1. This writ petition is filed under Articles 226 and 227 of the Constitution of India seeking for a declaration that the action of the respondents in not complying with the judgment of this Court in W.P. No. 21793/2005 dated 5.9.2007 with regard to the application of the petitioner for grant of mining lease in its favour to an extent of 242.82 hectares of applied area in Ramanadurg range and village, Sandur Taluk, Bellary District conseuqently upon the application dated 14.9.93, is arbitrary, illegal and unjust and in violation of fundamental rights guaranteed under Articles 14, 19(1)(g) of the Constitution of India and the constitutional rights guaranteed under Article 300-A and not in accordance with the judgment of this Court in W.P. No. 21793/2005 dated 5.9.2007; and issue appropriate direction directing that the respondents shall grant mining lease in favour of the petitioner-company in accordance with the sketch map annexed to its mining lease application dated 14.9.1993 and in accordance with the order of Board of Industrial and Financial Reconstruction ('BIFR' for short) dated 25.11.2008 and issue the Gazette notification accordingly.
2.1. The petitioner-Company is an operator of sponge iron manufacturing plant at Bellary since 1993 and it proposed to setup an integrated steel plant in the State of Karnataka. According to the petitioner, the first respondent-State promised the petitioner to grant a mining lease to procure its requirement: of seven lakhs tonnes of iron ore per annum for a period of 50 years and the petitioner also applied for a mining lease over an extent of 600 acres in the Ramanadurg Range in Sandur Taluk on 14.9.1993. But the said application dated 14.9.1993 was rejected by order dated 29.6.1994 on frivolous ground mentioning that the area applied for by the petitioner overlaps with the area of another similar applicant. Being aggrieved by the said order dated 29.6.1994, petitioner filed revision petition, which was allowed by order dated 29.6.1994, and the order dated 29.6.1994 rejecting the application for grant of mining lease in favour of the petitioner was thus set aside in revision and matter was remitted to the State Government to consider the application of the petitioner in accordance with law. But, no action was taken by the Government.
2.2. Upon the initial commitment to the petitioner, the first respondent issued Government Order on 4.12.1995 and acting thereon the petitioner promptly commenced work at the then estimated cost of Rs. 891 crore. The commitment of the first respondent to the petitioner was reaffirmed and recorded at a meeting of the senior officials of all the concerned departments and the petitioner, held on 27.2.1997. However, the petitioner's efforts to secure the promised mining lease were not fruitful though the petitioner had progressed with the work of setting up its plant at the estimate of 1996 had to be revised in 2001 to Rs. 1,679 crore. Since the petitioner has already spent Rs. 1,250 crore without being able to commence production for want of assured supplies of iron ore for its continuous plant operations, the petitioner requested the first respondent on various dates and also wrote letters on 7.2.2005 and 9.2.2005 requesting the second respondent-the Hon'ble Chief Minister and the Hon'ble Minister for Industries. But no tangible action was taken by the State Government.
3.1. Being aggrieved by the inaction of the respondents, petitioner filed W.P. No. 21793/2005 and the said writ petition was allowed directing the respondents to pass appropriate orders on the petitioner's application for grant of mining lease within the outer limit of three months from the date of the order i.e. 5.9.2007.
3.2. Despite said specific order, no order was passed by the respondents and therefore, the petitioner filed Contempt Petition No. 127/2008.
3.3. On hearing the said contempt petition, the Division Bench of this Court, by order dated 13.11.2008, held that the respondent was not incumbent to the post of Secretary on the relevant date, and accordingly dismissed the contempt petition.
4. Being aggrieved by the dismissal of the contempt petition, the petitioner preferred SLP No. 717/2009 before the Hon'ble Supreme court and the said SLP was disposed of on 27.1.2009 passing the following order:
We do not find any merit in this Special Leave Petition accordingly dismissed. However, as it is stated that the remedy against the State to enforce the writ of mandamus issued by the High Court is still subsisting, the petitioner shall be at liberty to pursue remedies, if any, available to it.
