M/s. India Cements Ltd v. The State of Tamilnadu

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 27.04.2007CORAMTHE HONOURABLE Mr. JUSTICE P.D.DINAKARANandTHE HONOURABLE MR. JUSTICE P.P.S. JANARTHANA RAJAWrit Appeal No.2515 of 2002M/s. India Cements Ltd.,No.827, Anna Salai,Chennai 600002... Appellantvs.1. The State of Tamilnadu, rep. by its Commissioner & Secretary to Government, Industries Department, Fort St. George, Chennai-9.2. The District Forest Officer, Erode Division, Erode.3. The District Collector, Salem District, Salem. .. RespondentsWrit Appeal under Clause 15 of Letters Patent against the order dated5.7.2002 made in Writ Petition No.16230 of 1995 filed under Article 226 ofthe Constitution of India calling for the records relating to thecommunication bearing No.Na.Ka.2235/93/V1 dated 11.06.1993 andC.No.2235/93/P1 dated 18.09.1995 on the file of the Second Respondent andquash the said communications.For Appellant .. Mr. R.Muthukumarasami, S.C.for K.KuppusamyFor Respondents .. Mr. R.ThirugnanamSpl. Govt. Pleader-R1 & R3Mr. Titus Jesudoss Spl. Govt. Pleader (Forest-R2) https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N T(Delivered by P.D.DINAKARAN, J.)The correctness of the order of the learned single Judge dated5.7.2002 made in Writ Petition No.16230 of 1995 refusing to quash thedemand made by the District Forest Officer in his proceedings dated11.6.1993 and 18.9.1995 on the grounds of want of jurisdiction, arbitraryand unreasonable exercise of power, non application of mind as well aslack of privity of contract between the appellant/writ petitioner and thesecond respondent to raise the impugned demand, is challenged before us inthis writ appeal under the following facts and circumstances of the case.2.1. The genesis of the lis challenging the impugned order is basedupon the following undisputed facts.The Government by G.O.Ms.No.2701, Department of Industries, Labourand Cooperation, dated 22.5.1962, granted a mining lease of limestone andkankar for a period of twenty years over an extent of 8.78 acres inS.No.161/1 and 166 of Chinnagoundanur Village and an extent of 300 acresin S.No.173 of Devagoundanur Village, Sankari Taluk, Salem District, infavour of the appellant/writ petitioner, subject to the conditionsprovided under Rule 27 of the Mineral Concession Rules, 1960 (hereinafterreferred to as "the Rules"), framed under the Mines and Minerals(Development and Regulation) Act, (Act No.67 of 1957) by the CentralGovernment. 2.2. As per Section 22 of the Rules, the mining lease can be grantedonly on an application for the grant of mining lease in respect of land inwhich the minerals vest in the Government and such application shall bemade to the State Government in Form I and the State Government shallconsider such application and grant the mining lease. Rule 22 of theRules concededly does not have any reference to any particular departmentof the Government. 2.3. Rule 27 of the Rules prescribes the conditions for granting themining lease. Sub rule (c) of Rule 27(1) of the Rules contemplates thatthe lessee shall pay such yearly dead rent at the rates specified in theThird Schedule of the said Act and if the lease permits the workings ofmore than one mineral in the same area, the State Government shall notcharge separate dead rent in respect of each mineral. 2.4. As per Rule 27(1)(d) of the Rules, the lessee shall also paysurface rent and water rate at such rate as may be specified by the StateGovernment in the lease. https://hcservices.ecourts.gov.in/hcservices/

2.5. It is not in dispute that the appellant/writ petitioner hadcomplied with both the said conditions. On the other hand, by theirletter dated 24.11.1980, the appellant/writ petitioner proposed tosurrender their mining right over an area of 250 acres out of 300 acres inSuriamalai Reserve Forest, as they are barren lands. As provided underRule 29 of the Rules, which deals with the restrictions on determinationof lease, the appellant/writ petitioner decided to seek for renewal forthe rest of 50 acres out of 300 acres in Suriamalai reserved forest. Theadmitted fact remains that the Government did not renew the lease even forthe said 50 acres and as a result, the renewal was deemed to have beenrejected statutorily on the expiry of twenty years from 22.5.1962 viz.,on21st May 1982. 2.6. But, in the meanwhile, the Government by G.O.Ms.No.310,Industries (D) Department, dated 1.3.1988, with reference to theapplication of the appellant/writ petitioner dated 24.11.1980 referred toabove, have accepted the suggestion of the Director of Industries andCommerce for surrender of 250 acres of land out of 300 acres in Suriamalaireserved forest with effect from 24.11.1980 as per Rule 29 of the Rules.That apart, the Collector, Salem, was also requested to send to theGovernment draft notification and proposals, if considered necessary fornotifying the availability of 250 acres surrendered by the appellant/writpetitioner in the Tamilnadu Government gazette for re-grant as requiredunder Rule 59 of the Rules. 