SKS Ispat Ltd. vs Union of India and Others

These writ Appeals are against the order of the single judge, dated 12.7.2012, allowing writ petition (C) number 362 of 2012 and 363 of 2012 and setting aside the order of the Central Government dated 13.4.2012. The main question involved in these writ appeals is, whether they are maintainable u/s 2 of the Chhattisgarh High Court (Appeal to Division Bench) Act, 2006 (the 2006 Act).

THE FACTS

Applications were filed for prospecting licenses in different non-notified areas under the Mines and Minerals (Development and Regulation) Act, 1957 (the Act). They were considered by the State Government on 30.07.2008 and apart from others, the following recommendation/non-recommendations were made:

� An area of 440.75 hectares in Sahaspur-Lohara District Kabirdham (Lohara area) was recommended in favour of Prakash Industries Ltd. (Prakash-Industries);

� No area was recommended for SKS Ispat Ltd. (SKS-Ispat) as well as Satya Power & Ispat Ltd. (Satya-Power) on the ground that 876.71 hectares in Khara forest range, District Kabirdham (Khara area) and 135.61 hectares in Rajhara District Durg (Rajhara area) respectively were already recommended in their favour.

Against the aforesaid order of the State Government, SKS-Ispat and Satya-Power (jointly referred to as the Appellants) filed revisions before the Central Government u/s 30 of the Act.

While deciding the revisions, the Central Government recorded the following findings:

� The State Government has recorded contradictory finding in respect of 750.30 hectares of land at Halba Bina Pal, district Kanker (Halbabinapal area) and has suppressed vital fact in its respect;

� SKS-Ispat was the earlier applicant than Prakash-Industries and had preferential claim. It was ignored because of the aforesaid suppression as well as by mentioning that land was recommended in its favour in Khara area;

� The impugned area was free and not notified, therefore, provisions of Section 11(2) of the Act should have been relied upon by the State Government, instead of invoking Section 11(5);

� No special reasons have been recorded by the State Government u/s 11(5) of the Act for ignoring the preferential claim;

� The area was not available for grant and the State Government extended undue favour to Prakash-Industries;

� The action of the State Government was arbitrary and violated section 11(2) of the Act.

On the basis of the aforesaid findings, the Central Government allowed the revisions on 13.4.2010 and remanded the matter to the State Government for re-consideration.

The Prakash-Industries initially filed writ petitions before the Delhi High Court and thereafter withdrew them and filed WP(C) 362/2012 and 363/2012 in this Court.

While deciding the writ petitions, the single judge recorded the following findings:

� Prakash-Industries was the earlier applicant than SKS-Ispat for Khara area, yet over an area of 876.71 hectares in Khara area (approximately double the present area of Lohara area) was recommended in favour of SKS-Ispat on the ground that 750.30 hectares of land at Halbabinapal area (that was already recommended in favour of SKS-Ispat) may not receive forest clearance;

� The manner in which the consideration had been made for Lohara and Khara area demonstrated (as both considerations were made on the same date) that the State Government was alive to the fact that Khara area is in the process of recommendation in favour of SKS-Ispat as Halbabinapal area already recommended in favour of SKS-Ispat may not get forest clearance;

� The aforesaid factor was taken in favour of SKS-Ispat for recommendation of Khara area in its favour. Therefore, while considering Lohara area, the file notings mentioned both the areas as available in paragraph 3 of noting dated 29.1.2007. Thus, the file notings were neither contradictory nor arbitrary or pre-planned;

� In any case, SKS-Ispat having been benefited by receiving recommendation in its favour for Khara area on the ground that Halbabinapal area may not get forest clearance, the same cannot be used to its advantage when Lohara area was being considered;

� While recommending grant in favour of the Prakash-Industries, the State Government had considered special reasons as mentioned in the chart that the production of the Prakash-Industries was more than any other applicant however, it did not have proportionate prior allocation corresponding to its demand under the declared mineral policy of the State;

� Similar special reasons as aforesaid were assigned, while recommending Khara area in favour of SKS-Ispat over 876.71 acres. This was upheld by the Delhi High Court in the matter of Real Ispat and Power Limited Vs. Union of India (UOI) and Others,

� While recommending grant of prospecting license to Prakash-Industries, the State has considered the investment already made/proposed investment of Rs. 1017 crores to be made by the Prakash-Industries pursuant to MoU. These were special reasons for exercising power u/s. 11(5) of the Act;

� The Central Government misread the file notings and there was perversity in its order.

