M/s Shri Bajrang Power And Ispat Limited v. State of Chhattisgarh

By virtue of this petition, the petitioner is questioning the legality and propriety of the order dated 13.07.2020 passed by respondent No.1- Secretary, Department of Mineral Resources, State of Chhattisgarh and, the letter dated 31.07.2020 issued by the Collector, District Kanker, respondent No.3 herein and, also the demand notice, dated 20.09.2019 issued by the Divisional Forest Officer, East Bhanupratappur, Forest Division, Kanker,

respondent No.5 herein, whereby, the petitioner- M/s Shri Bajrang Power and Ispat Limited, a Company duly incorporated under the Companies Act, 1956 (hereinafter referred to as ‘the petitioner-company’), was directed to deposit a sum of Rs.68,28,480/- (Rs. Sixty Eight Lacs Twenty Eight Thousand Four Hundred Eighty only) towards compensation on pro rata basis payable to the villagers in the name of grazing, collection of tendu leaves and other Non Timber Forest Produce (in short ‘NTFP’), presently accruing from forest land which was proposed for diversion for mining activities for the petitioner-company.

(i) According to the petitioner-company, an application dated

19.06.2006 for obtaining mining lease for iron-ore over an area 3 of 75 hectares land in forest compartment No.641 and 642 (old No.364 and 365) near the village Hahaladdi, Durgkondal Forest Range and Bhanupratappur East, Forest Division, District Kanker, was made and, the respondent No.6- Union of India, granted prior approval for the said purpose vide its order dated

23.10.2007 (Annexure P-1) under Section 5 of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as ‘the Act, 1957’) and thereafter, the respondent No.1 sought consent from the petitioner-company vide its letter, dated 18.02.2008 (Anenxure P-2) in order to incorporate certain terms and conditions as mentioned therein for the proposed mining lease and, the petitioner-company has given its consent vide its letter dated 19.02.2008 (Annexure P-3). After considering the terms and conditions, the respondent No.7- Union of India granted ‘in-principle’ approval vide its letter dated

03.05.2013 (Annexure P-4) for diversion of 76.5 hectares of forest land (75 hectares for lease while 1.5 hectare for approach road to the mining lease area) for iron-ore mining for the concerned area subject to fulfilling the terms and conditions mentioned therein. (ii) It is pleaded by the petitioner-company that as per the condition No.30 mentioned in the said ‘in-principle’ approval granted by the Union of India, the final study report was submitted on 14.08.2013 (Annexure P-5), whereby, a sum of Rs.6,85,500/- (Rs.Six Lacs Eighty Five Thousand Five Hundred only) was assessed per year for all the times to come, if the said 4 area would not be diverted for mining and that by applying the ‘faustmann formula’ for capitalization of forest reserve, the amount of compensation payable to the villagers was calculated to the tune of Rs.13,37,580/- (Rs. Thirteen Lacs Thirty Seven Thousand Five Hundred Eighty only) with regard to the assessment of benefits, such as grazing, collection of tendu leaves and other NTFP, accruing from the forest land proposed for diversion and the report, so submitted, was forwarded by the respondent No.5- The Divisional Forest Officer, East Bhanupratappur, Forest Division, District Kanker, on 02.12.2013 (Annexure P-6) to the Chief Conservator of Forest, Raipur, for its recommendation, who in turn, vide its letter, dated 19.03.2014 (Annexure P-8) has recommended the amount of compensation as determined by the petitioner-company in its final report to the Secretary for the Department of Forest, State of Chhattisgarh and the amount, so determined, i.e. Rs.13,37,580/- (Rs.Thriteen Lacs Thirty Seven Thousand Five Hundred Eighty only) was deposited by the petitioner-company on 02.04.2014. (iii) It is pleaded further by the petitioner-company that the proposal with regard to the condition No.30 incorporated in the ‘in-principle’ approval granted by the Ministry of Environment and Forest on 03.05.2013 (Annexure P-4) was approved by the respondent No.2- State of Chhattisgarh, vide its letter, dated

28.05.2014 (Annexure P-10) and, the respondent No.7- Union of India has granted final approval vide its letter, dated 04.08.2014 (Annexure P-11), as per the provision prescribed under Section 5 2 of the Forest (Conservation) Act, 1980 for diversion of 76.5 hectares of land (75 hectares for mining lease while 1.5 hectare of approach road to the mining area) for iron ore mining in the concerned area, subject to fulfillment of terms and conditions mentioned therein. (iv) Further plea of the petitioner-company is that after the final approval made on 04.08.2014, the respondent No.1 vide its letter dated 31.10.2014 (Annexure P-12) has obtained the consent from the petitioner-company for incorporation of certain additional terms and conditions, including condition No.10.7(2) in the mining lease and, since it was not in a position to bargain with the State government, a consent was, therefore, given.

