MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA AND ORS

Citation: [2012] 7 S.C.R. 644

Court: Supreme Court of India

Bench: RAJENDRA MAL LODHA, H.L. GOKHALE

Case summary

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA AND ORS.pdf

Judgment text

[2012] 7 S. C. R. 644 MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA AND ORS. (Civil Appeal No. 3285 of 2009 etc. ) JULY 26, 2012 [R. M. LODHA, AND H. L. GOKHALE, JJ. ] Constitution of India, 1950: Art. 294, First Schedule - State Government's ownership in mines and minerals within its territory - Held: Erstwhile State of Bihar being a part-A State specified in First Schedule and prior thereto the Province of Bihar, by virtue of Art. 294 all properties and assets which were vested in His Majesty for the purpose of the Government of Province of Bihar stood 0 vested in corresponding State of Bihar - By the Bihar Act, 1950, all other lands, i. e.

estates and tenures of whatever kind including the mines and minerals therein stood vested in the State of Bihar - Pursuant to Bihar Re-Organisation Act, 2000, all land, inter alia, belonging to the then State of Bihar and situated in the transferred territories passed to the newly created State of Jharkhand which is the owner of the subject area - Mines and minerals within its territory vest in it absolutely - Bihar Land Reforms Act, 1950 - Bihar Reorganization Act, 2000 - Jurisprudence-' Ownership'. Seventh Schedule - List I, Entry 54, List II, Entry 23 read with Entry 18 - Minerals - Iron ore - Right of State Government to reserve mining area for public sector exploitation - Held: The authority of State Government flows from the fact that it is the owner of the mines and the minerals within its territory - Rule 59 of 1960 Rules clearly contemplates reservation by an order of State Government - Provisions that follow s.

2 of 1957 Act have left untouched the State's ownership of mines and minerals within its territory AND ORS. although regulation of mines and the development of minerals have been taken under control of the Union - Therefore, reservation made by State Government under Notifications dated 21. 12. 1962, 28. 02. 1969 and 27. 10. 2006 is not at all contrary to or inconsistent with 1957 Act- These notifications do not impinge upon the legislative power of the Central Government - Mines and Minerals (Regulation and Development) Act, 1957 - ss. 2 to 17-A - Mineral Concession Rules 1960 - rr. 58, 59 and 63A. Arts.

19(1)(g), 39, and 299 - Right to carry on any trade or business - Government contracts - State Government of Jharkhand recommending to Union Government to grant mining lease to certain companies - Subsequently, realizing that the subject area had already been reserved for public sector exploitation, it withdrew the proposal and issued a further notification declaring that iron ore deposits in the subject area would not be thrown to private sector - Held: No person has any fundamental right or any right to claim that he should be granted mining lease or prospecting licence or permitted reconnaissance operation in any land belonging to Government except under 1957 Act and the 1960 Rules - It is true that by the MOU entered into between State Government and appellants, certain commitments were made by State Government but firstly, such MOU is not a contract as contemplated under Art.

299(1) and secondly, in grant of mining lease of a property of the State, the State Government has discretion to grant or refuse to grant any mining lease - Obviously, State Government is required to exercise its discretion, subject to the requirement of law - In view of the fact that the area is reserved for exploitation of mineral in public sector, it cannot be said that the discretion exercised by State Government suffers from any legal flaw. Mines and Minerals (Regulation and Development) Act, 1957: s. 17-A read with rr. 58 and 59 of 1960 Rules - Approval of Central Government for grant of mining lease - Held: Rule 58 as amended in 1980 expressly provided that the State Government by Notification in the official gazette can reserve any area for exploitation in public sector - The amendments have been effected only to make explicit what was implicit and they cannot be read to nullify the powers which the State Government otherwise had under the statute - On coming into force of s.

17-A, r. 58 has been omitted - According to s. 17- A(2). the State Government with the approval of Central Government may reserve any area not already held under any mining lease, to undertake mining operations in public sector - Section 17-A is prospective in nature - The reservations made prior to insertion of s. 17-A continue to be in force - Besides, approval contemplated by s. 17-A may be obtained by State Government before exercise of power of reservation or after exercise of such power - It may be express or implied 0 - Interpretation of Statutes - Prospective operation. Interpretation of Statutes: Prospective operation of a statutory provision - Held: Presumption of prospectivity operates unless shown to the contrary by express provision or is discernible by necessary implication - Maxim - 'Nova constitution futuris formam imponere debet non praete ritis.

' Administrative Law: Doctrines of promissory estoppel and legitimate expectation - Explained - Held: Doctrine of promissory estoppel is not attracted when promise was made in a mistaken belief - State Government had agreed to grant mineral concession as per existing Act and Rules - As a matter of fact, when the MOU was entered into, State Government was not even aware about the reservation of the subject mining area for exploitation in public sector - In view of the fact that the subject mining area had been reserved for exploitation in pubic sector under 1962 and 1969 Notifications, MONNET ! SPAT & ENERGY LTD. v. UNION OF INDIA 647 AND ORS.

the stipulation in the MOU that the State Government shall assist in selecting the area for iron ore and other minerals as per requirement of the company and the commitment to grant mineral concession, cannot be enforced because firstly, the stipulation in the MOU is not unconditional - Secondly, if the State Government is asked to do what it represented to do under the MOU then that would amount to asking the State Government to do something in breach of the Notifications which continue to hold the field - Thus, the doctrines of promissory estoppel and legitimate expectation are not attracted in the instant case - There is no error in the letter of withdrawal dated 13. 9. 2005 issued by State of Jharkhand and the letter of rejection dated 6. 3. 2006 issued by Union of India. ' Doctrine of desuetude - Explained - Held: Insofar as 1962 and i 1969 Notifications are concerned, the doctrine of des.

uetude is not attracted for the reasons: Firstly, nonimplementation of such Notifications for 30-35 years is not that 'long a period which may satisfy the requirement of the doctrine of desuetude - Secondly, as a matter of fact, except stray grant of mining lease for a very small portion of the reserved area to one or two parties there is nothing to suggest much less to establish the contrary usage or contrary practice that the reservation made in the two Notifications has been given a complete go by- Further, since the State of Jharkhnd has not altered, repealed and/or amended the 1962 and the 1969 Notifications, the same cannot be said to have lapsed - Bihar Reorganization Act, 2000 - ss. 84, 85 and 86. The appellants, engaged in the business of production of iron and steel etc.

were stated to have entered into Memorandums of Understanding with the State Government of Jharkhand whereunder the latter was stated to have agreed to assist them in selecting the area for iron ore and other minerals as per requirement. In August 2004, the State Government forwarded applications of ten companies, including the six appellants, with its recommendation to the Government of India for grant of mining lease of iron ore in the subject area. However, on 17. 11. 2004 the District Mining Officer informed the Secretary, Department of Mines and Geology, Government of Jharkhand that the subject area was reserved for public sector exploitation under Notifications dated 21. 12. 1962 and 28. 2. 1969 issued by the Government of Bihar. Consequently, the Government of Jharkhand by its letter dated 13. 9. 2005 sought to withdraw nine of the said proposals including those of all the appellants. On 6. 3. 2006, the .

Central Government passed an order accepting the request of the State Government. Subsequently, by Notification dated 27. 10. 2006, the State Government also declared that the iron ore deposits in the subject area (where the appellants were proposed the mining leases and was at all material times kept reserved by the 1962 and 1969 0 Notifications issued by State of Bihar) would not be thrown open for grant of prospecting licence, mining licence or otherwise for private parties. The appellants filed writ petitions before the High Court challenging the letters dated 13. 9. 2005 and 6. 3. 2006 as also the Notification dated 21. 12. 1962, 28. 2. 1969 and 27. 10. 2006, and prayed for a direction to grant them mining leases as proposed. The writ petitions were dismissed by the High Court. In the instant appeals filed by the companies, the main issue for consideration of the Court was: whether the Notifications dated 21. 12. 1962 and 28. 2.

1969 issued by the State of Bihar and the Notification dated 27. 10. 2006 issued by the State of Jharkhand were legal and valid. Dismissing the appeals, the Court HELD: (Per R. M. Lodha. J. ) 1. 1. In the Constitution of India, 1950, management AND ORS. of mineral resources has been left with both the Central Government and State Governments in terms of Entry 54 in List I and Entry 23 in List II of the Seventh Schedule. In the scheme of the Constitution, the State Legislatures enjoy power to enact legislation on the topics of 'mines and mineral development'. The only fetter imposed on the State Legislatures under Entry 23 is by the latter part of the said entry which says 'subject to the provisions of List I with respect to regulation and development under the control of the Union'. If Parliament by its law has declared that regulation of mines and development of minerals should in public interest be under the control of the Union, which it did by making declaration in s.

2 of the Mines and Minerals (Regulation and Development) Act, 1957, to the extent of such legislation incorporating the declaration, the power of the state legislature is excluded. The declaration made by Parliament in s. 2 of 1957 Act states that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent provided in the Act itself. The requisite declaration has the effect of taking out regulation of mines and development of minerals from Entry 23, List II to that extent. As the declaration made in s. 2 trenches upon the State Legislative power, it has to be construed strictly. By the presence of keynote expression 'to the extent hereinafter provided' in s. 2, the Union has assumed control to the extent provided in 1957 Act. The 1957 Act prescribes the extent of control and specifies it. The declaration made in s. 2 is, thus, not all comprehensive.

