Oral Judgment: (A.S. Chandurkar, J.)
The challenge in the present Writ Petition is to the Notification (Revised Guidelines for Making Selection of Applicants for Grant of Off-shore Exploration Licence) issued on 29th December 2010. Considering the nature of controversy we have heard the Writ Petition finally with the consent of parties. Hence Rule. Rule made returnable forthwith with the consent of parties.
2. Shri N. H. Seervai, learned Senior Counsel with Shri A. A. Naik, learned counsel for the petitioner, Shri K. Setalvad, learned Additional Solicitor General with Shri S. K. Mishra, learned Assistant Solicitor General of India for respondents 1 and 2, Shri N. C. Phadnis learned counsel for respondent no.3, Shri A. S. Mardikar learned counsel for the respondent No.4 and Shri Anand Parchure for the respondent No.5 have been heard at length.
3. The facts relevant for considering the aforesaid challenge are that, according to petitioner-Company it carries on the business of prospecting, exploring and operating licence and quarries. The National Institute of Oceanography Goa (NIO) has been permitted to do reconnaissance operations. According to petitioner on 24th February 2009 the NIO provided initial reconnaissance report to the petitioner for the offshore area from Jaigad to Kalbadevi. It further received exploration data on 8th December 2009 from Mirya to Vijaydurg. The respondent no.2 Controller General, Indian Bureau of Mines Nagpur was appointed as administering authority on 11th February 2010. According to petitioner on 7th June 2010 a Notification was issued by the respondent no. 1 notifying that mineral bearing offshore blocks were available for grant of Exploration Licence. The applications for Exploration Licence were to be made from 15th June 2010 to 14th September 2010. There were about 63 offshore areas in the waters of Bay of Bengal and Arabian Sea. The petitioner-Company made about 17 applications for Item Nos. 21 to 37 of Schedule II being offshore areas in the waters of Arabian Sea. The said applications were made within the prescribed time. According to petitioner on 29th December 2010 a Notification came to be displayed on the website of Ministry of Mines according to which certain guidelines for selecting applicants for grant of offshore exploration licence were made. The petitioner on 3rd January 2011 made a representation and sought cancellation of aforesaid Notification. Similar reminder was issued on 10th March 2011. Ultimately on 25th March 2011 the present Writ Petition has been filed challenging the aforesaid Notification (Guidelines) dated 29th December 2010.
4. This Court on 28th March 2011 has issued notice to the respondents and had passed an interim order permitting the continuation of the process of selection but directed that the same should not be finalized without obtaining orders from this Court. In the meanwhile on 5th April 2011 the respondents issued letter of intent to various successful applicants. As a result of issuance of such letters of intent, intervention applications were filed in the present Writ Petition. On 13th July 2011 three such applications were allowed and the intervenors were permitted to participate in the present proceedings. Thereafter on 28th November 2011 the interim order dated 28th March 2011 was confined to only 17 blocks for which the petitioner-company had staked its claim. The intervenor Nos.2 and 3 who were allottees for offshore areas in the Bay of Bengal were therefore discharged. Intervenor No. 1 M/s U. A. Minerals Pvt. Ltd., was directed to be added as respondent no.3 to the Writ Petition. Similarly, on the request made on behalf of the petitioner, leave was granted to join other claimants who had been allotted the remaining sites for which the petition had been filed. Accordingly, respondent Nos.3 to 5 were added to the array of parties. The parties were also put on notice that the Writ Petition could be disposed of finally at the stage of admission. It is further necessary to note here that Writ Petitions relating to challenge of issuance of letters of intent pursuant to Notification dated 7th June 2010 came to be filed before the Madras High Court and the Andhra Pradesh High Court. Respondent No. 3 had moved an application for staying present proceedings on the ground that the transfer petitions were pending before the Hon'ble Apex Court. On 12th June 2012 this Court deferred the hearing of the matter to 12th July 2012 clarifying that further adjournments would not be granted on the ground that the transfer petition was pending before the Hon'ble Apex Court. A similar application being C. A. W. No. 2045 of 2013 was again moved by the respondent no. 3 praying that hearing of the Writ Petition be deferred as the application for transfer was being considered by the Hon'ble Apex Court. In view of the earlier order dated 12th June 2012 said application seeking staying of the proceedings was rejected on 12th August 2013. It is in this background that respective counsel have been heard by us at length.