The said additional condition reads as under :- “10.7(2) खनि(cid:3)पሾኋ(cid:6) ቌኔ(cid:8)्ቔ के(cid:8) अं(cid:12)त्ቇ(cid:15)त आवे(cid:8)दि(cid:19)त वे(cid:3) एवे(cid:12) रा(cid:6)जस्वे ቌኔ(cid:8)्ቔ ेሰ(cid:25) उत्प(cid:6)दि(cid:19)त हो(cid:29)(cid:3)(cid:8) वे(cid:6)ले(cid:8) वे(cid:3)(cid:29)पज के(cid:6) अं(cid:3)(cid:31)ेሰ(cid:6)नि(cid:3)त ेሰ ल्य के(cid:8) आधा(cid:6)रा परा ቚኘ(cid:29)रा(cid:8)टा(cid:6) ቚኘनित परिरावे(cid:6)रा वे(cid:6)ቧኌ()के आय के* रा(cid:6)शि, ቝኋ(cid:6)(cid:3).य खनि(cid:3)ज ቌኔ(cid:8)्ቔ निवेके(cid:6)स नि(cid:3)धा. ेሰ(cid:25) जेሰ(cid:6) के* ज(cid:6)य(cid:8)्ቇ.। तत्पቐኋ(cid:6)त यहो रा(cid:6)शि, ቚኘभा(cid:6)निवेत परिरावे(cid:6)रा के(cid:8) ेሰ(cid:31)खिखय(cid:6) केत(cid:6)(cid:15)्ቍ के(cid:8) (cid:3)(cid:6)ेሰ परा टा(cid:6)(cid:12)सफरा के* ज(cid:6)ए्ቇ.। इस रा(cid:6)शि, ेሰ(cid:25) ቚኘनितवे((cid:15) 10 ቚኘनित,त के* वे7दि(cid:19) के* ज(cid:6)ए्ቇ."। (v) It is pleaded further by the petitioner-company that after the incorporation of the aforesaid additional condition, the mining lease (Ex.P-15) was executed on 21.11.2014 between the petitioner-company and the respondent No.3- The Collector, District Kanker and, thereafter on 31.03.2017 (Annexure P-16), the respondent No.5- The Divisional Forest Officer, East Bhanupratappur Forest Division, District Kanker, demanded 6 compensation amount from the petitioner-company to the tune of Rs.30,39,810/- (Rs.Thirty Lacs Thirty Nine Thousand Eight Hundred Ten only) for the financial year 2015-16 and 2016-17 distributable amongst the villagers of the nearby villages in lieu of forest produce with an increase of 10% every year till the lease period and, the objection, so raised by the petitioner- company in this regard on 25.04.2017, was turned down by the respondent No.4-The Chief Conservator of Forest, Kanker Circle, Kanker vide its letter, dated 19.05.2017 (Annexure P-18) based upon the condition mentioned in the alleged mining lease (Annexure P-15).

(vi) It is pleaded further by the petitioner-company that vide letter, dated 05.07.2017 (Annexure P-21), it was requested to the respondent No.1 for deletion of the said additional condition incorporated in the mining lease as the same is contrary to the terms and conditions mentioned in the ‘in-principle’ approval granted by the Union of India on 03.05.2013, vis-a-vis, the final approval issued by the Ministry of Environment and Forest Department. (vii) While referring to the guidelines, i.e. F.No.11-306/2014- FC, dated 08.08.2014, issued by the Ministry of Environment and Forest, it is pleaded further by the petitioner-company that the additional conditions cannot be made by the State government in the mining lease without prior approval of the Central Government. As such, the impugned demand notice, dated 20.09.2019 (Annexure P-27) issued by the respondent 7 No.5- The Divisional Forest Officer, East Bhanupratappur Forest Division, District Kanker, demanding a sum of Rs.68,28,480/- (Rs.

Sixty Eight Lacs Twenty Eight Thousand Four Hundred Eighty only) from the petitioner-company towards compensation payable to the villagers in the name of grazing, collection of tendu leaves and other NTFP, presently accruing from the forest land proposed for diversion for mining activities for the petitioner- company in compliance of the alleged additional condition No.10.7(2) as mentioned in the mining lease, dated 21.11.2014 (Annexure P-15) and, consequent upon the issuance of letter dated 31.07.2020 by the Collector, District Kanker and the order impugned dated 13.07.2020 issued by the Secretary, Department of Mineral Resources, State of Chhattisgarh, deserves to be quashed.

In response, it is pleaded by the respondents that the alleged additional condition, i.e. condition No.10.7(2) in the alleged mining lease (Annexure P-15) was incorporated after prior consent from the petitioner-company, therefore, the impugned demand notice/ order issued strictly in compliance of the said condition, deserves to be upheld and the petition as framed is liable to be dismissed, as no prior approval from the Central Government as pleaded by the petitioner-company, is required to be obtained.

Mr. Ankit Singhal, learned counsel appearing for the petitioner- company, submits that since the impugned demand notice/order 8 has been issued based upon the alleged additional condition No.10.7(2) incorporated in the alleged mining lease dated

21.11.2014 even without prior approval from the Central Government as required under sub-rule (3) of Rule 27 of the Mineral Concession Rules, 1960, therefore, it deserves to be quashed. In support, he placed his reliance upon the decisions rendered by the Supreme Court in the matters of M/s. Ramlal and Sons Vs. The State of Rajasthan and Sandur Manganese and Iron Ores Limited Vs. State of Karnataka