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PETITIONER: INDUSTRIAL DEVELOPMENT CORPORATION OF ORISSA LTD.

       Vs.

RESPONDENT: UNION OF INDIA & OTHERS

DATE OF JUDGMENT:       23/07/1996

BENCH: CJI, B.L. HANSARIA

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T Ahmadi, CJI         Special leave granted.      These  appeals   seek  to  challenge:  (1)  the  common judgment and  order of  the Orissa High Court dated April 4, 1995, arising  out of OJC No.7729 of 1993 and allied matters and (2)  the decision of the Central Government dated August 17, 1995  made pursuant  to the  said judgment  of the  High Court.      The appellants  in these  appeals are the Tata Iron and Steel Company, Limited, (hereinafter called "TISCO") and the Industrial  Development   Corporation  of   Orissa   Limited (hereinafter called  "IDCOL"). The principal respondents are the Union  of India, the State of Orissa, M/s. Indian Charge Chrome Limited,  (hereinafter called "ICCL"), Indian Metal & Ferro  Alloys  Limited  (hereinafter  called  "IMFA"),  M/s. Jindal Strips  Limited, (hereinafter  called  "JSL"),  Ferro Alloys Corporation  Limited (hereinafter called "FACOR") and Ispat Alloys Limited.         The factual matrix of the case is as follows:      The appellant,  TISCO, is  a limited  company,  one  of whose primary  objects has  been to  carry on  business as a mining industry. It claims that it was the first to discover Chrome ore  in the Sukinda Valley, Orissa, in the year 1949. It applied  to the Raja of Sukinda for a prospecting licence and was  granted the  same in  1952. On October 22, 1952, it was granted a mining lease over an area of 1813 hectares for chromite for  a period  of 20 years. Subsequently, under the provisions of the Orissa Estates Abolition Act, 1952, on the rights of  the Raja  having vested  in the State Government, the latter  recognised the lease of TISCO for a period of 20 years with effect from January 12, 1953.      TISCO claims  that over  the years,  it has  spent more than  Rs.180   crores  for  the  development  of  the  mine, including Rs.27  crores spent  in setting up a beneficiation plant. It  utilises the  Chrome ore  mined  by  it  for  the manufacture of  Charge Chrome/Ferro  Chrome refractories. It also supplies  ore to  forty  Chrome  ore  based  industries situated in different parts of the country.      In the  year  1957,  Parliament  enected  the  Mines  &