5. Shri N. H. Seervai, learned Senior Counsel assailing the Notification dated 29th December 2010 made the following submissions:
(a) It was urged that Notification (Guidelines) as issued was beyond the scope of the Offshore Areas, Mineral (Development and Regulation) Act 2002 (hereinafter referred to as the Act of 2002). The same contravened the rule making power conferred by Section 35 of the Act of 2002. It was also submitted that respondent no.2 â Controller General had no authority to issue aforesaid notification (Guidelines) and the same could have been issued only by respondent no.1 â Union of India. In support of the said submission, reliance was placed by the learned Senior Counsel on the decision of Privy Council reported in NazirAhmad v. King Emperor, AIR 1936 PC 253(1) and the judgment of the Hon'ble Apex Court reported in ParmeshwarPrasad v. Union of India and others, (2002) 1 SCC 145.
(b) It was then submitted that the Notification (Guidelines) having been issued after the last date of making applications which was 14th September 2010, the same amounted to changing in the nature of criteria after all applications had been made. According to the learned Senior Counsel, this course was not permissible, and it amounted to changing the goalpost itself. There was thus, violation of the provisions of Article 14 of the Constitution of India. To buttress the aforesaid submission, reliance was placed on the decisions of the Hon'ble Apex Court reported in RamanaDayaram Shetty v. Intrnational Airport Authority of India and others, (1979) 3 SCC 489, UmeshChandra Shukla v. Union of India and others, (1985) 3 SCC 721, 1986(3) SCC 247, (2001) 10 SCC 51 and Monarch Infrastructure (P) Ltd., v. Commissioner, Ulhasnagar Municipal Corporation and others, (2000) 5 SCC 287. Another limb of the aforesaid submission was based on the doctrine of legitimate expectation. It was submitted that the petitioner legitimately expected that its application for exploration licence would be considered in accordance with the provisions of the Act of 2002. As the petitioner's applications were considered on the basis of the Notification (Guidelines) dated 29.12.2010, the same caused serious prejudice to the expectations of the petitioner. In this regard reliance was placed upon the Judgment of the Hon'ble Apex Court reported in Global Energy Limited and another v. Central Electricity Regulatory Commission, (2009) 15 SCC 570.
(c) It was thereafter submitted that the impugned Notification (Guidelines) exceeded the permissible limits of the delegated legislation and it introduced criteria de hors the provisions of the Act of 2002. In support of the aforesaid submission, reliance was placed on the judgments of the Hon'ble Apex Court in the case of Academy of Nutrition Improvement and others Vs. Union of India, (2011) 8 SCC 274, SandurManganese and Iron Ores Limited Vs. State of Karnataka and others, (2010) 13 SCC 1.
(d) That assuming that the Notification (Guidelines) was legal and valid, the same in itself was arbitrary and as non application of mind was inherent and hence, was required to be struck down. Submissions made in an attempt to demonstrate the same are required to be looked into in detail and hence, we find it convenient to mention the same at that juncture. In support of the aforesaid submission, reliance was placed on the decisions of the Hon'ble Apex Court reported in P. N. Kaushal and Ors Vs. Union of India (1978) 3 SCC 558, Dakshin Haryana Bijli Vitran Nigam and others Vs. Bachan Singh, (2009) 14 SCC 793 and State of Orissa and Another Vs. Mamata Mohanty, (2011) 3 SCC 436.
On the basis of the aforesaid submissions, the learned Senior Counsel, therefore, submitted that the Notification dated 29.12.2010 was required to be quashed as being illegal and arbitrary.
6. Contesting the claims of the petitioner, Shri K. Setalvad learned Additional Solicitor General of India on behalf of respondent Nos.1 and 2 made the following submissions:
(a) That in view of provisions of Section 34 of the Act of 2002, the petitioner had an alternate remedy of preferring an appeal. Without exhausting said statutory remedy, the writ petition was not maintainable. In this regard, reliance was placed on an unreported judgment of the Madras High Court in Writ Petition No.12333 of 2011 decided on 24.6.2011.
(b) It was then submitted that though the petitioner had referred to the Guidelines issued on 29.12.2010 as a Notification, the same were in fact, revised Guidelines and by no stretch of imagination could the same be called a Notification. In this regard, reliance was placed on the Full Bench decision reported in Kashmiri Lal and others Vs. State of Punjab and another, AIR 1984 Punjab and Haryana 87.
(c) It was then urged relying upon the Article 297 and Article 39(b) of the Constitution of India that the matter pertains to exploration of minerals and hence, the public trust doctrine as enunciated by the Hon'ble Apex Court in its decision reported in Reliance Natural Resources Limited VS. Reliance Industries Limited, (2010) 7 SCC 1 was applicable.
