Chowgule And Company Private … vs Goa Foundation on 13 October, 2020


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Supreme Court of India

Chowgule And Company Private … vs Goa Foundation on 13 October, 2020

Author: Hon’Ble The Justice

Bench: Hon’Ble The Justice, A.S. Bopanna, V. Ramasubramanian

                                                                                        1


                                 IN THE SUPREME COURT OF INDIA
                                  CIVIL APPELLATE JURISDICTION

                 M.A.NO.1260 OF 2020 IN CIVIL APPEAL NO. 839 OF 2020


          CHOWGULE AND COMPANY                                          …APPLICANT(S)/
          PRIVATE LIMITED                                               ...APPELLANT(S)

                                                VERSUS



          GOA FOUNDATION & ORS.                                    ... RESPONDENT(S)

                                                   WITH

             M.A.NOS.1385­1387/2020 IN CIVIL APPEAL NOS.840­842 OF 2020

                          M.A.NO.1384/2020 IN CIVIL APPEAL NO. 843 OF 2020

                          M.A.NO.1345 /2020 IN CIVIL APPEAL NO.848 OF 2020

                          M.A.NO.1344/2020 IN CIVIL APPEAL NO. 847 OF 2020

                           M.A.NO.1625/2020 IN CIVIL APPEAL NO.839 OF 2020



                                               ORDER

1. While M.A.Nos.1260, 1344, 1345, 1384, 1385, 1386 and

1387 of 2020 are applications filed by the lessees of

manganese/iron ore mines, seeking extension of time for the

transportation of the mineral alleged to have been mined before
Signature Not Verified

Digitally signed by
Rachna
Date: 2020.10.13
15:50:23 IST

15.03.2018, M.A.No.1625 of 2020 is filed by the Goa Foundation,
Reason:

2

which was the writ petitioner before the High Court and the first

respondent in the Civil Appeals before this Court, praying for

certain directions and for a clarification of the judgment delivered

by this Court in Civil Appeal No.839 of 2020 dated 30.01.2020.

2. M.A.No.1653 of 2020 is by a person who claims to be one of

the lease holders but who was not a party to the Civil Appeals.

As the applicant was not a party to the Civil Appeals, he has

come up with an application for intervention so as to enable him

to seek extension of time for transporting the mineral allegedly

extracted on or before 15.03.2018.

3. We have heard learned counsel appearing for the parties.

4. Brief facts essential for the disposal of these applications

are as follows:­

(i) In Goa Foundation vs. Union of India­I1, this Court

held that all iron­ore and manganese­ore leases had

expired on 22.11.2007 and that any mining operation

carried out beyond the said date was illegal. While holding

so, this Court also pointed out that for a second renewal of

1 (2014) 6 SCC 590
3

the mining lease, an order is required to be passed by the

State;

(ii) The observations regarding second renewal of the

mining leases, gave rise to a fresh set of litigations, which

culminated in the decision in Goa Foundation vs. Sesa

Sterlite Ltd.­II2. In paragraph 154 of the said decision,

this Court recorded 9 conclusions, one of which in para

154.6, reads as follows:­

“…

154.6. The mining leaseholders who have been granted
the second renewal in violation of the decision and
directions of this Court in Goa Foundation [Goa
Foundation v. Union of India
, (2014) 6 SCC 590] are given
time to manage their affairs and may continue their
mining operations till 15­3­2018. However, they are
directed to stop all mining operations with effect from
16­3­2018 until fresh mining leases (not fresh renewals
or other renewals) are granted and fresh environmental
clearances are granted.”

(iii) The aforesaid directions led to a fresh bout of litigation,

that culminated in the order by this Court on 30.01.2020

in Civil Appeal Nos.839­848 of 2020. The controversy that

revolved around paragraph 154.6 Goa Foundation­II was

as to whether the time given to the lease holders to manage

their affairs up to 15.03.2018 would include the time to

2 (2018) 4 SCC 218
4

remove the mined mineral. This controversy was resolved

by this Court in the judgment dated 30.01.2020 which we

may call Goa Foundation­III. This Court held therein:­

(1) that the only prohibition imposed by
paragraph 154.6 of Goa Foundation­II was for
carrying out mining operations and not
transportation; and

(2) that the policy decision of the State of Goa
dated 21.03.2018, to permit the transportation of
mineral mined prior to 15.03.2018 was valid.

