HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
D. B. Special Appeal (Writ) No. 987/2021
In
S. B. Civil Writ Petition No. 356/2017
1. State of Rajasthan, through the Principal Secretary
(Mines), Department of Mines and Petroleum,
Government of Rajasthan, Jaipur.
2. The Director, Department of Mines and Geology, Udaipur.
----Appellants/Respondent No. 2 & 3.
Versus
1. UltraTech Cement Limited, Unit: Kotputli Cement Works
Village Mohanpura, Tehsil Kotputli, District Jaipur through
its Joint Executive President Shri Chandra Shekhar
Pandey.
Respondent/Petitioner
2. Union of India, through Secretary, Ministry of Mines,
Department of Mines, Shastri Bhawan, Dr. Rajendra
Prasad Marg, New Delhi - 110001.
----Respondent/Respondent No. 1
For Appellants: Ms. Sheetal Mirdha Additional
Advocate General
assisted by Mr.
Prateek Singh Advocate.
For Respondents: Mr. K.K. Sharma Senior Advocate.
Mr. Vivek Tankha Senior Advocate
through Video Conferencing.
Ms. Alankrita Sharma Advocate,
Mr.
Madhusudan Singh Rajpurohit
Advocate.
Mr. Prashant Sivarajan Advocate.
Mr. Rohan Talwar Advocate.
Mr. Tushar Saigal Advocate through
Video Conferencing.
Mr. Molik Purohit Advocate.
Mr. Rahul Yaduvanshi Advocate.
HON'BLE MR. JUSTICE MANINDRA MOHAN SHRIVASTAVA
HON'BLE MRS. JUSTICE SHUBHA MEHTA
Judgment
REPORTABLE
31/01/2023
By the Court: (Per Manindra Mohan Shrivastava, J.)
1. This appeal is directed against order dated 01.09.2021 passed by the learned Single Judge in S.B. Civil Writ Petition No. 356/2017, whereby, writ petition filed by Respondent No. 1-writ petitioner has been allowed and learned Single Judge has directed the appellants-State to execute mining lease in favour of Respondent No. 1-writ petitioner-company and also directed for handing over the possession to Respondent No.1-writ petitioner, while issuing ancillary directions.
2. Respondent No. 1-writ petitioner filed writ petition aggrieved by inaction/refusal on the part of the appellants in the matter of execution of mining lease in its favour on pleadings inter alia that Respondent No. 1-writ petitioner is a company incorporated and registered under the provisions of the Companies Act, 1956 (hereinafter referred to as 'the Companies Act of 1956') and is the successor of M/s. Grasim Industries Limited. According to Respondent No.1-writ petitioner, under a scheme of arrangement (demerger) entered into between M/s. Grasim Industries Limited and M/s. Samruddhi Cement Limited on 18.05.2010, entire cement business of M/s. Grasim Industries Limited was transferred to its fully owned subsidiary M/s. Samruddhi Cement Limited in terms of Sections 391 and 394 of the Companies Act of 1956. This scheme of demerger was approved by the High Court of Madhya Pradesh and the High Court of Gujarat. Subsequently, scheme of amalgamation was entered into between M/s. Samruddhi Cement Limited and M/s. UltraTech Cement Limited, which was approved by the High Court of Gujarat and the High Court of Bombay. In terms of approved amalgamation scheme, all the assets including land, mining lease and Letters of Intent (LoIs), as claimed by Respondent No.1-writ petitioner, stood transferred and vested in favour of M/s. UltraTech Cement Limited(writ petitioner).
3. It was further averred that the State Government notified an area admeasuring 318.78 hectares under the Mineral Concession Rules, 1960 (hereinafter referred to as 'the Rules of 1960') for grant of mining lease for setting up of a cement plant with the capacity of 1.0 MTPA. M/s. Grasim Industries Limited had already applied for grant of mining lease vide its application dated 05.06.2007, in pursuance whereof, the State Government issued a Letter of Intent (LoI) on 10.10.2007 containing as many as four conditions which related to environmental clearance, submission of mining plan, consent letter from land owner and NOC from Forest Department. The letter of intent was further extended from time to time. The Forest Department granted NOC on 11.08.2008 and environmental clearance from Ministry of Environment and Forest was also granted on 06.05.2010. Respondent No.1-writ petitioner had already submitted mining plan, which was approved on 22.12.2008.
According to Respondent No.1-writ petitioner, Letter of Intent was further extended on 03.12.2010 up to 30.09.2011 on three conditions, namely, enhancement of capacity of plant from 3 MTPA to 4 MTPA, deposit of keenness money and payment of stamp duty for the amalgamation effected between M/s. Grasim Industries Limited and M/s. UltraTech Cement Limited. Further, in view of the approval of the scheme of amalgamation, condition was also imposed in the LoI with regard to change in the name from M/s. Grasim Industries Limited to M/s. UltraTech Cement Limited. Respondent No.1-writ petitioner wrote a letter to Director, Department of Mines and Geology on 07.07.2010 for grant of mining lease. Since all the compliance had been made, Assistant Mining Engineer also recommended grant of mining lease in favour of Respondent No.1-writ petitioner. On the request of Respondent No.1-writ petitioner, LoI was further extended from time to time. Lastly, it was extended for a period of six months vide letter dated 11.12.2014. As according to Respondent No.1-writ petitioner, it had applied for grant of lease with all the formalities and letter was also being written by the concerned authority for grant of mining lease, it was illegally withheld without any justifiable reason.
4. Aggrieved by non-execution of mining lease, Respondent No.1-writ petitioner approached this Court by filing writ petition seeking direction for execution of mining lease in its favour in respect of the area applied for.
5. In the reply filed by the appellants (Respondents No. 2 and 3 in the writ petition), it was stated that in view of amendment in the Mines and Minerals (Development and Regulation) Act, 1957 (for short 'the MMDR Act') vide Amendment Act No. 10 of 2015, the application submitted by Respondent No.1-writ petitioner for grant of mining lease as well as LoI issued to it stood automatically lapsed in view of the sunset clause under the newly amended provision. The other main ground to oppose the relief sought by Respondent No.1-writ petitioner was that a part of the land admeasuring 1.38 hectares out of total area of 318.78 hectares covered under the LoI and in respect of which, application for grant of lease was made by Respondent No.1-writ petitioner, is recorded as charagah (pasture) land in the revenue records and, therefore, in view of the directions issued by the Hon'ble Apex Court in the case of Jagpal Singh and Others Vs. State of Punjab and Others (2011) 11 SCC 396 and policy decision taken by the State Government in compliance of the directions of the Hon'ble Apex Court, no mining lease could have been granted on the land, which was recorded as charagah land. Various circulars issued by the State Government from time to time which remained in force till 11.01.2017, on which date, by operation of sunset clause, the application for grant of mining lease and LoI allegedly stood lapsed, were also relied upon by the appellants.
6. It was further case of the appellants that apart from fulfillment of four conditions enumerated in Letter of Intent, Respondent No.1-writ petitioner was required to fulfill all other conditions, particularly condition relating to exclusion of charagah land from the mining lease area. However, Respondent No.1-writ petitioner refused to exclude the area of charagah land from the mining area vide its letter dated 16.05.2016. It was the case of the appellants that in view of the provisions contained in the Rajasthan Tenancy (Government) Rules, 1955 (hereinafter referred to as 'the Rules of 1955'), as amended from time to time, it was provided in the newly added proviso to Rule 7 of the Rules of 1955 that pasture land shall not be changed as sawai chak for mining purposes without prior permission of the State Government and the permission shall be granted only if the intending applicant surrenders equal area of khatedari land in favour of the State Government in the same or nearby village. However, before the said amendment was brought into effect, the application stood lapsed in view of provisions contained under Section 10A of the MMDR Act.
7. Before learned Single Judge, Respondent No.1-writ petitioner also claimed relief on the ground of parity stating that in identical cases relating to the matters of application of mining lease submitted by Wonder Cement and Shree Cement, this Court allowed their writ petitions, directing grant of mining lease excluding charagah land and, therefore, Respondent No.1-writ petitioner was also entitled to the same relief.
8. Vide impugned order dated 01.09.2021, learned Single Judge allowed the writ petition holding that amendment made under the MMDR Act vide notification dated 20.03.2021 would not cover the cases where the applications were also made and LoIs have been issued much earlier.
Further, the learned Single Judge also took into consideration that relief was granted to M/s. Wonder Cement by directing that land admeasuring 40.62 hectares recorded as charagah land be excluded and lease be granted for the remaining part of the land. Learned Single Judge also held that similar issue arose for consideration in the case of Shree Cement Limited and lease was granted by directing exclusion of charagah land. Learned Single Judge further noticed that Respondent No.1-writ petitioner has also deposited stamp duty. Learned Single Judge also held that the order passed by the High Courts in the matter of amalgamation specifically mentions regarding LoI as an asset, to be transferred as right of title, interest and investments, vests with M/s. UltraTech Cement. Respondent No.1-writ petitioner- company having informed the Government regarding the change of name, as per Rule 62 of the Rules of 1960, it was held that Respondent No.1-writ petitioner was entitled to grant of mining lease.
9. Learned Additional Advocate General appearing on behalf of the appellants would submit that Letter of Intent was initially issued in the name of M/s. Grasim Industries Limited and it could not be transferred automatically in favour of Respondent No.1-writ petitioner, M/s. UltraTech Cement Limited, which is successor company. It is contended that there is no vesting of LoI with Respondent No.1-writ petitioner as a result of demerger/ amalgamation. According to learned Additional Advocate General, the provisions contained in the MMDR Act and the Rules framed thereunder do not envisage transfer of LoI. She would submit that none of the rules framed under the MMDR Act provides for transfer of LoI. Therefore, at the time, when application was made for grant of mining lease, until its automatic rejection in view of sunset clause, the LoI issued in favour of M/s. Grasim Industries could not be claimed as LoI issued in favour of Respondent No.1-writ petitioner. It is further submitted that Rule 62 of the Rules of 1960 does not apply in the case of demerger/amalgamation of companies and transfer of assets. It is argued that said Rule applies only in limited circumstances where an applicant for, or the holder of a reconnaissance permit, a prospecting licence or a mining lease shall intimate to the State government within sixty days any change that may take place in his name, nationality or other particulars mentioned in the relevant forms and similarly where holder of a reconnaissance permit or a prospecting licence or a mining lease requires any change in its name, nationality or other particulars. Present is not a case of mere change of name, nationality, but it is a case of transfer of assets of one company into other company through the process of demerger/amalgamation. It is further submitted that mere payment of stamp duty will not suffice the purpose. It is also argued that LoI does not create any relationship as it is not an asset. Reliance has been placed on the decision of the Delhi High Court in the case of M/s. Ispat Industries Ltd. Vs. Union of India & Others, Writ Petition (Civil) No. 17320 of 2006 decided on 04.11.2009.
10. Next submission of learned Additional Advocate General is that in view of newly inserted Section 10A vide Amendment Act No. 10 of 2015 amending MMDR Act, all applications prior to the commencement of the Mining and Mineral (Development and Regulations) Amendment Act, 2015, shall become ineligible. It is contended that in the present case, the application remained pending and Respondent No.1-writ petitioner failed to fulfill the conditions, therefore, the application and LoI, if any, lapsed. Thus, by virtue of operation of sunset clause with effect from 11.01.2017, the right of Respondent No.1-writ petitioner, if any, to seek a direction for grant of mining lease, no longer exists and, therefore, no mandamus could be issued commanding the State to execute lease deed on the basis of the application and LoI, which no longer remained valid and operative in law.
11. Learned Additional Advocate General would next submit that Respondent No.1-writ petitioner had applied for grant of mining lease in respect of the area admeasuring 318.78 hectares, which also included pasture land over an area of 1.38 hectares comprised in the total area of mining. Respondent No.1-writ petitioner had submitted an affidavit under which it has stated that he would produce NOC, but no NOC was produced. In view the judgment of the Hon'ble Supreme Court in the case of Jagpal Singh and Others Vs. State of Punjab and Others (supra) as also various circulars issued by the State authorities from time to time, which have been annexed with the reply to writ petition and affidavits, the mining lease could not be granted in favour of Respondent No.1-writ petitioner in respect of the area comprising charagah (pasture) land. Respondent No.1-writ petitioner neither obtained NOC from the State Government, nor excluded the area of charagah land from the mining area. On the other hand, Respondent No.1-writ petitioner vide its letter dated 16.05.2016 communicated its refusal to reduce the mining area by excluding charagah land. Respondent No.1-writ petitioner, even till date, has failed to produce any offer or application made before the competent authority for setting apart charagah land under Rule 7A of the Rules of 1955 by surrendering an equal area of khatedari land in favour of State in the same village. Therefore, Respondent No.1-writ petitioner was not entitled to any relief.