(d) It was thereafter, submitted that the guidelines dated 29.12.2010 merely laid down the criteria for selecting the applicants in the matter of grant of exploration licence. In absence of any rules under Section 35 of the Act of 2002, such guidelines could be issued to facilitate the operation of provisions of Section 12 of the Act of 2002. In support of the aforesaid submission, reliance was placed on the following judgments of the Hon'ble Apex Court namely U.P. State Electricity Board, Lucknow v. City Board, Mussoorie and others AIR 1985 SC 883, The Mysore State Road Transport Corporation v. Gopinath Gundachar Char AIR 1968 SC 464, SantRam Sharma v. State of Rajasthan and others, AIR 1967 SC 1910, Orissa State prevention and Control of Pollution Board vs. M/s Orient Paper Mills and another, AIR 2003 SC 1966, SurinderSingh v. Central Government and others, AIR 1986 SC 2166 and V. T. Khanzode and others v. Reserve Bank of India and another, AIR 1982 SC 917.
(e) It was further submitted that the guidelines dated 29.12.2010 had been framed by experts in the field who had proper knowledge about the criteria to be applied while selecting the applicants for grant of exploration licence. The said exercise having been undertaken by the experts in the field, the Court would be slow in interfering with such an exercise. The reliance was sought to be placed on the decisions of the Hon'ble Apex Court reported in The University of Mysore v. C. D. Govinda Rao and another, AIR 1965 SC 491, Federation of Railway Officers Association and others, v. Union of India, AIR 2003 SC 1344, Centre for Public Interest Litigation and another v. Union of India and others, AIR 2001 SC 80, Secy. (Health) Deptt. Of Health and F.W. And another v. Dr. Anita Puri and others, (1996) 6 SCC 282, IbalcoEmployees' Union (Regd.) v. Union of India and others,(2002) 2 SCC 333 and Bajaj Hindustan Limited v. Sir Shadilal Enterprises Limited and another, (2011) 1 SCC 640.
(f) It was thereafter submitted that no case of malafides had been made out by the petitioner so as to quash the guidelines dated 29.12.2010. Reliance was placed on the judgment of the Hon'ble Apex Court reported in The Regional Manager and another v. Pawan Kumar Dubey, AIR 1976 SC 1766. It was, in fact, submitted that the letter of intent having been issued to various parties, they had not been joined as respondents in the writ petition. It was submitted that they were necessary parties as they were likely to be affected if the guidelines dated 29.12.2010 were quashed. It was also submitted that the writ petition sought to raise academic issues and hence, the writ petition did not deserve to be entertained. In this regard, reliance was placed on the decisions of the Hon'ble Apex Court reported in SanjeevCoke Manufacturing Company v. M/s Bharat Coking Coal Ltd and another, AIR 1983 SC 239, The Central Arecanut and Cocoa Marketing and Processing Cooperative Ltd. v. State of Karnataka and others, AIR 1998 SC 2399 and BasantKumar v. State of Rajasthan and others, (2001) 7 SCC 201. It was also submitted that there was no question of invoking either the doctrine of legitimate expectation or promissory estoppel in the matters of public interest. In this regard, reliance was sought to be placed on the judgment of the Division Bench of this Court at Bombay in Writ Petition No.3748 of 2011 decided on 8.7.2011.
7. It was thus submitted that there was no case made out for interference and the Writ Petition was liable to be dismissed. Shri N. C. Phadnis, learned counsel for respondent no.3, Shri A. S. Mardikar, learned counsel for respondent No.4 and Shri Anand Parchure, learned Counsel for respondent No.5 adopted the arguments made on behalf of respondent Nos. 1 and 2 and also sought for dismissal of the Writ Petition.
8. Learned Senior Counsel for the petitioner in rejoinder submitted that Guidelines dated 29th December 2010 did not partake the colour of an order and hence there was no question of filing any appeal under Section 34 of the Act of 2002. It was further submitted that there being breach of fundamental rights of the petitioner to carry on business along-with the right to be treated equally, it had sufficient locus to challenge the aforesaid guidelines. It was then submitted that as the respondent no.1Union of India had the power to frame Rules, the impugned Guidelines for filling in the gaps ought to have been issued by Union of India itself. As said Guidelines had been issued by the Controller General the same were without any authority. Countering the submissions made on behalf of the respondents that the Guidelines had been framed by experts, it was submitted that the challenge in the present Writ Petition was to the decision making process while selecting applicants and hence the Court could look into said matter for setting aside the impugned guidelines.
