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REPORTABLE     IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION    CIVIL APPEAL NOS. 6209-6211 OF 2016

   (Arising Out of SLP (C) Nos.9823-9825 of 2012)   

STATE OF GUJARAT & ORS.                …………APPELLANTS Vs.

NIRMALABEN S. MEHTA & ANR.ETC.         ………RESPONDENTS

   J U D G M E N T

V. GOPALA GOWDA, J.

Leave granted.

2. These  appeals  are  directed  against  the  common

judgment and order dated 13.12.2011 passed by the High

Court of Gujarat at Ahmedabad in LPA No. 683 of 2011 in

SCA No. 6897 of 2010, LPA No. 684 of 2011 in SCA No. 6899

of 2010 and LPA No. 685 of 2011 in SCA No. 6898 of 2010

urging various legal grounds and praying to set aside the

same.  

3. Brief  facts  of  the  case  are  stated  hereunder  to

appreciate the rival legal contentions urged on behalf of

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both the parties: One  Kantilal  Mohanlal  Mehta  entered  into  lease

agreement  with  the  appellant-State  on  20.02.1964  for

mining lease for bauxite in respect of lands described in

Part I of the Schedule to Mines and Minerals (Development

and Regulation) Act, 1957 (hereinafter called the “MMDR

Act”). The said lease was for 20 years and was given

effect from 09.10.1963.  

4. On  26.02.1964,  the  appellant-State  issued  a

notification bearing no.MND 1760/3788G.V. reserving all

areas of Jamnagar and Junagadh district for exploitation

of  bauxite  for  public  sector.  However,  on  02.08.1978,

again a  notification was issued by the appellant-State,

whereby  the  lands,  specified  in  the  schedule  thereto,

which  were  earlier  reserved  vide  notification  dated

26.02.1964, for exploitation of bauxite for the public

sector  were  de-reserved  and  thus,  made  available  for

grant of mineral concession w.e.f. 02.09.1978. The  same  day,  i.e.,  on  02.08.1978,  the

appellant-State  addressed  a  letter  to  the  Central

Government seeking permission for de-reservation of the

areas  of  bauxite  in  Jamnagar  and  Junagadh  districts,

which were earlier reserved for exploitation of bauxite

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in public sector for setting up of alumina plant on the

ground that many applications were received by it for the

establishment  of  small  scale  industries  in  the  State

based on bauxite as raw material. The appellant-State,

therefore, desired to release areas, which were earlier

reserved,  to  industrial  units  for  their  captive

consumption  only.  By  this  letter  the  appellant-State

sought  permission  not  only  for  de-reservation  of  the

areas, which were earlier reserved for public sector but

also  to  impose  certain  conditions  upon  the  mining  of

bauxite with a view to protect the interest of the State

and at the same time extending help to industries which

require bauxite as a raw material for bonafide captive

use. The relevant portion of the aforesaid letter dated

02.08.1978 reads thus: “5. Central Government may kindly be moved in the interest  of  mineral  development  to  grant permission  under  Rule  27  of  the  Mineral Concession Rules, 1960 for imposing the following conditions  for  protecting  the  interest  of  the State Government and at the same time extending help  to  industries  which  need  bauxite  for  its bonafide captive use. (1) the lessee shall establish an industrial unit consuming bauxite as main raw material within a period of two years from the date of grant of the mineral concession. (2)  the  State  Government  shall  have  right  to review and reduce the areas of mining lease for bauxite granted, if the industrial unit set up works continuously below the rated capacity and

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areas  granted  is  found  excess  of  its requirements. (3) the lessee shall utilize maximum quantity of bauxite excavated in his own industrial unit and shall be allowed to sell the bauxite not suitable for its own industrial unit to other industrial unit  in  the  State  for  their  own  consumption, provided the quantity of bauxite for sale does not exceed 20% of the total production and also provided that the prior permission of the D.G.M. or an officer authorizes by the State Government is obtained for the sale. (4) the lessee shall have to sell the bauxite at prevailing  market  rate  to  government  or  the person to whom the State Government may direct, as and when such need arise. (5) Briefly the Central Government’s approval to the following proposal is required;

(1)  to  de-reserve  the  areas  of  Kalyanpur Taluka of Jamnagar-District mentioned in the Govt. of India letter dated 17.03.1962. (2) to stipulate conditions mentioned above.”

