2015.   Amended Section  11 now

makes it clear that the mining leases are to be granted by auction.  It is

for  this  reason that  sub-section (1)  of  Section 10A mandates that  all

applications received prior to January 12, 2015 shall become ineligible.

Notwithstanding, sub-section (2) thereof carves out exceptions by saving

certain categories of applications even filed before the Amendment Act,

2015 came into operation. Three kinds of applications are saved.

First, applications received under Section 11A of the Act. Section 11A,

under new avatar is an exception to Section 11 which mandates grant of

prospecting  license  combining  lease  through  auction  in  respect  of

minerals,  other  than  notified  minerals.   Section  11A  empowers  the

Central Government to select certain kinds of companies mentioned in

the said Section, through auction by competitive bidding on such terms

and  conditions,  as  may  be  prescribed,  for  the  purpose  of  granting

reconnaissance permit, prospecting license or mining lease in respect of

any area containing coal or lignite.  Unamended provision was also of

similar nature except that the companies which can be selected now for

this purpose under the new provision are different from the companies

which  were  mentioned  in  the  old  provision.   It  is  for  this  reason,  if

applications were received even under unamended Section 11A, they

are saved and protected, which means that these applications can be

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processed under Section 11A of the Act.

Second category of applications, which are kept eligible under the new

provision,  are those where the reconnaissance, permit  or  prospecting

license had been granted and the permit holder or the licensee, as the

case may be, had undertaken reconnaissance operations or prospecting

operations.  The reason for protecting this class of applicants, it appears,

is that such applicants, with hope to get the license, had altered their

position  by  spending  lot  of  money  on  reconnaissance  operations  or

prospecting operations.  This category, therefore, respects the principle

of legitimate expectation.

22) Third  category  is  that  category  of  applicants  where  the  Central

Government  had  already  communicated  previous  approval  under

Section 5(1) of the Act for grant of mining lease or the State Government

had issued Letter of Intent to grant a mining lease before coming into

force of the Amendment Act, 2015.  Here again, the raison d'etre is that

certain  right  had  accrued  to  these  applicants  inasmuch  as  all  the

necessary  procedures  and  formalities  were  complied  with  under  the

unamended  provisions  and  only  formal  lease  deed  remained  to  be

executed.

It would, thus, be seen that in all the three cases, some kind of right, in

law,  came  to  be  vested  in  these  categories  of  cases  which  led  the

Parliament  to  make  such  a  provision  saving  those  rights,  and

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understandably so.

23) Here, the petitioner seeks to cover its case under the third category with

the  plea  that  insofar  as  the  State  Government  is  concerned,  it  had

issued  'Letter of Intent'.  The petitioner is treating letter dated May 24,

2014,  which  was  sent  by  the  State  Government  to  the  Central

Government  with  a  request  to  the  Central  Government  to  give  its

approval for grant of mineral concessions, as the 'Letter of Intent'.    It is

in this hue, submission is that the intention behind the said letter is to be

seen even if  it  is not termed as  'Letter of Intent' and this argument is

predicated on  the words 'by whatever name called'.

24) No doubt,  having regard to the words  'by whatever name called', the

expression 'Letter of Intent' is to be given wider connotation.  It means

that nomenclature of the letter would not be the determinative factor.  It

is the substantive nature of the letter in question that would determine as

to whether it can be treated as the Letter of Intent.  For this purpose, it is

first necessary to find the meaning that has to be attributed to the term

'Letter  of  Intent'.   As  per  the  legal  dictionary,  Letter  of  Intent  is  a

document  that  described  the  preliminary  understanding  between  the

parties who intend to make a contract or join together in another action.

This term has come up for interpretation on few occasions before this

Court.  In Rishi Kiran Logistics Private Limited v. Board of Trustees

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of Kandla Port Trust and Others6, relying upon an earlier decision, this

Court held that a Letter of Intent merely indicates a party's intention to

enter into a contract with other party in future, as can be seen from the

following para 43 thereof, which reads as under:

“43. At this juncture, while keeping the aforesaid pertinent features of the case in mind, we would take note of “the Rules and Procedure for  Allotment  of  Plots”  in  question issued by Kandla Port Trust. As per Clause 12 thereof the Port Trust had reserved with itself right of acceptance or rejection  of  any  bid  with  specific  stipulation  that  mere payment of EMD and offering of premium will not confer any right or interest in favour of the bidder for allotment of land. Such a right to reject the bid could be exercised “at any time without assigning any reasons thereto”. Clause 13 relates  to  “approvals  from statutory  authorities”,  with unequivocal assertion therein that the allottees will have to obtain  all  approvals  from different  authorities  and these included approvals from CRZ as well. As per Clause 16, the allotment was to be made subject to the approval of Kandla  Port  Trust  Board/competent  authority. In  view of this material on record and factual position noted in earlier paragraphs  we  are  of  the  opinion  that  observations  in Dresser Rand S.A.  v.  Bindal  Agro Chem Ltd.   would be squarely available in the present case, wherein the Court held that: (SCC p. 773, paras 39-40)