9. Before considering the challenge of the petitioner on merits, it would be necessary to first take into account certain preliminary objections raised by the respondents. According to the learned Additional Solicitor General of India appearing for respondent Nos.1 and 2, though the document dated 29.12.2010 were merely revised guidelines issued by respondent No.2 â Controller General, they had been wrongly referred to as a Notification. Referring to the prayers made in the writ petition, it was submitted that what was, in fact, under challenge were the revised guidelines dated 29.12.2010 and not any Notification dated 29.12.2010 as prayed. Perusal of the document dated 29.12.2010 indicates that it has been titled as 'REVISED GUIDELINES FOR MAKING SELECTION OF APPLICANTS FOR THE GRANT OF OFFSHORE EXPLORATION LICENCE'. The perusal of said document reveals that the said guidelines have been framed for processing applications for grant of exploration licence. Thereafter, the evaluation criteria has been stipulated therein. In the Full Bench decision of the Punjab and Haryana High Court in the case of Kashmirilal (supra), the question arose as to whether publication in the Official Gazette was a sine qua non of a Notification envisaged under Section 4 of the Land Acquisition Act 1894. It was held in the said decision that the factum of proclamation or publication in the Official Gazette were the modes of giving publicity to an order or decision and until the same had been done, the same would not become Notification. It was held that the publication in the Official Gazette was a sine qua non of a notification under Section 4 of the Land Acquisition Act, 1894. In the present case, the petitioner has pleaded that the revised guidelines dated 29.12.2010 were found on the website of the respondents. They were never published in the Official Gazette. Perusal of the contents of the said guidelines indicate that the same were meant only to prescribe criteria for processing of various applications for grant of Offshore Exploration Licence. Thus, said revised guidelines cannot be termed as a âNotificationâ as referred to by the petitioner in the writ petition. We, therefore, hold that the document dated 29.12.2010 that has been impugned in the present writ petition are merely revised guidelines as prescribed by respondent Nos.1 and 2 for selecting the applicants for grant of licence. The same cannot be called as Notification under the Act of 2002. Though the said document has been referred to as a Notification, we proceed to consider challenge to it by treating the same as revised guidelines issued by respondent No.2. Hereinafter the said impugned document dated 29.12.2010 shall be referred to as âGuidelinesâ.
10. This now takes us to consider the other preliminary objection raised by the respondents of there being an alternate remedy available to the petitioner under Section 34 of the Act of 2002 to challenge the guidelines dated 29.12.2010. Section 34(1) confers a right to appeal on a person aggrieved by an order made by the administering authority or any other officer under said Act. Said provision reads as under:
â34(1) : Subject to the provisions of sub section (2), any person aggrieved by an order made by the administering authority or any officer under this Act or the rules made there-under may prefer an appeal against such order to the Central Government.â
Rule 59 of the Offshore Areas Mineral Concession Rules, 2006 (hereinafter referred to as Rules of 2006) prescribes the manner of preferring an appeal under Section 34 of the Act of 2002. Perusal of Guidelines dated 29th December 2010 reveal that the same had been framed for processing of applications taking into consideration the provisions of Section 12 of the Act of 2002, Rule 13 of the Rules of 2006 and Notification dated 7th June 2010 published by the respondent no. 2 whereby applications were called for grant of exploration licence. The evaluation criteria stipulates various items and points to be awarded while evaluating various applications. The same have been titled as revised guidelines for making selection of applicants for grant of offshore exploration licence. Hence by no stretch of imagination can these revised Guidelines be termed as an âOrderâ made by the administering authority. The said guidelines do not determine rights of any applicant. They merely stipulate the manner in which applications have to be evaluated. Perusal of Section 34 of the Act of 2002 with Rule 59 of the Rules of 2006 clearly indicates that the connotation of an order as contemplated under the Act of 2002 is one which determines rights of a party in the matter of grant of permit, exploration licence or the production lease. The administering authority has been granted the power to grant an exploration licence under Section 12 of the Act of 2002. Under Section 13 of the Act of 2002 the administering authority has been empowered to grant production lease. In the exercise of such power when the administering authority makes an order the same is subject to appeal under Section 34(1) of the Act of 2002. The impugned Guidelines having been issued merely to facilitate the evaluation of applications made cannot be termed as an order and hence it cannot be said that the petitioner had remedy of preferring an appeal under Section 34(1) of the Act of 2002, for challenging the Guidelines dated 29th December 2010. Hence we reject the said preliminary objection raised on behalf of respondents that the petitioner ought to have preferred an appeal under Section 34(1) of the said Act for challenging the Guidelines dated 29th December 2010.