Legal regime relating to regulation of mines and development of minerals is thus guided by the 1957 Act and the Mineral Concession Rules 1960 Rules. However, in order that the declaration made by Parliament should be effective, the making of rules or enforcement of rules so made is not decisive. [para 101-102, 108 and 109] [765-G-H· 766-A-H· 767-A-B· 771-E-F] ' ' ' Hingir-Rampur Coal Co. Ltd. & Ors. v. State of Orissa & Ors. 1961 SCR 537 =AIR 1961 SC 459; State of Orissa & Anr. v. Mis M. A. Tulloch & Co. 1964 SCR 461 =AIR 1964 SC 1284; Baijnath Kadio v. State of Bihar and Others 1970 (2) SCR 100 =1969 (3) SCC 838; Bharat Coking Coal Ltd. v. State of Bihar & Ors. 1990 (3) SCR 744 = 1990 (4) SCC 557; D. K. Trivedi and Sons and Others v. State of Gujarat and Others 1986 SCR 479 = 1986 Suppl. SCC 20; HRS Murthy v. Collector of Chittoor 1964 SCR 666=AIR (1965) SC 177, M. Karunanidhi v. Union of India and Anr. 1979 (3) SCR 254 = 1979 (3) SCC 431 , Dharambir Singh vs.

Union of India 1996 (6) Suppl. SCR 566 = 1996 (6) SCC 702 13; Bhupatrai Magan/a/ Joshi and Others v. Union of India and another 2001 (10) SCC 476; M. P. Ram Mohan Raja vs. State of T. N. & Ors. 2007 (5) SCR 576 = 2007 (9) SCC 78; Sandur Manganese & Iron Ores Ltd. vs. State of Karnataka 2010 (11) SCR 240 = 0 2010 (13) sec 1 - referred to. 1. 2. Iron-ore is a mineral included in the First Schedule to the 1957 Act in respect of which no mining lease for it can be granted without the prior approval of the Central Government. No person has any fundamental right or for that matter any right to claim that he should be granted mining lease or prospecting licence or permitted reconnaissance operation in any land belonging to Govern! llent, except under 1957 Act and the Mineral Concession Rules1960. [para 104] [767-H; 768-A- C] State of Tamil Nadu v. Mis. Hind Stone and Others 1981 (2) SCR 742 = 1981 (2) sec 205 - relied on 2. 1.

Minerals constitute the national wealth and are vital raw-material for infrastructure, capital goods and basic industries. For proper development of economy and industry, the exploitation of natural resources cannot be permitted indiscriminately; rather nation's natural wealth has to be used judiciously. Surely, in the case of , AND ORS. a scarce mineral, to permit exploitation by the State or its agency and to prohibit exploitation by private agencies is the most effective method of conservation and prudent exploitation. [para 103-104] [767-D-F; 768-D-E] State Government's ownership in Mines and Minerals and the power of reservation: 2. 2. It is not in dispute that all rights and interests, including rights in mines and minerals in the subject area, had, vested absolutely in the erstwhile State of Bihar free from all encumbrances.

At the time of commencement of the Constitution, the erstwhile State of Bihar was a Part- A State specified in the First Schedule to the Constitution and prior thereto the Province of Bihar. By virtue of Art. 294 all properties and assets which were vested in His Majesty for the purpose of the Government of Province of Bihar, stood vested in the corresponding State of Bihar. By the Bihar Land Reforms Act, 1950, all other lands, i. e. estates and tenures of whatever kind, including the mines and minerals therein, stood vested in the State of Bihar. Pursuant to the Bihar Re-Organization Act, 2000, all lands, inter alia, belonging to the then State of Bihar situated in the transferred territories, including the subject area of the instant appeals, passed to the newly created State of Jharkhand. The admitted position is that the State Government (erstwhile Bihar and now Jharkhand) is the owner of the subject area. Mines and minerals within its territory vest in it absolutely.

As a matter of fact it is because of this position that the appellants made their application for grant of mining lease to the State Government. [para 105] [768-F-H; 769-A-C] 2. 3. Since the State Government's paramount right over the iron ore being the owner of the mines did not get affected by 1957 Act, the power existed with the State Government to reserve subject areas of mining for exploitation in public sector undertaking. [para 107] [770-8-C] 2. 4. It cannot be said that by 1957 Act, State Government's ownership rights in so far as 'development of minerals' was concerned, stood frozen. In the first place, the declaration made by Parliament in 8 s. 2 and the provisions that follow s. 2 of 1957 Act, have left untouched the State's ownership of mines and minerals within its territory although the regulation of mines and the development of minerals have been taken under the control of the Union.

Section 4 deals with activities in relation to land and does not extend to extinguish the State's right of ownership in such land. Section 4 regulates the right to transfer but does not divest ownership of minerals in a State and does not preclude the State Government from exploiting its minerals. Section 4(1) can have no application where the State Government wants to undertake itself mining operations in the area owned by it. Further, s. 5 or, for that matter, ss. 6, 9, 10, 11 and 13(2)(a) also do not take away the State's ownership rights in the mines and minerals within its territory. The power to legislate for regulation of mines and development of minerals under the control of the Union may definitely imply power to acquire mines and minerals in the larger public interest by appropriate legislation, but by 1957 Act that has not been done.

There is nothing in 1957 Act to suggest even remotely - and there is no express provision at all - that the mines and minerals that vested in the States have been acquired. Rather, the scheme and provisions of 1957 Act themselves show that Parliament itself contemplated State legislation for vesting of lands containing mineral deposits in the State Government and did not intend to trench upon powers of State Legislatures under Entry 18, List II. The declaration made in s. 2 of the 1957 Act is not all comprehensive. It does not contemplate acquisition of mines and minerals. Although the word 'regulation' must AND ORS. in the context receive wide interpretation, but the extent of control by the Union as specified in the 1957 Act has to be construed strictly.

This Court in Orissa Cement Limited has emphatically asserted that in the case of a declaration under Entry 54, the legislative power of the State Legislatures is eroded only to the extent control is assumed by the Union pursuant to such declaration as spelt out by the legislative enactment which makes the declaration. [para 107,108, 109 and 110] [770-C-E-H; 771- A-D-E-F; 772-F-G] Orissa Cement Ltd. v. State of Orissa & Others 1991 (2) SCR 105 = 1991 (1) Suppl. SCC 430; State of Haryana and Another v Chanan Mal and Others 1976 (3) SCR 688 = 1977 (1) SCC 340;, lshwari Khetan Sugar Mills (P) Limited & Ors. v. State of Uttar Pradesh and Others 1980 (3) SCR 331 = 1980 (4) SCC 136; Western Coalfields Limited v. Special Area Development Authority Korba & Anr. 1982 (2) SCR 1 =1982 (1) SCC 125 - relied on 2. 5.

Secondly, after enactment of 1957 Act and 1960 Rules, the Central Government has all throughout understood that the State Governments, as owners of mines and minerals within their territory, have inherent right to reserve any particular area for exploitation in the public sector. [para 111] [773-B] Amritlal Nathubhai Shah and Ors. v. Union Government of India and Another 1977 (1) SCR 372 = 1976 (4) SCC 108; and Indian Metals and Ferro Alloys Ltd. v. Union of India & Ors 1990 (2) Suppl. SCR 27 = 1992 (1) Suppl. SCC 91relied on 2. 6. The judgment of this Court in Amritlal Nathubhai Shah establishes the distinction between the power (of State Government) of reservation to exploit a mineral as its own property on the one hand and the regulation of mines and mineral development under the 1957 Act and the 1960 Rules on the other.

The authority of the State Government to make reservation of a particular mining area within its territory for its own use is the offspring of ownership; and it is inseparable therefrom unless denied to it expressly by an appropriate law. By 1957 Act that has not been done by Parliament. Setting aside by a State of land owned by it for its exclusive use and under its dominance and control is an incident of sovereignty and ownership. It cannot be said that Amritlal Nathubhai Shah is not a binding precedent being per incuriam inasmuch as earlier judgments of this Court have not been considered and applied. There is no incongruity or inconsistency in the decisions of this Court in Hingir- Rampur Coal Co. , M. A. Tulloch & Co. , Baijnath Kadio and Amritlal Nathubhai Shah. The Bench in Amritlal Nathubhai Shah was alive to the legal position highlighted by this 0 Court in Hingir-Rampur Coal Co. , M. A. Tulloch & Co. and Baijnath Kadio although it did not expressly refer to these decisions.

The legal position exposited in Amritla/ Nathubhai Shah is that even though the field of legislation with regard to regulation of mines and development of minerals has been covered by the declaration of Parliament in s. 2 of the 1957 Act, but that can not justify the inference that the State Government has lost its right to the minerals which vest in it as a property within its territory and hence no person has a right to exploit the mines other than in accordance with the provisions of the 1957 Act and the 1960 Rules. The authority of the State Government to order reservation flows from the fact that it is the owner of the mines and the minerals within its territory. Such authority is also traceable to Rule 59 of 1960 Rules. [para 113-114] [774- E-H; 775-A-E] 2. 7. Thus, the reservation made by 1962 and 1969 Notifications is not at all contrary or inconsistent with 1957 Act. The impugned Notifications do not impinge AND ORS. upon the legislative power of the Central Government.