(iv) After so interpreting paragraph 154.6 of Goa

Foundation­II, this Court also took note of Rule 12(1)(gg) of

The Minerals (Other than Atomic and Hydro Carbons Energy

Minerals) Concession Rules, 2016, which also allows a

period of six months for the lessees to remove the excavated

material, on the expiry or sooner termination of the term of

lease. Accordingly, this Court, by its order dated

30.01.2020, granted a period of 6 months to all lease

holders to transport the mineral already excavated on or

before 15.03.2018;

(v) The time granted by this Court to the lease holders, by

the order dated 30.01.2020 expired on 30.07.2020. A lock

down was clamped on 24.03.2020 due to the pandemic.
5

Therefore, a few lessees have come up with the aforesaid

applications for extension of time by six months with effect

from 01.10.2020 for the transportation of the mineral

allegedly extracted by them on or before 15.03.2018;

(vi) Contending that the benefit of extension of time should

be granted also to them, a lessee who did not challenge the

order of the High Court by way of a civil appeal, has come

up with an application for intervention, in the disposed of

Civil Appeals;

(vii) Goa Foundation which was the first respondent in the

Civil Appeals has come up with an independent application

seeking the following reliefs:­

(a) Clarify that the judgment/order, dated 30.1.2020,
passed in Civil Appeal No.839 of 2020 only applies to
or on which royalty has been paid prior to 15.03.2018;

(b) Direct the Directorate of Mines & Geology of the
Government of Goa (Respondent No.4) to recover the
amounts involved in transportation and sale of
mineral in violation of the order dated 30.01.2020;

(c) Direct the State of Goa (Respondent No.2) to take
possession of all active and passive mining leases
forthwith in compliance of the aforesaid judgment;

(d) Pass such other or further order(s) as this Hon’ble
Court may deem fit in the facts and circumstances of
the case in favour of the Applicant.

6

Intervention application

5. Let us first take up the intervention application, as it is

capable of being disposed without much ado. The applicants in

M.A. No.1653 of 2020 did not challenge the order of the High

Court before this Court. Even if he had benefited by the

judgment dated 30.01.2020, by virtue of the policy of the State

dated 21.03.2018, which we upheld, the applicant cannot now

seek the benefit of extension. Therefore, the application for

intervention is dismissed.

Applications for extension of time and application of Goa
Foundation for directions

6. Applications for extension of time have been filed by the

lessees primarily on two grounds namely:­

(1) the delay on the part of the statutory authorities
in issuing transit permits for the transportation of the
royalty paid ore; and

(2) the imposition of lockdown within two months of
the judgment of this Court dated 30.01.2020.

7. But the applications for extension of time are opposed by

Goa Foundation on the grounds inter alia:­
7

(1) that the ore on which royalty had not already
been paid, can never be removed;

(2) that even as per the affidavit of the Chief
Secretary of the State, the ore inside the lease­hold
area on which advance royalty had already been paid,
was only 73,850.26 tonnes;

(3) that in terms of Rule 12(1)(hh) of The Minerals
(Other than Atomic and Hydro Carbons Energy
Minerals) Concession Rules, 2016, the mineral not
removed within a period of six calendar months is
liable to be confiscated to the Government; and

(4) any extension of time is bound to be misused by
the lessees.

8. On the same grounds as aforesaid, Goa Foundation has also

sought some directions in M.A.No.1625 of 2020, which we have

already extracted above.

9. From the rival contentions raised in the applications for

extension of time and in the petition for directions, two issues

arise for consideration. They are :­

(1) whether the right to remove the mined minerals is
only in respect of “the royalty paid ore” or upon
8

payment of royalty at the time of movement and
disposal; and

(2) whether the State Government ought to have
invoked Rule 12 (1)(hh) of the Rules or not?

10. For finding an answer to issue no.1, we have to take a look

at the statutory provisions. Section 9 of the Mines and Minerals

(Development and Regulation) Act, 1957, deals with royalties in

respect of mining leases. Sub­section (1) of Section 9 deals with

the liability to pay royalty by the holder of a mining lease granted

before the commencement of the Act. Sub­section (2) of Section

9 deals with the liability of a holder of a mining lease granted on

after commencement of the Act.

11. Obviously, Section 9(2) is what may be applicable to the

lessees who are now before us. It reads as follows:­

“9. Royalties in respect of mining leases.­

… … … …

(2) The holder of a mining lease granted on or after the
commencement of this Act shall pay royalty in respect of
any mineral removed or consumed by him or by his
agent, manager, employee, contractor or sub­lessee from
the leased area at the rate for the time being specified in
the Second Schedule in respect of that mineral.

… … … …”
9

12. Therefore, the contention of the lessees that royalty is

payable at the time of removal or consumption, cannot be

rejected outright. We must keep in mind the fact that we are now

dealing with the miscellaneous applications in a disposed of

matter. Therefore, a substantial question as to when the royalty

is payable, cannot be decided at this stage.