12. Learned Additional Advocate General, in support of her submissions, has placed reliance upon the decisions of the Hon'ble Supreme Court in the cases of South Eastern Coalfields Ltd. & Others Vs. S. Kumar's Associates AKM (JV), 2021 SCC OnLine SC 486; Rajasthan Cooperative Dairy Federation Ltd. Vs. Maha Laxmi Mingrate Marketing Service Pvt. Ltd. & Others, (1996) 10 SCC 405; Jagpal Singh and Others Vs. State of Punjab and Others (supra); Maharashtra State Cooperative Bank Limited Vs. Assistant Provident Fund Commissioner and Others (2009) 10 SCC 123; Sri Tarkeshwar Sio Thakur Jiu Vs. Dar Dass Dey & Co. & Others (1979) 3 SCC 106; State of Karnataka & Others Vs. Subhash Rukmayya Guttedar & Others 1993 Supp (3) SCC 290; M/s. General Radio and Appliances Co. Ltd. & Others Vs. M.A. Khader (Dead) by LRs (1986) 2 SCC 656; Delhi Development Authority Vs. Nalwa Sons Investment Ltd. and Another, 2019 SCC OnLine SC 586; Miheer H. Mafatlal Vs. Mafatlal Industries Ltd. (1997) 1 SCC 579; Hindustan Lever and Another Vs. State of Maharashtra and Another (2004) 9 SCC 438; Gram Panchayat, Village Kanonda, Tehsil Bahadurgarh, District Rohtak, through its Sarpanch Vs. Director, Consolidation of Holdings, Haryana, Chandigarh and Others 1989 Supp (2) SCC 465; State of Bihar (Now State of Jharkhand) through the Sub-Divisional Officer Vs. Tata Iron and Steel Company Limited (2019) 7 SCC 99; The Commissioner of Sales Tax, U.P., Lucknow Vs. M/s. Parson Tools and Plants, Kanpur (1975) 4 SCC 22; Assistant Commissioner, Assessment-II, Bangalore and Others Vs. Velliappa Textiles Ltd. and Another (2003) 11 SCC 405.
13. Lastly, it is submitted that the case of Respondent No.1-writ petitioner is distinguishable from the decisions of this Court in the cases of M/s Wonder Cement Limited Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No. 126/2017 decided on 23.08.2017) and Shree Cement Limited Vs. The State of Rajasthan & Others (S.B. Civil Writs No. 128/2017 decided on 26.09.2018). The relief was granted to the petitioners in the aforesaid cases because they had excluded charagah land from mining area whereas in the case of Respondent No.1-writ petitioner, it refused to reduce charagah land from the mining lease area. Therefore, it is argued, learned Single Judge was not correct in holding that case of Respondent No.1-writ petitioner was identical to that of M/s. Wonder Cement and Shree Cement.
14. Per contra, in reply to the submissions made by learned Additional Advocate General appearing on behalf of the appellants, learned Senior Counsels appearing on behalf of Respondent No.1- writ petitioner would submit that insofar as transfer of Letter of Intent in favour of Respondent No.1-writ petitioner, M/s. UltraTech Cement Limited is concerned, the State, for the first time, has come out with an afterthought whereas at no point of time, in any of the communications till filing of the writ petition, the State ever denied grant of mining lease on the ground that Letter of Intent initially issued in favour of demerged company i.e. M/s. Grasim Industries Limited lapsed after its demerger under the scheme of arrangement with M/s. Samruddhi Cement Limited followed by amalgamation of M/s. Samruddhi Cement Limited with Respondent No.1-writ petitioner, M/s. UltraTech Cement Limited. Referring to letters issued from time to time, extending the validity period of Letter of Intent and more particularly, letter dated 03.12.2010 followed by further extension of Letter of Intent including letter dated 11.09.2014, it is contended that the extension of Letter of Intent was being granted with full notice and knowledge regarding demerger and amalgamation approved by the jurisdictional High Courts. The communications clearly show that the appellants had accepted Respondent No.1-writ petitioner- company as the successor company and has extended Letter of Intent. Therefore, it lies ill in the mouth of the State, now to raise such an issue before the Court. He would submit that the State is estopped from raising any such objection.
15. Further submission of learned Senior Counsels is that neither any of the provisions of the MMDR Act, as amended from time to time and in force during the relevant period, nor the provisions contained in Rule 37 of the Rules of 1960, nor the provisions contained in the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 (hereinafter referred to as 'the Rules of 2016') govern or regulate, much less prohibit such transfer of LoI in favour of Respondent No.1-writ petitioner as a result of legal proceedings of demerger and amalgamation under the orders of the jurisdictional High Courts. It is submitted that the rule regulating transfer of LoI, for the first time, was made in the year 2021 by introducing Rule 23A in the Rules of 2016 with effect from 24.03.2021. Therefore, it is contended that in the absence of special law governing transfer of LoI in respect of grant of mining leases, the provisions of general application as contained in the Companies Act of 1956 will hold the field. Referring to the provisions of Section 391 to 394 of the Companies Act of 1956 as also demerger order and amalgamation order passed by the jurisdictional High Courts and various clauses contained therein, it has been contended that all the assets and liabilities including applications or any other interest of the demerged and amalgamated company stood transferred/vested in favour of Respondent No.1-writ petitioner, which included LoI issued in favour of M/s. Grasim Industries Limited.
16. In reply to submission regarding application for grant of mining lease having lapsed and become ineligible by operation of sunset clause contained in Section 10A introduced vide Amendment Act No.10 of 2015, it is contended that the case of Respondent No.1-writ petitioner is saved under clause (c) of sub- section (2) of Section 10A of the MMDR Act as in the present case, Letter of Intent was issued by the State Government for grant of mining lease before the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015.
17. Replying to the submission of learned Additional Advocate General regarding failure on the part of Respondent No.1-writ petitioner to fulfill terms and conditions in the matter of grant of mining lease, it has been extensively argued that Respondent No.1-writ petitioner fulfilled all the four conditions of Letter of Intent and, therefore, it cannot be said that the conditions of Letter of Intent were not fulfilled. Referring to the scheme of the Rules of 1960, prescribed performa of application and application for grant of mining lease, it is contended that there is no requirement of mining laws and the rules framed thereunder, which mandates submission of any affidavit or undertaking regarding charagah (pasture) land. Various conditions enumerated in Rule 27 of the Rules of 1960 alone are required to be fulfilled. Sub-rule (h) of Rule 27 of the Rules of 1960 prohibits carrying on or allowing to be carried on any mining operation in prohibited areas, however, it does not include charagah land. Learned Senior Counsel would further submit that Respondent No.1-writ petitioner gave an undertaking and submitted affidavit that it will not carry out any mining activities in charagah land unless it gets NOC from the competent authority.
Learned Senior Counsel would further argue that the notification inviting applications for grant of mining lease specified the entire area of 318.78 hectares without excluding charagah land. He would further submit that even in multiple extensions of LoI, which were granted, nowhere it was stated that Respondent No.1-writ petitioner should exclude the charagah land, though it was within the jurisdiction of the State authorities to direct that mining lease should be confined to or exclude charagah land. Referring to material on record, it has been argued that in fact, in the past, the entire area was already under excavation since 1981 when mining lease was granted in favour of one Rameshwar Bajaj in the year 1981. That lease was again transferred in the year 1986 in the name of National Limestone Company Private Limited without excluding any area comprised in 318 hectares. There was no condition in any of those leases to exclude charagah land and, therefore, ever since 1981, the then mining lease holders already exploited the entire mining area including so called charagah land and as a matter of fact, no charagah land exists in the entire area and, therefore, it is for this reason that while granting environmental clearance vide letter dated 06.05.2010, it was recorded that in the mining lease area of 318.78 hectares, there is no grazing land involved in the project. It was for this very reason also that in the mining plan duly approved by the Indian Bureau of Mines, no charagah land is shown. Learned Senior Counsel would submit that in fact, a part of the land was already allotted in favour of KVGSS and the area, which is now claimed as charagah land, was already exploited as mining area. Despite all this, Respondent No.1-writ petitioner had clearly given an undertaking and submitted affidavit that it will not operate any mining activity over the so called charagah land unless there is NOC granted in its favour. It is also contended that even though the State was empowered under the rules to reduce the mining area while granting mining lease, the State never communicated Respondent No.1-writ petitioner to either reduce the area applied for mining by excluding charagah land, nor directed the petitioner to exclude charagah land from the proposed mining lease area. Learned Senior Counsel also submitted that in any case, after the introduction of new rule, i.e. Rule 7A under the Rules of 1955, Respondent No.1-writ petitioner has already applied to the District Collector, District Jaipur on 13.06.2017 for surrender of 1.38 hectares of land for charagah purposes in lieu of 1.38 hectares of charagah land stated to be included in the mining lease area. There was no legal impediment in granting mining lease in favour of Respondent No.1-writ petitioner on its clear undertaking that it will not operate mining activities over the charagah land without NOC or appropriate orders as may be passed by the competent revenue authority.
18. In support of their submissions, learned Senior Counsels have placed reliance on the decisions of the Hon'ble Supreme Court in the cases of His Holiness Kesavananda Bharati Sripadagalvaru Vs. State of Kearla & Another (1973) 4 SCC 225; Kusheshwar Prasad Singh Vs. State of Bihar & Others (2007) 11 SCC 447; Mohammed Gazi Vs. State of M.P. & Others (2000) 4 SCC 342; State of West Bengal & Others Vs. Mandira Chatterjee & Others (2012) 13 SCC 582; Beg Raj Singh Vs. State of U.P. & Others (2003) 1 SCC 726; Manuelsons Hotels Private Limited Vs. State of Kerala & Others (2016) 6 SCC 766; State of Bihar & Others Vs. Kalyanpur Cement Limited (2010) 3 SCC 274; Employees' State Insurance Corporation Vs. Union of India & Others AIR 2022 SC 1017; Public Service Commission, Uttaranchal Vs. Jagdish Chandra Singh Bora and Another (2014) 8 SCC 644; State of U.P. and Others Vs. Daulat Ram Gupta (2002) 4 SCC 98; Bhushan Power and Steel Limited Vs. S.L. Seal, Additional Secretary (Steel and Mines), State of Odisha and Others (2017) 2 SCC 125; Hindustan Lever and Another Vs. State of Maharashtra and Another (2004) 9 SCC 438; M/s. J.K. (Bombay) Private Ltd. (In all the Appeals) Vs. M/s. New Kaiser-I-Hind Spinning and Weaving Co. Ltd. & Others, AIR 1970 SC 1041; Dalmia Power Limited & Another Vs. Assistant Commissioner of Income Tax Circle 1, Trichy (2020) 14 SCC 736; Rajendra Prasad Gupta Vs. Prakash Chandra Mishra & Others (2011) 2 SCC 705; Principal Commissioner of Income Tax (Central)-2 Vs. Mahagun Realtors (P) Ltd., AIR 2022 SC 1672; decisions of Bombay High Court in the cases of Sadanand S. Varde & Others Vs. State of Maharashtra & Others, 2000 SCC OnLine Bom 341; Sequent Scientific Ltd., In Re, 2009 SCC OnLine Bom 2182; In Re: Pmp Auto Industries Ltd. & Others, Company Petitions Nos. 428 of 1991 and other connected petitions and applications decided on 12.12.1991; decision of Delhi High Court in the case of Telesound India Ltd., In re, 1980 SCC OnLine Del 327; decision of Calcutta High Court in the case of Castron Technologies Ltd. Vs. Castron Mining Ltd., A.O.P. No. 411 of 2011 and C.P. No. 594 of 2002 decided on 12.07.2013 which was affirmed by the Hon'ble Supreme Court in Castron Technologies Ltd. Vs. Anup Agarwalla and Another, Petition for Special Leave to Appeal (Civil) No. 32486/2013 decided on 25.11.2013; M/s. Kusum Marketing Ltd. & Another Vs. the State of West Bengal & Others 2017 SCC OnLine Cal 16551; decision of Gujarat High Court in the case of State of Gujarat & Others Vs. Nirmalaben S. Mehta & Others, (Letters Patent Appeal No. 683 of 2011 and other connected matters decided on 13.12.2011); decision of Madras High Court in Sahayanidhi Virudhunagar Ltd. through its Managing Director, A. Saminatha Mudaliar Vs. A.S.R. Subrahmanya Nadar and Others, AIR 1951 MAD 209; order dated 18.03.2011 passed by this Court in the case of Ojaswi Marbles and Granites Pvt. Ltd. Vs. The State of Rajasthan & Others (S.B. Civil Writ Petition No. 15114/2016 and one other connected writ petition); decisions in the cases of The State of Rajasthan & Others Vs. Ojaswi Marbles and Granites Pvt. Ltd. & Others (D.B. Special Appeal (Writ) No. 301/2021 decided on 08.07.2021); Shree Cement Limited Vs. The State of Rajasthan & Others (S.B. Civil Writs No. 128/2017 decided on 26.09.2018); affirmed by Division Bench of this Court in The State of Rajasthan & Others Vs. Shree Cement Limited (D.B. Special Appeal Writ No. 26/2019 decided on 22.01.2019); M/s Lafarge India Ltd Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No. 427/2017 decided on 04.01.2018); M/s Wonder Cement Limited Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No. 126/2017 decided on 23.08.2017); M/s. NU Vista Limited Vs. Union of India & Others (S.B. Civil Writ Petition No. 360/2017 decided on 01.09.2021); State of Rajasthan & Others Vs. M/s. NU Vista Limited & Others. (D.B. Civil Special Appeal (Writ) No. 998/2021 decided on 04.03.2022).