5. On 16.01.1980, Central Government addressed a letter

bearing No.4(2)/78-NVI to the appellant-State, whereby,

it  granted  permission  for  de-reservation  of  areas  of

Jamnagar for exploitation of bauxite mineral, which were

earlier reserved, and for the imposition of conditions on

mining  lease.  The  relevant  portion  of  the  aforesaid

letter reads thus: “2. As regards the proposal contained in Para 5 of  the  State  Government’s  letter  dated 02.08.1978, I am directed to say that the Central Government has no objection if such clauses are included under Rule 27(3) of Mineral Concession Rules, 1960 for the de-reserved area.”

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6. On 27.02.1992, a circular was issued by the State

Government  permitting  sale/export  of  Non-Plant  Grade

(NPG)  bauxite.  During  the  period  from  10.04.2003  to

04.03.2005  various  notifications  were  issued  by  the

Central Government in exercise of its power under Section

9(3) of the MMDR Act, 1957 and Rule 64D of the Mineral

Concession Rules, 1960, laying down the guidelines for

computation of royalty on the basis of State wise mineral

value to be notified by the Indian Bureau of Mines (IBM).

7. On 28.11.2007, respondent no.1- Nirmalaben S. Mehta

sought the permission of the appellant-State for sale of

NPG  bauxite  for  a  quantum  of  1  lakh  metric  tonnes

(approx).  The  appellant-State  vide  its  order  dated

15.02.2008  granted  permission  for  sale  of  NPG  bauxite

subject to condition, interalia, that the respondent no.1

shall  deposit  royalty  of  Rs.  120  per  metric  tonne  in

advance with the appellant-State.  

8. The  respondent  no.1  again  applied  to  the

appellant-State by letter dated 18.02.2008 for sale of

1,12,900  metric  tonnes  of  NPG  bauxite.  The  same  was

rejected  by  the  appellant-State  vide  order  dated

19.06.2008 holding that the respondent no.1 has failed to

establish captive plant within a period of two years in

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accordance with prevailing policy. The relevant portion

of the aforementioned order reads thus: “5. Sanction of lease area was accorded to the lease holder for establishing bauxite base unit for his own consumption use. However, such unit is  not  yet  setup  by  the  lease  holder  and  the minerals at the lease area is not utilised for its value addition purpose. Valuable and useful mineral was being excavated in the bulk and the same  was  exported/sold.  This  activity  is  not found befitting to wider interest of the state.”  

 9. Aggrieved  by  the  orders  dated  15.02.2008  and

19.06.2008 passed by the appellant-State, the respondent

no.1 approached the High Court of Gujarat at Ahmedabad by

filing  Special  Civil  Application.  The  learned  Single

Judge  vide  order  dated  31.07.2008  dismissed  the

application  holding  that  the  respondent  no.1  had  not

exhausted the statutory remedy available under Section 30

of the MMDR Act, 1957 read with Rule 54 of the Mineral

Concession Rules, 1960. Instead of approaching the High

Court,  the  respondent  no.1  should  have  approached  the

Central  Government  which  is  the  Revisional  Authority

under the MMDR Act, in the matter.   10. Thereafter,  respondent  no.1  approached  the  Central