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Minerals (Regulation  & Development) Act, 1957, (hereinafter called "the  Act"). Section  8 of  the Act  deals  with  the renewal of  mining leases  which are  to be  granted by  the Central Government,  Applications under  this Section are to be made through the State Government which is to furnish all relevant information and material to the Central Government. On  October  10,  1980,  the  Central  Government  issued  a circular which  laid down  guidelines in  this behalf. Under the provisions  of the  Mineral Conservation  &  Development Rules, 1988,  framed under Section 18 of the Act, the Indian Bureau  of  Mines  is  also  required  to  furnish  relevant information to the Central Government.      Since the  lease was  to expire  on  January  12,  1973 TISCO sought  its  renewal  which  was  duly  granted  under Section 8(2) in respect of 1261.476 hectares for a period of 20  years  i.e.  till  January  11,  1993,  subject  to  the condition that lt would set up a beneficiation plant.      On October 3, 1991, more than a year prior to the  date of expiry  of the  lease, TISCO applied for a second renewal under Section  8 (3)  of the  Act for a further period of 20 years, On November 28, 1992, the State Government, acting on the basis  of a  favourable  report  dated  March  31.  1992 submitted  by  the  Director  of  Mines  &  Geology,  Orissa Recommended to  the Central government that the entire lease of TISCO  be renewed  for a period of 10 years under Section 8(3) of  the Act.  On April  27, 1993,  the Indian Bureau of Mines, after  analysing the  mining plan submitted by TISCO, recommended to  the Central Government that TISCO’S lease be renewed in its entirety.      On June  3, 1993, the Central Government authorised the renewal of  the lease  over  the  entire  area  of  1261.476 hectares.  However,   before  the   formal  lease  could  be executed, the  Union Minister  of State  for Steel &  Mines, acting on  a complaint  filed by  Shri G.C. Munda, Member of Parliament, directed that the matter be kept in abeyance. On September 27,  1993, the  said Union Minister wrote a letter to the  Chief Minister of Orissa stating that the lease area of TISCO should be reduced by half and the balance should be distributed in an equitable manner taking into consideration the need of genuine consumers for captive consumption.      On October  5, 1993,  the Central Government superseded its earlier approval dated June 3, 1993, and renewed TISCO’s lease over  a reduced  area of  651 hectares. On October 19, 1993, TISCO  filed a  writ petition in the High Court, being OJC  No.7729/93,  under  Article  226  of  the  Constitution challenging the  order  dated October 5, 1993, inter alia on the ground  that the  scheme of  equitable  distribution  on mining leases  on the  basis  of  need  of  an  industry  is extrancous to  the concept  of  mineral  development,  which alone  is   relevant    under  Section  8(3).  of  the  Act. Meanwhile, FACOR,  Ispat Alloys, JSL and Jindal Ferro Alloys Ltd. applied  for mining  leases of  the area held by TISCO, but the  State Government refused to entertain them as being premature under  Rules 59  and 60  of the Mineral Concession Rules framed under the Act (hereinafter called "the Rules").      While TISCO’s  writ petition  was pending, ICCL and JSL filed  writ   petitions,  being   OJC  No.5422/94   and  OJC No.7054/94, challenging the renewal of TISCO’s lease by ’the Central Government, both the order dated June 3, 1993 (which had authorised  the renewal of the entire lease area of 1261 hectares)  and  the  order  dated  October  5,  1993  (which subsequently reduced the authorisation to 651 hectares) were challenged.      By its  impugned order  dated April  4, 1995  the  High Court of  Orissa struck  down the  renewal of  TISCO’s lease

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granted by  the Central  Government  through  its  decisions dated June  3, 1993  and October  5,  1993.  Thereafter,  it directed  the   Central  Government  to  reconsider  TISCO’s application for  renewal of  the lease  in  accordance  with law; the  Central Government  was also  directed to  give  a personal hearing  to, and  consider the applications of, the other parties before the Court.      The  High   Court  of   Orissa  after  hearing  lengthy arguments  of  counsel  appearing  for  different  interests including the Central and the State Governments concluded in paragraph 57  of its  judgment that two courses were open to it, namely,  (i) to accept the submission of the counsel for the State  Government that  all the writ petitions should be dismissed and  the parties  may  be  asked  to  exhaust  the alternative remedy  of permitting  the State  Government  to take a  decision as authorised by the Central Government and if any party is aggrieved it may move the Central Government under the  Act and  the Rules, or (ii) the Court may dispose of the  writ petitions giving certain specific directions in the shape  of guidelines to the Governments as well as other authorities under  the Act  to consider in the light thereof if there  is any  necessity to renew the lease for the whole or part  of the area covered under the lease. The High Court took the  second course, in that, it accepted the submission of  counsel  for  the  State  Government  that  the  Central Government  should  hear  the  matter  de  novo  on  TISCO’s application for  renewal of  the  lease  after  hearing  all parties including  ICCL and  JSL. It  set aside  the  orders dated June  3, 1993  and October  5, 1993, inter alia on the ground that  the Central Government had not kept in view the recommendation made  by the Rao Committee which was accepted by this  Court in  the case  of Indian Metals & Ferro Alloys Ltd. v. Union of India [AIR 1991 SC 818, = 1992 Supp.(1) SCC 91],  and  directed  the  Central  Government  to  hear  the application for  renewal of   the lease, keeping in view the report submitted  by the  Rao Committee  and the decision of this Court in the aforesaid case.      After the  judgment of  the High Court was delivered on April 4,  1995, a  Committee was constituted by the Ministry of Mines,  Government- of  India, under  the Chairmanship of one Shri  S.D. Sharma  for rehearing  and reconsidering  the issue in regard to the renewal of mining lease to TISCO. The Committee  submitted   a  report   dated  August  16,  1995, recommending renewal  of the  lease for  a reduced  area  to TISCO. Acting  on that  report, on the very next day, August 17, 1995,  the Central  Government authorised the renewal of TISCO’s lease  over the  reduced area of 406 hectares which, according to  the Central  Government,  would  meet  TISCO’s captive requirements  and requested  the State Government to issue orders  for the same. At the same time, in exercise of powers conferred" by Rule 59(2) of the Rules, the    Central Government relaxed  the provisions  of sub-rule (1) with the objective of expediting the process of granting chromite ore and requested the State Government to grant mining leases to four other  parties, namely,  ICCL, JSL,  IMFA and FACOR for the balance area of 855.476 hectares.      SLP  Nos.10838/95,   11391/95  and   11392/95  seek  to challenge the  order dated  April 4, 1995 of the Orissa High Court and  SLP Nos.22710/95,  23131/95 and  23132/95 seek to challenge the Central Government’s decision dated August 17, 1995, made pursuant to the High Court’s order dated April 4, 1995. While the first four special leave petitions have been filed by TISCO, the last two have been filed by IDCOL.      Before we proceed to deal with the arguments of counsel appearing for  the different  parties, we must deal with the