On the aforesaid findings, the writ petitions were allowed and the order of the central government dated 13.4.2010 was set aside. Hence, the present appeals by SKS-Ispat and Satya-Power (the Appellants).

POINTS FOR DETERMINATION

We have heard counsel for the parties. The following points arise for determination in the case:

(i) Whether, while exercising the powers u/s 30 of the Act, the Central Government acts as a tribunal;

(ii) Whether the order of the single Judge was under Article 226 or 227 of the Constitution;

(iii) Whether the present writ appeals are maintainable;

(iv) Whether the single judge committed an illegality in setting aside the order of the Central Government.

1st POINT: CENTRAL GOVERNMENT ACTS AS A TRIBUNAL

In Durga Das Basu''s Shorter Constitution of India 14th edition (page 864-865), the basic tests for determining whether an authority is a tribunal or not, have been rightly summarised as follows:

(a) That the power of adjudication has been conferred on the authority in question by statute;

(b) That such adjudicating power is a part of the State''s inherent power exercised in discharging its judicial function.

(c) If there a lis and the decision of the authority is binding and final.

In case, an authority hearing an administrative appeal or revision, satisfies the aforesaid criteria then it is a ''tribunal'' subject to supervisory jurisdiction under article 227 of the Constitution of India.

The question is whether the Central Government while deciding the revision u/s 30 of the Act, satisfies the aforesaid criteria or not. Let''s consider the first criterion, whether the power is conferred by a statute or not.

Power Conferred By A Statute

Mines and mineral are the natural wealth of the nation and the State is merely a trustee. The natural wealth is to be used for the benefit of the public and the State is under legal duty to protect it.

The Supreme Court has established the following principles by different decisions (for citation see below) 1 in order to protect the environment and natural wealth:

(i) There should be Sustainable Development.

(ii) Precautionary Principles should be adopted.

(iii) Polluter Pays.

(iv) Public Trust Doctrine.

(v) Save Forests, trees, biodiversity.

(vi) The Rule of Absolute Liability.

The concept of sustainable development was initiated in the Stockholm Declaration of 1972.2 It was given definite shape in 1987 by the World Commission on Environment and Development 3 in its report, ''Our Common Future''. This commission was chaired by the then Prime Minister of Norway Ms. GH Brundtland 4 and this report is also known as ''Brundtland Report''.

Sustainable Development means that the development should meet the needs of the present without compromising the ability of the future to meet their own needs. Its salient features are:

� Inter Generational Equity;

� Use and Conservation of Natural Resources;

� Environmental Protection;

� The Precautionary Principle;

� Polluter Pays principle;

� Obligation to assist and cooperate;

� Eradication of Poverty; and

� Financial Assistance to the developing countries.

The Legislature has also enacted different statutes to protect environment, natural resources, and to deal with them. The Act is one such statute and has been enacted to provide for the development and regulation of mines and mineral under the control of the Union.

Section 11 of the Act is titled ''Preferential right'' of certain persons. Sub-section 2 of Section 11 {Rule 11(2)} of the Act provides that in case an area was not notified in the official gazette then the first applicant would have the preferential right.

Nevertheless, the State Government has been empowered under sub-section 5 of section 11 {section 11(5)} of the Act, to grant prospecting licences to the person who is not the first applicant provided it also records the special reason for doing it.

u/s 30 of the Act, the Central Government has been empowered to adjudicate the lis between the two applicants or test the legality of order of the State Government. This power is conferred by a statute enacted by the Parliament. The first criterion is satisfied.

Let''s consider, whether, while deciding the revision, the central government discharges judicial functions or not.

Central Government Discharges Judicial Function

The State Government does not consider the applications in private. They are considered after hearing the parties or their representative i.e. the order is passed after affording reasonable opportunities to the parties or their representatives.

A revision lies before the Central Government u/s 30 of the Act against the order/recommendations of the State Government u/s 11 of the Act.

The Central Government has also framed the Mineral Concession Rules 1960 (the Rules) under the Act. Chapter VII of the Rules is titled ''REVISION''. It contains two rules namely rule number 54 and 55.

Rule 54 is titled ''Application for revision''; whereas, rule 55 is titled ''Orders on revision application''. These two rules explain the procedure how the revision u/s 30 of the Act is to be dealt with.

Any person, aggrieved by any order under the Act by the State Government or any authority, may file revision. There is limitation of three months in filing the revision {rule 54(1) of the Rules}. Under proviso to rule 54 (1) of the Rules, the delay can also be condoned.

In the revision, by an unsuccessful party for the licence or lease, the other successful party is to be impleaded {rule 54 (2)} of the Rules.