Government by filing Revision Application No. 09/16 of

2008  against  the  order  dated  19.06.2008  passed  by  the

appellant-State.  The  Central  Government  vide  its  order

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dated 27.08.2009 allowed the said Revision Application by

setting aside the order dated 19.06.2008 passed by the

appellant-State holding thus: “5.  ……We  have  gone  through  the  case  records carefully and after hearing the both sides come to the conclusion that- (a) as far as the instant case is concerned, it is not a case of fresh grant of mining lease but one of renewal. (b) no conditions of setting up of captive plant of  bauxite  was  mentioned  while  granting  mining lease. (c) no restriction was put on export and mining of bauxite in mining leases. (d) applicant if exporting bauxite for more than a decade. (e)  guidelines  issued  by  the  State  Govt.  vide G.R. dated 04.02.2005 as only an administrative in nature. (f) the approval of Central Government given vide letter  No.  4(2)/78-VI  dated  16.01.1980  in pursuance of State Government communication dated 02.08.1978 is not applicable in respect of the area  already  under  lease  and  to  which  neither reservation  nor  de-reservation  would  be applicable. 6. In view of the above circumstances and taking all  aspects  into  consideration  we  come  to  the conclusion  that  in  the  instant  case  while rejecting  the  applicants  renewal  application State Govt. has not followed the due process of law under Rule 27(3) of the Mineral Concession Rules, 1960.”   

11. Aggrieved  by  the  aforesaid  order  dated  27.08.2009

passed  by  the  Central  Government  in  exercise  of  its

revisional power under Section 30 of the MMDR Act, 1957

read with Rule 55 of the Mineral Concession Rules, 1960,

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the appellant-State approached the High Court of Gujarat

at Ahmedabad by filing Special Civil Application No. 6897

of  2010.  The  learned  Single  Judge  vide  order  dated

22.12.2010 dismissed the said Special Civil Application

holding  that  the  appellant-State  ought  not  to  have

suppressed the material fact of Writ Petition being filed

before the High Court of Delhi at New Delhi with regard

to  the  same  matter.  The  learned  Single  Judge  further

imposed costs of Rs.50,000/- on the appellant-State.

12. Aggrieved by the Order dated 22.12.2010 passed by the

learned Single Judge, the appellant-State approached the

Division Bench of the High Court of Gujarat at Ahmedabad

by filing Letters Patent Appeal No.683 of 2011. The High

Court vide its common judgment and order dated 13.12.2011

partly allowed the appeals to the extent of setting aside

the order of the learned Single Judge imposing cost of

Rs.50,000/-  upon  the  appellant-State.  Hence,  these

Appeals.

13. Mr. Parag Tripathi, the learned senior counsel for

the  appellant-State  contended  that  the  High  Court  has

failed to consider that huge quantity of bauxite has been

exported  by  the  lease  holders  without  informing  the

appellant-State and without paying due amount of royalty.

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Only with a view to regulate the trade of bauxite, vide

Resolution  dated  04.02.2005  the  appellant-State  had

framed policy for taking prior approval before exporting

bauxite outside India. He further submitted that by way

of the said resolution a mechanism is framed so that the

trade of bauxite, especially the export can be regulated

by the appellant-State. Bauxite being a valuable mineral

which  is  available  in  rare  pockets  of  the  State  of

Gujarat, such a step is necessary on the part of the

appellant-State which enables it to take necessary action

with regard to the same. It was further submitted by him

that as per the data available with the appellant-State

from 2004 onwards, around 70% to 90% of bauxite excavated

from  the  land  in  the  areas  by  the  lease  holders  was

exported  from  the  leased  areas.  Thus,  if  such  a  huge

quantity of bauxite is exported outside India it would

certainly  jeopardise  the  purpose  of  establishing  the

bauxite  based  value  addition  projects  in  the  State.

Further, export of bauxite in such a huge quantity might

lead to non-availability of bauxite for consumption in

the State. He further submitted that the resolution dated

04.02.2005  was  indirectly  accepted  by  the

lessee-respondents  and  even  applications  were  filed  in

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tune with the same. He further contended that the High

Court  has  committed  error  while  not  considering  the

purpose and object advanced by the appellant-State vide

resolution dated 04.05.2005.   14. It was further contended by him that the application

dated 28.11.2007 made by the lessee-respondents to the

appellant-State seeking permission of sale/export of NPG

bauxite for quantum of 1,12,900 MTs,  was based on the

premise that they were seeking permission to export the

bauxite  which  is  not  useful  for  the  plant.  However,

factually,  from  almost  five  decades,  the

lessee-respondents  have  not  taken  any  step  for  the

establishment of captive plant. He further submitted that

from  the  circumstances  it  is  clear  that  the

lessee-respondents are only interested in excavation of

the  bauxite  for  export  purpose  which  would  result  in

irreparable  depletion  of  the  valuable  mineral  for

domestic purpose. The High Court has failed to take note

of this important aspect while passing impugned judgment

and  order  and  therefore,  the  same  is  required  to  be

interfered  with  by  this  Court  in  exercise  of  its

appellate jurisdiction.   

