TMI Blog1991 (12) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... of 15 years and covered an area of 363 hectares at Wamsophi. The three lease deeds were to expire on 26.5.77, 9.4.78 and 7.6.82 respectively but there was a clause for further renewal. The petitioner company had also established a refractory Plant in 1961 near Ramgarh in District Hazaribagh. It appears, however, that petitioner faced a number of difficulties in operating the refractory plant and was explaining its difficulties to the State of Maghalaya which was formed in 1970. Between 1970 to 1972, the Union of India, through its public sector companies, Hindustan Steel Ltd. and Bokaro Steel Ltd. negotiated with the petitioner for the purchase of its refractory plant and also for having the mining leases transferred to them. Though the refractory plant was not functioning properly and was on the verge of closure, the petitioner was not willing to transfer its mining leases to the public sector companies but was willing to supply the required quantity of sillimanite to the Bakaro Steel Plant. It is also stated that some negotiations took place as a result of which the petitioner was planning to re-open the factory on 6.11. 1972. However, in the meantime on the 2nd of November ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... structures or for conservation of mineral resources or for maintaining safety in the mines or for such other purposes, as the Central Government may deem fit, it may request the State Government to make a premature termination of a prospecting licence or mining lease in respect of any mineral other than a minor mineral in any area or part thereof, and, on receipt of such request, the State Government shall make an order making a premature termination of such prospecting licence or mining lease with respect to the area or any part thereof. (2) Where the State Government, after consultation with the Central Government, is of opinion that it is expedient in the interest of regulation of mines and mineral development, preservation of natural environment, control of floods, prevention of pollution or to avoid danger to public health or communications or to ensure safety of buildings, monuments or other structures or for such other purposes, as the State Government may deem fit, it may, by an order, in respect of any minor mineral, make premature termination of a prospecting licence or mining lease with respect to the area or any part thereof covered by such licence or lease: Provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this Court. On 5.3. 1973, this Court issued rule nisi and also directed the maintenance of the status quo pending notice. It, however, appears that Hindustan Steel Ltd. had taken possession of the properties in question and the interim stay was also vacated on 20th of January, 1987. The present position, therefore, is that the mining leases have been granted to the Hindustan Steel Ltd. and they have also been operating the mines for the past several years. Though several objections have been raised to the action of the State Government in the writ petition, including a challenge to the validity of section 4A, the arguments before us were restricted by Shri P.C. Jain to only two aspects. He submitted that, admittedly, no notice had been issued by the State Government before terminating the leases prematurely. This, according to him, amounts to denial of natural justice and vitiates the order dated 7.12. 1972. The second contention is that the order does not fulfil the requirements specified in section 4-A justifying the premature termination of leases in pursuance thereof. This writ petition came up for hearing on earlier occasions but it was adjourned from time to time as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral development, to have the mining operations in respect of raw materials necessary for the production of iron and steel entrusted to public sector companies and a policy decision to this effect had been taken by the Government. In this context, he submits, the grant of an opportunity to the lessee would be totally meaningless and futile. He says that the object and purpose of the statute clearly excludes the provision of an opportunity to the lessees before termination of the leases. If at all, he submits, it will be open to a lessee, whose lease is prematurely terminated under section 4-A, to challenge the order of premature termination, after it was passed, on the ground that it did not satisfy the conditions set out in section 4-A but that the section should not be construed as envisaging a hearing of the lessees before an order of premature termination is made. Referring to the amendment of section 4-A in 1986, which specifically provides for an opportunity of hearing under sub-section (3), Shri Datar says that this provision became necessary because the grounds for premature termination set out in the new sub-section (1) of section 4-A were made wider and made more comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1986, no useful purpose would have been served by the giving of such an opportunity. Several situations and circumstances can be conceived of where, given an opportunity of hearing, the lessee may be able to either dissuade the Government from terminating the leases prematurely or in persuading the government to do it subject to certain safeguards for its benefit. For example, the lessee may be able to show that the public sector corporation to whom it is proposed to entrust the working of the mines is not yet adequately equipped to exploit the mines and that, atleast for some more time the status quo should continue; or, again, if there is only a short period before the leases are to expire in the normal course, the lessee may be able to persuade the Government that no great advantage would be derived by premature termination of the lease. These are only illustrative. Several such other situations can be thought of. It is very difficult, therefore, to accept the contention that because an order under section 4-A is to be passed in order to give effect to a policy of the Government, it is not necessary or useful to provide the lessees, whose leases are about to be terminated, an op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod of all the leases. We refer this issue to arbitration. Shri Justice S. Natarajan, retired Judge of this Court, is appointed as Arbitrator to decide the above issue. The Union of India has promised to place the services of a mining engineer/expert at the disposal of the arbitrator to assist him on the technical aspects of the matter. The name of the nominee should be communicated to the arbitrator within four weeks from today. It will be open to the arbitrator to avail himself of the services of such nominee. Parties may settle the terms of arbitration with the arbitrator. The company and Union of India should, however, deposit ₹ 10,000 each with the arbitrator as soon as the terms are settled to enable him to start the proceedings without delay. The Arbitrator may enter upon the reference within four weeks of the date of communication of this order to him. He may make his award within a period of four months thereafter. He will not be obliged to give reasons for his conclusions. A copy of this order may be sent to the learned Arbitrator by the Registry. The writ petitions disposed of in the above terms. In the circumstances, we make no order as to costs. - - TaxTM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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