19. Lastly, it is submitted that Respondent No.1-writ petitioner is entitled to similar benefit already granted by this Court in the cases of M/s Wonder Cement Limited Vs. State of Rajasthan & Others (supra) and Shree Cement Limited Vs. The State of Rajasthan & Others (supra) and other cases where on facts, even though it was found that the area applied for mining lease included charagah land, direction was issued by this Court to grant mining lease excluding charagah land.
20. The first issue arising for consideration is whether Letter of Intent issued in favour of M/s. Grasim Industries Limited was transferred/vested in favour of Respondent No.1-writ petitioner- successor company. Learned Additional Advocate General has vehemently contended that LoI could not be transferred as there exists no provision in the MMDR Act or in the Rules of 1960 or in the subsequent Rules of 2016 or under any other provisions of the Act and the rules framed thereunder.
A perusal of the reply to writ petition filed by the appellant- State reveals that the State did not come out with such a case that as LoI could not be transferred in favour of Respondent No.1- writ petitioner, the appellants decided not to grant mining lease. Even with the reply, no such document has been filed by the State that at any stage, in the matter of consideration of writ petitioner's application for grant of mining lease, such a decision was taken in the files and note sheets to reject the application on this count. However, during the pendency of the writ petition, in subsequent additional counter affidavits filed by the appellant- State, a stand was taken that according to clarification dated 12.02.2018 issued by the Government of India, amalgamation of the company falls within the ambit of transfer and as there is no entailing transfer of application for grant of mining lease or Letter of Intent in MMDR Act and the rules framed thereunder, Respondent No.1-writ petitioner could not claim any right of grant of mining lease on the basis of LoI initially issued and thereafter extended from time to time in the name of transferor company M/s. Grasim Industries Limited. According to learned Additional Advocate General, LoI does not create any binding legal relationship between the parties. It cannot even be considered as an asset/property of the company and termed as transfer of assets and liabilities through scheme of amalgamation, if subject to statutory provisions.
21. One of the arguments on the aforesaid issue is that since there does not exist any provision in the MMDR Act or under the rules framed thereunder, LoI is not transferable. It is contented that it is to be treated as excluded on the application of maxim, "expressio unius est exclusio alterius" and "casus omissus". The submission in this regard, is legally misconceived. There is neither any express, much less, any implied bar on the transfer of LoI either under the MMDR Act or the Rules of 1960 or even under the subsequently framed rules, i.e. the Rules of 2016. Section 12A of the MMDR Act provides for transfer of mineral concessions. The provisions relating to transfer of mining lease or a composite licence granted under the MMDR Act requires previous approval of the State Government. There is nothing in the aforesaid provision, which deals with Letter of Intent. Section 3, sub-section (ae) of the MMDR Act defines mining concession to mean either a reconnaissance permit, prospecting licence, mining lease, composite licence or a combination of any of the aforesaid and further provides that the expression "concession" shall be construed accordingly. Use of the word "means" clearly implies that the definition of mineral concession is exhaustive and not inclusive. It does not mention Letter of Intent. Thus, Section 12A of the MMDR Act does not govern transfer of Letter of Intent. In fact, under the scheme of the MMDR Act, there is no provision dealing with Letter of Intent.
22. The Rules of 1960 have been framed by the Central Government. The provisions contained in Chapter IV of the Rules of 1960 regulates grant of mining lease in respect of land in which the mineral vest in the Government. Those provisions also do not regulate transfer of Letter of Intent. Rule 37 of the Rules of 1960 provides for transfer of lease and obviously, has no application in relation to Letter of Intent.
23. The Rules of 2016, when framed and at the time when demerger and amalgamation took place in the year 2010, did not contain any provision with regard to transfer of Letter of Intent. Therefore, to say that in the absence of there being any provision regulating transfer of Letter of Intent, it should be assumed that there is implied prohibition on transfer of Letter of Intent, cannot be accepted. Reliance placed on the judgments of the Hon'ble Supreme Court in the cases of Gram Panchayat, Village Kanonda, Tehsil Bahadurgarh, District Rohtak, through its Sarpanch Vs. Director, Consolidation of Holdings, Haryana, Chandigarh and Others (supra); The Commissioner of Sales Tax, U.P., Lucknow Vs. M/s. Parson Tools and Plants, Kanpur (supra) and Rajasthan Cooperative Dairy Federation Ltd. Vs. Maha Laxmi Mingrate Marketing Service Pvt. Ltd. & Others, (supra) are misconceived in law. All that can be said is that there does not exist any provision regulating transfer of Letter of Intent.
24. The provision for transfer of Letter of Intent, for the first time, was introduced by inserting Rule 23A vide GSR 209(E) dated 24.03.2021 with effect from 24.03.2021 in the Rules of 2016 which regulates transfer of Letter of Intent for grant of mining lease or composite licence in certain cases and till then, there was no provision. In the absence of there being any provision in the MMDR Act and the rules referred to above regulating transfer of Letter of Intent for grant of mining lease, all that can be said is that transfer of Letter of Intent, until insertion of Rule 23A in the Rules of 2016, there was no provision regulating transfer of Letter of Intent and it could not be advanced as a proposition of law that absence of provision for transfer of Letter of Intent implidely prohibits transfer of Letter of Intent.
25. In the case of Rajasthan Cooperative Dairy Federation Ltd. Vs. Maha Laxmi Mingrate Marketing Service Pvt. Ltd. & Others, (supra), it was held that Letter of Intent merely expresses an intention to enter into a contract and where the conditions stipulated in the Letter of Intent are not fulfilled, and the conduct of the party in whose favour LoI has been issued is otherwise not such as would generate confidence, the party issuing Letter of Intent is entitled to withdraw the same and there is no binding legal relationship between the parties at the stage of issuance of Letter of Intent. It was held that the party issuing Letter of Intent is entitled to look at the totality of the circumstances in deciding whether to enter into a binding contract with the party or not.
26. In one of the recent decisions, in the case of South Eastern Coalfields Ltd. & Others Vs. S. Kumar's Associates AKM (JV) (supra), it has been reiterated as settled proposition of law that LoI merely indicates a party's intention to enter into a contract with the other party in future and no binding relationship between the parties at that stage emerges. It has been observed that Letter of Intent can possibly be construed as a binding contract if such an intention is evident from its terms but then the intention to do so must be clear and unambiguous. However, it takes a deviation from how normally Letter of Intent has to be understood. Therefore, it is explicitly clear that Letter of Intent, as such, does not create a binding contractual relationship between the parties, but it can only be said to be an expression of an intention to enter into a contract.
27. Demerger/amalgamation of company incorporated under the Companies Act of 1956 is governed by the Companies Act of 1956 itself. The provisions contained in Sections 391 to 394 of the Companies Act of 1956 govern demerger and amalgamation processes in relation to a company incorporated under the Companies Act of 1956. The Companies Act of 1956 was later on repealed and substituted by the Companies Act, 2013 (for short 'the Companies Act of 2013'). In the present case, the proceedings of demerger and amalgamation, to which we shall deal with in greater details hereafter, were drawn in the year 2010 and orders were passed by the respective jurisdictional High Courts in those years. Therefore, in the present case, the provisions of the Companies Act of 1956 were applicable.
28. The scheme of arrangement (demerger) was entered into between M/s. Grasim Industries Limited and M/s. Samruddhi Cement Limited on 18.05.2010. The scheme envisaged transfer of entire cement business of M/s. Grasim Industries Limited to M/s. Samruddhi Cement Limited (a fully owned subsidiary of M/s. Grasim Industries Limited). In terms of statutory scheme of Sections 391, 392, 393 and 394 of the Companies Act of 1956, the High Court of Madhya Pradesh and the High Court of Gujarat vide their orders dated 31.03.2010 and 06.05.2010 respectively approved the scheme of demerger between M/s. Grasim Industries Limited and M/s. Samruddhi Cement Limited.
Subsequently, scheme of amalgamation was entered into between M/s. Samruddhi Cement Limited and M/s. UltraTech Cement Limited (Respondent No.1-writ petitioner). The scheme of amalgamation was duly approved by the High Court of Bombay and the High Court of Gujarat vide orders dated 11.06.2010 and 01.07.2010 respectively.
29. In the case of Sadanand S. Varde & Others Vs. State of Maharashtra & Others (supra), an argument was raised before the Bombay High Court that the transaction by which two companies were amalgamated under the scheme of amalgamation, amounted to a "transfer" within the meaning of Clause (f) of Section 269UA of the Income Tax Act, 1961 and the "apparent consideration" for the transfer was the consideration indicated in the scheme of amalgamation and it being far in excess of the monetary limit of Rs. 10,00,000/-, there was an obligation to file a declaration in Form No. 37-I, and by reason of failure to do so, the consequences of application of Chapter XX-C of the Income Tax Act, 1961 could not be avoided.
In reply, the argument was that Chapter XX-C of the Income Tax Act, 1961 was not intended to apply to transfer effected under the orders of a Court pursuant to Sections 391 to 394 of the Companies Act of 1956.
It was further contended that the provisions of Chapter XX-C of the Income Tax Act, 1961 will apply only to the cases of "transfer" as defined by Clause (f) of Section 269UA of the Income Tax Act, 1961. While examining the aforesaid contentions, the
consequences of amalgamation of companies under the Companies Act of 1956 were also taken into consideration by the Bombay High Court and it was observed thus:
"106. It is next contended that the provisions of Chapter XX-C would apply only to cases of "transfer" as defined by Clause (f) of Section 269- UA. A scrutiny of the definitions of "apparent consideration" given in Clause (b) and "transfer" given in Clause (f) would unmistakably indicate that the transfers to which the provisions of Chapter XX-C are intended to apply, are only transfers under agreement or contractual transfers and not statutory transfers or transfers effected by orders of the Court or by operation of law. In a situation of amalgamation, the transfer is not by way of sale, exchange, lease or rent so as to fall within Section 269-UA. Further, the process by which the land in question stood vested in the transferee company by virtue of the amalgamation order, would not answer the description of "immovable property" within the meaning of Clause (d)(ii), nor does it answer the description of "transfer" as defined in Clause (f)(ii) of section 269-UA of the Income Tax Act. See in this connection (Sailendra Kumar Ray v. The Bank of Calcutta), 1948 (18) Company Cases 1 and (Sayananidhi Virudhunagar Ltd. v. A.S.R. Subramanya Nadar), A.I.R. 1951 Madras 209 and (Telesound India Ltd. In Re.), 1983 (53) Company Cases 926. In Sailendra Kumar Ray's case (supra), the Calcutta High Court held that in a situation of amalgamation even if it can be said that there was a transfer of asset, the transfer was not by way of an assignment but by the order of the Court backed up by the force of a statutory provision and by operation of law. In Sayayanidhi's case (supra), the Madras High Court reiterated this proposition. In Telesound's case (supra), it is held that as amalgamation has its origin in statute and is statutory in character, the transfer and vesting is by operation of law and not an act of the transferor company, nor an assignment by it, but is the result of a statutory instrument. In J.K. (Bom.) Pvt. Ltd. v. New Kaiser J. Hind Spinning and Weaving Co. Ltd., 1967 (2) Company Law Journal 272, this Court cited with approval the decision of the English Court in (Re Garner Motors Ltd.), 1937 (1) All. E.R. 671 and held that a scheme of amalgamation has statutory operation when sanctioned by the Company Court under the relevant provisions of the Companies Act and is distinct and different from a mere agreement signed by the necessary parties. Even if the scheme is approved by all concerned parties by consensus, merely because it is so agreed upon, the Court is not obliged to put its imprimatur on it. The Court has the discretion and power to reject a scheme even if all the shareholders and creditors have agreed to it. But, once the scheme is scrutinised by the Company Court and sanctioned by an order made by it under section 391 of the Companies Act, it ceases to retain the character of contract and operates by force of the statute. This judgment was considered by the Supreme Court in appeal in (J.K. (Bom.) Pvt. Ltd. v. New Kaiser J. Hind Spinning and Weaving Co. Ltd.), 1970 (40) Company Cases 689, and the Supreme Court reiterated that once a scheme becomes sanctioned by the Court, it ceases to operate as a mere agreement between the parties and becomes binding on the company, the creditors and shareholders and has statutory operation by virtue of the provisions of section 391 of the Companies Act. Such a scheme sanctioned by the Company Court is statutorily binding even on the creditors and shareholders who might have dissented from it or who might have opposed its being sanctioned. It, therefore, has the statutory sanction in that sense. The Supreme Court also approved the observations in Re Garner Motors Ltd. (supra) while coming to this conclusion. The observations of the Calcutta High Court in (House of Labourers Ltd. v. Comilla Baking), A.I.R. 1937 Cal. 381 are to similar effect.