11. It was then urged on behalf of respondent Nos.1 and 2 that the petitioner was not an aggrieved person as it was neither an applicant who required minerals for use in an industry already owned by it, nor had it taken sufficient steps to set up such industry. On this basis, it was urged that the petitioner did not have sufficient locus to challenge the guidelines dated 29.12.2010. It is seen that the challenge in writ petition is to the revised guidelines dated 29.12.2010. One of the grounds of challenge is the lack of authority with respondent No.2 to frame such guidelines. It is also the case of the petitioner that the guidelines are in themselves arbitrary and unreasonable. Even if it is assumed that the petitioner is not an applicant who requires the minerals for use in an Industry already owned by it or that the petitioner has not taken sufficient steps to set up such industry, under the provisions of Section 12(3)(b)(II) the applicants not covered under sub clause (I) can be granted licence on the basis of a comparative evaluation of the matters stated in the proviso to sub clause (I). Hence, the challenge being raised to the revised guidelines itself and the same being required to be applied even in absence of an applicant owning an industry or in absence of an applicant having taken sufficient steps to set up such industry, the comparative evaluation even otherwise is required to be made. Hence, we find that the petitioner has sufficient locus to challenge the guidelines dated 29.12.2010. We, therefore, decline to non suit the petitioner on the ground of lack of locus to challenge the guidelines dated 29.12.2010.
12. The decks having been cleared with consideration of the preliminary objections, it would be now necessary to consider the various challenges raised by the petitioner to the guidelines dated 29.12.2010.
13. The principal challenge to the guidelines dated 29.12.2010 is that the same is beyond the scope of the Act of 2002 in as much as it contravenes the power conferred by Section 35 of the Act of 2002. According to the learned Senior Counsel appearing for the petitioner, respondent No.2 â Controller General had no authority to issue said guidelines which were in fact, required to be issued only by respondent No.1. The relevant portion of Section 35 of the Act of 2002 which confers the power to make rules reads as under:â
35.(1) The Central Government may, by notification in the Official Gazette, make rules for the purposes of this Act.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:
(a) the requisite technical ability and financial resources to undertake exploration operation on scientific parameters under clause (b) of subsection (1) of section 12;
(e) the manner in which a work programme shall be prepared and the data by which the work programme shall be supported under clause (c) of subsection (1) of section 12;
(f) the manner of transfer referred to in sub-clause (ii) of clause (e) of subsection (1) of section 12;
(g) the time within which the applications under sub-section (3) of section 12 are to be received.
Section 12 of the Act of 2002 empowers the administering authority to grant an exploration licence. The relevant portion of Section 12 of the Act of 2002 in so far as the same is required to be considered while deciding the challenge in question is reproduced hereunder: â12.(1) The administering authority may grant an exploration licence to any person who
(a) is eligible under section 6 for grant of operating right;
(b) produces, to the satisfaction of the administering authority, evidence that such person possesses the requisite technical ability and financial resources to undertake exploration operation based on such scientific parameters, as may be prescribed;
(c) submits a work programme for the area applied for, prepared in such manner and supported by such data as may be prescribed, setting forth the activities proposed to be carried out during the period of the exploration licence including the intended exploration schedule and methods to be used, an estimated schedule of expenditure, measures to prevent pollution and protect the environment and to monitor the effectiveness of environmental safeguards subject to the modifications which the administering authority may make in such work programme;
(d) undertakes not to deviate from the work programme for exploration licence approved by the administering authority; and
(e) has fulfilled, to the satisfaction of administering authority, all his statutory obligations under any operating right previously
(i) granted; or
(ii) transferred in the prescribed manner, to him.
(2) The administering authority may, if there is any reasonable cause to believe that any person, to whom an exploration licence has been granted, has violated by undertaking given under clause (d) of subsection (1), terminate the exploration licence.
(3) All applications for the grant of exploration licence received within the prescribed time and which satisfy the conditions specified in subsection (1) shall be considered together and while making a selection for the grant of exploration licence, the administering authority shall follow the procedure given below, namely:
(a) where only one application is received in respect of an area, the administering authority may grant the exploration licence to the applicant;
(b) where two or more applications are received in respect of the same area or substantially the same area, the order of preference shall be as follows, namely:
(1) preference shall be given to an applicant who requires the mineral for use in an industry either already owned by the applicant or who has taken sufficient steps to setup such industry: Provided that where there are more than one application of such category, the administering authority may grant licence based on a comparative evaluation of the
(i) nature, quality and experience of the technical personnel employed by the applicant;
(ii) financial resources of the applicant;
(iii) nature and quantum of the exploration work proposed by the applicant; and
(iv) nature, quality and quantum of data submitted along with the programme of exploration;
(II) in case of other applicants, not covered under subclause (I), the administering authority may grant licence based on a comparative evaluation of matters stated in items (i) to (iv) of the proviso to sub-clause (I).â
An application for exploration licence is required to be made in the manner prescribed by Rule 13 of the Rules 2006 and the same is required to be considered and disposed of in terms of Rule 15 of the Rules of 2006.