The Government of erstwhile State of Bihar had the power to make reservation which it did by 1962 and 1969 Notifications. There was no lack of power in the State in making such reservation. [para 102] [767-8-C] 2. 8. It can also not be said that in view of ss. 17 and 18 of the 1957 Act, the 1962 and the 1969 Notifications are not relatable to statutory provisions contained in 1957 Act and 1960 Rules. Section 17 is not all-comprehensive on the subject of refusal to grant prospecting licence or mining lease and it has nothing to do with public or private sector. It does not deal directly or indirectly with the State Government's right for reservation of its own mines and minerals. Its application is not general but it is confined to a specific situation where the Central Government proposes to undertake prospecting or mining operations in any area not already held under any prospecting licence or mining lease. Insofar as s.

18 is concerned, it basically confers additional rule making power upon the Central Government for achieving the objectives, namely, conservation and systematic development of minerals articulated therein. If the State Government makes reservation in public interest with respect to minerals which vest in it for exploitation in public sector, such reservation cannot be seen as impairing the obligation cast upon the Central Government u/s 18. [para 115-116] [775-F-H; 776-A-D] 2. 9. Rule 59 continued to recognize the State Government's right to reserve any area for mining within its territory for any purpose including exploitation in public sector. [para 118] [777-E] Amritlal Nathubhai Shah and Ors. v. Union Government of India and Another 1977 (1) SCR 372 = 1976 (4) SCC 108 relied on Janak Lal v. State of Maharashtra and Others 1989 (3) SCR 830 = 1989 (4) sec 121 - cited 2. 10.

Rule 58 was amended in 1980 whereby it expressly provided that the State Government may, by Notification in the official gazette, reserve any area for 8 exploitation by the Government, a corporation established by the Central, State or Provincial Act or a Government company within the meaning of s. 617 of the Companies Act. Rule 58 has been omitted from 1960 Rules as the provision for reservation has now been expressly made by insertion of s. 17A in 1957 Act. According to s. 17A(2), the State Government with the approval of the Central Government may reserve any area not already held under any prospecting licence or mining lease to undertake prospecting or mining operations through a Government company or a corporation owned or controlled by it. In terms of s. 17A(2), any reservation made by the State Government after coming into force of that Section must bear approval of the Central Government.

Thus, what was implied by the provisions originally contained in 1957 Act and 1960 Rules insofar as authority of the State Government to reserve any area within its territory for mining in public sector, has been made explicit first by amendment in Rule 58 in 1980 and later on by introduction of s. 17A in 1957 Act by virtue of amendment effective from 1987. [para 119 and 120] [777- G-H; 778-A-D] 2. 11. With regard to the impact of omission of r. 58 in 1988 from 1960 Rules and the introduction of s. 17A in 1957 Act in the context of reservation of the mining area by the State Government for public sector exploitation, this Court in Indian Metal and Ferro Alloys Ltd. has categorically held that reservations made prior to insertion of s. 17A continue to be in force even after the introduction of s. 17A. This Court holds that s. 17A is prospective. There is no indication in s. 17A or in terms AND ORS. of the Amending Act that by insertion of s.

17A Parliament intended to alter the pre-existing state of affairs. Parliament does not seem to have intended by bringing in s. 17A to undo the reservation of any mining area made by the State Government earlier thereto for exploitation in public sector. Where an issue arises before the court whether a statute is prospective or retrospective, the court has to keep in mind presumption of prospectivity articulated in legal maxim nova constitutio futuris formam imponere debet non praeteritis, i. e. , 'a new law ought to regulate what is to follow, not the past'. The presumption of prospectivity operates unless shown to th"e contrary by express provision in the statute or is otherwise discernible by necessary implication. [para 122-124] [778- G-H; 779-A-B; 780-C-D] Keshavan Madhava Menon v. State of Bombay 1951 SCR 228 =AIR 1951 SC 128 - referred to. Colonial Sugar Refining Co. v. Irving (1905) AC 369; Pu/borough Parish School Board Election, Bourke v. Nutt (1894) 1 QB 725, p.

737 - referred to. Principles of Statutory Interpretation (Seventh Edition, 1999) by Justice G. P. Singh - referred to. 2. 12. If a state government has power to reserve mineral bearing area for exploitation in public sector and the then Government of Bihar had such power - the act of reservation by 1962 and 1969 Notifications is not rendered illegal or invalid.

The aspects, namely, (i) 1993 mineral policy framed by the Central Government envisaged permission of captive consumption of minerals across the country; (ii) in 1994 Central Government asked all the state governments to dereserve 13 minerals including iron ore and directed them to take steps accordingly; (iii) confirmation by the Government of Bihar to the Central Government in 1994 that no mining areas were reserved for public sector undertaking in the then State of Bihar; (iv) confirmation by the State Government in 2001 to Central Government that there are no reserved areas in the State and (v) in 2004, the recommendation by the State Government in favour of the appellants to the Central Government for grant of prior approval and reminder in 2005, have no impact and effect on the validity of 1962 and 1969 Notifications.

The above acts of the Government of Bihar and the Government of Jharkhand in ignorance of 1962 and 1969 Notifications cannot be used as a sufficient ground for invalidating these Notifications. Lack of knowledge on the part of the State Government about the reservation of areas for exploitation in public sector by 1962 and 1969 Notifications does not affect in any manner the legality and validity of these Notifications once it has 0 been found that these Notifications have been issued by the erstwhile State of Bihar in valid exercise of power which it had. [para 125] [780-E-H; 781-A-C] 3. 1. As regards the Notification dated 27. 10. 2006, it states that it has been issued in the public interest and in the larger interest of the State for optimum utilization and exploitation of the mineral resources in the State and for establishment of mineral based industry with value addition thereon. It mentions the factum of reservation made by 1962 and 1969 Notifications.

It is founded on the policy of the State Government that such reservation will usher in maximum benefits to the State and would also generate substantial amount of employment in the State. The public interest is, thus, paramount. The State Government had authority to do that u/s 17A(2) of 1957 Act read with Rule 59(1)(e) of 1960 Rules. The mineral reserved in the said area by 2006 Notification has been decided to be utilized for exploitation by public sector undertaking or 'joint venture project' of the State Government. 2006 Notification does mention reservation AND ORS. for joint venture project of the State Government but, the said expression must be understood to be confined to an instrumentality having the trappings and character of a government company or corporation owned or controlled by the State Government and not outside of such instrumentality. [para 126 and 128] [781-E-H; 782- A-D-E] Indian Metals and Ferro Alloys Ltd. v. Union of India & Ors 1990 (2) Suppl.

SCR 27 = 1992 (1) Suppl. SCC 91relied on 3. 2. The approval by the Central Government contemplated in s. 17A may be obtained by the State Government before the exercise of power of reservation or after exercise of such power. It may be express or implied. In a case such as the present one where the Central Government has relied upon 2006 Notification while rejecting appellants' application for grant of mining lease, it necessarily implies that the Central Government has approved reservation made by the State Government in 2006 Notification otherwise it would not have acted on the same. In any case, the Central Government has not disapproved reservation made by the State Government in 2006 Notification. Further, the 2006 Notification has not been given retrospective operation; it is prospective. Mere reference to 1962 and 1969 Notifications in the 2006 Notification does not make it retrospective. [para 129- 130] [783-A-C, E-F] 4. 1.

The doctrine of promissory estoppal is firmly established and is well accepted in India. The following principles must guide a court where an issue of applicability of promissory estoppel arises: (i) Where one party has by his words or conduct made to the other clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is, in fact, so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective of whether there is any pre-existing relationship between the parties or not.

(ii) The doctrine of promissory estoppel may be applied against the Government where the interest of justice, morality and common fairness dictate such a course. The doctrine is applicable against the State even in its governmental, public or sovereign capacity where it is necessary to prevent fraud or manifest injustice. However, the Government or even a private party under the doctrine of promissory estoppel cannot be asked to do an act prohibited in law. The nature and function which the Government discharges is not very relevant. The Government is subject to the rule of promissory estoppel and if the essential ingredients of this doctrine are satisfied, the Government can be compelled to carry out the promise made by it. (iii) The doctrine of promissory estoppel is not limited in its application only to defence but it can also furnish a cause of action. In other words, the doctrine of promissory estoppel can by itself be the basis of action. MONNET ! SPAT & ENERGY LTD. v.

UNION OF INDIA 661 AND ORS. (iv) For invocation of the doctrine of promissory estoppel, it is necessary for the promisee to show that by acting on promise made by the other party, he altered his position. The alteration of position by the promisee is a sine qua non for the applicability of the doctrine. However, it is not necessary for him to prove any damage, detriment or prejudice because of alteration of such promise. (v) In no case, the doctrine of promissory estoppel can be pressed into aid to compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make. No promise can be enforced which is statutorily prohibited or is against public policy. (vi) It is necessary for invocation of the doctrine of promissory estoppel that a clear, sound and positive foundation is laid in the petition.