5. In the meanwhile, the Government of Karnataka has come up with the fresh Mining Policy 2008, wherein it has been highlighted that the mining lease should be preferably granted for steel plants and value addition has been encouraged.
6. The petitioner further contends that BIFR has passed an order on 25.11.2008 in BIFR Case No. 114/2004 as follows:
Government of Karnataka will sanction the mining lease no M/s. Bellary Steels and Alloys Ltd., and will also issue gazette notification in the matter within a period of 60 days from the date of this order.
A compliance report shall be forwarded to the Board immediately after implementing the Bench directions.
7. On 20.2.2009 the petitioner appraised the Government of all the facts up to date including the order of the BIFR and requested to immediately comply with the order of this Court in W.P. No. 21793/2005 and also the order passed by the BIFR. On 27.2.2009 the petitioner filed I.A.1/2009 in W.P. No. 30213/2008 seeking permission to withdraw the writ petition. The same was allowed and this Court permitted the petitioner to withdraw W.P. No. 30213/2008 and to file a fresh petition. Accordingly the present writ petition is filed contending that the inaction on the part of the respondents in not complying with the direction dated 5.9.2007 issued by this Court in W.P. No. 21793/2005, and also the order of the BIFR dated 25.11.2008, affects the fundamental right of the petitioner guaranteed under Articles 14 and 19(1)(g) of the Constitution of India and constitutional right guaranteed under Article 300-A of the Constitution. Hence the present Writ Petition No. 7194 of 2009 seeking for a declaration that the action of the respondents in not complying the judgment of this Court in W.P. No. 21793/2005 dated 5.9.2007 with regard to the application of the petitioner for grant of mining lease in favour of the petitioner to an extent of 242.82 hectares of applied area in Ramanadurga range and village, Sandur Taluk, Bellary District conseuqently upon the application dated 14.9.93, is arbitrary, illegal and unjust and in violation of fundamental rights guaranteed under Articles 14, 19(1)(g) and constitutional rights guaranteed under Article 300-A and not in accordance with the judgment of this Court in W.P. No. 21793/2005 dated 5.9.2007; and issue appropriate direction directing that the respondents shall grant mining lease in favour of the petitioner-company in accordance with the sketch map annexed to its mining lease application dated 14.9.1993 and in accordance with the order of BIFR dated 25.11.2008 and issue the Gazette notification accordingly.
8.1 Notice was issued to the respondent-State and respondents 1 to 3 have filed objections statement averring that the writ petition is frivolous and not maintainable. As the contempt petition C.C.C. No. 127/2008 filed by the petitioner has been dismissed, the writ petition is also liable to be dismissed.
8.2. The application for grant of mining lease was filed by the petitioner on 14.9.1993 and the same cannot be granted since there are prior applications from National Mineral Development Corporation ('NMDC' for short), which is a government of India entity, and others in respect of the very land and there are orders of this Court in W.P. No. 18445/2003 and connected writ petitions which have been confirmed in W.A. No. 781/2007 and there is a direction in W.P. No. 18445/2003 that until the application filed by NMDC and others is considered in preference on priority to other applications filed by other persons, application filed by other persons shall not be considered.
8.3. Respondents 1 to 3 have also denied the averments made in the petition regarding the promise made to the petitioner for supply of iron ore and it is also averred that the application filed by the petitioner could not be considered in view of the pendency of the writ petitions referred to above in the objections statement including W.P. No. 21608/2005, wherein there was a direction not to consider any of the applications for grant of mining lease during the pendency of the writ petition.
8.4. The averments made in the petition that inaction on the part of the respondents has affected the fundamental right of the petitioner guaranteed under Articles 14 and 19(1)(g) of the Constitution of India and constitutional right under Article 300-A of the Constitution of India and that there is no impediment for grant of mining lease applied for the by petitioner and a direction may be issued in that behalf, are also denied.