13. We may also point out one more fact. The question whether

royalty had already been paid or not assumed significance in the

second round of litigation, in respect of the minerals

excavated/mined on or before 15.03.2018 and removed to jetties.

The order dated 04.04.2018 in SLP(C)Nos.8483 & 8484 of 2018,

and the order dated 11.05.2018 in SLP(C)No.12449 of 2018 used

the expression “royalty paid ore”, in the context of the mineral

removed from the mines and brought to the jetties on or before

15.03.2018. Therefore, the first objection of Goa Foundation

cannot be sustained. In any case the acceptance of the said

objection would tantamount to reviewing the judgment dated

30.01.2020, without an application for review.

14. Coming to the second contention, the same revolves around

Rule 12(1)(hh) of The Minerals (Other than Atomic and Hydro
10

Carbon Energy Minerals) Concession Rules, 2016, which reads as

follows:­

“…

(hh) if at the end of six calendar months after the expiry or
sooner termination of the lease term there shall remain in or
upon the leased land, any ore or mineral, engines, machinery,
plant, buildings structures, tramways, railways and other
work, erections and conveniences or other property which are
not required by the lessee in connection with operations in any
other lands held by it under prospecting licence or mining
lease, the same shall, if not removed by the lessee within one
calendar month of being notified to do so by the State
Government, be deemed to become the property of the State
Government and may be sold or disposed of in such manner
as the State Government shall deem fit without liability to pay
any compensation or to account to the lessee in respect
thereof.

…”

15. By virtue of the aforesaid Rule, any (i) ore or mineral; (ii)

engines; (iii) plant and machinery; (iv) building structures; (v)

tramways, railways and other work; (vi) erections and

conveniences; and (vii) other property which are not required by

the lessee in connection with operations in any other land held by

it under a mining lease, shall be deemed to become the property

of the Government if two conditions are satisfied, namely:­

(i) that such property remained in or upon the
leased land, at the end of six calendar months after
the expiry or sooner termination of the lease term; and
11

(ii) that such property is not removed by the lessee
within one calendar month of being notified to do so by
the State Government.

16. Therefore, Goa Foundation may be right in contending that

the State Government should have invoked Rule 12(1)(hh) to

confiscate the mineral allegedly lying at site for the past more

than 2½ years. But the difficulty today is that Rule 12(1)(hh) was

not pressed into service before this Court, when this Court

rendered its judgment dated 30.01.2020. As a result, the

judgment dated 30.01.2020 giving six months’ time to the lessees

to remove the material, has attained finality. If the lessees had

removed the material within the six months’ period prescribed in

the judgment 30.01.2020, Goa Foundation could not have come

up with this contention. In fact, the application for clarification/

direction in M.A.No.1625 of 2020 was filed only in September,

2020, after the expiry of six months’ period granted by this Court

by the judgment dated 30.01.2020.

17. Having said that, we should also clarify that we should not

be understood as saying as though the power under Rule 12(1)
12

(hh) is no more available to the State. Even now there is no

impediment for the State to invoke Rule 12(1)(hh).

18. One last contention was with regard to the quantity of

mineral allegedly mined on or before 15.03.2018, but lying un­

removed from lease­hold area. The learned Advocate General

stated that the Government has complete details about the

mineral already excavated on or before 15.03.2018 and lying at

site. The lessees cannot remove more than what the records of

the Government, already maintained in the course of discharge of

official duties of the concerned officers, reflect. In the judgment

dated 30.01.2020, this Court has proceeded in good faith that all

mining activities have been stopped on 15.03.2018 and that the

mineral mined until then is what is sought to be removed now.

Therefore, this should be made subject to the verification with

reference to records.

19. In the light of the above, the applications for extension of

time filed by the lessees and the application for

clarification/direction filed by Goa Foundation are disposed of to

the following effect:­
13

(1) The lessees are granted time up to end of
January, 2021 for the removal of the minerals
excavated/mined on or before 15.03.2018 subject to
payment of royalties and other charges;

(2) The quantity of mineral to be removed by each of
the lessees shall be determined by the concerned
officials with reference to the records of the
Government maintained at the relevant point of time;

(3) If within the time stipulated above, the lessees
could not remove the mineral, the Government shall
invoke the power under Rule 12(1)(hh).

………………………………CJI
(S.A. Bobde)

…………………………………J.

(A.S. Bopanna)

………………………………….J.

(V. Ramasubramanian)

New Delhi
October 13, 2020



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