Bald assertions, averments or allegations without any supporting material are not sufficient to press into aid the doctrine of promissory estoppel. (vii) The doctrine of promissory estoppel cannot be invoked in abstract. When it is sought to be invoked, the court must consider all aspects including the result sought to be achieved and the public good at large. The fundamental principle of equity must forever be present to the mind of the court. Absence of it must not hold the Government or the public authority to its promise, assurance or representation. [para 132 and 146) [784-E; 801-F-H; 802-A-H; 803-A- E] Mis Motilal Padampat Sugar Mills Co. Ltd. V. State of UP. & Ors. 1979 (2) SCR 641 = 1979 (2) SCC 409; Union of India and Others v. Godffey Philips India Limited 1985 (3) Suppl. SCR 123 = 1985 (4) SCC 369; and Delhi Cloth and General Mills Limited v. Union of India 1988 (1) SCR 383 = 1988 (1) SCC 86; Amrit Vanaspati Co. Ltd. vs.

State of Punjab 1992 (2) SCR 13 =1992 (2) SCC 411; State of Orissa and Ors. v. Mangalam Timber Products Limited 2003 Suppl. SCR 476 =2004 (1) SCC 139; State of Punjab v. Nestle India Ltd. and Another 2004 (2) Suppl. SCR =2004 (6) SCC 465; Union of India v. lndo-Afghan Agencies [1968) 2 SCR 366; Collector of Bombay v. Municipal Corporation of the City of Bombay (1952) SCR 43, Century Spinning and Manufacturing Co. Ltd. v. Ulhasnagar Municipal Council 1970 (2) SCR 854 = 1970 (1) SCC 582, M. Ramanatha Pillai v. State of Kera/a (1974) 1 SCR 515, Assistant Custodian v. Brij 0 Kishore Agarwala 1975 (2) SCR 359 = 1975 (1) SCC 21, State of Kera/av. Gwalior Rayon Silk Manufacturing Co. Ltd. 1974 (1) SCR 671 =1973 (2) sec 713 I Excise Commissioner, UP. , Allahabad v. Ram Kumar 1976 Suppl. SCR 535 = 1976 (3) SCC 540, Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. v. Sipahi Singh 1978 (1) SCR 375 = 1977 (4) SCC 145 and Radhakrishna Agarwal v.

State of Bihar 1977 ( 3) SCR 249 = 1977 (3) SCC 457; Kasinka Trading & Anr. v. Union of India and Anr. 1994 (4) Suppl. SCR 448 =1995 (1) SCC 274; Bannari Amman Sugars Ltd. v. Commercial Tax Officer & Ors. (2005) 1 SCC 625 - referred to Central London Property Trust Ltd. v. High Trees House Ltd. (1956) 1 All ER 256; Jorden v. Money (1854) 5 HLC 185; Hughes v. Metropolitan Railway Company (1877) 2 AC 439, Birmingham and District Land Co. , v. London and North Western Rail Co. (1889) 40 Ch D 268; Durham Fancy Goods Ltd. v. Michael Jackson (Fancy Goods) Ltd. (1968) 2 All ER 987, Evenden v. Guildford City Association Football Club Ltd. (1975) 3 All ER 269 and Crabb v. Arun District Council (1975) AND ORS. 3 All ER 865; Allengheny College v. National Chautauque County Bank 57 ALR 980 and Grennan v. Star Paving Company (1958) 31 Cal 2d 409- referred to 4. 2.

The following principles in relation to the doctrine of legitimate expectation are well established: (i) The doctrine of legitimate expectation can be invoked as a substantive and enforceable right. (ii) The doctrine of legitimate expectation is founded on the principle of reasonableness and fairness. The doctrine arises out of principles of natural justice and there are parallels between the doctrine of legitimate expectation and promissory estoppel. (iii) Where the decision of an authority is founded in public interest as per executive policy or law, the court would be reluctant to interfere with such decision by invoking doctrine of legitimate expectation. The legitimate expectation doctrine cannot be invoked to fetter changes in administrative policy if it is in the public interest to do so. (iv) The legitimate expectation is different from anticipation and an anticipation cannot amount to an assertible expectation.

Such expectation should be justifiable, legitimate and protectable. (v) The protection of legitimate expectation does not require the fulfillment of the expectation where an overriding public interest requires otherwise. In other words, personal benefit must give way to public interest and the doctrine of legitimate expectation would not be invoked which could block public interest for private benefit. [para 153] [809-C-H; 810-A] MP. Oil Extraction and Another v. State of MP. and Ors. 1997 ( 1 ) Suppl. SCR 671 = (1997) 7 SCC 592; J. P. Bansal v. State of Rajasthan and Anr. (2003) 5 SCC 134; Union of India and Others v. Hindustan Development Corporation and Others 1993 (3) SCR 128 = (1993) 3 sec 499; P. T. R. Exports (Madras) Pvt. Ltd. & Ors. v. Union of India & Ors. 1996 (2) Suppl. SCR 662 = (1996) 5 SCC 268 - referred to. 4. 3. The State Government had agreed to grant mineral concession as per existing Act and Rules.

As a matter of fact, when the MOU was entered into, the State Government was not even aware about the reservation o of the subject mining area for exploitation in the public sector. It was on November 17, 2004 that the District Mining Officer informed the Secretary, Department of Mines and Geology, Government of Jharkhand that the subject area was reserved for public sector under 1962 and 1969 Notifications issued by the erstwhile State of Bihar. In view of the fact that the subject mining area had been reserved for exploitation in pubic sector under 1962 and 1969 Notifications, the stipulation in the MOU that the State Government shall assist in selecting the area for iron ore and other minerals as per requirement of the company and the commitment to grant mineral concession cannot be enforced. For one, the stipulation in the MOU is not unconditional. The commitment is dependent on availability and as per existing law.

Two, if the State Government is asked to do what it represented to do under the MOU then that would amount to asking the State Government to do something in breach of these two Notifications which continue to hold the field. [para 159] [812-E-G; 813-A-D] 4. 4. The doctrine of promissory estoppel is not AND ORS. attracted in the facts, particularly, when promise was made - assuming that some of the clauses in the MOU amount to promise - in a mistaken belief and in ignorance of the position that the subject land was not available for iron ore mining in the private sector. The State Government cannot be compelled to carry out what it cannot do in the existing state of affairs in view of 1962 and 1969 Notifications.

The State Government cannot be held to be bound by its commitments or assurances or representations made in the MOU because by enforcement of such commitments or assurances or representations, the object sought to be achieved by reservation of the subject area is likely to be defeated and thereby affecting the public interest. The overriding public interest also persuades this Court in not invoking the doctrines of promissory estoppal and legitimate expectation. Thus, none of the appellants is entitled to any relief based on these doctrines. [para 159) [813-D-G] 4. 5. As a matter of fact, on coming to know of 1962 and 1969 Notifications, the State Government withdrew the proposals which it made to the appellants and reiterated the reservation by its Notification dated October 27, 2006 expressly "in public interest and in the larger interest of the State".

The act of the State Government in withdrawing the recommendations made by it to the Central Government in the factual and legal backdrop cannot be said to be bad in law on the touchstone of doctrine of promissory estoppal as well as legitimate expectation. The act of the State Government is neither unfair nor arbitrary nor does it suffer from the principles of natural justice. [para 160-161) [813-H; 814-A-C] 5. 1. As regards, the doctrine of desuetude and its applicability, the essentials of doctrine of desuetude may be summarized as follows: I. The doctrine of desuetude denotes principle of quasi repeal but this doctrine is ordinarily seen with disfavour. II. Although doctrine of desuetude has been made applicable in India on few occasions but for its applicability, two factors, namely, (i) that the statute or legislation has not been in operation for very considerable period and (ii) the contrary practice has been followed over a period of time must be clearly satisfied.

Both ingredients are essential and want of anyone of them would not attract the doctrine of desuetude. [para 167] [816-D-G] State of Maharashtra v. Narayan Shamrao Puranik &Ors. 1983 (1) SCR 655 =(1982) 3 SCC 519; Cantonment Board, MHOW and Anr. v. M. P. State Road Transport Corporation 1997 (3) SCR 813 = (1997) 9 SCC 450; Municipal Corporation for City of Pune vs. Bharat Forge Co. Ltd. 1995 ( 2 ) SCR 716 = 1995 (3) SCC 434 - referred to R. v. London County Council LR (1931) 2 KB 215 (CA); Brown v. Magistrate of Edinburgh 1931 SLT (Scots Law Times Reports) 456; and Buckoke v. Greater London Council (1970) 2 All ER 193 - referred to. Francis Bennion's Statutory Interpretation; Craies Statute Law (7th Edn. ) and" Repeal and Desuetude of Statutes" by Aubrey L. Diamond; referred to 5. 2. Insofar as 1962 and 1969 Notifications are concerned, the doctrine of desuetude is not attracted for more than one reason.