2.7. Rule 29(1) provides that the lessee shall not determine thelease except after notice in writing of not less than twelve calendarmonths to the State Government or to such officer or authority as theState Government may specify in the lease.2.8. In the instant case, the appellant/writ petitioner has proposedto surrender 250 acres of land as referred to above as early as 24.11.1980even during the existence of the lease for a period of twenty years from22.5.1962, which expired on 21.5.1982 and the same was accepted by theState Government in G.O.Ms.No.310 Industries (D) Department, dated1.3.1988, of course, with retrospective effect from 24.11.1980. 2.9. The second proviso to Rule 29(1) as then in force reads asfollows:"PROVIDED FURTHER that where a lessee applies forthe surrender of the whole or a part of lease-hold areaon the ground that such area is barren or the depositsof minerals have since exhausted or depleted to such anextent that it is no longer economical to work in sucharea, the State Government shall permit the lessee,from the date of receipt of the application, tosurrender that area if the following conditions aresatisfied, namely:- https://hcservices.ecourts.gov.in/hcservices/ (a) the leasehold area to be surrendered has beenproperly surveyed and is contiguous,(b) the lessee has paid all the dues payable tothe Government under the lease up to the date ofapplication."2.10. In the instant case, concededly, the State Government hasrightly permitted the lease to terminate from the date of application i.e.24.11.1980 in G.O.Ms.No.310, Industries (D) Department, dated 1.3.1988,which reads as follows:GOVERNMENT OF TAMILNADUABSTRACTMines and Minerals – Mining Lease – Limestone – SalemDistrict – Sankari Taluk S.No.173 – over an extent of250.00 acres in Devannagoundanur Village – Held byTvl.India Cements Limited – Sankari, Salem District –Partial Surrender – Permitted.INDUSTRIES (D) DEPARTMENTG.O.Ms.No.310Dated 1.3.1988Read again:G.O.Ms.No.2701: ILC, dated 22.5.1962Read also:i. From Tvl. India Cements Limited, Madras-2, Lr.No.Fs/21/ML/4669, dated 24.11.1980.ii. From the Collector,Salem Lr.Roc. No.1105877/80/12 dated 23.03.1987.iii.From the District of Industries and Commerce Lr.No.15188/B3/80 dated 26.11.1981.ORDER:In the Government Order read above, Tvl. IndiaCements Limited, Sankari, Salem District, were granted amining lease for limestone over an extent of 300 acres inS.No.173/3 of Devannagoundanur village, Sankari Taluk,Salem District for a period of 20 years. The connectedlease deed was executed on 21.11.1962. https://hcservices.ecourts.gov.in/hcservices/

2. In their letter read above, Tvl. India CementsLimited have applied for the partial surrender of 250.00acres out of 300 acres held by the, under lease inS.No.173 of Devannagoundanur village, Sankari Taluk,Salem District on the ground that the area contains thinbands of limestone which are not workable. The saidsurrender application was received by the Collector,Salem on 24.11.1980. The Collector, Salem, has forwardedthe surrender application of Tvl. India Cements Limitedto the Government to pass suitable orders. The Directorof Industries and Commerce has suggested that thesurrender proposal of Tvl. India Cements Limited may beaccepted under Rule 29(1) of Mineral Concession Rules,1960, with effect from 24.11.1980. The Governmentaccepted the recommendation of the Director of Industriesand Commerce.3. Under Rule 29 of the Mineral Concession Rules1960, the Government permit Tvl. India Cements Limited,Sankari, Salem District to surrender 250.00 acres out of300 acres granted to them under mining lease in theGovernment Order read above with effect from 24.11.1980,the date of receipt of surrender application in theoffice of the Collector, Salem.4. The Collector, Salem is requested to takenecessary further action in the matter. He is requestedto collect the mining dues from the company afteradjusting the security deposit remitted by it. He isalso requested to take necessary action as per the ordersin force in respect of local cess and local cesssurcharge payable by the lessee company. The Collector,Salem is also requested to send to Government draftnotification and proposals if considered necessary fornotifying the availability of 250.00 acres surrendered bythe company in the Tamilnadu Government Gazette forregrant as required under Rule 59 of the MineralConcession Rules, 1960. (emphasis supplied)(BY ORDER OF THE GOVERNOR)P. SHANKAR Commissioner & Secretary to Govt.2.11. It is therefore evident that the lessee had fully satisfiedconditions (a) and (b) referred to in the second proviso to Rule 29(1) ofthe Rules viz., (a) leasehold area to be surrendered has been properly https://hcservices.ecourts.gov.in/hcservices/ surveyed and (b) the lessee has paid all the dues payable to theGovernment under the lease up to the date of application and that theGovernment has accepted the surrender of lease with effect from24.11.1980, viz., the date of application for surrender made by theappellant/writ petitioner.2.12. That apart, in the instant case, the appellant/writ petitionerhad paid dead rent till 1985 even after the expiry of the lease period inthe year 1982 for the reasons that the Government had not passed anyorders for the renewal of 50 acres of land and for the surrender of 250acres of land as requested by them in the letter dated 24.11.1980. 