15. It  was  further  contended  by  the  learned  senior

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counsel for the appellant-State that the High Court has

erred  in  coming  to  the  conclusion  that  the  permission

granted by the Central Government under Rule 27(3) of the

Mineral  Concession  Rules,  1960  vide  letter  dated

16.01.1980 would not be applicable to the respondents’

mine for the reason that since the notification reserving

the area of bauxite mining did not affect their mines, it

must necessarily follow that the permissions granted by

the Central Government at the time of de-reservation also

would  not  apply  to  their   mines.   It  was  further

submitted  by  him  that  by  the  notification  dated

26.02.1964 issued by the appellant-State the entire areas

of  Junagadh  and  Jamnagar  districts  were  reserved  for

public  sector.  Admittedly,  the  respondents’  mine  fell

within  Jamnagar  district,  a  reserved  area,  though  the

respondents were not affected by the reservation as the

said reservation was made to operate prospectively.

16. He further submitted that the appellant-State wrote a

letter dated 02.08.1978 to the Central Government seeking

permission  under  Rule  27(3)  of  the  Mineral  Concession

Rules, 1960 for de-reservation of the areas of Junagadh

and  Jamnagar  Districts  and  for  imposition  of  certain

conditions, including establishment of an industrial unit

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for captive consumption of bauxite. The permission for

the  said  de-reservation  was  granted  by  the  Central

Government  vide  letter  dated  16.01.1980.  He  further

submitted that once it is admitted that the respondents’

mines  fall  within  the  area  of  the  aforesaid  Jamnagar

district,  it  would  not  be  correct  to  say  that  the

permission of the Central Government under Rule 27(3) of

the Mineral Concession Rules, 1960 for de-reservation of

areas of bauxite mining would not be applicable to leases

granted prior to 16.01.1980 merely because the concerned

mines were not affected by the reservation. He further

submitted that any other interpretation in this regard

would lead to discrimination between fresh leases granted

post 16.01.1980 on the one hand and renewals of existing

lease granted after 16.01.1980 on the other and the same

is impermissible.  

17. With  regard  to  the  renewal  of  the  lease,  it  was

contended  by  him  that  the  High  Court  has  erred  in

concluding that a renewal of lease is not a fresh grant

and  thus,  at  the  time  of  renewal  of  lease  the

appellant-State cannot impose conditions,  interalia, of

setting up of a captive plant. In this regard it was

submitted by him that it is well settled position of law

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that a renewal of a lease is akin to a fresh grant and

hence, in the absence of either Lease Deed or the Rules

providing that renewal shall be granted on the same terms

and  conditions  as  the  original  grant,  a  renewal  is

governed by the law/conditions in force at the time of

grant  of  renewal  of  the  lease  of  the  mining  area  in

question.  Therefore,  in  the  case  at  hand,  the

appellant-State,  at  the  time  of  grant  of  renewal  of

lease, can impose such condition/conditions,  inter alia,

of  setting  up  of  a  captive  plant.  With  regard  to

aforesaid legal submission he has placed strong reliance

upon the decision of this Court in the case of  Gajraj

Singh v. State Transport Appellate Tribunal1. The relevant

paras relied upon by him read thus:

“38. It is settled law that grant of renewal is a fresh  grant  though  it  breaths  life  into  the operation  of  the  previous  lease  or  licence granted as per existing appropriate provisions of the Act, rules or orders or acts intra vires or as per the law in operation as on the date of renewal. The right to get renewal of a permit under  the  Act  is  not  a  vested  right  but  a privilege  subject  to  fulfillment  of  the conditions precedent enumerated under the Act…                     xx               xx               xx 41.  In  State  of  M.P.  &  Ors.  v.  Krishnadas Tikaram this Court  had held that it is settled law that renewal is a fresh grant and must be granted consistent with law in operation as on