In the first place, the Notifications are of 1962 and 1969 and non-implementation of such Notifications for 30-35 years is not that long a period which may satisfy the first requirement of the doctrine of desuetude. Moreover, State of Jharkhand came into AND ORS. existence on November 15, 2000 and it can hardly be said that 1962 and 1969 Notifications remained neglected by the State Government for a very considerable period. As a matter of fact, in 2006, the State Government issued a Notification mentioning therein about the reservation made by 1962 and 1969 Notifications. Secondly, as a matter of fact, except stray grant of mining lease for a very small portion of the reserved area to one or two parties there is nothing to suggest much less establish the contrary usage or contrary practice that the reservation made in the two Notifications has been given a complete go by. [para 168] [817-B-D, F-G] 5. 4.

It can also not be said that 1962 and 1969 Notifications had lapsed as the State Government never adopted them. In the light of s. 85 of the Bihar Reorganisation Act read with ss. 84 and 86 thereof, position that emerges is that the existing law shall have effect until it is altered, repealed and/or amended. Since the new State of Jharkhand had not altered, repealed and/ or amended 1962 and 1969 Notifications issued by the erstwhile State of Bihar, it cannot be said that 1962 and 1969 Notifications had lapsed. Moreover, in 2006 Notification, 1962 and 1969 Notifications and their effect have been mentioned and that also shows that 1962 and 1969 Notifications continued to operate. [para 131] [783- G; 784-A-C] /. T. C. & Ors. v. State of Karnataka & Ors. 1985 Suppl. SCR 145 = 1985 Suppl. SCC 476; Maya Mathew v. State of Kera/a and Ors. 2010 (3) SCR 16 = 2010 (4) sec 498; Pratik Sarkar, MB. Suresh and Jitendra Laxman Thorve v.

State of Jharkhand 2008 (56) 1 BLJR 660; Lord Krishna Textile Mills v. Its Workmen 1961 SCR 204 = 1961 AIR 860; Life Insurance Corporation of India v. Escorts Limited and others 1985 (3) Suppl. SCR 909 = 1986 (1) SCC 264; and High Court of Judicature for Rajasthan v. P. P. Singh and Another 2003 (1) SCR 593 = 2003 (4) SCC 239; Nagarjuna Construction Company Ltd. v. Government of Andhra Pradesh & Ors. 2008 (14) SCR 859 = (2008) 16 SCC 276; Jayalakshmi Coelho v. Oswald Joseph Coelho 2001 (2) SCR 207 = (2001) 4 SCC 181; and Mohinder Singh Gill and Anr. v. The Chief Election Commissioner, New Delhi, & Ors. , (1978) 1 SCC 405; Nazir Ahmad v. King-Emperor AIR 1936 PC 253; and Sir Kameshwar Singh of Darbhanga and Ors. 1952 SCR 889; - cited. Per Gokhale, J 1. 1. Section 3 of the Bihar Land Reforms Act, 1950 provides for issuance of notification of vesting the estates and tenures in the State.

Section 4 provides for consequences of the vesting, namely, that they shall vest absolutely in the State free from all encumbrances. Ownership denotes a complex of rights. The right of the State of Jharkhand to deal with the mines and minerals within its territory including reserving the same for Public Sector Undertakings, or to direct avoidance of overlapping while granting leases of mines, obviously flows from its ownership of those mines and minerals. [para 30 and 31] [849-B; 850-C-D; 851-A-B] State of Bihar vs. Kameshwar Singh 1952 SCR 1056= AIR 1952 SC 252, referred to. Salmond on Jurisprudence (Twelfth Edn. 246) - referred to. 1. 2. Entry 54 of List I states that regulation of Mines and Minerals Development is within the power of the Union Government to the extent a declaration is made by Parliament in that behalf, and such a declaration has been made in s. 2 of the MMDR Act. [para 32(i)] [851-C] lshwari Khetan Sugar Mills (P) Limited & Ors. v.

State of Uttar Pradesh and Others 1980 (3) SCR 331 = 1980 (4) AND ORS. SCC 136; Orissa Cement Ltd. v. State of Orissa &Others 1991 (2) SCR 105 = 1991 (1) Suppl. SCC 430 - referred to 1. 3. Section 4 (1) of the MMDR Act lays down that prospecting or mining operations are to be done as per the provisions of the license or lease. Section 4(3) does 8 not restrain the State Government from undertaking these operations in the area within the State though, when it comes to the minerals in the first schedule, it has to be done after prior consultation with the Central Government. The authority to grant the reconnaissance permit, prospecting license or mining lease on the conditions which are mentioned in s. 5 of the Act is specifically retained with the State Government. However, with respect to the minerals specified in the First Schedule (which include iron-ore), it is added that previous approval of the Central Government is required. [para 33 and 34) [852-F-H; 854-D] 1. 4.

Section 10 of the Act deals with the procedure for obtaining the necessary licences. It makes it very clear that the application is to be made to the State Government, and it is the right of the State Government either to grant or refuse to grant the permit, licence or lease. Again, it is the right of the State Government to give preferences in the matters of granting lease, though this right is regulated by the provisions of s. 11 of the Act. Thus, although the Central Government is given the authority to approve the applications with respect to the specified minerals, that does not take away the ownership and control of the State Government over the mines and minerals within its territory. [para 35-36) [855-G-H; 856-D- E; 857-E] 1. 5. S. ection 17 (1) gives the power to the Central Government to undertake prospecting and mining operations in certain lands. However, such operations have also to be done only after consultation with the State Government as stated in sub-s. (2) thereof.

Besides, subs. (3) requires the Central Government also to pay the reconnaissance permit fee or prospecting fee, royalty, surface rent or dead rent as the case may be. Section 17A gives the power to the Central Government to reserve s any area not held under any prospecting licence or mining lease with a view to conserving any minerals. However that power is also to be exercised in consultation with the State Government. Similarly, under sub-s. (2) of s. 17A, the State Government may also reserve any such area, though with the approval of the Central Government. Thus, these sections and the duty cast on the Central Government u/s 18 do not affect the ownership of the State Government over the mines and minerals within its territory, or to deal with them as provided in the statute. [para 37] [857-H; 858-A-D] 0 2. 1. The provisions of the MMDR Act contain certain regulations.

The provisions of the Act do not in any way take away or curtail the right of the State Government to reserve the area of mines in public interest, which right flows from vesting of the mines in the State Government. It is inherent in its ownership of the mines. [para 38] [858- D-F] 2. 2. The Central Government does have the power to issue a direction as contained in the letter dated 6. 3. 2006. As far as the notification of 27. 10. 2006 is concerned, the same is also clearly traceable to s. 17A (2) of the Act. This sub-section requires the approval of the Central Government for reserving any new area which is not already held through a Government Company or Corporation, and where the proposal is to do so. The notification of 27. 10. 2006 refers to the previous notifications of 1962 and 1969 whereunder the mining areas in the subject area were already reserved, and reiterates the decision of the State Government that the AND ORS.

minerals which were already reserved in the area under the two notifications will continue to be utilised for exploitation by public sector undertakings or joint venture projects of the State Government. Therefore, the notification dated 27. 10. 2006 did not require the approval of the Central Government. [para 38] [858-G; 859-C-E] 2. 3. As regards the letter dated 13. 9. 2005, it is seen that the State Government states therein that nine out of the ten proposals overlap the areas meant for public undertakings and two other companies and, therefore, the proposals were called back. The power to take such a decision rests in the State Government in view of its ownership of the mines, though there may not be a reference to the source of power. Absence of reference to any particular section or rule which contains the source of power will not invalidate the decision of the State Government, since there is no requirement to state the source of power. [para 39] [859-F-G] Dr.

Ram Manohar Lohia Vs. State of Bihar 1966 SCR 709 =AIR 1966 SC 740 - relied on 2. 4. The notification of 1969 is clearly protected under r. 59 as amended on 9. 7. 1963, in as much as the rule clearly states that the State Government can refuse to grant a mining lease, should the land be reserved for any purpose. [para 43(i)] [864-0-E] 2. 5. As far as the notification of 1962 is concerned, it cannot be said that because the power to reserve the land 'for any purpose' was specifically provided thereunder from 9. 7. 1963, such power did not exist in rr. 58 and 59 as they stood prior thereto. The provisions of the Act clearly show that the power to grant the mining leases is specifically retained with the State Government even with respect to the major minerals, though with the approval of the Central Government. The power to effect such reservations for public undertakings, or for any purpose flows from the ownership of the mines and minerals which vests with the State Government.

The amendment of r. 59 in 1963 made it clear that the State can reserve land 'for any purpose', and the amendment of rr. 58 and 59 in 1980 clarified that the State can reserve it for a public corporation or a Government company. These amendments have been effected only to make explicit what was implicit, and they can not be read to nullify the powers which the State Government otherwise had under the statute. [para 43-44] [864-E; 865-D-H;. 866- A] Janak Lal v. State of Maharashtra and Others 1989 (3) SCR 830 = 1989 (4) SCC 121 - held inapplicable Indian Metals and Ferro Alloys Ltd. v. Union of India & Ors 1990 (2) Suppl. SCR 27 = 1992 (1) Suppl. SCC 91 held inapplicable 2. 6. It cannot be said that in view of s. 15, the State Government's power is only to regulate the minor minerals. The provisions from ss.