“39...a  letter  of  intent  merely  indicates  a  party's intention to enter into a contract with the other party in future. A letter of intent is not intended to bind either party ultimately to enter into any contract. …

40. It is no doubt true that a letter of intent may be construed as a letter of acceptance if such intention is evident from its terms. It is not uncommon in contracts involving detailed procedure, in order to save time, to issue a letter of intent communicating the acceptance of the offer and asking the contractor to start the work with a stipulation that the detailed contract would be drawn  up  later.  If  such  a  letter  is  issued  to  the contractor,  though  it  may  be  termed  as  a  letter  of intent,  it  may  amount  to  acceptance  of  the  offer resulting in a concluded contract between the parties.

6 (2015) 13 SCC 233

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But the question whether the letter of intent is merely an  expression  of  an  intention  to  place  an  order  in future or whether it is a final acceptance of the offer thereby leading to a contract, is a matter that has to be decided with reference to the terms of the letter.”

When the LoI is itself hedged with the condition that the final  allotment  would be made later  after  obtaining CRZ and other clearances, it  may depict an intention to enter into contract  at  a later stage.  Thus, we find that  on the facts of this case it appears that a letter with intention to enter into a contract which could take place after all other formalities are completed. However, when the completion of  these formalities  had taken undue long time and the prices  of  land,  in  the  interregnum,  shot  up  sharply, the respondent had a right to cancel the process which had not resulted in a concluded contract.”

{See  also  Rajasthan  Cooperative  Dairy  Federation  Ltd.  v.  Maha

Laxmi Mingrate Marketing Service Pvt. Ltd. and Ors.7}.

25) Applying the aforesaid meaning, can it be said that letter dated May 24,

2014 of the State Government would constitute a Letter of Intent?  We

are afraid,  answer  has to  be in  the negative.  Reason is  simple.   As

mentioned above, in order to enable the State Government to enter into

any lease agreement/contract  with the prospecting licensee,  'previous

approval' of  the  Central  Government  was  essential.   Unless  such

approval  came,  the State  Government  could not  communicate  to the

prospecting licensee/lessee its intention to enter into any contract as the

pre-requisite  prior  approval  would  be lacking.   Therefore,  no promise

could be held by the State Government  to  any applicant  showing its

intention to enter into a contract in the future.  Position would have been

7 (1996) 10 SCC 405

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different  had  letter  dated  May  24,  2014  been  issued  after  receiving

previous approval of the Central Government.  However, that is not so.

This  letter  to  the  Central  Government  was  only  recommendatory  in

nature and ultimate decision rested with the Central Government.  It is a

different thing if the Central Government refuses to give its approval on

any extraneous reasons or mala fides or does not take into consideration

relevant factors/material while rejecting the application, which may form

a different cause of action and may become a reason to challenge the

action  of  the  Central  Government  rejecting  the  application  on  the

grounds  that  are  available  in  law to  seek  judicial  review of  such  an

action.  However, we are not dealing with that situation in the instant

case.   Our  discussion  is  confined  to  the  plea  raised  before  us,  viz.,

whether letter dated May 24, 2014 can be termed as  'Letter of Intent'.

For the reasons stated above, we are of the view that it was not a Letter

of  Intent.  The  application  of  the  petitioner,  therefore,  would  not  be

covered by clause (c) of Section 10A of the Act.

26) We are conscious of  the fact  that  the petitioner  herein had originally

succeeded in the appeal inasmuch as judgment dated March 14, 2012

was rendered giving direction to the State Government to recommend

the case of the petitioner, in terms of the MoU entered into between the

parties, to the Central Government.  This was not done and the decision

was  reiterated  in  orders  dated  April  22,  2014  passed  in  Contempt

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Petition  (Civil)  No.  374  of  2012.   It  is  possible  that  had  the  State

Government acted promptly and sent the recommendations earlier, the

Central  Government  might  have  accorded  its  approval.   However,

whether  it  could  have  done  so  or  not  would  be  in  the  realm  of

conjectures.   Insofar  as  the  Central  Government  is  concerned,  no

direction  was  ever  given  by  this  Court.   On  the  contrary,  it  was

categorically  observed in  the order  dated April  22,  2014 in  Contempt

Petition  (Civil)  No.  374  of  2012  that  it  would  be  for  the  Central

Government to consider the recommendations of the State Government

on its own merits and in accordance with law.  If that has not been done

by the Central Government, it cannot be the subject matter of present

Contempt Petition.

27) This  Contempt  Petition,  thus,  stands  closed  with  the  aforesaid

observations.

.............................................J. (A.K. SIKRI)

.............................................J. (ABHAY MANOHAR SAPRE)

NEW DELHI; DECEMBER 15, 2016.

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