1   (1997) 1 SCC 650

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that date……”              18. It  was  further  submitted  by  him  that  the  renewal

clause in the Lease Deed of 1964 makes it very clear that

any renewal of the lease shall be in accordance with the

provisions of the Act and Rules in force at the time of

grant of renewal. Therefore, the Revisional Authority and

the High Court, both have arrived at erroneous conclusion

that  in  the  absence  of  condition  of  setting  up  of  a

captive plant in the Lease Deed of 1964, such a condition

cannot be imposed at the time of grant of renewal of the

lease of the area in question.

 19. Per  Contra,  Mr.  Mihir  Joshi,  the  learned  senior

counsel appearing on behalf of the respondents contended

that neither the Export Import policy nor the MMDR Act

enacted by the Central Government impose any restrictions

on sale/export of bauxite and hence, the appellant-State

could not have introduced its own policy for restricting

or regulating the sale/export of bauxite in conflict with

policies and decisions of the Central Government.

20. It  was  further  submitted  by  him  that  there  is  no

question  of  general  public  importance  in  the  instant

case. It was submitted by the learned senior counsel that

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under the scheme of Section 9 read with Section 13 of

MMDR Act and Article 162 of the Constitution of India, it

is  the  prerogative  of  Central  Government  to  frame

policies  with  regard  to  major  minerals.  The  State

Governments  across  the  country  are  only  supposed  to

implement  the  policies  made  by  the  Central  Government

with regard to the grant of lease as well as renewal of

lease in respect of major minerals. He further submitted

that when the Central Government has deemed it fit not to

impose any restrictions on sale/export of bauxite either

in  export/import  policy  or  under  the  MMDR  Act,  the

appellant-State being simply an implementing agency, has

no authority, whatsoever, to impose any restriction in

the  renewal  of  grant  order  prohibiting  the  export  of

bauxite to other countries by the respondents.    21. It  was  further  submitted  by  the  learned  senior

counsel that merely because huge quantity of bauxite has

been exported by leaseholders, the same does not confer

any power under the MMDR Act upon the appellant-State to

frame any policy with regard to the export of bauxite

vide  resolution  dated  04.02.2005  under  the  guise  of

regulating the export of bauxite without the sanction of

the Central Government. Furthermore, it is an admitted

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fact that the said resolution dated 04.02.2005 was passed

by  the  State  Government  without  the  permission  of  the

Central Government.      22. It was further contended that as per the terms and

conditions  of  the  lease  deed  executed  between  the

respondents  and  the  appellant-State  there  was  no

restriction of any kind on the sale/export of bauxite. A

conjoint  reading  of  the  notification  dated  02.08.1978

issued by the appellant-State, the letter addressed to

the Central Government by the appellant-State on the same

day  seeking  permission  for  de-reservation  of  bauxite

areas which were earlier reserved for exploitation by the

public sector undertakings and for imposing conditions of

captive consumption for industrial units, read with the

order dated 16.01.1980 of the Central Government make it

absolutely clear that the said permission of imposing the

condition of captive consumption, granted by the Central

Government to the appellant-State was only for new units

requiring  the  said  lease.  He  further  submitted  that

respondents  were  already  continuing  with  the  mining

activity on the demised premises even during the alleged

period of reservation. It neither formed part of reserved

area  nor  de-reserved  area.  Thus,  the  sanction  of  the

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Central  Government  vide  its  letter  dated  16.01.1980

certainly should not apply to the lease of bauxite mining

area  belonging  to  the  respondents  as  has  been  rightly

held by both the Revisional Authority and the High Court.

23. With regard to the renewal of lease of the mining

area in question it was submitted by the learned senior

counsel  that  concept  of  deemed  renewal  or  that  each

renewal is a fresh lease, would not apply to the facts of

the instant case in view of the specific directions of

the Central Government in its order dated 16.01.1980.  