9. We have heard Mr. Soli Sorabjee, learned Senior counsel appearing for the petitioner, Mr. Basavaraj Kareddy, Principal Government Advocate appearing for respondents 1 to 3 and Mr. Y. Hariprasad, learned Counsel appearing for the fourth respondent-Central Government.
10.1 Mr. Soli Sorabjee, learned Senior Counsel appearing for the petitioner submits that the writ petition No. 21793/2005 filed by the petitioner herein has been allowed on 5.9.2007 by accepting the contention that on the ground of promissory estoppel, which is a rule of equity, the application of the petitioner for grant of mining lease shall be considered and time-limit of three months was fixed for consideration of the application of the petitioner for grant of mining lease. However, respondents have not chosen to comply with the direction issued in the said writ petition. It is further contended that even though the contempt petition initiated against the respondents was dropped on 13.11.2008 holding that the accused in the said contempt petition was not holding the post of the Secretary to Government, Department of Industries, during the period of three months during which the application of the petitioner was directed to be considered and the accused was held not guilty of disobedience of the order, on appeal before the Hon'ble Supreme Court in SLP (Civil) No. 717/2009, by order dated 27.1.2009, the Hon'ble Supreme Court clearly observed that the remedy against the State to enforce the writ of mandamus issued by the High Court is still subsisting and petitioner shall be at liberty to pursue the remedy available to it, and therefore this writ petition is filed.
10.2. Having regard to the fact that despite the direction issued in W.P. No. 21793/2005 on 5.9.2007 and the same having not been complied with, there is no impediment for grant of mining lease in favour of the petitioner as sought for.
10.3. The learned senior counsel submits that petitioner has been granted the relief in W.P. No. 21793/2005 for consideration of its application on the ground that promissory estoppel and is not relying upon the decision of this Court in W.P. No. 18445/2003. Order passed in W.P. No. 21608/2005 has now been set: aside in appeal by this Division Bench and therefore, having regard to the inordinate delay in non-consideration of the application of the petitioner for grant of mining lease and in the absence of any impediment, direction may be issued to the respondents to grant mining lease in favour of the petitioner-Company in accordance with the sketch map annexed to its mining lease application dated 14.9.1993 and in accordance with the order of BIFR dated 25.11.2008 wherein also a direction has been issued for grant of mining lease in favour of the petitioner. The learned senior counsel has relied upon the decisions of the Hon'ble Supreme Court in The Union of India v. Anglo Afghan Agencies AIR 1968 SC 718 and The Gujarat State Financial Corporation v. Lotus Hotels Pvt. Ltd. : AIR 1983 SC 848, wherein the principle of promissory estoppel has been reiterated.
11. Learned Government Advocate appearing for respondents 1 to 3 reiterates the grounds urged in the objections statement and submits that the direction issued by this Court in W.P. No. 21793/2005 could not be complied with, as there was a direction in W.P. No. 21608/2005 not to consider any application for grant of mining lease and the order passed in W.P. No. 18445/2003 and connected matters was pending in writ appeals before this Division Bench which came to be disposed of on 5.6.2009. Learned Government Advocate further submits that the application of the petitioner will be considered in accordance with law.
12. We have given careful consideration to the contentions of the learned senior counsel appearing for the petitioner and the learned Principal Government Advocate appearing for the respondents and scrutinised the material on record.
13. The material on record would clearly show that the learned Single Judge of this Court, by order dated 5.9.2007 in the Writ Petition No. 21793/2005 filed by the petitioner herein, has allowed the writ petition and directed the State Government to consider its application for grant of mining lease, in accordance with law. The material on record would also clearly show that petitioner has sought for a writ of mandamus in the said writ petition to direct the first respondent to hear and dispose of the application for grant of mining lease filed by the petitioner. However, respondents have not yet taken any steps for consideration of the application of the petitioner as per the direction issued in W.P. No. 21793/2005 on 5.9.2007. It is clear, while dismissing the SLP (Civil) No. 717 of 2009 filed by the writ petitioner herein against the order passed in CCC. No. 127/2008 dated 3.3.2008, the Hon'ble Supreme Court has observed that the writ of mandamus issued by the High Court is still subsisting and the petitioner shall be at liberty to pursue the remedy if any, available to it. Therefore, the petitioner is entitled to exercise its liberty to enforce the mandamus issued by this Court in W.P. No. 21793/2005 dated 5.9.2007.