4 to 17A clearly show the power of the State Government either to grant or not to grant the mining leases, prospecting licenses and reconnaissance permits and to regulate their operations even with respect to the major minerals specified in the First Schedule to the act though with the previous approval of the Central Government. This would include the power to effect reservations of mining areas for the public sector. [para 46] [866-G; 867-A-B] Bharat Coking Coal Ltd. v. State of Bihar & Ors. 1990 (3) SCR 744 = 1990 (4) SCC 557- held inapplicable 2. 7. The power of the State flows from its ownership of the mines, and it is not in any way taken away by the law made by Parliament viz. the MMDR Act or the MC AND ORS. Rules. Therefore, it cannot be said that because a regulatory regime is created under the MMDR Act giving certain role to the Central Government, the power to effect reservations is taken away from the State Government. [para 46] [867-C-D] D. K.

Trivedi and Sons and Others v. State of Gujarat and Others 1986 SCR 479 =1986 Suppl. SCC 20 Hukam Chand etc. v. Union of India &Ors 1973 (1) SCR 896=1972 (2) SCC 601- distinguished 2. 8. The action of the State cannot as well be faulted for being unreasonable to be hit by Art. 19(1) (g) of the Constitution of India since all that the State has done is to follow the Statute as per its letter and its true spirit. [para 47] [867-G-H] 2. 9. As regards the plea that once the State Government had recommended the proposal to the Central Government for grant of mineral concession it becomes functus-officio in view of the provision of r. 63 A of the MC Rules, 1960, and it cannot withdraw the same, it is significant to note that, firstly, the impugned judgment shows that this plea was not canvassed before the High Court. Besides, in any case, 'recommendation' will mean a complete and valid recommendation after an application for grant of mining lease is made under r.

22 with all full particulars in accordance with law. In the instant case, the State Government found that its own proposal was a defective one, since it was over-lapping a reserved area. In such a case, the withdrawal thereof by the State Government cannot be said to be hit by r. 63A. In any case, the Central Government subsequently rejected the proposal. [para 48] [868-A-D] 2. 10. As regards the plea that the appellants could not resort to their remedy of revision under r. 54 against the letter of State Government dated 13. 9. 2005, suffice it to say that it is the appellants who chose to file their writ petition directly to the High Court to challenge the same (along with Central Government letter dated 6. 3. 2006) without exhausting that remedy. The Central Government cannot be faulted for the same. Incidentally, the petition nowhere states as to how the appellant came to know about these internal communications between the State and the Central Government. [para 49] [868-F-H] 2.

11. From the judgments of the Constitution Benches of this Court in Hingir-Rampur Coal Co. , M. A. Tulloch & Co. and Baijnath Kadio, it is evident that if there is a declaration by Parliament, to the extent of that declaration, the regulation of mines and minerals development will be outside the scope of the State legislation as provided under Entry 54 of the Centre List. In the instant matter, the Court is not concerned with the conflict of any of the provisions under the MMDR Act, either with any State Legislation or with any Executive Order under a State Legislation issued by the State Government. As regards the case of the appellants that the State Government was not competent at all to issue the notifications of 1962 and 1969 reserving the mining areas for public undertaking, in Amritlal Nathubhai Shah's case, this Court has held in clear terms that the power of the State Governme11t arose from its ownership of the minerals, and that it had the inherent right to deal with them.

[para 50,53 and 55] [869-B; 871-D-F; 872-C] Amritlal Nathubhai Shah Vs. Union of India 1977 (1) SCR 372 = 1976 (4) sec 108 - relied on Hingir-Rampur Coal Co. Ltd. & Ors. v. State of Orissa & Ors. 1961 SCR 537 = AIR 1961 SC 459; State of Orissa & Anr. v. Mis M. A. Tulloch & Co. 1964 SCR 461 AIR 1964 SC 1284; Baijnath Kadio v. State of Bihar and Others 1970 (2) SCR 100 = 1969 (3) SCC 838 - referred to. AND ORS. 2. 12. The judgment in Amritlal cannot be said to be stating anything contrary to the propositions in Hingir- Rampur Coal Co. , M. A. Tulloch & Co. and Baijnath Kadio, but is a binding precedent. The notifications impugned by the appellants in the instant group of appeals were fully protected under the provisions of MMDR Act, and also as explained in Amritlal. [para 59] [875-C] 3. 1. It cannot be said that the two notifications suffer on account of desuetude.

The law requires that there must be a considerable period of neglect, and it is necessary to show that there is a contrary practice of considerable time. The appellants have not been able to show anything to that effect. The authorities of the State of Jharkhand have acted the moment the notifications were brought to their notice, and they have acted in accordance therewith. This certainly cannot amount to desuetude. [para 60] [875-D-F] 3. 2. For invoking the principle of promissory estoppal there has to be a promise, and on that basis the party concerned must have acted to its prejudice. In the instant case, it was only a proposal, and it was very much made clear that it was to be approved by the Central Government, prior whereto it could not be construed as containing a promise. Besides, equity cannot be used against a statutory provision or notification. What the appellants are seeking is in a way some kind of a specific performance when.

there is no concluded contract between the parties. An MOU is not a contract, and not in any case within the meaning of Art. 299 of the Constitution. Barring the appellant in C. A. No 3286 of 2009, other appellants do not appear to have taken further steps. In any case, in the absence of any promise, the appellants cannot claim promissory estoppal in the teeth of the notifications issued under the relevant statutory powers. [para 61-62] [875-F-H; 876-A-B] 3. 3. The doctrine of legitimate expectation can also not be invoked where the decision of the public authority is founded in a provision of law, and is in consonance with public interest. As has been reiterated by this Court in Sandur Manganese 'it is a well settled principle that equity stands excluded when a matter is governed by statute'. [para 62) [876-C-D] Sandur Manganese & Iron Ores Ltd. vs. State of Karnataka 2010 (11) SCR 240 = 2010 (13) SCC 1 - relied on 4. 1. Mines and minerals are a part of the wealth of a nation.

They constitute the material resources of the community. Art. 39(b) of the Directive Principles mandates that the State shall, in particular, direct its policy towards securing that the ownership and control of the material resources of the community are so distributed as best to sub-serve the common good. Article 39(c) mandates that the State should see to it that operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. The public interest is very much writ large in the provisions of MMDR Act and in the declaration u/s 2 thereof. The ownership of the mines vests in the State of Jharkhand in view of the declaration under the provisions of Bihar Land Reforms Act, 1950 which Act is protected by placing it in the Ninth Schedule. [para 66] [878-G-H; 879- A-B] State of Tamil Nadu Vs. Mis Hind Stone [1981) 2 SCR 742 =AIR 1981 SC 711; and Waman Rao Vs. Union of India 1981 (2) SCR 1 = 1981 (2) sec 362- relied on 4. 2.

There is no error in the letter of withdrawal dated 13. 9. 2005 issued by the State of Jharkhand, and the letter of rejection dated 6. 3. 2006 issued by the Union of India for the reasons stated therein. The State Government MONNET ! SPAT & ENERGY LTD. v. UNION OF INDIA 677 AND ORS. was fully justified in declining the grant of leases to the private sector operators, and in reserving the areas for the public sector undertakings on the basis of notifications of 1962, 1969 and 2006. All that the State Government has done is to act in furtherance of the policy of the statute which cannot be faulted. [para 67) [879-F-G] Air India Vs. Union of India 1995 (2) Suppl. SCR 175=1995 (4) SCC 734; Mis Motila/ Padampat Sugar Mills Co. Ltd. V. State of UP. & Ors. 1979 (2) SCR 641 = 1979 (2) SCC 409 State of Punjab v. Nestle India Ltd. and Another 2004 (2) Suppl. SCR 135 = 2004 (6) SCC 465; State of Maharashtra vs.

Narayan Shamrao Puranik 1983 (1) SCR 655 =1982 (3) SCC 519; Municipal Corporation for City of Pune & Ors. v. Bharat Forge Co. Ltd. & Ors. 1995 (2) SCR 716 = 1995 (3) SCC 434; Cantonment Board Mhow vs. M. P. State Road Transport Corpn. 1997 (3) SCR 813 =1997 (9) SCC 450; Amrit Banaspati Ltd. and Another v. State of Punjab and Another 1992 (2) SCR 13=1992 (2) SCC 411; M. P. Mathur and Others v. OTC and Others 2006 (9) Suppl. SCR 519 = 2006 (13) SCC 706; Dharambir Singh vs. Union of India 1996 (6) Suppl. SCR 566 = 1996 (6) SCC 702; M. P. Ram Mohan Raja vs. State of Tamil Nadu 2007 (5) SCR 576 = 2007 (9) SfC 78; State of Kera/a v. B. Six Holiday Resorts {P) Ltd. 2010 (3) SCR 1 = 2010 (5) SCC 186 - cited. Case Law Reference: Per R. M. Lodha,J. 1961 SCR 537 referred to para 21 1964 SCR 461 referred to para 21 1970 (2) SCR 100 referred to para 21 1977 (1) SCR 372 relied on para 21 1989 (1) Suppl.