24. After considering the rival legal contentions urged

on  behalf  of  both  the  parties,  following  issues  would

arise for our consideration: 1.Whether the appellant-State has the power at the

time of renewal of lease of the mining area in

question to impose the condition of setting up of

a captive plant by the respondents? 2. Whether  the  permission  granted  by  the  Central

Government  under  Rule  27(3)  of  the  Mineral

Concession  Rules,  1960  vide  letter  dated

16.01.1980  would  be  applicable  to  the

respondents’ mine? 3.What order?

Answer to Point No.1

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25. Both the Revisional Authority as well as the High

Court  have  erred  in  coming  to  the  conclusion  that  a

renewal of lease of the mining area in question is not a

fresh grant and have wrongly concluded that at the time

of  grant  of  renewal  of  lease  of  the  area,  the  State

Government  is  not  empowered  to  impose  or  enforce

condition inter-alia, of setting up of a captive plant by

the respondents.

26. The High Court has failed to appreciate an important

aspect  of  the  matter  namely  that  for  imposition  of

condition in the grant of renewal of lease,  inter alia,

of setting up of a captive plant by the respondents, the

appellant-State  had  sought  permission  from  the  Central

Government  vide  communication  dated  02.08.1978  and  the

same  was  granted  by  the  Central  Government  vide  its

letter no.4(2)/78-NVI dated 16.01.1980. The relevant para

no.2  of  the  aforesaid  letter,  stated  supra,  makes  it

abundantly  clear  that  the  Central  Government  had  no

objection  if  clauses  pertaining  to  the  imposition  of

certain  conditions  upon  the  leaseholders  are  included

under Rule 27(3) of the Mineral Concession Rules, 1960

with  respect  to  the  bauxite  areas  of  Junagadh  and

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Jamnagar  districts  de-reserved  by  the  appellant-State

vide  notification  dated  02.08.1978,  which  were  earlier

reserved for exploitation of bauxite by the public sector

undertakings.  

27. Further, the High Court has erred in not noticing the

well settled legal proposition as laid down by this Court

in Gajraj Singh’s case supra, on the point that the grant

of renewal of the lease in respect of the mining area in

question is a fresh grant. The relevant paras read thus:

“37.  In  Provash  Chandra  Dalui  v. Bisawanath Banerjee this Court drew the distinction between the meaning of the words extension and renewal. It was held that:

“…a distinction between ‘extension’ and ‘renewal’ is chiefly that in the case of  renewal,  a  new  lease  is  required while in the case of extension the same lease  continues  in  force  during additional period by the performance of stipulated  act.  In  other  words,  the word  'extension'  when  used  in  its proper  and  usual  sense  in  connection with a lease, means prolongation of the lease.”

38. It is settled law that grant of renewal is a fresh  grant  though  it  breathes  life  into  the operation  of  the  pervious  lease  or  licence granted as per existing appropriate provisions of the Act, rules, or orders or acts intra vires or as per the law in operation as on the date of renewal. The right to get renewal of a permit

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Central Government showed no objection for the inclusion

of conditions mentioned in the letter dated 02.08.1978

addressed to it by the appellant-State under Rule 27(3)

of the Mineral Concession Rules, 1960 for the de-reserved

area.  

28. It is clear that in the absence of any provision in

the lease deed or in the Act, Rules or Orders etc in

operation  as  on  the  date  of  renewal  of  lease  of  the

mining  area  in  question  providing  renewal  of  lease  in

favour of the respondents shall be granted on the same

terms  and  conditions,  is  governed  by  the  law  or

conditions in force at the time of renewal.  

29. Thus,  from  the  factual  matrix,  the  relevant  legal

provisions  and  the  case  law  referred  supra  upon  which

strong reliance is placed by the learned senior counsel

on behalf of the appellant-State, it is clear that in the

instant case the appellant-State after 16.01.1980 had the

power to impose condition interalia, for setting up of a

captive plant for bauxite by the respondents at the time

of renewal of their lease. Therefore, the impugned order

passed by both the Revisional Authority and High Court

are vitiated in law and therefore, the same are liable to

be set aside.