107. There is overwhelming authority of precedents suggesting that when an amalgamation takes place, the transfer of assets takes place by the force of the Company Court's order and/or by operation of law; it ceases to be a contractual or a consensual transfer. The contention, therefore, is that Chapter XX-C is not attracted to such a transfer by operation of law. This contention has substance and needs to be upheld."
30. In another decision in the case of Sequent Scientific Ltd., In Re (supra), Bombay High Court, relying upon decisions of the Hon'ble Supreme Court and different High Courts, observed thus:
"18. ............ The question is whether the transferee company would be the successor of the transferor company in the context of the supply agreement.
While giving the description of the intervenor company in the recital, the same agreement mentions that the expression unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and assigns. In other words, both parties clearly understood that in so far as the successors of any of the party would be bound by the terms and conditions of the supply agreement. In the entire agreement, nowhere it is provided that before allowing succession, the concerned party should take prior written consent of the other. Unlike, in the case of transfer or assignment it is expressly provided that prior written consent of the intervenor company should be obtained. In the present case, the transferee company would become successor in interest as a consequence of the scheme of amalgamation as the transferor company would stand dissolved without winding up. The petitioners has justly relied on the decision of the apex court in the case of Bhagwandas Chopra v. United Bank of India reported in 1987 Supp SCC 536 : AIR 1988 SC 215, wherein the court considered the argument about the effect of scheme of amalgamation and the status of the transferee company as a result of such amalgamation. In paragraph 5, the apex court observed thus (page 218 of AIR 1988):
"It is, however, necessary to evolve a reasonable procedure to deal with cases where a devolution of interest takes place during the pendency of a proceeding arising under the Industrial Disputes Act, 1947. In the circumstances it is reasonable to hold that in every case of transfer, devolution, merger, takeover or a scheme of amalgamation under which the rights and liabilities of one company or corporation stand transferred to or devolve upon another company or corporation either under a private treaty, or a judicial order or under a law the transferee company or corporation as a successor-in- interest becomes subject to all the liabilities of the transferor company, or corporation and becomes entitled to all the rights of the transferor company or corporation subject to the terms and conditions of the contract of transfer or merger, the scheme of amalgamation and the legal provisions, as the case may be, under which such transfer, devolution, merger, takeover or amalgamation, as the case may be, may have taken place. It follows that subject to such terms it becomes liable to be impleaded or becomes entitled to be impleaded in the place of or in addition to the transferor company or corporation in any action, suit or proceeding filed against the transferor company or corporation by a third party or filed by the transferor company or corporation against a third party and that whatever steps have already taken place in those proceedings will continue to operate against and be binding on the transferee company or corporation in the same way in which they operate against a person on whom any interest has devolved in any of the ways mentioned in rule 10 of Order 22 of the Code of Civil Procedure, 1908, subject of course to any terms in the contract of transfer or merger, scheme of amalgamation or other relevant legal provisions governing the transaction under which the transferee company or corporation has become the successor-in-interest of the transferor company or corporation."
In the aforesaid case, Full Bench judgment of the Madras High Court in the case of Sahayanidhi (Virudhunagar) Ltd. v. A.R.S. Subrahmanya Nadar (1950) 20 Comp Cas 214, dealing with the effect of order of the Court sanctioning the scheme of arrangement, was also considered by the Bombay High Court as below:
"19. It may be useful to advert to the decision of the Full Bench of the Madras High Court in the case of Sahayanidhi (Virudhunagar) Ltd. v. A.S.R. Subrahmanya Nadar reported in [1950] 20 Comp Cas 214 : AIR 1951 Mad 209. In Paragraph 4, the court dealing with the effect of order of court sanctioning the arrangement observed thus (page 217):
"Before considering the terms and stipulations in the two deeds of transfer referred to as A-2 and A-3, we would like to refer to section 153A of the Companies Act which has been enacted with a view to facilitate arrangements and compromises between a company and its creditors or shareholders which involve a transfer of its assets and liabilities to other companies as part of such arrangement. If any such scheme or arrangement is sanctioned by court, the court is empowered by the section to make provision by its order sanctioning the arrangement or any subsequent order, for the transfer of the assets and liabilities of a company in liquidation to another company, styled in the section as the transferee company.
Where an order of court made under the section provides for the transfer of the assets and liabilities of a company in liquidation to another company, the assets are, by virtue of that order, without more, transferred to and vest in the transferee company and the liabilities of the former company are also cast upon the transferee company."
The legal consequences flowing as a result of scheme of arrangement approved by the High Court under the provisions of the Companies Act, 1956 were considered on the factual premise of that case that the supply agreement provided that the transferor company shall, unless it be repugnant to the context and meaning thereof, be deemed to mean and include its successors and permitted assigns and it was held as below:
"21. A priori, the transferee company would step in the shoes of successor in interest of the transferor company and would be bound by the terms and conditions of the supply agreement and is obliged to comply with the same in its letter and spirit in all respects. .............."
31. In another decision in the case of Telesound India Ltd., In re (supra), Delhi High Court while dealing with legal consequences flowing from the scheme of arrangement under the Companies Act of 1956 in the matter of amalgamation of two companies, held as below:
"12. Amalgamation of a company with another or an amalgamation of two companies to form a third is brought about by two parallel schemes of arrangements entered into between one company and its members and the other company and its members and the two separate arrangements bind all the members of the companies and the companies when sanctioned by the court. Amalgamation is, therefore, an absorption of one company into another or merger of both to form a third, which is not a mere act of the two companies or their members but is brought about by virtue of a statutory instrument and to that extent has statutory genesis and character, and to that extent it is distinguishable from a mere bilateral arrangement to merge or join in a common endeavour, an undertaking or enterprise J.K. (Bombay) P. Ltd. v. New Kaiser: I-Hind Spg. & Wvg. Co. Ltd., [1970] 40 Comp Cas 689 (SC). Once the court sanctions the amalgamation, the amalgamation is made effective and binding by virtue of statutory power, inter alia, by the transferor to the transferee-company of the whole or any part of the undertaking, property rights and liabilities of the transferor-company by virtue of the provisions of s. 394 of the Act, which are intended to facilitate the process of amalgamation : Sailendra Kumar Ray v. Bank of Calcutta Ltd., [1948] 18 Comp Cas 1 (Cal).
The expression "property" and "liabilities", which can be transferred on amalgamation, under s. 394(1) have been defined in very wide terms by sub-s. (4)(a) of that section, so as to include "rights and powers of every description" and "duties of every description" respectively. The expression "property" would, therefore, be wide enough to include rights under a contract, including a contract of tenancy. These are co-extensive with the property and right which the transferor-company has in relation to its assets, but could not be wider than what the transferor-company was entitled to enjoy. The rights, property, as indeed the liabilities of the transferor-company, become the rights, property and liabilities of the transferee-
company by virtue of the order of vesting made by the court consequent on amalgamation. It is neither an assignment of right or property, nor an assignment of property by the company. It is the transfer of rights, property and liabilities along with the company itself and it is only as a result of confusion of thought that it could be described as an assignment by the company to another person, which is independent and distinct from the company. Such a notion ignores the peculiar position of amalgamation in company law and its true legal incident. It is for historical reasons that the device of amalgamation was built into the company law for facilitating the merger of companies, inter alia, with a view to help restoration of sick units to health, better, more effective and economical management of the corporate sector to ensure continued production, increased employment avenues and generation of revenues. Section 72A of the I.T. Act is one of the incentives for this kind of absorption of one company into another. On amalgamation the transferor-company merges into the transferee-company shedding its corporate shell, but for all purposes remaining alive and thriving as part of the larger whole. In that sense the transferor-company does not die either on amalgamation or on dissolution without winding-up under sub-s. (1) of s. 394. It is not wound up because it has merged into another. Winding-up is unnecessary. It is dissolved not because it has died, or ceased to exist, but because for all practical purposes, it has merged into another forming part of one corporate shell; The dissolution is the death of its independent corporate shell, because a company cannot have two shells. It is, therefore, dissolved because the independent shell or corporate name is superfluous. The company in its essence means its members, who compose it, the assets, property and rights that it had, its liabilities, its undertaking, business or other activity. It is not synonymous with the shell or name. On amalgamation and consequential dissolution all these attributes continue to live as part of a larger entity. The only part that dies is the shell and the name. It is unlike the death of a natural person and yet in a larger and deeper sense the same. It is unlike it, because a natural person, as ordinarily understood, does not survive the death in any physical form.
The transferor-company, however, does survive, in that there is a continuity even after dissolution of its members, its assets, undertaking, etc. The estate of a natural person continues in the hands of the successor for a limited period. In a larger and a deeper sense even a natural person survives his physical death in the continuation of a being, which is supposed to merge in the wider cosmic whole. That, however, is an area of study of life after death, or what is sometimes described as life after life, where the process is of a different dimension and defies description and is, in any event, too deep and wide for the narrow compass of this judgment.
The analogy, therefore, between the death of a natural person and dissolution without winding-up is inappropriate."
32. A Division Bench of Calcutta High Court in the case of Castron Technologies Ltd. Vs. Castron Mining Ltd. (supra) dealt with legal consequences flowing from scheme of arrangement under the provisions of the Companies Act of 1956 and held as below:
"29. In the present case the scheme of arrangement was jointly submitted before the company court for necessary orders in March, 2002. Under the scheme the parties agreed that the C.M.L. would be entitled to pursue and derive the benefit of applications submitted by C.T.L. for the grant of a mining lease upon the scheme being made effective. The mining lease was granted in favour of C.T.L. on June 18, 2002 and was registered in favour of C.T.L. on July 1, 2002. Notices were addressed to the Ministry of Coal, Government of India as also to the Government of Jharkhand in January 2003, indicating that an application had been filed in this court for confirming the scheme of arrangement between the parties herein whereby the mining division of C.T.L. was being transferred to C.M.L. On April 28, 2003, the Central Government informed the Court that it had no objection to the scheme. The scheme was sanctioned by this court only thereafter, on May 13, 2003. A deed of rectification has also been executed in June, 2009 changing the name of the lessee on the mining lease to C.M.L.
30. We are of the view that the application for the mining lease was transferred and not the mining lease itself. Such a transfer did not require the sanction of the Government. It is only if a mining lease is to be transferred that a prior sanction is required. Admittedly, the scheme was sanctioned with effect from October 31, 2001, when there was no mining lease in favour of C.T.L. Therefore the inevitable inference is that the application for the mining lease was transferred under the scheme."
33. In the aforesaid decision, it was held that application for grant of mining lease was transferred under the scheme of arrangement. That was not a case where it required sanction of the Government for such transfer, it being not a case of transfer of mining lease but only an application for grant of mining lease.