Sub-rule 1 of rule 55 {rule 55 (1)} of the Rules provides that the Central Government will send a copy of the revision to the State Government to implead the necessary parties and thereafter their comments including that of the State Government are called.

The different sub-rules of rule 55 of the Rules provide the procedure of revision as follows:

� The comments are required to be sent to the other side for making further comments if they so like {rule 55 (2) of the Rules};

� The revision application, communications, comments, and counter comments constitute the record of the case {rule 55(3) of the Rules};

� The Central Government also has power to pass interim orders {rule 55 (5) of the Rules};

� The Central Government also provides personal hearing to the parties or their representatives before passing any final order. The order is passed after affording reasonable opportunity to them;

� The Central Government may affirm, modify, or set-aside, or pass such orders (as in the present case, the matter was remanded) as it may deem just and proper.

Section 30 of the Act along with rule 54 and 55 of the Rules shows that the Central Government is discharging judicial functions; it has trappings of a court. It was also so held by the Supreme Court in Bharat Raja Vs. The Union of India (UOI) and Others, . The second test for being tribunal is satisfied.

Let''s consider, if third criterion of its decision being final is satisfied or not.

Decision Is Final

There is no provision in the Act making the order final but nature of legislation, the topic that it deals with, and different provisions by necessary implication make the orders of the State Government final. These orders are subject only to revision u/s 30 of the Act.

The order of Central Government u/s 30 of the Act is final and subject only to a writ jurisdiction of High Court or to the Supreme Court under Article 136 of the Constitution of India. The order of the Central Government is final and binding on the parties.

In our opinion, the Central Government, while exercising the power u/s 30 of the Act, acts as a Tribunal.

2nd & 3rd POINT: WRIT APPEALS ARE NOT MAINTAINABLE

The Chhattisgarh High Court was established on 1st November, 2000. No writ appeal was maintainable against the order of the single judge passed under Article 226 and 227 of the Constitution of India. But subsequently, the State of Chhattisgarh enacted the 2006 Act providing appeals before a division bench against the order of single judge in some cases.

Section 2(2) of the 2006 Act provides:

� An appeal against the order passed by the single judge of the High Court in exercising of original jurisdiction under Article 226 of the Constitution of India to a Division Bench comprising of 2 Judges;

� Sub-section 2 {section 2(2)} of the 2006 Act provides limitation of 45 days;

� The proviso to Section 2(1) of the 2006 Act provides that no appeal shall lie against the interlocutory order or against the order passed in exercising supervisory jurisdiction under Article 227 of the Constitution of India.

It is not disputed that if the order of the single judge was under Article 227 of the Constitution then, the writ appeals are not maintainable. However, the question is, whether the single judge exercised power under Article 226 or 227 of the Constitution of India.

Order Is Under Article 227

The counsel for the Appellants have brought to our notice the writ petition filed by the Prakash-Industries as well as placed reliance on Ashok K. Jha and Others Vs. Garden Silk Mills and Another, and M.M.T.C. Limited Vs. Commissioner of Commercial Tax and Others, They submit that:

� The writ petition was filed under Article 226/227 of the Constitution of India;

� The prayers number 10.2 to 10.4 of the writ petitions are for mandamus, which can only be granted under Article 226 and not 227 of the Constitution of India;

� The single judge has exercised jurisdiction under Article 226 of the Constitution.

The heading or nomenclature of a writ petition does not determine whether the order has been passed under Article 226 or 227 of the Constitution of India. It is the substance of the order passed by the Court that determines whether the order was passed under Article 226 or 227 of the Constitution.

The petition was filed against the order of the Central Government u/s 30 of the Act. While deciding the first point, we have held that the Central Government was acting as a Tribunal. On the face of it, the Petitioner was invoking supervisory jurisdiction of the High Court under Article 227 of the Constitution. Nevertheless, it is to be seen whether the single judge has exercised any power that are beyond Article 227 and can be granted only under Article 226 of the Constitution. In case, the order was such that could be passed only under Article 226 of the Constitution, then the writ appeals will be maintainable.

While exercising the revisional power, the Central Government remanded the case back to the State Government for re-consideration on the ground that relevant consideration were not applied by the State Government. However, the single judge has allowed the writ petitions on the ground that there were special reasons for granting prospecting licence to the Prakash-Industries. The single judge has set aside the order passed by the Central Government u/s 30 of the Act. This order can be passed under supervisory jurisdiction of Article 227 of the Constitution. In this case, the single judge did not pass any order or issued any direction under Article 226 of the Constitution.