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impugned judgment of the Orissa High Court and the report of the Committee that was set up pursuant to its directions, in some detail.      In its  impugned judgment, the High Court has taken the view that  Section 8(3)  of the  Act is  applicable  to  the dispute in  the present  case; it  further  held  that  this provision mandatorily  requires the  Central  Government  to give reasons  as to  why it  was in  the interest of mineral development to  renew TISCO’s lease The High Court took note of the  decision of  this Court in Indian Metals case where, faced with  a dispute  involving the grant of rights for the mining of  chromite ore  in the  State of Orissa, this Court had appointed  a Committee  headed by  the Secretary  to the Government of  India in  the Ministry of Mines, Mr. B.K. Rao thereinafter called  the Rao  Committee")  to  consider  the claims of  the various  parties. The Rao Committee submitted its report  wherein  it  studied  the  issue  of  mining  of chromite ore in the State of Orissa at great length and gave its specific  findings. This  Court, in  rendering its final decision in  the Indian  Metals  case,  relied  on  the  Rao Committee report  and also  opined that the report was bound to be of use. to the Central Government as well as the State Government of Orissa in regard to their future policy in the matter of grant of chromite leases.      The. High  Court of  Orissa was, therefore, of the view that  in  deciding  to  renew  TISCO’s  lease,  the  Central Government should  have considered  the Rao Committee report as well  as the decision of this Court in Indian Metals case and for its failure to do so, the High Court struck down the orders of the. Central gvernment renewing TISCO’s lease. The High Court  directed the Committee that was to be set up, to consider the issue keeping in mind the Rao Committee report, this Court’s  decision in  Indian Metals  case, the National Mineral Policy and all other factors relevant under the Act. Before the  High Court,  the learned  counsel for  TISCO put forth a  preliminary objection;  he argued  that  since  the matter concerned  the issue of renewal of TISCO’s lease, the other parties  before the  High Court had no locus standi in view of  the express  bar in Rules 59 and 60 of the  Rules . After considering  these submissions,  the High  Court while directing the  constitution of  Committee to  look into  the matter, made following observations:      "As we  are of  the view  that  the      Central Government  should consider      afresh and  as Mr. B.M. Patnaik has      submitted    that    the    Central      Government  has   no  objection  to      consider afresh,  there is  no  bar      and/or impediment  if  the  Central      Government considers  the  proposal      of subsequent  renewal of  lease of      TISCO by  giving it  opportunity of      hearing which.  may be  effected in      presence of  the other  petitioners      who  have   come  to   this  Court.      Nevertheless, it  is submitted that      the  Central   Government  has   no      obligation    to    invite    other      intending parties  besides the writ      petitioners in the case at the time      of disposal  of the application for      a subsequent  renewal of  the lease      at  the  instance  of  TISCO,  this      Court finds  that by  the  ultimate      result other  writ petitioners  are