34. In the case of Principal Commissioner of Income Tax (Central)-2 Vs. Mahagun Realtors (P) Ltd., (supra), the Hon'ble Supreme Court considered in detail the statutory scheme and legal consequences flowing upon amalgamation of the companies under the scheme of the Companies Act of 1956 and held as below:
"18. Amalgamation, thus, is unlike the winding up of a corporate entity. In the case of amalgamation, the outer shell of the corporate entity is undoubtedly destroyed; it ceases to exist. Yet, in every other sense of the term, the corporate venture continues - enfolded within the new or the existing transferee entity. In other words, the business and the adventure lives on but within a new corporate residence, i.e., the transferee company. It is, therefore, essential to look beyond the mere concept of destruction of corporate entity which brings to an end or terminates any assessment proceedings. There are analogies in civil law and procedure where upon amalgamation, the cause of action or the complaint does not per se cease
- depending of course, upon the structure and objective of enactment. Broadly, the quest of legal systems and courts has been to locate if a successor or representative exists in relation to the particular cause or action, upon whom the assets might have devolved or upon whom the liability in the event it is adjudicated, would fall.
20. In Saraswati Industrial Syndicate v. Commissioner of Income Tax Haryana, Himachal Pradesh, (1990) Supp (1) SCR 332, the facts were that after amalgamation, the transferee company claimed exemption from tax, of a sum which had been allowed as a trading liability-on accrual basis, in the hands of the transferee company which had ceased to exist. The revenue disallowed that claim; that view was upheld. This court stated that:
"In amalgamation two or more companies are fused into one by merger or by taking over by another. Reconstruction or 'amalgamation' has no precise legal meaning. The amalgamation is a blending of two or more existing undertakings into one undertaking, the share holders of each blending company become substantially the share-holders in the company which is to carry on the blended undertakings. There may be amalgamation either by the transfer of two or more undertakings to a new company, or by the transfer of one or more undertakings to an existing company. Strictly 'amalgamation' does not cover the mere acquisition by a company of the share capital of other company which remains in existence and continues its undertaking but the context in which the term is used may show that it is intended to include such an acquisition. See: Halsbury's Laws of England, 4th Edition Vol. 7 Para 1539. Two companies may join to form a new company, but there may be absorption or blending of one by the other, both amount to amalgamation.
When two companies are merged and are so joined, as to form a third company or one is absorbed into one or blended with another, the amalgamating company loses its entity.
In M/s General Radio and Appliances Co Ltd v M.A.. Khader (dead) by Lrs., [1986] 2 S.C.C. 656 : (AIR 1986 SC 1218), the effect of amalgamation of two companies was considered. M/s. General Radio and Appliances Co. Ltd. was tenant of a premises under an agreement providing that the tenant shall not sub-let the premises or any portion thereof to anyone without the consent of the landlord. M/s. General Radio and Appliances Co. Ltd. was amalgamated with M/s. National Ekco Radio and Engineering Co. Ltd. under a scheme of amalgamation and order of the High Court under Sections 391 and 394 of Companies Act, 1956. Under the amalgamation scheme, the transferee company, namely, M/s. National Ekco Radio and Engineering Company had acquired all the interest, rights including leasehold and tenancy rights of the transferor company and the same vested in the transferee company.
Pursuant to the amalgamation scheme the transferee company continued to occupy the premises which had been let out to the transferor company. The landlord initiated proceedings for the eviction on the ground of unauthorised sub-letting of the premises by the transferor company. The transferee company set up a defence that by amalgamation of the two companies under the order of the Bombay High Court all interest, rights including leasehold and tenancy rights held by the transferor company blended with the transferee company, therefore the transferee company was legal tenant and there was no question of any sub-letting. The Rent Controller and the High Court both decreed the landlord's suit. This Court in appeal held that under the order of amalgamation made on the basis of the High Court's order, the transferor company ceased to be in existence in the eye of law and it effaced itself for all practical purposes. This decision lays down that after the amalgamation of the two companies the transferor company ceased to have any entity and the amalgamated company acquired a new status and it was not possible to treat the two companies as partners or jointly liable in respect of their liabilities and assets. In the instant case the Tribunal rightly held that the appellant company was a separate entity and a different assessee, therefore, the allowance made to Indian Sugar Company, which was a different assessee, could not be held to be the income of the amalgamated company for purposes of Section 41(1) of the Act. The High Court was in error in holding that even after amalgamation of two companies, the transferor company did not become non-existent instead it continued its entity in a blended form with the appellant company. The High Court's view that on amalgamation 'there is no complete destruction of corporate personality of the transferor company instead there is a blending of the corporate personality of one with another corporate body and it continues as such with the other is not sustainable in law. The true effect and character of the amalgamation largely depends on the terms of the scheme of merger.
But there cannot be any doubt that when two companies amalgamate and merge into one the transferor company loses its entity as it ceases to have its business. However, their respective rights of liabilities are determined under scheme of amalgamation but the corporate entity of the transferor company ceases to exist with effect from the date the amalgamation is made effective."
35. Keeping in view the aforesaid legal position adumbrated in series of decisions referred to hereinabove, dealing with the consequences flowing upon the scheme of arrangement or in the case of amalgamation, we shall now consider the facts of the present case and the consequences flowing upon the scheme of arrangement between M/s. Grasim Industries Limited and M/s. Samruddhi Cement Limited followed by the scheme of amalgamation entered into M/s. Samruddhi Cement Limited and M/s. UltraTech Cement Limited (Respondent No.1-writ petitioner).
Scheme of arrangement between M/s. Grasim Industries Limited and M/s. Samruddhi Cement Limited was approved by the High Court of Madhya Pradesh vide order dated 31.03.2010. Clause (e) of Section 3, Transfer and Vesting of the Demerged Undertaking in Part II, "Demerger" provided as below:
"(e) Without prejudice to the generality of the foregoing, upon the coming into effect of the Scheme, all the rights, title, interest and claims of the Demerged Company in any leasehold properties, including the mining leases (including those set out in Schedule III hereof) and the prospecting licenses (including in each case, any applications made therefor) of the Demerged Company in relation to the Demerged Undertaking, shall, pursuant to Section 394(2) of the Act, without any further act or deed, be transferred to and vested in or be deemed to have been transferred to and vested in the Resulting Company with effect from the Appointed Date."
Importantly, in the Schedule III, "Details of the mining leases pertaining to the Demerged Undertaking", in relation to the State of Rajasthan, under Clause 6.h, it was clearly recorded as below:
"h. Letter of Intent No. P.2(185) Mines/Group- 2/07 dated October 10, 2007 from Government of Rajasthan for allotting Mining Lease No. 19/06 covering area of 318.78 hectares to Grasim Industries Limited, villages of Ajeetpura, Bhainslana, Kujota & Mehrampur (Nawab), Tehsil Kotputli, Jaipur, Rajasthan."
In the order dated 06.05.2010 passed by the Gujarat High Court, approving the scheme of arrangement, in the Schedule III, "Details of the mining leases pertaining to the Demerged Undertaking", in relation to the State of Rajasthan, under Clause 6.h, it was clearly recorded as below:
"h. Letter of Intent No. P.2(185) Mines/Group- 2/07 dated October 10, 2007 from Government of Rajasthan for allotting Mining Lease No. 19/06 covering area of 318.78 hectares to Grasim Industries Limited, villages of Ajeetpura, Bhainslana, Kujota & Mehrampur (Nawab), Tehsil Kotputli, Jaipur, Rajasthan."
It is, thus, clear that Letter of Intent, which was issued to M/s. Grasim Industries Limited was transferred in favour of M/s. Samruddhi Cement Limited by virtue of scheme of arrangement approved by the High Court of Madhya Pradesh and the High Court of Gujarat. It is relevant to note that it was Letter of Intent dated 10.10.2007 issued by the Government of Rajasthan in favour of M/s. Grasim Industries Limited for allotting Mining Lease No. 19/06 covering area of 318.78 hectares situated in the villages Ajeetpura, Bhainslana, Kujota & Mehrampur (Nawab), Tehsil Kotputli, Jaipur, Rajasthan which is subject matter of the present appeal.
36. Similarly, later on, scheme of amalgamation of M/s. Samruddhi Cement Limited and M/s. UltraTech Cement Limited (Respondent No.1-writ petitioner) was approved by the High Court of Bombay vide order dated 11.06.2010. Heading "Undertaking" for the purpose of amalgamation as defined under Clause (b) of the scheme of amalgamation clearly provided as below:
"(b) all permits, quotas, rights, entitlements, industrial and other licences, bids, tenders, letters of intent, .................."
Sub-clause (a) of Clause 4, "Transfer of Assets" under Part II, "Amalgamation of the transferor company with the transferee company" provided as below:
"(a) Without prejudice to the generality of Clause 3 above, upon the coming into effect of the Scheme and with effect from the Appointed Date, all the estate, assets, properties, rights, claims, title, interest and authorities including accretions and appurtenances comprised in the Undertaking of whatsoever nature and wheresoever situate shall, under the provisions of Sections 391 to 394 and all other applicable provisions, if any, of the Act, without any further act or deed, be and stand transferred to and vested in the Transferee Company and/or be deemed to be transferred to and vested in the Transferee Company as a going concern so as to become, as and from the Appointed Date, the estate, assets, properties, rights, claims, title, interest and authorities of the Transferee Company."
Order dated 01.07.2010 passed by the Gujarat High Court approving the scheme of amalgamation of M/s. Samruddhi Cement Limited with M/s. UltraTech Cement Limited (Respondent No.1-writ petitioner), amongst other things, provided as below:
"2. That with effect from the Appointed Date, the entire business and the whole of the undertaking of the Petitioner Company as set out in the Scheme being Annexure "F" to the Petition shall without any further act or deed is transferred to and vested in and/or deemed to be transferred to and vested in the Transferee Company."
Under the heading "(B) Mining Leases pertaining to Samruddhi Cement Limited, the Transferor Company" in relation to State of Rajasthan, in Clause 6.h it was provided as below:
"h. Letter of Intent No. P.2(185) Mines/Group- 2/07 dated October 10, 2007 from Government of Rajasthan for allotting Mining Lease No. 19/06 covering area of 318.78 hectares to Samruddhi Cement Limited, villages of Ajeetpura, Bhaislana, Kujota & Mehrampur (Nawab), Tehsil Kotputli, Jaipur, Rajasthan."
37. Present is not a case where the scheme of arrangement (demerger) between M/s. Grasim Industries Limited and M/s. Samruddhi Cement Limited followed by the scheme of amalgamation between M/s. Samruddhi Cement Limited and M/s. UltraTech Cement Limited, specifically providing for transfer of Letter of Intent dated 10.10.2007 initially issued in favour of M/s. Grasim Industries Limited, was in contravention of any law in force or opposed to public policy. As has been referred to hereinabove, under the scheme of arrangement (demerger) and scheme of amalgamation, Letter of Intent stood automatically transferred/vested in favour of transferee company and approved by the orders passed by the jurisdictional High Courts from time to time, there was no statutory bar operating under the law against such transfer/vesting of Letter of Intent.
38. Learned Additional Advocate General appearing for the appellants has relied upon the decision of the Hon'ble Supreme Court in the case of M/s. General Radio and Appliances Co. Ltd. & Others Vs. M.A. Khader (Dead) by LRs (supra). On facts, it was found in that case that there was contravention of statutory scheme of Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 regarding restriction on subletting and/or transfer and assignment of interest as well as of rent agreement.
39. In another case, in Delhi Development Authority Vs. Nalwa Sons Investment Ltd. and Another (supra), on facts, it was held that transfer of any asset, right or interest through scheme of amalgamation is subject to other statutory provisions which govern the said asset, right or interest.
As has been held hereinabove that the provisions of the MMDR Act and the rules framed thereunder do not create any bar or legal impediment for transfer/vesting of Letter of Intent under the scheme of arrangement (demerger) and the scheme of amalgamation, it has to be held that there was valid transfer/vesting of Letter of Intent, issued in favour of M/s. Grasim Industries Limited, in favour of Respondent No.1-writ petitioner, M/s. UltraTech Cement Limited.
40. Learned Additional Advocate General has placed heavy reliance upon the decision of Delhi High Court in the case of M/s. Ispat Industries Ltd. Vs. Union of India & Others (supra).
On facts, that was a case where fourth respondent therein made application to the Government for grant of permission to change name in the Letter of Intent or transfer the same in favour of its subsidiary company, which request was accepted by the State Government. Such transfer having been challenged in revision by a third party, revision petition was disposed off holding that Letter of Intent could not be transferred by the State as under the Mineral Concession Rules, only mining lease could be transferred. That was not a case where the legal consequences flowing from the scheme of arrangement (demerger) and the scheme of amalgamation, approved by the jurisdictional High Courts, were examined and held that transfer of Letter of Intent was not permissible. The aforesaid case turns more on its own facts. The aforesaid decision is not an authority for the proposition that in the absence of provisions in the Rules of 1960, transfer of Letter of Intent was impliedly prohibited under the law.