14. However, the question of issuing a direction to the first respondent to grant mining lease in favour of the petitioner in accordance with the sketch map annexed to its mining lease application dated 14.9.1993 and in accordance with the order of the BIFR dated 28.4.2008 would not arise at this stage. Of course, in view of the fact that the first respondent has not taken any step for consideration of the application for grant of mining lease on 14.9.1993 as per the direction of this Court in W.P. No. 21793/2005 dated 5.9.2007, the petitioner would be entitled to the direction to the first respondent to consider the application of the petitioner for grant of mining lease dated 14.9.1993 in accordance with law expeditiously and within the time-limit fixed by this Court. The material on record would also show that the order of the learned Single Judge dated 7.8.2008 passed in W.P. No. 21608/2005 that application of the mining lease shall not be considered in respect of the forest area, was pending in a batch of writ appeals before this Division Bench till 5.6.2009. Therefore, it cannot be said that the action of the respondents in not complying with the direction issued by this Court in W.P. No. 21793/2005 dated 5.9.2007 is arbitrary, illegal, unjust and in violation of the fundamental rights guaranteed under Articles 14 and 19(1)(g) and the constitutional right guaranteed under Article 300-A of the Constitution of India, and therefore, the petitioner is not entitled for declaration in that behalf. That apart, even though the respondents have not complied with the directions issued in ,W.P. No. 21793/2005 which has become final, neither the order passed by BIFR can be enforced by issuing mandamus, as there is provision in the Sick Industrial Companies Act, 1935 for implementation of order passed by BIFR, nor the petitioner is entitled for grant of lease merely based on the promissory estoppel or equity.
15. The Apex Court in the case of Raghunath Rai Bareja v. Punjab National Bank : (2007) 2 SCC 230 held as follows:
29. ...While we fully agree with the learned Counsel that equity is wholly in favour of the respondent Bank, since obviously a bank should be allowed to recover its debts, we must, however, state that it is well settled that when there is a conflict between law and equity, it is the law which has to prevail, in accordance with the Latin maxim 'dura lex sed lex' which means 'the law is hard, but it is the law'. Equity can only supplement the law, but cannot supplant or override it.
Therefore, if at all the petitioner has got any right baced on the order dated 5.9.2007 made in W.P. No. 21793 of 2005, it shall be entitled for such a right strictly in accordance with the provisions of the Mines and Minerals (Development and Regulation) Act 1957, and the Mineral Concession Rules, 1960.
16. Accordingly, we hold that the petitioner is not entitled to the relief sought for in the writ petition to declare that the action of the respondents in not complying with the direction issued in W.P. No. 21793/2005 dated 5.9.2007 is null and void, arbitrary, illegal, unjust and in violation of fundamental and constitutional right of the petitioner and in accordance with direction issued by BIFR dated 25.11.2003. However, petitioner is entitled to a direction to the respondents to consider the application dated 14.9.1993 filed by the petitioner for grant of mining lease, only in accordance with the provisions of Mines and Minerals (Development and Regulation) Act 1957, and the Mineral Concession Rules, 1960. The respondents are thus directed to consider the application dated 14.9.1993 filed by the petitioner for grant of mining lease in accordance with the provisions of the Mines and Minerals (Development and Regulation) Act 1957, and the Mineral Concession Rules, 1960, expeditiously and at any rate not later than three months from the date of receipt of this order or production of certified copy of the order, whichever is earlier.
17. Writ petition is ordered accordingly.