2.13. After acceptance of surrender by the Government byG.O.Ms.No.310, Industries (D) Department, dated 1.3.1988, with effect from24.11.1980, the appellant/writ petitioner applied for the grant of surfaceright over an extent of one hectare viz., 2.50 acres on payment of annualrent fixed by the Government as they were keeping their machineries in thesaid land, which was also admittedly surrendered on 1.3.1994.2.14. Misconstruing the said surface right over an extent of onehectare of land on payment of annual rent to the Government contrary toG.O.Ms.No.310, Industries (D) Department dated 1.3.1988, the secondrespondent by his proceedings dated 11.6.1993 raised a demand for a sum ofRs.24 lakhs towards the arrears of alleged dead rent. 2.15. On receipt of the said demand dated 11.6.1993, theappellant/writ petitioner by detailed letters dated 26.2.1994 and31.3.1995 explained that there was no due from the appellant/writpetitioner to the State Government much less to the second respondent-forest department with whom there was no privity of contract and that theentire dues payable to the Government was concededly settled through theIndustries Department as evident from G.O.Ms.No.310, Industries (D)Department, dated 1.3.1988 itself, as the appellant/writ petitioner hadalso obtained "no due certificate" from the Collector, Salem.2.16. Not satisfied with the said explanation, the second respondentagain by their letter dated 18.9.1995 required the appellant/writpetitioner to settle the alleged arrears of dead rent to the tune of Rs.24lakhs, which necessitated the appellant/writ petitioner to file the abovewrit petition seeking a writ of Certiorari to call for the recordsrelating to the communication bearing No.Na.Ka.2235/93/01 dated 11.6.1993and C.No.2235/93/D1 dated 18.9.1995 on the file of the second respondentand quash the said communications.3. Submissions were made by both sides on the above admitted facts. https://hcservices.ecourts.gov.in/hcservices/

4. However, the learned single Judge by his order dated 5.7.2002,taking note of the contents in the letters dated 28.11.1989 and 9.12.1991written by the appellant/writ petitioner, dismissed the writ petition.Hence, the above appeal.5.1. In this regard, it is apt to extract both the letters written bythe appellant/writ petitioner dated 28.11.1989 and 9.12.1991 for properappreciation of the same.28.11.1989.The District Forest Officer,Erode.Sir,Sub: Forests-Lease of Forest land in Suriyamalai Reserve Forest vide G.O.No.2701 (ILC) dated 22.5.1962.Ref: Your letter No.Roc.7070/88 dated 7.11.1989.---With reference to the above, kindly find enclosedherewith a Statement showing the royalty, dead rent andsurface rent paid in respect of G.O.No.2701 dated 22.5.1962from 1964 to 1985 as per the demands received from theCollector, Salem. In this connection, we would like toinform you that similar details were already furnished toyour Salem office upto 1979 after receiving a letter fromDistrict Forest Officer, Salem (copies are enclosed).Since no demand has been received from the Collector,Salem, the dead rent or surface rent has not been paid from1985 onwards in respect of G.O.No.2701 and as on date wehave paid all the dues to the Government and duly obtained"No Due Certificate" from the Collector, Salem.2. Regarding surface right over an extent of 1 hec.(2.5 acres) in S.F.No.173 of Suriyamalai Reserve Forest, wehereby give our consent to pay the annual rent fixed by theForest Department/Government.3. Regarding surrender of lands we would like to informyou that we were granted mining lease over an extent of308.78 acres in Chinnagoundanur and Devannagoundanur(Suriyamalai Reserve Forest) Villages of Sankari Taluk,Salem District, for a period of 20 years vide G.O.No.2701dated 25.2.1962. Out of this 308.78 acres 300 acres are in https://hcservices.ecourts.gov.in/hcservices/ Devannagoundanur Village covering under S.F.No.173(Suriyamalai Reserve Forest). Though this 300 acres inSuriyamalai Reserve Forest is barren and devoid of anylimestone deposit, mining lease was obtained for 300 acres,only to have our explosives magazine and to have safetydistance around our magazine.Later mining lease over an extent of 250 acres out of300 acres in Suriyamalai was surrendered vide our letterdated 24th November 1980. While surrendering the mininglease over an extent of 250 acres, we also requested theGovernment to grant surface right over the area (2.5 acres)for safety distance around our explosives magazine. Afterprocessing, the State Government has permitted surface rightover an extent of 1 hec. (2.5 acres) only instead of 250acres requested on payment of annual rent fixed by theForest Department/Government. The surrender of mining leaseover an extent of 250 acres in Suriyamalai Reserve Forestarea is also duly approved by the Government vide theirG.O.Ms.No.310 dated 1.3.1988 (a copy enclosed).The renewal of mining lease over an extent of 50 acresin Suriyamalai area is still pending with the Government andis likely to be renewed shortly. The surface right over anextent of 1 hec.