Therefore, the first contention of learned Additional Advocate General deserves to be rejected and is, accordingly, rejected.
41. It is to be noted that no material has been produced before this Court to show that the operative reason for non-grant of mining lease was based on an opinion formed that Letter of Intent was not transferable under the law. On the contrary, the conduct of the appellant-State shows that the appellants being fully aware of demerger and amalgamation kept on issuing Letter of Intent. Vide letter dated 03.12.2010 addressed in the name of M/s. Grasim Industries Limited, it was informed that the validity of Letter of Intent was extended for a period upto 30.09.2011 on certain conditions. Condition (x) clearly provided that as a result of demerger of the cement business of M/s. Grasim Industries Limited with M/s. Samruddhi Cement Limited followed by amalgamation of M/s. Samruddhi Cement Limited with M/s. UltraTech Cement Limited (Respondent No.1-writ petitioner), necessary stamp and registration fee shall be payable by the company before change of the name of the applicant company. It is, thus, clear that the State was fully aware of the demerger and amalgamation proceedings and that all the assets, rights and liabilities stood transferred in the name of Respondent No.1-writ petitioner-company and it was required to fulfill certain conditions before change of name of the applicant from M/s. Grasim Industries Limited to M/s. UltraTech Cement Limited. It, therefore, lies ill in the mouth of the appellant-State to say that the provisions with regard to change of name as contained in Rule 62 of the Rules of 1960 will not be applicable in the present case. The State clearly gave representation to Respondent No.1-writ petitioner that it was prepared to transfer application for grant of mining lease and had also extended validity of Letter of Intent and Respondent No.1-writ petitioner company was required to pay registration fee and stamp duty. Not only this, Respondent No.1- writ petitioner was required to enhance its production capacity from 3 million tonnes per annum to 4 million tonnes per annum within a period of 18 months. Further, Respondent No.1-writ petitioner was required to submit bank guarantee towards keenness money valid for a period of two years with the forfeiture clause that if the production capacity is not enhanced from 3 million tonnes per annum to 4 million tonnes per annum, keenness money would be forfeited and the lease would be revoked.
We are at complete loss as to how the State could take such a stand in the Court against its own conduct, particularly when the other party has acted on its representation because it is matter of record and not under dispute that Respondent No.1-writ petitioner had fulfilled the condition of enhancement of its production capacity from 3 million tonnes per annum to 4 million tonnes per annum and also fulfilled the condition of furnishing bank guarantee towards keenness money. The period under which Letter of Intent was further extended vide letter dated 11.12.2014, being fully aware of demerger and amalgamation proceedings. In fact, vide letter dated 24.06.2016, Assistant Mining Engineer, Kotputli itself recommended to the Director, Mines and Geology, Rajasthan for grant of lease/extension of Letter of Intent in favour of Respondent No.1-writ petitioner. The Superintendent Mining Engineer vide its letter dated 27.06.2016 required the Assistant Mining Engineer, Kotputli to submit relevant information. It is, therefore, clear that at no point of time, there was any decision taken to reject the application for grant of mining lease on the ground that Letter of Intent was not transferable upon demerger and amalgamation proceedings. On the contrary, Respondent No.1-writ petitioner was required to fulfill the terms and conditions of Letter of Intent also.
Respondent No.1-writ petitioner has placed on record letter dated 25.01.2017 of the State by which Letter of Intent for grant of mining lease earlier issued in the name of M/s. Vedanta Industries Limited has been permitted to be changed in the name of M/s. Marwar Cement Limited. The aforesaid document has been filed by Respondent No.1-writ petitioner along with additional affidavit in the appeal. In its counter, this position is sought to be justified by the State that Rule 62 of the Rules of 2016 permit change of name and in case of demerger and amalgamation, such change of name is not permissible in law. It is not the case of the State that M/s. Vedanta Industries Limited itself changed the name of the company to M/s. Marwar Cement Limited requiring change in name under Rule 62 of the Rules of 2016. Therefore, it is clearly a case of transfer of Letter of Intent whereas in the present case, Letter of Intent issued in favour of M/s. Grasim Industries Limited stood vested in Respondent No.1-writ petitioner by operation of law, as has been elaborately dealt with by us hereinabove.
42. The second ground, on which the order passed by the learned Single Judge, allowing writ petition of Respondent No. 1, is assailed is that application for grant of mining lease which was made to the State Government by the transferor company i.e. M/s. Grasim Industries Limited attained its natural demise in view of operation of sunset clause with effect from 11.01.2017 upon coming into force of Section 10A inserted in the MMDR Act vide the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (No. 10 of 2015). Learned Additional Advocate General vehemently contended that the application for grant of mining lease became automatically ineligible in view of the provisions contained in sub-section (1) of Section 10A of the MMDR Act. It is argued that even though earlier Letter of Intent was issued in favour of the transferor company, i.e. M/s. Grasim Industries Limited, extended from time to time, the same could not get crystallised as Respondent No.1-writ petitioner failed to fulfill the terms and conditions of Letter of Intent. Therefore, right to get the mining lease executed on the fulfillment of the terms and conditions of Letter of Intent did not exist and, therefore, in such a case, it is argued, Clause (c) of sub-section (2) of Section 10A of the MMDR Act has no application in the present case.
The MMDR Act was extensively amended vide the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (No. 10 of 2015). A new section, namely, Section 10A was inserted which dealt with the rights of existing concession holders/applicants. As the submissions of learned Additional Advocate General are primarily based on the construction of the provisions contained in newly inserted Section 10A of the MMDR Act, it would be appropriate to extract the provisions of Section 10A of the MMDR Act as below:
"[10A. Rights of existing concession-holders and applicants.―(1) All applications received prior to the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, shall become ineligible. (2) Without prejudice to sub-section (1), the following shall remain eligible on and from the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015―
(a) applications received under section 11A of this Act;
(b) where before the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 a reconnaissance permit or prospecting licence has been granted in respect of any land for any mineral, the permit holder or the licensee shall have a right for obtaining a prospecting licence followed by a mining lease, or a mining lease, as the case may be, in respect of that mineral in that land, if the State Government is satisfied that the permit-holder or the licensee, as the case may be,―
(i) has undertaken reconnaissance operations or prospecting operations, as the case may be, to establish the existence of mineral contents in such land in accordance with such parameters as may be prescribed by the Central Government;
(ii) has not committed any breach of the terms and conditions of the reconnaissance permit or the prospecting licence;
(iii) has not become ineligible under the provisions of this Act; and
(iv) has not failed to apply for grant of prospecting licence or mining lease, as the case may be, within a period of three months after the expiry of reconnaissance permit or prospecting licence, as the case may be, or within such further period not exceeding six months as may be extended by the State Government;
[Provided that for the cases covered under this clause including the pending cases, the right to obtain a prospecting licence followed by a mining lease or a mining lease, as the case may be, shall lapse on the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2021:
Provided further that the holder of a reconnaissance permit or prospecting licence whose rights lapsed under the first proviso, shall be reimbursed the expenditure incurred towards reconnaissance or prospecting operations in such manner as may be prescribed by the Central Government;]
(c) where the Central Government has communicated previous approval as required under sub-section (1) of section 5 for grant of a mining lease, or if a letter of intent (by whatever name called) has been issued by the State Government to grant a mining lease, before the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, the mining lease shall be granted subject to fulfilment of the conditions of the previous approval or of the letter of intent within a period of two years from the date of commencement of the said Act:
Provided that in respect of any mineral specified in the First Schedule, no prospecting licence or mining lease shall be granted under clause (b) of this sub-section except with the previous approval of the Central Government.] [(d) in cases where right to obtain licence or lease has lapsed under, clauses (b) and (c), such areas shall be put up for auction as per the provisions of this Act:
Provided that in respect of the minerals specified in Part B of the First Schedule where the grade of atomic mineral is equal to or greater than the threshold value, the mineral concession for such areas shall be granted in accordance with the rules made under section 11B.]"
43. The newly inserted Section 10A of the MMDR Act is in two parts. First part is contained in sub-section (1) which provides that all applications received prior to the date of commencement of the Mining and Minerals (Development and Regulation) Amendment Act, 2015 shall become ineligible. Thus, by operation of law, it is vividly clear that applications received prior to the appointed date stood rejected/rendered automatically ineligible/attained natural demise.
The second part of Section 10A of the MMDR Act as contained in sub-section (2), however, carves out exceptions to sub-section (1). Categories (a), (b) and (c) of sub-section (2) of Section 10A, exhaustively enumerated therein, save certain applications from being rendered ineligible by operation of law. Apparently, case of Respondent No.1-writ petitioner is not covered either under clause (a) and (b) of sub-section (2) of Section 10A of the MMDR Act. However, clause (c) of sub-section (2) of http://Section 10A of the MMDR Act is relevant because that deals with a situation where the Central Government has communicated previous approval as required under sub-section (1) of Section 5 for grant of mining lease, or if a Letter of Intent (by whatever name called) has been issued by the State Government to grant a mining lease, before the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015. Present is not a case covered under sub-section (1) of Section 5 of the MMDR Act. However, second part of clause (c) of sub-section (2) of Section 10A of the MMDR Act saves those applications where Letter of Intent has been issued by the State Government prior to commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015. Thus, in a case where Letter of Intent has been issued by the State Government to grant a mining lease prior to commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, operation of sub-section (1) of Section 10A of the MMDR Act stands excluded and the consequences provided therein would not follow. Thus, by operation of law, application would not become ineligible. It may be a different thing altogether that for some other reason, the application is not found acceptable and the same is liable to be rejected. It is important to note that clause (c) of sub-section (2) of Section 10A of the MMDR Act not only excludes application of sub-section (1), but at the same time, creates an obligation on the State and a corresponding right on the applicant for grant of mining lease, subject to fulfillment of the conditions of the previous approval or of the Letter of Intent, within a period of two years from the date of commencement of the Act.
It may be a different thing altogether that an application for grant of mining lease is liable to be rejected for any other reason viz., failure to fulfill the terms and conditions of Letter of Intent, but the application remains pending until it is rejected and is not rendered ineligible by operation of sunset clause. It is not in dispute between the parties that sunset clause rendering pending applications ineligible by operation of law, came into force with effect from 11.01.2017.
In taking the aforesaid view on the interpretation of the provisions contained in Section 10A of the MMDR Act, this Court relies upon the judgment of the Hon'ble Supreme Court in the case of Bhushan Power and Steel Limited Vs. S.L. Seal, Additional Secretary (Steel and Mines), State of Odisha and Others (supra) as also order passed by Calcutta High Court in the case of M/s. Kusum Marketing Ltd. & Another Vs. the State of West Bengal & Others (supra).
44. What is not in dispute in view of the respective pleadings, affidavits and counter affidavits of the parties is that M/s. Grasim Industries Limited had applied for grant of mining lease on 05.06.2007 and first Letter of Intent was issued in its favour on 10.10.2007. The pleadings in the writ petition further show that Letter of Intent was extended from time to time. Therefore, present case is covered by clause (c) of sub-section (2) of Section10A of the MMDR Act and not by sub-section (1) of Section 10A of the MMDR Act. As we shall deal, little later, with another aspect of the matter that main operative reason for not granting mining lease was that the proposed mining area included certain charagah (pasture) land and not for any other reason, much less those, which have been now invented while opposing the relief sought by Respondent No.1-writ petitioner, the second argument of learned Additional Advocate General that the application for grant of mining lease was rendered ineligible by operation of law in view of sunset clause cannot be accepted and liable to be rejected and the same, is accordingly, rejected.
45. It is an admitted position on record that vide notification dated 06.05.2006, an area ad-measuring 318.78 hectares near Village Mohanpura, Jodhpura, Tehsil Kotputali, District Jaipur was notified by the State Government as open and vacant for grant of lease for mining of limestone. The said notification was issued in view of the provisions contained in Rule 59 of the Rajasthan Minor Mineral Concession Rules, 1986. Rule 59 of the Rules of 1960 provides for availability of area for regrant to be notified. Having so declared regarding availability of an area of 318.78 hectares, applications were invited vide notification dated 26.05.2007 for grant of mining lease of cement grade limestone in respect of the entire area of 318.78 hectares. It would, thus, be clear that the State itself declared the entire area open for grant of mining lease and having invited applications, it was expected of all the intending applicants to apply for grant of mining lease. Letter of Intent was issued in favour of M/s. Grasim Industries Limited on 10.10.2007. Letter of Intent contained following four conditions:
(i) Obtaining environmental clearance as per notification dated 14.09.2006 issued by the Ministry of Environment and Forest, Government of India;
(ii) Production of mining lease plan as well as mining closure plan approved by Indian Bureau of Mining;
(iii) Submission of statement with regard to khatedari land in terms of Rule 22(3)(h) of the Rules of 1960; and
(iv) Submission of NOC from the Forest Department.