SCR 692 referred to para 21 1991 (2) SCR 105 referred to para 21 2010 (3) SCR 16 cited para 21 2008 (56) 1 BLJR 660 cited para 21 1990 (3) SCR 744 referred to para 23 1989 (3) SCR 830 referred to para 26 2010 (11) SCR 240 referred to para 28 1986 SCR 479 referred to para 30 1981 (2) SCR 742 relied on para 30 1990 (2) Suppl. SCR 27 relied on para 30 1973 (1) SCR 896 referred to para 31 1952 SCR 889 cited para 33 2001 (10) sec 476 referred to para 33 1961 SCR 204 cited para 35 1985 (3) Suppl. SCR 909 cited para 35 1995 (2) SCR 716 referred to para 35 2003 (1) SCR 593 cited para 35 1976 (3) SCR 688 relied on para 36 1980 (3) SCR 331 relied on para 36 1979 (2) SCR 641 referred to para 37 1992 (2) SCR 13 referred to para 37 2004 (2) Suppl. SCR 135 referred to para 37 2006 (9) Suppl. SCR 519 referred to para 37 1964 SCR 666 referred to para 94 AND ORS. 1979 (3) SCR 254 referred to para 94 1985 Suppl. SCR 145 cited para 94 1982 (2) SCR 1 relied on para 94 1996 (6) Suppl.

SCR 566 referred to para 96 2007 (5) SCR 576 referred to para 98 1951 SCR 228 referred to para 123 (1905) AC 369 referred to para 123 (1894) 1 QB 725, p. 737 referred to para 123 (1956) 1 All ER 256 referred to para 131 (1854) 5 HLC 185 referred to para 131 (1877) 2 AC 439 referred to para 131 (1889) 40 Ch D 268 referred to para 131 (1968) 2 All ER 987 referred to para 132 (1975) 3 All ER 269 referred to para 132 (1975) 3 All ER 865 referred to para 132 57 ALR 980 referred to para 135 (1958) 31 Cal 2d 409 referred to para 135 (1968) 2 SCR 366 referred to para 136 (1952) SCR 43 referred to para 136 1970 (2) SCR 854 referred to para 136 (1974) 1 SCR 515 referred to para 136 1975 (2) SCR 359 referred to para 136 1974 (1) SCR 671 referred to para 136 1976 Suppl. SCR 535 referred to para 136 1978 (1) SCR 375 referred to para 136 1977 (3) SCR 249 referred to para 137 1985 (3) Suppl. SCR 123 referred to para 138 1988 (1) SCR 383 relied on para 139 1994 (4) Suppl.

SCR 448 referred to para 141 2003 Suppl. SCR 476 referred to para 142 2004 (6) Suppl. SCR 264 referred to para 144 1993 (3) SCR 128 referred to para 148 1996 (2) Suppl. SCR 662 referred to para 148 1997 (1) Suppl. SCR 671 referred to para 150 2003 (2) SCR 933 referred to para 151 1983 (1) SCR 655 referred to para 163 (1931) 2 KB 215 (CA) referred to para 163 1931 SLT (Scots Law Times Reports)456 referred to para 163 (1970) 2 All ER 193 referred to para 163 1997 ( 3) SCR 813 referred to para 166 AIR 1936 PC 253 referred to para 172 2008 (14) SCR 859 cited para 172 2001 (2) SCR 207 cited para 173 1978 (2) SCR 272 referred to para 174 As Per Gokhale, J 1961 SCR 537 referred to para 14 AND ORS. 1961 SCR 537 referred to para 14 1964 SCR 461 referred to para 14 1970 (2) SCR 100 referred to para 14 1977 (1) SCR 372 relied on para 14 1989 (3) SCR 830 held inapplicablepara 14 1973 (1) SCR 896 distinguished para 16 1990 (2) Suppl.

SCR 27 held inapplicable para 16 [1986] SCR 479 distinguished para 16 1995 (2) Suppl. SCR 175cited para 17 1990 ( 3) SCR 744 held inapplicablepara 18 1979 (2) SCR 641 cited para 18 2004 (2) Suppl. SCR 135 cited para 18 1952 SCR 1056 referred to para 19 1981 (2) SCR 1 relied on para 19 1966 SCR 709 relied on para 22 1983 (1) SCR 655 cited para 23 1995 (2) SCR 716 cited para 23 1997 (3) SCR 813 cited para 23 1992 (2) SCR 13 cited para 24 2006 (9) Suppl. SCR 519 cited para 24 2010 (11) SCR 240 relied on para 24 1981 (2) SCR 742 relied on para 25 1996 (6) Suppl. SCR 566 cited para 25 2007 (5) SCR 576 cited para 25 2010 (3) SCR 1 cited para 25 1980 (3) SCR 331 referred to para 32 1991 (2) SCR 105 referred 10 para 32 [1985] 2 SCR 175 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3285 of 2009 etc. From the Judgment & Order dated 04. 04. 2007 of the Higl' Court of Jharkhand at Ranchi in Writ Petition {Civil) No. 4151 of 2006. WITH CA. Nos. 3286, 3287, 3288, 3289 & 3290 of 2009. Con.

Pel (C) No. 14 of 2009 in C. A. No. 3287 of 2009. Dt: Abhishek M. Slnghvi, Or. Rajeev Dhawan, Ohruv Mehta, Ajit Kr. Sinha, P. S. Narasimha, T. S. Doabia, Ashok Bhan, J. K. Oas, Krishnan Venugopal, Sanjiv Sen, Gaurav Goel, Sun1l Mitlal, Pulkit Sharma, E. G. Agrawala, Omar Ahmad, Prashant Mehta, Sunita Bankoti (for Suresh A. Shroff & Co. ), Jaya Bharukha, Guru Partap, (for Devashish Bharukha), Sanjeev K. Kapoor, Zafar lnayat, Gaurav Juneja, Yogesh V. Kotemath, Rohlni Misra, Rahu1 Chandra (for Khaltan & Co. ), K. B. Rohtagi, Mahesh Kasana, Aparana Rohatgi Jain, B. Vijayatakshmi Menon, Rohit Choudhary, Preeti Khiwani, Sri Ram Krishnan, Garvesh Kabra, Gaurav Pratap (for Devashish Bharuka), Ratan Kumar Choudhary, Brahmajeet Mishra, N. N. Singh, S. Chandrashekhar, Ashwarya Sinha, Sunil Kumar Jain, Aneesh Mittal, Sachin Sharma, Sridhar Potaraju, Gaichang Ganmei, Sriram Parakkat, D.

Siri Rao, Annapurna, Sandeep Grover, Siddhartha (for Luthra & Luthra), Madhurima Talia, Sadhana Sandhu, Sunita Sharma, Gargi Khanna, S. S. Rawat (for D. S. Mahra), Avijeet Bhujabal, P. P. Nayak (for Paramanand Gaur), AND ORS. S. K. Divakar, Chhaya Kumari for the appearing parties. The Judgments & order of the Court was delivered by R. M. LODHA, J. Introduction 1. This group of six appeals occupied considerable judicial time. These matters were heard on ten days between November 2, 2011 and November 29, 2011. Although the facts differ from one another in some respects but since fundamental issues appeared to be common and all these matters arise from a common judgment dated April 4, 2007 passed by the Division Bench of the Jharkhand High Court at Ranchi, we have heard all these matters together which are being disposed of by this common judgment. Prayers 2. The prayers in the writ petitions filed by the appellants before the High Court also differ.

However, principally the reliefs prayed for by the appellants in their writ petitions were for quashing (i) the decision of the Department of Mines and Geology, Government of Jharkhand contained in the letter dated September 13, 2005 whereby the State Government sought to withdraw the recommendation for grant of mining lease made in favour of the appellants in the subject iron ore bearing areas in Mauza Ghatkuri, West Singhbhum District, Jharkhand (ii) the order of the Ministry of Mines, Government of India whereunder the said Ministry returned the recommendation made by Government of Jharkhand in favour of each of.

the appellants (iii) for declaring the Notifications dated December 21, 1962 and February 28, 1969 issued by the Government of Bihar and the Notification dated October 27, 2006 issued by the Government of Jharkhand null and void and (iv) directing the respondents to proceed under Rule 59(2) of the Mineral Concession Rules, 1960 (for short, '1960 Rules') for grant of mining lease to each of the appellants in the iron ore bearing areas in Ghatkuri as applied. Bihar Land Reforms Act 3. Bihar Land Reforms Act, 1950 (for short, '1950 Bihar Act') came to be enacted by the Bihar Legislature to provide for the transference to the State of the interest of proprietors and tenure holders in land of the mortgagees and lessees of such interest including interest in mines and minerals and other matters connected therewith. It came into force on September 25, 1950. Chapter II of the 1950 Bihar Act deals with vesting of an estate or tenure in the State and its consequences.