The counsel for Prakash-Industries submits that:

� Even if a direction in the nature of mandamus is issued, the order would be under Article 227 of the Constitution as a direction incidental to the main relief, can always be passed under Article 227 of the Constitution; and

� The writ appeals are not maintainable.

It is not necessary for us to express any view on the aforesaid submission as the single judge has neither entertained nor issued any direction that could not be issued under Article 227 of the Constitution.

In our opinion,

� The order of the single judge was under Article 227 of the Constitution; and

� The writ appeals are not maintainable.

4th POINT NOT NECESSARY TO DECIDE

The counsel for SKS-Ispat submits that:

� The State Government had called for the information, which was specified u/s 11(3) of the Act. This was not permissible as it was not a notified area;

� In the comparative chart, the case of SKS-Ispat had not been considered;

� The Central Government has merely remanded the matter back for re-decision in accordance with law. The Single Judge ought not to have interfered with the order;

� The SKS-Ispat was a prior applicant and had preferential right over Prakash-Industries;

� The State Government has not recorded any reason for granting a licence in favour Prakash Industries.

The counsel for Satya-Power has adopted the arguments raised by the counsel for SKS-Ispat and further submits that:

� The case of Satya Power was not considered on the ground that it has already been recommended an area. However, it had already surrendered that area on 16.1.2007, much before the impugned order was passed;

� The aforesaid consideration could not be a ground for negating the preferential right of Satya-Power.

The counsel for Prakash-Industries submits that:

� The special reasons have been recorded in the order of the State Government;

� The comparative chart between the parties shows that the State Government, while recommending 440.75 hectares of land of Lohara area to Prakash-Industries, has considered the need of the area allocated to different persons and has compared them by the chart in accordance with the mineral policy of the State Government;

� Prakash-Industries was prior applicant than SKS-Ispat in Khara area. The reasons that were applicable to grant of Lohara area to Prakash Industries were the same for which the SKS-Ispat was recommended for Khara area. These recommendations in favour of SKS-Ispat have been upheld by the single judge of the Delhi High Court;

� The case of Satya-Power was also considered however, no area was recommended in its favour as it was already allocated area according to its need in Rajhara area;

� There was nothing on record to show that Satya-Power had filed any application surrendering Rajhara area prior to the date of the order passed by the State Government;

� In any case, Satya-Power had filed an application for prospecting licence for Rajhara area and it was allocated to them. In case, no iron ore was found in that area then, they cannot maintain that other areas may not be allocated in favour of Prakash-Industries. They cannot reserve every area for themselves.

In view of our findings in first three points, it is not necessary for us to consider the submissions on the merit of the writ appeals or answer the 4th point.

CONCLUSIONS

Our conclusions are as follows:

(a) The Central Government acts as a Tribunal while exercising the powers u/s 30 of the Act;

(b) The substance of the order, rather than the heading or nomenclature of the writ petition determines, whether the order is under Article 226 or 227 of the Constitution;

(c) The single judge has neither entertained any prayer nor granted any relief that could only be granted under Article 226 of the Constitution. The single judge has granted relief under Article 227 of the Constitution

(d) The single judge has exercised jurisdiction under Article 227 of the Constitution and not under Article 226 of the Constitution;

(e) The writ appeals are not maintainable.

(f) It is not necessary for us to express our opinion on the merits of the case.

In view of our conclusions, the writ appeals are dismissed as not maintainable.

________________________________________________________________________________________________________________________________ 1 See the following cases in this regard:

� Vellore Citizens Welfare Forum Vs. Union of India and others,

� Indian Council for Enviro-Legal Action and Others Vs. Union of India (UOI) and Others,

� M.C. Mehta Vs. Kamal Nath and Others,

� T.N. Godavarman Thirumulkpad Vs. Union of India and others,

� M.C. Mehta and another Vs. Union of India and others,

2 This was result of an international conference convened under the auspices of United Nations at Stockholm, Sweden from June 5-16, 1972 on the Human Environment (also known as the Stockholm Conference). It was the UN''s first major conference on international environmental issues, and marked a turning point in the development of international environmental politics. It started on 5th of June and now this day is observed as World Environment Day (WED).

3 It was commission''s recommendation that led to the Earth Summit "C the United Nations conference on Environment and Development (UNCED) in Rio de Janeiro in 1992.

4 Ms. G.H. Brundtland is a medical doctor and was Prime Minister of Norway for 10 years. She stepped down as a Prime Minister to become Director General of World Health Organisation.