(2.5 acres) has already been approved.Therefore we would like to surrender the balance area of247.50 acres to Bargoor Forest Division.Kindly intimate us the procedure that are to be adoptedfor surrendering the above 247.50 acres to Bargoor ForestDivision.We trust the above is in order.Sd/-. The letter dated 9.12.1991 reads as follows:The District Forest Officer,Erode Division,Erode – 3.Sir,Sub: Surrender of 297.50 acres of Suriyamalai Reserve Forest land in Devannagoundanur Village – Sankari Taluk, Regarding. https://hcservices.ecourts.gov.in/hcservices/ Ref: The District Forest Officer – Erode - Letter No.Roc:7070/88/L dated 19.11.1991---With reference to your above letter, we have handedover 297.50 acres in Suriyamalai Reserve Forest to the RangeOffice of your Mettur Division on 2.12.1991. We are retaining 2.50 acres (1hect) on surface lease for ourpresent explosive magazine and its approach road as per yourletter.Thanking you,sd/." 5.2. From a careful reading of the above letters particularly in thecontext of G.O.Ms.No.310, Industries (D) Department dated 1.3.1988, in thelight of Rule 29 of the Rules, which deals with the restrictions ondetermination of the lease, particularly second proviso to Rule 29(1)referred to above, we can arrive at the following findings:(i) In the letter dated 28.11.1989, the writpetitioner/appellant only re-emphasised their request forgrant of surface right over an area of 2.50 acres inS.F.No.173, Suriyamalai Reserve Forest for safety distancearound their explosive magazine, because in the same letter,the appellant has stated that the surrender of mining leaseover an extent of 250 acres in Suriyamalai reserve forestwas also duly approved by the Government vide theirG.O.Ms.No.310, dated 1.3.1988.(ii) As per Rule 29, termination of the lease takesplace with effect from the date of application and both theconditions provided in the second proviso to Rule 29(1) hadbeen duly complied with, viz., the leasehold area wasproperly surveyed and the lessee had paid all the dues.5.3. If that be so, the statement made by the appellant/writpetitioner in their letter dated 9.12.1991 that they have surrendered297.50 acres of land on 2.12.1991 and that they were retaining 2.5 acreson surface lease, by itself, would not confer any right on the secondrespondent to raise the impugned demand as it is a settled position of lawthat there cannot be estoppel against any statute. In the instant case,the second proviso to Rule 29(1) of the Rules provides that the surrendertakes place from the date of the application. In fact, the Government,while passing G.O.Ms.No.310, Industries (D) Department, dated 1.3.1988,on the application made by the appellant on 24.11.1980 to terminate thelease, specifically accepted the surrender proposal with effect from24.11.1980. In a republic governed by the rule of law, no one high or low, https://hcservices.ecourts.gov.in/hcservices/ is above the law. Every one is subject to the law as fully and completelyas any other and the Government is no exception. The Government cannotclaim immunity from the doctrine of estoppel, nor it can say that it isunder no obligation to act in a manner contrary to the second proviso toRule 29(1) of the Rules, much less to the G.O.Ms.No.310, Industries (D)Department, dated 1.3.1988 accepting the surrender from the date ofapplication, viz., 24.11.1980. This aspect of the case was, unfortunately,not properly put forth before the learned single Judge for hisappreciation. Therefore, we are of the considered view that the demandraised by the second respondent, who has no privity of contract with theappellant/writ petitioner, is without jurisdiction and the impugned demandis, therefore, arbitrary and unreasonable. Hence, the order of the learned single Judge is set aside and thewrit appeal is allowed. Consequently, the impugned demand of the secondrespondent stands quashed. No costs.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarATRTo1. The Commissioner & Secretary to Government, State of Tamilnadu, Industries Department, Fort St. George, Chennai-9.2. The District Forest Officer, Erode Division, Erode.3. The District Collector, Salem District, Salem.1 cc To The Government Pleader, SR.39821, 39842.W.A.No.2515 of 2002 JRG(CO)RVL 13.06.2007