14. The perusal of the provisions of Section 12 of the Act of 2002 indicates that an applicant seeking grant of exploration licence has first to produce evidence to the satisfaction of the administering authority that such applicant possesses the requisite technical ability and financial resources to undertake exploration operations. Similarly, such applicant under clause (c) of Section 12(1) of the Act of 2002 is also required to submit a work programme for the area applied along with supporting data as may be prescribed setting forth the activities proposed to be carried out. Thereafter, under Section 12(3) of the Act of 2002, only those applicants which satisfy the conditions specified in sub-section (1) of Section 12 are to be considered for grant of exploration licence. Section 12(3)(a) stipulates that if only one application is received in respect of an area, the administering authority may grant the exploration licence to such applicant. However, if two or more applications are received in respect of the same area, or substantially the same area, then the order of preference has been prescribed under Section 12(3)(b). The preference is required to be given to an applicant who requires the minerals for use in an industry either already owned by the applicant or who has taken sufficient steps to set up such industry. The proviso thereof stipulates that if more than one application of such category is received, then on the basis of a comparative evaluation the administering authority may grant the licence. The items of which the comparative evaluation is required to be made by the administering authority, has been stipulated by clause (i) to (iv) of proviso to Section 12(3)(b)(I). It is thus clear that Section 12 (3)(b) itself envisages the procedure to be followed by the administering authority when two or more applications are received in respect of the same area or substantially the same area. Similarly, the manner in which the preference is to be given and the manner in which a comparative evaluation of various applications is to be made, is already stipulated. It is not in dispute that it is the administering authority who has to make a selection from amongst various applicants for grant of exploration licence. In the light of provisions of Section 12(3) of the Act of 2002, if the guidelines dated 29.12.2010 are looked into, it will be clear that the evaluation criteria mentioned in said guidelines pertains to the various factors that are required to be considered by the administering authority while selecting an applicant for grant of exploration licence. Item 1 of said evaluation criteria which prescribes the industry status is based on the provisions of Section 12(3)(b)(I). The manner in which the preference is to be given has been stated in the said provisions. In so far as Item No.2 is concerned, the same prescribes the technical capability of an applicant. Perusal of Section 12(3) (b)(I) proviso (i) indicates that the administering authority is required to consider the nature, quality and experience of the technical personnel employed by the applicant. In so far as the Item No.3 of the criteria is concerned, same deals with the exploration work proposed. Perusal of provisions of Section 12(3)(b)(I) proviso (iii) indicates that this is also one of the factors to be taken into consideration by the administering authority during its comparative evaluation. In so far as Item No.4 of the evaluation criteria is concerned, the same deals with financial resources. Section 12(3) (b) (I) proviso (ii) also requires evaluation of the financial resources of the applicant. Lastly, Item No.5 of the evaluation criteria that relates to data submitted along with the exploration work is relatable to the provisions of Section 12(3)(b)(I), proviso (iv) of the Act of 2002.
It is, therefore, clear that the guidelines dated 29.12.2010 prescribe points for such evaluation criteria which the administering authority is, even otherwise, required to take into account while selecting the applicants for grant of exploration licence on the basis of a comparative evaluation. Section 12(3)(b)(I) proviso itself prescribes matters of which there should be a comparative evaluation. These very matters have been utilized and treated in the guidelines dated 29.12.2010. Discussion little later will show that the challenge to these norms as arbitrary is without any substance. Petitioner, therefore, is not correct in contending that process prescribed by the guidelines dated 29.12.2010 and the nature of evaluation criteria therein is something which is not consistent with Section 12(3)(b) of the Act of 2002.