The State Government has been empowered under Section 3 to declare that the estates or tenures of a proprietor or tenure holder, as may be specified in the notification/s from time to time, to become vested in the State. Section 4 provides for consequences of vesting of an estate or tenure in the State. Section 4 has undergone amendments on few occasions. To the extent it is relevant, Section 4 of the 1950 Bihar Act reads as follows: "4. Consequences of the vesting of an estate or tenure in the State. -Notwithstanding anything contained in any other law for the time being in force or any contract and notwithstanding any non-compliance or irregular compliance of the provisions..............

on the publication of the notification under sub-section (1 ), of section 3 or sub-section (1) or sub-section (2) of section 3A, the following consequences shall ensue and shall be deemed always to have ensued, namely; (a) Such estate or tenure including the interests of the proprietor or tenure-holder in any building or part of a building comprised in such estate or tenure ......... as also his interest in all sub soil including any rights in mines and minerals whether discovered or undiscovered or whether been worked or not, inclusive of such rights of a lessee of mines and minerals, comprised in such estate are tenure (other than the interests of raiyats or under - raiyats) shall, with effect from the date of vesting, vest absolutely in the State free from all encumbrances and such proprietor or tenure-holder shall cease to have any interest in such 8 estate or other than the interests expressly saved by or under the provisions of this Act". 4.

The brief facts relating to each of these appeals may be noticed now. Factual features Civil Appeal No. 3285 of 2009, Monnet lspat and Energy Ltd. Vs. Union of India and Ors. 5. The appellant company, referred to as Monnet, is registered under the Companies Act, 1956. Monnet is engaged in the business of mining, production of steel, ferro-alloys and power. Monnet decided to set up an integrated steel plant in Hazaribagh District with a proposed investment of Rs. 1400 crores. A Memorandum of Understanding (MOU) was entered into between Monnet and the State Government on February 5, 2003. The main raw material for the integrated steel plant is iron ore. On January 29, 2004, Monnet made an application to State of Jharkhand, referred to as State Government, for mining lease of iron ore over an area of 3566. 54 hectares in Mauza Ghatkuri for the purpose of the proposed steel plant. 5. 1.

It is the case of Monnet that after consideration of the application and following the necessary procedure contemplated under the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as 'the 1957 Act') and the 1960 Rules, the State Government in August, 2004 recommended Monnet's application to the Government of India for grant of mining lease of iron ore over an area of 705 hectares in Mauza Ghatkuri under Section 5(1) and Section 11 (5) of the 1957 Act. The recommendation was made after the State Government was satisfied that the said mining block was suitable for exploitation and met the requirement of Monnet. The recommendation was also made on priority basis as Monnet fulfilled the essential objectives of the industrial policy of the State with commitment for investment and growth of employment and social sector under its aegis. 5. 2.

The Ministry of Mines, Government of India, on receipt of the recommendation of the State Government, sought for certain clarifications from the State Government vide their communication dated September 6, 2004. The State Government is said to have responded to the said communication and clarified the position in their reply of November 17, 2004. The State Government reiterated the recommendation in favour of Monnet setting out the comparative merit of all such proposals. 5. 3. On November 17, 2004, the District Mining Officer, Chaibasa informed the Secretary, Department of Mines and Geology, Government of Jharkhand that certain portions of Mauza Ghatkuri and the adjoining areas were reserved for public sector exploitation under the two Notifications issued by the Government of Bihar on December 21, 1962 and February 28, 1969.

He further suggested that approval of the Central Government under Rule 59(2) of the 1960 Rules should be obtained by the State Government for grant of leases in this area to avoid complications. 5. 4. The Central Government vide its letter dated June 15, 2005 informed that a joint meeting of officers of Ministry of Mines, Government of India and concerned officers of the State Government be held to clarify certain issues in connection with the Ghatkuri Reserve Forest. 5. 5. On June 29, 2005, a joint meeting of the officials of the Central Government and State Government on the issues relating to proposals for grant of mining leases in Ghatkuri was held wherein the Secretary of the State Government is stated to have requested the Central Government to hold on the processing of the pending applications. 5. 6. On September 13, 2005, the State Government requested the Central Government to return the proposals of 8 mining lease of nine out of ten applicants, including Monnet. 5. 7.

On September 14, 2005, a joint meeting of the officials of the State Government and the Central Government took place. In that meeting also the officials of the State Government informed the Central Government that it has decided to withdraw nine pending mining lease proposals, including that of Monnet. 5. 8. Monnet has averred that compartment no. 5 which was recommended for allocation to it was not at all affected by reservation. Block No. D (500 acres) which is overlapping with compartment no. 5 (recommended in favour of Monnet) was earlier lease area of Mis. Rungta Sons Pvt. Ltd. (for short, 'Rungta'). The said lease was granted to Rungta for twenty years upto September 3, 1995. Monnet claims that application for renewal was not submitted by Rungta one year prior to expiry of their lease and their lease automatically expired on September 3, 1995. Moreover, only 102. 25 hectares area has been overlapping with compartment no.

5 (out of the 705 hectares recommended by the State Government for Monnet). Monnet has thus, set up the case that the area recommended by the State Government for grant of mining lease to it was not under any previous reservation for any public sector undertaking. 5. 9. On March 6, 2006, the Government of India passed an order accepting the request of the State Government dated September 13, 2005 for withdrawal of the mining proposals made in favour of applicants, including Monnet. Civil Appeal No. 3286 of 2009, Adhunik Alloys & Power Ltd. Vs. Union of India and Ors. 6. The appellant M/s. Adhunik Alloys & Power Limited, referred to as Adhunik, is a company registered under the provisions of the Companies Act, 1956. It carries on business 8 of iron and steel. Adhu nik intended to set up 2. 2 MTPA integrated steel plant at Kandra in the State of Jharkhand. The first phase of this integrated steel plant is said to have been completed and commissioned in June, 2005.

The work for completion of phase-I I has been going on. On September 1, 2003, Adhunik made an application to the State Government for grant of mining lease over an area of 8809. 37 acres (3566. 54 hectares) in Mauza Ghatkuri for iron ore for captive consumption of its proposed integrated steel plant at Kandra, Jharkhand. 6. 1. On September 16, 2003, the Deputy Commissioner, Chaibasa forwarded Adhunik's application along with few others to the Director of Mines, Jharkhand. 6. 2. As the applications were overlapping, the Director of Mines called Adhunik and other applicants for a meeting on December 26, 2003. The Director of Mines gave hearing to the applicants, including Adhunik. 6. 3. On February 26, 2004, an MOU was entered into between the State Government and Adhunik in connection with an integrated steel plant at Village Kandra in the District of Seraikela - Kharswan setting out the details of the project; capacity per annum, project cost and implementation period. 6. 4.

On August 4, 2004, the State Government recommended Adhunik's case to the Central Government for grant of mining lease for iron ore for captive consumption over an area of 426. 875 hectares. In its letter dated August 4, 2004 seeking prior approval of the Central Government for grant of mining lease for iron ore in favour of Adhunik, the State AND ORS. [R. M. LODHA, J. ] Government gave various reasons justifying grant of mining lease to Adhunik. 6. 5. Adhunik claims that substantial progress has been made in construction of its Rs. 790 crores integrated steel plant and the plant has been seriously affected due to shortage of 8 iron ore. Civil Appeal No. 3287 of 2009. Abhiieet Infrastructure Ltd. Vs. Union of India and Ors. 7. The appellant M/s. Abhijeet Infrastructure Limited, referred to as Abhijeet, was earlier known as Abhijeet Infrastructure Pvt. Limited. Abhijeet has been in the business of iron and steel for last many years.

On November 21, 2003, Abhijeet submitted the application to the State Government for mining lease over an area of 1633. 03 hectares in Mauza Ghatkuri for iron ore and manganese for captive consumption of its proposed Sponge Iron Plant and Ferro-Alloys Plant in Village Rewali, Block Katkamsandi, District Hazaribagh. On February 26, 2004, an MOU was entered into between Abhijeet and the State Government for setting up a Sponge Iron Plant and Ferro-Alloys Plant at suitable location in the State of Jharkhand. 7. 1. On August 5, 2004, the State Government took a decision to grant a mining lease to Abhijeet for iron ore for captive consumption over an area of 429 hectares not overlapping with the area of any other applicant in Mauza Ghatkuri. The State Government sought prior approval of the Central Government vide its letter dated August 5, 2004 for grant of mining lease to Abhijeet. 7. 2.

Abhijeet has averred that based on firm and definite commitment of the State Government in the form of MOU dated February 26, 2004 it has taken all required steps including the steps for getting acquisition of land in village Kud, Rewali and Damodih. Civil Appeal No. 3288 of 2009, lspat Industries Limited Vs. Union of India and Ors. 8. The appellant. lspat Industries Limited, referred to as lspat, is a company registered under the Companies Act, 1956. According to lspat, it is one of the largest steel producers in the private sector and has got vast resources and technical experience. lspat intended to set up an integrated steel plant in the State of Jharkhand and accordingly made an application to the State Government for grant of mining lease over an area of 725. 32 hectares in Village Rajabeda in West Singhbhum District for iron ore. 8. 1. The State Government took a decision on August 5, 2004 to grant a mining lease over an area of 470.

06 hectares for captive consumption of iron ore in respect of the area not overlapping with the area of any other major mineral. The State Government on August 5, 2004 also wrote to the Central Government seeking their prior approval in the matter. Civil Appeal No. 3289 of 2009, Jharkhand lspat Pri