46. It is not in dispute that when the Letter of Intent was extended, NOC was granted by the Forest Department on 11.08.2008; approval of mining plan had taken place on 22.12.2008; environmental clearance was granted on 06.05.2010. Thereafter, a letter of compliance dated 07.07.2010 was submitted by M/s. Samruddhi Cement Limited to the effect that all conditions as per LoI dated 10.10.2007 had been fulfilled. On 07.10.2010, Assistant Mining Engineer sent recommendations to the Director, Mines and Geology Department stating that the company had complied with all the conditions of LoI and, therefore, mining lease could be granted in its favour. Thereafter, LoI was further extended on 03.12.2010 with following three additional conditions:
(i) Increasing capacity of plant from 3 MT per annum to 4 MT per annum;
(ii) Keenness money to be deposited @ Rs. 2 crores per MT per annum towards establishment of cement plant; and
(iii) The Company would deposit stamp and registration fee towards change of name upon demerger of cement business of M/s. Grasim Cement Limited into M/s. Samruddhi Cement Limited and also regarding amalgamation of M/s. Samruddhi Cement Limited into M/s. UltraTech Cement Limited (Respondent No. 1- writ petitioner).
Though there was some dispute with regard to leviability of stamp duty and cases were filed by Respondent No. 1-writ petitioner in the High Court and interim orders were also passed in its favour, later on a letter of all compliances was submitted on 06.06.2014 stating that all conditions of LoI extension dated 03.12.2010 had been complied with. However, since with regard to condition (x), interim order was passed in favour of Respondent No.1-writ petitioner, request was made for grant of mining lease. Thereafter, a letter along with an affidavit was submitted on 06.09.2014 before the Government undertaking that as the issue with regard to payment of stamp duty is pending consideration before the High Court and Respondent No.1-writ petitioner is enjoying interim order, the Company shall abide by the directions issued by the Court and it also undertook to pay the stamp duty as per the final decision that may be taken by the Court in the pending matters. On 11.12.2014, the Government extended the period of Letter of Intent for another six months, during which period, Respondent No.1-writ petitioner deposited stamp duty with regard to demerger and amalgamation, taking benefit of Amnesty Scheme and thus, all the writ petitions were accordingly withdrawn.
47. On 17.01.2015, Respondent No.1-writ petitioner submitted letter to the effect that it had made all compliance and also enclosed certificates of the Collector (Stamps), Jaipur showing payment of complete stamp duty with regard to demerger and amalgamation. On 16.05.2016, Respondent No.1-writ petitioner submitted letter of compliance clearly stating that the mining lease area was consisting of 1.38 hectares of charagah land spread all over the mining lease area and, therefore, it was not possible to reduce the charagah land from the mining lease area. However, an undertaking was given by Respondent No.1-writ petitioner on affidavit that it will not start mining activities in the aforesaid charagah land till permission is granted from the State Government. The said affidavit has been annexed as Annexure-21 with the writ petition. The affidavit clearly stated that no mining operation would be done in the area of charagah land without prior permission of the State Government. It is relevant to note that vide letter dated 24.06.2016, the Assistant Mining Engineer recommended to the Director, Mines and Geology Department for grant of mining lease in favour of Respondent No.1-writ petitioner. The Director, Mines and Geology Department sought certain details vide letter dated 27.06.2016 to which the Assistant Mining Engineer replied on 19.07.2016 stating that a portion of charagah land existed in the proposed mining lease area. It also clearly stated that an affidavit was submitted that no mining activities would be carried out in the charagah land without prior permission of the State Government.
48. The provisions of the MMDR Act or the Rules of 1960 nowhere deals with charagah land. Conditions incorporated in Rule 27 of the Rules of 1960 also do not include any condition with regard to charagah land, though under clause (h) thereof, certain prohibited areas out of the mining area have been carved out where law prohibits lessee from carrying or allowing to be carried on, any mining operation at any point within a distance of fifty metres from any prohibited area like railway line, except under and in accordance with the written permission of the railway administration concerned or under or beneath any ropeway or any ropeway trestle or station, except under and in accordance with the written permission of the authority owning the ropeway or from any reservoir, canal or other public works, or buildings, except under and in accordance with the previous permission of the State Government.
49. The statutory performa of application for grant of mining lease (Form-I) referable to Rule 22 of the Rules of 1960 also does not contain any stipulation with regard to charagah land (pasture land).
On 14.09.1981, a mining lease for mineral limestone and marble was granted in favour of one Rameshwar Bajaj for an area of 415.03 hectares and that was subsequently transferred in the name of National Limestone Company Private Limited vide transfer deed dated 24.02.1986. Copy of the transfer deed dated 24.02.1986 has also been placed on record along with the counter affidavit as Annexure-RA-2. It has also been stated that National Limestone Company Private Limited subsequently surrendered approximately 318.78 hectares of land to the State Government in the year 2005, which was subsequently notified by the State Government for which notification dated 06.05.2006 was issued which was followed by notification dated 26.05.2007, referred to above, inviting applications for mining of limestone over the area of 318.78 hectares. By disclosing these facts, it has been firmly asserted by Respondent No.1-writ petitioner that the entire area without exclusion of any charagah land was thoroughly excavated and completely exploited since 1981 by more than one lease holders and, therefore, there is hardly any grazing land available. In support of this submission, google maps of the year 2016 as well as 2017 have also been annexed with the same counter affidavit. According to Respondent No.1-writ petitioner, the stated area on the site is no more charagah land and the same cannot be used for charagah purposes in any case.
It is worthwhile to note that in the environmental clearance granted vide letter dated 06.05.2010 by the Ministry of Environment and Forests (Annexure-8 of the writ petition) it was stated that the total mining lease area of the project is 318.78 hectares, out of which 311.4 hectares is agriculture land, 1.5 hectares is wasteland and 5.88 hectares is others (Charnot land). It also states that no forest land and no grazing land is involved in the project. It further states that the area proposed for mining is only 73.62 hectares and an area of 4.7 hectares is kept for storage of topsoil, 2.44 hectares for waste dumps, 3.2 hectares for infrastructure, 50 hectares for green belt and 184.82 hectares is for other purposes. It has also been stated therein that Sota River (2.25 Km NW) and Sabi River (5.25 Km S) are flowing in the buffer zone of the mine and the drainage pattern of the study area is controlled by both the seasonal rivers. This, however, is disputed question of fact because in letter dated 07.10.2010 of the Assistant Mining Engineer addressed to the Director, Mines and Geology Department, it has been stated that khasra verification was got conducted through surveyor and according to spot inspection conducted by the surveyor, the area contains charagah land also. The statement of fact in the affidavit regarding allotment of 0.47 hectares of land for establishment of a grid station by KVGSS is not in dispute.
50. The mining plan shows that the mining operations are to be undertaken only on a part of the area comprised within the mining lease and not on the entire area. Provisions contained in Rules 22 and 27(1)(h) of the Rules of 1960 clearly show that even if the land is included in the mining lease or there is prohibited area where mining operations cannot be undertaken, even then such area is included in the mining lease or the mining plan, which excludes many areas within the lease area where no mining operations could be allowed. Furthermore, Rule 27(2), clause (d) of the Rules of 1960 provides that a mining lease may contain a condition in the form of restriction of surface operations in any area prohibited by any authority. Therefore, under the scheme of MMDR Act and the Rules of 1960, while granting mining lease over an area, the lease may contain various conditions, restrictions with regard to mining operations over certain parts of the mining lease area. Respondent No.1-writ petitioner's case has been that once the area of 318.78 hectares was notified and notification for grant of mining lease was notified, Respondent No.1-writ petitioner had no option but to submit its application for grant of mining lease in respect of the area and get mining plan approved from the competent authority in accordance with the statutory scheme. The power to increase or decrease the area of mining does not rest with the applicant, but that power vests with the competent authority, as is clear from the provisions contained in Rule 26 of the Rules of 1960. Moreover, Rule 22A of the Rules of 1960 clearly provides that mining operations have to be in accordance with the mining plan. The mining plan may exclude many areas as would be clear from letter of environmental clearance dated 06.05.2010 (Annexure-8 of the writ petition). It is pertinent to mention here that when the State in its additional affidavit came out with the case that the mining plan of Respondent No.1-writ petitioner does not exclude charagah land of 1.38 hectares from mining operations, Respondent No.1-writ petitioner has stated in its additional affidavit that the area of charagah land has not been included in the mining plan and in support of this contention, approved map of the mining plan has been filed as Annexure-RA-7. It appears that initially at the time of submitting application for grant of mining lease, M/s. Grasim Industries Limited had filed an affidavit on 26.05.2006. Clause 6 of the said affidavit stated that in the applied area, there was no charagah land. It was further stated that if there was any charagah land in the applied area, the applicant would submit NOC from the State Government. Referring to Circular dated 21.07.2008, it has been the case of the State that since no NOC was submitted by Respondent No.1-writ petitioner and it also did not exclude charagah land ad-measuring 1.38 hectares from the mining lease area applied by it, the lease was not granted. We have perused circular dated 21.07.2008 which shows that if there is a charagah land existing in the applied area then no objection certificate is to be obtained from the District Collector/Government. This was reiteration of earlier instructions dated 29.12.1994.
51. The provisions contained in Rule 7 of the Rules of 1955 provides for allotment or setting apart of pasture land. It provides that the Collector may, in consultation with the Panchayat, change the classification of any pasture land, as defined in sub-section (28) of Section 5 of the Rajasthan Tenancy Act, 1955 or any pasture land set apart under Section 92 of the Rajasthan Land Revenue Act, 1956, as unoccupied culturable Government land (Sawai Chak), for allotment for agricultural or any non-agricultural purposes. As it is the stand of Respondent No.1-writ petitioner and is also permissible under the scheme of the Rules of 1960 that no pasture area is being included for the purpose of mining operation, in such an eventuality, grant of mining lease could be considered by imposing appropriate conditions including restrictions on mining operations over pasture areas as a whole, even though it is included within the larger mining lease area. Respondent No. 1-writ petitioner expressed its inability to exclude charagah land ad-measuring 1.38 hectares spread within the mining lease area vide letter dated 16.05.2016 attaching therewith an undertaking that it shall not start mining activities in the charagah land till permission is granted from the State Government.
52. Thus, where the environmental clearance itself allows mining operations on a limited area and Respondent No.1-writ petitioner also gave undertaking on affidavit not to undertake any mining operations over the charagah land which was only 1.38 hectares out of total lease area of 318.78 hectares, inaction on the part of the appellants on the ground that charagah land has not been excluded from the mining area appears to be arbitrary and unwarranted. The entire area was notified and applications were invited for grant of mining lease. Therefore, keeping the application for grant of mining lease pending without any order passed on it on the ground of there being charagah land included in the lease area and non-submission of NOC, does not appear to be fair, particularly when charagah land was not included for the purposes of mining operations. The requirement of NOC from the authority would be necessary only when the charagah land is included for the purpose of mining operations. If there is no prohibition of inclusion of charagah land in the entire mining lease area which comprises of many other parts where no mining operation is carried out under the mining plan, non-grant of NOC could not be made a basis to deny execution of mining lease.
53. It is quite apparent that though Respondent No.1-writ petitioner had complied with all the conditions of Letter of Intent and many other conditions included subsequently while extending Letter of Intent, the appellants developed cold feet on the basis that the law prohibited grant of mining over an area which comprises of charagah land ignoring that Respondent No.1-writ petitioner had given undertaking along with an affidavit not to carry out any mining operations over charagah land without grant of NOC. Ultimately after passing of the sunset clause with effect from 11.01.2017, the State did not proceed further on an erroneous assumption of law that after passing of sunset clause with effect from 11.01.2017, the application for grant of mining lease attained natural demise. This aspect has already been considered by us hereinabove and it has been held in favour of Respondent No.1-writ petitioner and against the appellant-State.