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Thus, point no.1 is answered accordingly.  

Answer to Point No.2 30. The  factual  matrix  of  the  instant  case  further

reveals  an  important  undisputed  fact  that  the

respondents’ mines were located in the Jamnagar district,

which area along with Junagadh district area was declared

a  reserved  area  for  exploitation  of  bauxite  in  public

interest vide notification dated 26.02.1964 issued by the

appellant-State. However, the said notification did not

affect the mine belonging to the respondents as the said

notification was made to operate prospectively. The facts

of the instant case further reveals that on 02.08.1978

the  appellant-State  issued  a  notification  whereby  the

bauxite  areas  of  Jamnagar  and  Junagadh  districts  were

de-reserved, which were earlier reserved and on the same

day addressed a letter to the Central Government seeking

permission  for  the  same  along  with  permission  for

imposition of certain conditions on the leaseholders of

the above area with a view to protect the interest of the

State Government and at the same time extending help to

the industries which require bauxite for its  bona fide

captive  use.  The  Central  Government  vide  letter  dated

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16.01.1980  granted  permission  in  favour  of  the  State

Government for both i.e., it allowed de-reservation of

the  bauxite  areas  of  Jamnagar  and  Junagadh  districts,

which  were  earlier  reserved,  and  also  allowed  the

appellant-State  to  read  clauses  referred  by  it  in  its

letter dated 02.08.1978 under Rule 27(3) of the Mineral

Concession Rules, 1960 for the de-reserved area.

31. As it is an admitted fact that the respondents’ mines

were located in the area of the above Jamnagar district,

it  would  not  be  correct  as  contended  by  the  learned

senior counsel for the respondent that the permission for

inclusion of certain conditions including condition for

setting up of a captive plant by the leaseholders under

Rule 27(3) of the Mineral Concession Rules, 1960 for the

de-reserved area granted by the Central Government vide

letter dated 16.01.1980 would not be applicable to the

respondents’ lease which was granted prior to 16.01.1980

merely  because  their  mines  were  not  affected  by  the

notification  of  reservation  dated  26.02.1964  issued  by

the appellant-State.    

32. It has been rightly contended by the learned senior

counsel on behalf of the appellant-State that any other

interpretation  of  the  above  order  of  the  Central

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Government in this regard would lead to discrimination

between  fresh leases granted post 16.01.1980 on the one

hand and renewals of the existing leases granted after

16.01.1980 on the other. Such a distinction sought to be

made by the respondents’ counsel is impermissible in law

as  after  16.01.1980,  a  fresh  grant  and  a  renewal  of

existing  lease  of  the  mining  area  stands  on  the  same

footing.   

33. The aforesaid important legal aspect of the matter

has not been taken note of by the High Court as well as

the Revisional Authority. Therefore, the impugned order

dated 13.12.2011 passed by the High Court confirming the

order dated 27.08.2009 passed by the Revisional Authority

being  contrary  to  the  approval  given  by  the  central

government  vide  letter  dated   16.01.1980  is  not  only

erroneous  but  also  suffer  from  error  in  law.  For  the

reasons stated supra the impugned orders of both the High

Court as well as the Revisional Authority are liable to

be set aside as they are vitiated in law.

Answer to Point No.3 34. Therefore, for the aforesaid reasons, we accept the

legal submissions made by the learned senior counsel on

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behalf  of  the  appellant-State  as  the  same  are  well

founded and based on law laid down by this Court in the

case referred to supra. The civil appeals are allowed by

setting  aside  the  order  of  the  High  Court  dated

13.12.2011  and  the  order  of  the  Revisional  Authority

dated 27.08.2009. The State Government is at liberty to

impose such terms and conditions in the renewal of lease

of the mining area in question granted in favour of the

respondents.  A  cost  of  Rs.5  lakhs  is  awarded  to  the

appellant-State  Government in  respect  of  these

proceedings.  

                                ……………………………………………J.     [V. GOPALA GOWDA]

   ……………………………………………J.       [ARUN MISHRA]

New Delhi, July 13, 2016