15. It can thus, be seen that an applicant who seeks an exploration licence under Section 12 of the Act of 2002 is aware while making such application that the same would be considered by the administering authority in the manner prescribed by said Section. It is also clear to an applicant that if there are two or more applications in respect of the same area or substantially the same area, then the exploration licence would be granted on the basis of a comparative evaluation of various applicants. Similarly, the matters that would be taken into account while making a comparative evaluation of various applications is also stipulated in Section 12(3)(b) of the Act of 2002. What the guidelines dated 29.12.2010 have done is merely to allot points with regard to various criteria for the purposes of comparative evaluation. The guidelines merely stipulate the various points that are required to be given to an applicant based on the information which was required to be given along with the application as required by Section 12(3) of the Act of 2002. It, therefore, cannot be said that the administering authority while stipulating various points for the purposes of evaluation of applications has acted beyond the provisions of Section 12(3) of the Act of 2002. The administering authority having been granted the power to select an applicant for grant of exploration licence on the basis of comparative evaluation of various applications cannot be said to have acted in contravention of the provisions of Section 12(3) (b)(I) of the Act of 2002. For the same reason, the aforesaid guidelines dated 29.12.2010 allotting points as the basis for evaluation cannot be said to be de hors the Act of 2002. In so far as the celebrated decision of Privy Council in the case of Nazir Ahmad (supra) relied upon by the learned Senior Counsel for the petitioner is concerned, there can hardly be any dispute about the proposition laid down therein. Section 12(3)(b)(I) proviso prescribes the grant of licence on the basis of a comparative evaluation of the applicants. As the guidelines merely seek to assist the administering authority in such comparative evaluation, it cannot be said that the administering authority has done something contrary to the manner in which the comparative evaluation is required to be done. The ratio of said decision, therefore, does not apply to the facts of the present case. Similarly, in so far as the Judgment of the Hon'ble Apex Court in the case of Parmeshwar Prasad (supra) is concerned, it has been laid down that the authority competent to make Rules or Regulations is alone competent to issue circulars in that regard. In the present case, the administering authority itself has been granted the power to make a comparative evaluation of various applications received by it. What has been done by the impugned guidelines is that the points have been allotted against various heads to evaluate various applications. It, therefore, cannot be said that in doing so, the respondent No.2 acted beyond its authority. It cannot be said that by doing so, it has attempted to fill in the gaps left in the Rules framed under Section 35 of the Act of 2002. Hence, ratio of said judgment is also inapplicable to the facts of the present case.
16. Another major limb of challenge to the impugned guidelines was that under the provisions of Section 12(3)(b) (I) where two or more applications were received in respect of the same area or substantially the same area, the order of preference was laid down and as per the same, preference was to be given to an applicant who required the mineral for use in an industry either already owned by the applicant or who had taken sufficient steps to set up such industry. An industry already owned and an industry for whose setting up sufficient steps were taken were treated as part of one category. On the basis of aforesaid provision, it was vehemently urged by the learned Senior Counsel that under the impugned guidelines whereby evaluation criteria was stipulated, 15 points were allotted for industry status. For an Industry already owned by the applicant, 10 points were allotted and alternatively for an applicant who had taken sufficient steps to set up such industry, 5 points were allotted. On this basis, it was urged that when the provisions of Section 12(3)(b)(I), had included an applicant who already owned an industry or an applicant who had taken sufficient steps to set up such industry in one category itself, the impugned guidelines by prescribing different points and treating an applicant owning an industry differently from an applicant who had taken sufficient steps to set up such industry showed that the respondent No.2 had acted in clear violation of the statute i.e. the Act of 2002. On this basis, it was urged that the impugned guidelines were illegal and were required to be quashed.
The argument though attractive, the same will have to be considered on the basis of the provisions of Section 12(3)(b)(I) and (II) and the material on record in the form of the respective pleadings of the parties. The petitioner has placed on record FormG being its application for exploration licence. With regard to particulars which the applicant desired to furnish under clause (xvi), the following has been stated:
| â(xvi) Any other particulars the applicant wishes to furnish | a) Work programme enclosed (annexure-19) b) Affidavit for work programmeenclosed (Annexure-20) c) Letter of interest for setting up an industry by Stock International GmbH is enclosed. It is proposed to set up an industry as a joint venture when a production lease is granted to us in future (Annexure-21)â |
âThe petitioner is not an applicant who requires the mineral for use in an industry already owned by it nor who has taken sufficient such steps to set up such industry. At highest the petitioner claims to have a letter of intent for setting up an industry as a joint venture â in any view of the matter this cannot constitute taking sufficient steps. The petitioner application for grant of exploration licence is therefore covered by Section 12(3)(b)(II) and not section 12(3)(b)(I).â
Thereafter the petitioner has filed an affidavit dated 7.11.2011. In response to para 3 of the affidavit in sur-rejoinder filed by the respondent No.2, it has been stated as under:
âIn any event, the contents of the paragraph under reference is a matter of interpretation of Section 12 of the Offshore Areas Minerals (Development and Regulation) Act, 2002 ('Act') and deserves no comment except to say that the paragraph under reference clearly overlooks that the Petitioner in the present Writ Petition has claimed a legal right under Section 12(3)(a) of the Act as well as (without prejudice) a legal right under section 12(3)(b)(I)(iv) of the Act.â
17. Besides the aforesaid pleadings noticed by us on record, there is no material on record placed by the petitioner to indicate that it required the mineral for use in an industry either already owned by it or that it had taken sufficient steps to set up such industry. Except for stating in clause (xvi) of Form-G that it proposed to set up an industry as a joint venture when a production lease was granted to it, there is no other material on record to enable us to hold that the application of the petitioner was entitled to be considered in the manner as prescribed by the provisions of Section 12(3) (b)(I) so as to be entitled to preference. On the contrary, perusal of Section 12(3)(b)(II) of the Act of 2002 indicates that in case of those applicants who were not covered under sub clause (I), the administering authority could grant licence based on a comparative evaluation of the matters stated in items (i) to (iv) of the proviso to sub clause (I). It is, therefore, clear that if there is an applicant who neither owns an industry or who has not taken sufficient steps to set up such an industry then his application is required to be considered in the manner as prescribed by the provisions of Section 12(3)(b)(II). In such situation, there is no question of any preference being given to such applicant and the licence is required to be granted on the basis of a comparative evaluation of the criteria mentioned in proviso to sub-clause (I). Therefore, in the wake of the material on record and the respective pleadings, it is difficult to hold that the application of the petitioner was required to be considered under sub clause (I) of Section 12(3)(b) of the Act of 2002. After the respondent no.2 had specifically asserted in its affidavit dated 3092011 that the case of the petitioner was covered by provisions of Section 12(3)(b)(ii), though the petitioner filed further affidavit dated 7.11.2011, it has not been stated that either it already owned an industry or that it had taken sufficient steps to set up such industry and therefore, its application was required to be considered under the provisions of Section 12(3)(b)(I) of the Act of 2002. Similarly, nothing has been stated about sufficient steps having been taken by the petitioner to set up such industry. A mere statement that it proposed to set up an industry as a joint venture, when a production lease would be granted to it in future can hardly be said to qualify the applicant as one âwho has taken sufficient steps to set up such industryâ. In fact, what is stated by the petitioner in Form-G is contingent on a production lease being granted it in future. It would, therefore, be an academic exercise to consider the challenge to the guidelines on the ground that separate treatment was given to an industry already owned by an applicant compared to an applicant who has taken sufficient steps to set up such industry in these facts of the matter. In view of the above, we are not inclined to consider the aforesaid submission of the learned Senior Counsel to hold guidelines dated 29.12.2010 illegal. The reliance placed by the learned Additional Solicitor General of India on the decisions of the Hon'ble Apex Court in the case of SanjeevCoke, Central Arecanut and Vasantkumar (supra) is well founded and in view of the law laid down therein, we refrain from considering and answering aforesaid academic challenge in the facts of the present case.
18. This takes us to consider the next challenge to the revised guidelines that they having been issued on 29.12.2010 i.e. after the last date of applying for exploration licences, the same resulted in changing the rules of the game after it had begun. It was submitted that none of the applicants were aware of any such guidelines when they had applied for the exploration licence and if such guidelines had been brought into effect before submission of the applications, the petitioner could have acted accordingly. Carrying aforesaid submission further, it was also urged that by framing the revised guidelines and judging various applications on that basis prejudiced the rights of the petitioner as it had legitimate expectation that its application would be considered as per the criteria laid down in the Act of 2002, the Rules of 2006 and the Notification dated 7.6.2010.
19. It is by now well settled that there cannot be any change in the criteria for selection after the process of selection itself has commenced. Reliance in this regard has been rightly placed on the judgment of the Hon'ble Apex Court in the case of Monarch Infrastructure (P) Limited (supra). Similar is the view expressed by the Hon'ble Apex Court in the case of Umeshchandra Shukla (Supra). In the light of the aforesaid settled legal position, the above submission made on behalf of the petitioner will have to be now examined. The scheme of Section 12(3) of the Act of 2002 has already been noticed herein above. The Section itself prescribes the procedure to be followed in the matter of selecting an applicant for grant of exploration licence. Where there are two or more applications, the manner in which the preference is to be given has been specified. Further if in such category there is more than one application, then the administering authority is required to grant licence on the basis of a comparative evaluation of the matters mentioned therein. Thus, the Section itself is a clear indicator of the matters that would be taken into account for the purposes of making a comparative evaluation for grant of exploration licence. As stated above, each of the applicants who has applied for an exploration licence in terms of provisions of Section 12 of the Act of 2002, is aware of the matters that would be taken into account for the purposes of making a comparative evaluation amongst the applicants. Thus, by prescribing points for various matters that are already stipulated in Section