54. The objection with regard to grant of mining lease over an area of charagah land is essentially based on the judgment of the Hon'ble Supreme Court in the case of Jagpal Singh and Others Vs. State of Punjab and Others (supra). The State proceeded to issue various circulars on 25.04.2011, 13.12.2011 and 17.09.2013. Circular issued on 21.07.2008 required that NOC will have to be obtained from the competent authority. These circulars, issued in view of the judgment of the Hon'ble Supreme Court in the case of Jagpal Singh and Others Vs. State of Punjab and Others (supra), restricted use of charagah land (pasture land) for private or commercial purposes. In circular dated 25.04.2011, it was stated that allotment of charagah land for private and commercial purposes shall not be made and where allotment of charagah land for public purposes or in public interest become necessary, State's approval through the District Collector shall be obtained. In a subsequent circular dated 13.12.2011, it was clarified that in respect of applications for grant of mining lease submitted before 25.04.2011, mining lease would be granted only after approval of the revenue department and in case NOC is not issued, the area comprising charagah land shall be excluded.
55. Subsequently, another circular was issued on 17.04.2013 followed by circular dated 17.09.2013 in continuation of earlier circulars. Circular dated 17.09.2013 sought to clarify that as per the opinion of the Law Department, grant of mining operations by declaring another land in place of pasture land is against the directions of the Hon'ble Supreme Court. It also clarified that in future, such a course of action of getting another parcel of land declared as charagah land in place of charagah land for grant of mining activities should not be permitted.
56. The Hon'ble Supreme Court in the case of Jagpal Singh and Others Vs. State of Punjab and Others (supra), held as below:
"23. Before parting with this case we give directions to all the State Governments in the country that they should prepare schemes for eviction of illegal/unauthorized occupants of the Gram Sabha/Gram Panchayat/poramboke/shamlat land and these must be restored to the Gram Sabha/Gram Panchayat for the common use of villagers of the village. For this purpose the Chief Secretaries of all State Governments/Union Territories in India are directed to do the needful, taking the help of other senior officers of the Governments. The said scheme should provide for the speedy eviction of such illegal occupant, after giving him a show-cause notice and a brief hearing. Long duration of such illegal occupation or huge expenditure in making constructions thereon or political connections must not be treated as a justification for condoning this illegal act or for regularising the illegal possession. Regularisation should only be permitted in exceptional cases e.g. where lease has been granted under some government notification to landless labourers or members of the Scheduled Castes/Scheduled Tribes, or where there is already a school, dispensary or other public utility on the land."
57. The first affidavit submitted by M/s. Grasim Industries Limited at the time of submitting its application was to the effect that if charagah land is existing in the mining lease area, NOC would be obtained from the competent authority. That would only mean that if the applicant intends to carry out mining operations and exploits charagah land, NOC would be required. However, as the transferee company has clearly given undertaking supported by its affidavit on 16.05.2016 that it shall not start mining activities in the area comprised of charagah land until NOC/permission from concerned authority is obtained, there was no legal impediment in grant of mining lease after imposing appropriate conditions. It is worthwhile to mention that in order dated 03.04.2018 passed in favour of M/s. Wonder Cement Limited and order dated 12.04.2019 passed in favour of M/s. Shree Cement Limited (both the orders filed in the appellate proceedings), there is clear condition imposed that no mining activities would be permitted in the leased area. Thus, in view of the undertaking given by Respondent No.1-writ petitioner, there was no legal impediment in granting mining lease by incorporating similar condition in respect of Respondent No.1-writ petitioner as well.
58. On the aspect as to whether there existed charagah land at the time of inviting applications for grant of mining lease over the entire stretch of land admeasuring 318.78 hectares, as we have observed hereinabove, there exists a dispute. While Respondent No.1-writ petitioner has come out with a case that the land was under excavation and exploitation since 1981 with different lease holders until it was surrendered in the year 2005, supported by certain google maps and this fact also stated in environmental clearance letter dated 06.05.2010, it has been stand of the State that there exists charagah land to the extent of 1.38 hectares as is reflected from letter dated 07.10.2010 of the Assistant Mining Engineer, Kotputli. According to this letter, the applied area includes charagah land. Though not impossible, it is highly improbable that while carrying out mining operations and exploiting the mining lease area since 1981 till 2005, earlier lease holders would have left the area of 1.38 hectares as charagah land. This is more so when State has not come out with any material to show that while granting leases to previous lease holders since 1981, a condition was imposed not to carry out mining operations on charagah land. On the other hand, it appears that there was no such restriction imposed earlier at least till 2005 and it was only thereafter that it was decided not to allow mining operations on charagah land. Moreover, Respondent No.1- writ petitioner has submitted google maps also, which cannot be easily brushed aside. Over and above all, letter dated 06.05.2010 granting environmental clearance also records the same fact that there is no grazing land involved in the project. Therefore, a fresh survey of a team comprising of officials of Revenue and Mining Departments is necessary.
59. Yet another aspect of the matter is that there exists a dispute as to whether Respondent No.1-writ petitioner had included charagah land of 1.38 hectares in its mining plan. Respondent No.1-writ petitioner has given an affidavit that charagah land is not included in the mining plan. However, the State has taken a stand that charagah land is included in the approved mining plan. In para no. 6 of the counter to affidavit submitted by Respondent No.1-writ petitioner, it has been vehemently contended that the area of charagah has not been included in the mining plan, referring to mining plan (Annexure RA-7). It has also been averred that charagah area has already been exploited by previous lessees. Therefore, it is argued that the said area now comes under the broken up area and there is no question of existence of pasture land. We do not find the mining plan submitted by Respondent No.1-writ petitioner. However, the State has submitted the mining plan of Respondent No.1-writ petitioner in appellate proceedings. In that mining plan, Khasra No. 318 is stated to be charagah land. As per survey field report dated 06.07.2016 annexed with letter dated 19.07.2016 (Annexure-25), prepared by Patwari of Panchayat Samiti Bhainslana, 1.01 hectares of Khasra No. 318, 0.05 hectares of Khasra No. 316 and 0.32 hectares of Khasra No. 192, total admeasuring 1.38 hectares is charagah land. Though Khasra No. 318 has been shown in Respondent No.1-writ petitioner's mining plan annexed by the State along with the appeal, all other Khasra numbers, are not indicated within mining plan. Thus, the statement made by Respondent No.1-writ petitioner as well as State are partially correct and partially incorrect. It appears that only 1.01 hectares of land in Khasra No. 318 is included in the mining plan. It is clear from the mining plan that this is not contiguous area or to say that it is scattered all over, but only at the corner of the area included in mining plan.
60. The Rules of 1955 were amended vide notification dated 31.05.2017 by the amendment carried out in sub-rule (1) of Rule 7 of the Rules of 1955. After the existing first proviso and before the existing second proviso to sub-rule (1), a new proviso was inserted as below:
"Provided further that the classification of pasture land shall not be changed as unoccupied culturable government land (Sawai Chak) for mining purposes without the prior permission of the State Government. The permission by the State Government shall be granted only if applicant has surrendered equal area of khatedari land in favour of the State Government in the same village or nearby village within the same Panchayat and has deposited development charges for the development of such surrendered land as pasture land. The development charges for the year 2017-2018 shall be rupees fifty thousand per bigha or part thereof and for subsequent year it shall be increased by five percent every year. The Development charges so deposited may also be used for the welfare of the cattle of the village by the village Panchayat with prior approval of the District Collector. The land so classified as unoccupied culturable government land (Sawai Chak) shall always remain and treated as government land for all purposes."; and"
61. Thus, in any case, even if there existed charagah land, the new proviso added to Rule 7(1) of the Rules of 1955 allowed classification of pasture land to be changed as unoccupied land for mining purposes. The condition, however, is that such a change would not be permissible without prior permission of the State Government. Moreover, the proviso further states that such permission could be granted by the State Government only if the applicant has surrendered equal area of khatedari land in favour of the State Government in the same village or nearby village within the same Panchayat and has deposited development charges for development of such surrendered land as pasture land. Respondent No.1-writ petitioner has placed on record an application submitted by it on 13.06.2017 to the District Collector, District Jaipur surrendering equivalent area of 1.38 hectares of land in village Bhainslana seeking change in classification of the pasture land in terms of newly added proviso to Rule 7(1) of the Rules of 1955. Letter dated 04.09.2017 of Sub Divisional Officer Kotputli, District Jaipur has also been annexed by which Tehsildar, Kotputli was directed to complete the enquiry and submit the report. According to Respondent No.1-writ petitioner, after change in law by addition of new proviso to Rule 7(1) of the Rules of 1955, it having surrendered equivalent area of land, there was no impediment in allowing change of classification, but the District Collector has not passed any order. On this aspect, the State has not come out with any stand, nor has disclosed in any of its affidavits, the fate of Respondent No.1-writ petitioner's application dated 13.06.2017. It appears that on an erroneous assumption of law that after passing of sunset clause, Respondent No.1-writ petitioner's application for grant of mining lease attained natural demise, the District Collector and the State presumably have not proceeded with the aforesaid application.
62. Since we have held that on account of Letter of Intent having been issued in favour of Respondent No.1-writ petitioner, its application fell outside the mischief of sub-section (1) of Section 10A of the MMDR Act, in view of provision contained in clause (c) of sub-section (2) of Section 10A of the MMDR Act, keeping aside all other disputes, Respondent No.1-writ petitioner's application in terms of newly added proviso to Rule 7(1) of the Rules of 1955, ought to be processed and appropriate order ought to be passed, which has also not been done.
63. In para no. 6 of the counter to affidavit, Respondent No.1- writ petitioner has categorically stated that earlier in tender for grant of mining lease for limestone block 4GII-A, near Village Tadas-Bairas, Tehsil Nagaur, issued for the year 2017-18, the offered land included charagah land also and tender document also dealt with charagah land stating that mining in charagah land will be carried out as per Government's notification dated 31.05.2017. Relevant pages of the tender document have also been annexed with the counter to affidavit filed by Respondent No.1-writ petitioner. In the absence of any denial to this statement of fact by the State in its subsequent affidavits, it is clear that in cases where the area proposed to be covered under the lease include charagah land, subject to compliance of newly added proviso to Rule 7(1) of the Rules of 1955, mining would be permissible. Along with the counter to affidavit, Respondent No.1- writ petitioner has placed on record letter dated 05.12.2016 of the Director, Mines and Geology Department, Government of Rajasthan, addressed to the Secretary, Department of Mines and Petroleum, Government of Rajasthan, wherein it has been clearly stated regarding compliance of all conditions of Letter of Intent by Respondent No.1-writ petitioner. That memo clearly states that Respondent No.1-writ petitioner has already submitted an undertaking that it will not carry out any mining activities unless permission is granted by the State Government. By the said letter, recommendation was made for grant of mining lease in favour of Respondent No.1-writ petitioner. However, no decision was taken in the matter by the State Government.
64. We, thus, find that though a part of the land was included in the mining plan, i.e. 1.01 hectares of land comprised in Khasra No. 318 as charagah land, Respondent No.1-writ petitioner gave clear undertaking on affidavit that it will not carry out any mining operations over the said land. Further, we have also held that NOC would be required in a case where charagah land is proposed to be included for mining activities. Therefore, there was otherwise no impediment in grant of mining lease in favour of Respondent No.1-writ petitioner as it was granted in favour of M/s. Wonder Cement Limited and M/s. Shree Cement Limited by excluding charagah land from mining operation area.
It is also pertinent to mention at this stage that similar relief has been granted in the case of M/s. NU Vista Limited Vs. Union of India & Others (supra) by the Single Judge of this Court. In the appeal preferred by the State also, order has been passed by the Division Bench of this Court on 04.03.2022 in D.B. Civil Special Appeal (Writ) No. 998/2021 regarding undertaking of the petitioner in that case that it shall not carry out any mining activities in the charagah land which may fall in mining area.
65. In view of above considerations, the direction of the learned Single Judge for grant of mining lease in favour of Respondent No.1-writ petitioner by excluding the area covered under charagah for mining activities on the basis of the undertaking given by Respondent No.1-writ petitioner does not warrant any interference by this Court. It is, however, made clear that Respondent No.1- writ petitioner shall not be allowed to carry out mining operation over the land identified as charagah land and condition to that effect would be inserted in the grant of mining lease, as has been inserted in the leases granted in favour of M/s. Wonder Cement Limited, M/s. Shree Cement Limited and M/s. NU Vista Limited. We also clarify that this judgment shall not come in the way of the State Government/District Collector in deciding Respondent No.1- writ petitioner's application dated 13.06.2017 for change of classification under newly added proviso to Rule 7 of the Rules of 1955, on its own merits and in accordance with law.
66. The appeal is, accordingly, dismissed.
67. No order as to costs.