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    consequently  to   be  affected  by      renewal, part renewal or refusal of      the lease   in favour of TISCO They      may be  heard by  way of  fair play      and   in    compliance   with   the      principles of  natural justice, and      to enable  them to  place on record      such necessary  facts for essential      consideration   by    the   Central      Government. It  is made  very  much      clear that  only in  the  event  of      availability of  the area  occupied      by  TISCO,  State  Government  will      consider     their      prospective      applications  in   accordance  with      law."      The  Committee  which  was  appointed  by  the  Central Government pursuant  to the directions of the High Court  of Orissa, consisted  of senior  officers from  the Ministry of Mines, the  Indian Bureau of Mines and the Geological Survey of India.  The Chairman  of the  Committee on Sukinda Valley Chromite  Lease  of  Tata  Iron  &  Steel  Corporation  Ltd. (hereinafter called  "The Committee")  was Shri S.D. Sharma, Joint Secretary,   Ministry  of  Mines.  The  Committee  was required to  submit its  report within two weeks. In view of the express directions of the High Court, the Committee gave a personal  hearing to  the advocates  appearing for  TISCO, FACOR, ICCI,  IMFA, JSL  and Ispat  Alloys  and  thereafter, submitted its  report which  extends  to  four  hundred  and fifty-one pages.      In  its  voluminous  report,  complete  with  elaborate annexures, the  Committee has,  dealt with many of the legal issues that  have been  canvassed before  us and  also  with other technical  considerations lnvolved  in the  mining  of chrome ore  in the  Sukinda Valley.  It would, therefore, be appropriate for  us to  examine the  recommendations of  the Committee and their basis for putting them forth.      In its  analysis of  the  submissions  of  the  various parties before  it, the Committee first dealt with the issue of the  relevance of  the Rao  Committee and the decision of this Court in Indian Metals case to the present dispute.      The learned  counsel appearing  for  TISCO  before  the Committee attacked  the Rao  Report on  several. grounds. He pointed out  that the  High Court  had required  the Central Government  only   to  consider   the  Rao  Report  and  not necessarily to  adopt its recommendations; he submitted that it would be open to the Committee to examine the correctness of the  legal and  factual premises  of the  Rao Report.  He contended that  since TISCO  was not  a party before the Rao Committee, its  report wag  not binding  for the purposes of considering TISCO’s  lease. He  further urged  that the  Rao Report does  not, in  essence, uphold  a principle of policy and was  superseded in  many respects  by this  Court in the Indian Metals  case. He contended that the Rao Committee did not endorse  the policy  of distributing leases on the basis of the  captive mining requirement of industries and, in the alternative, argued  that even  if the Rao Report were to do 80, such  a policy was unsustainable under the scheme of the Act and  the Rules  and, at  no point  of time  had the said principle  been  applied  in  determining  the  question  of renewal of  lease or in deciding on whom the right should be conferred.      The Committee  was of the firm opinion that the Central Government was required to take note of the Rao Report as it contains  important   findings,  guidelines  and  directions

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regarding  the  grant  of  chromite  leases  and  supply  of chromite ore to needy applicants in an equitable manner. The Committee took  note of the fact that, in reaching its final decision, this  Court, in the Indian Metals case relied upon the findings  of the Rao Report. It also noted that the High Court of  Orissa had studied the Rao Report and had required it to rely upon the findings therein. Finally, the Committee took note  of the  observations of  this Court in para 42 of the judgement in the Indian Metal case:      "...the  [Rao]   report   and   its      annexures  are   bound  to   be  of      immense help  and value to the S.G.      and  C.G.   in  arriving  at  their      decisions not  only on  the various      applications but  also in regard to      their future  policy in  the matter      of grant  of chromite leases and of      the supply of chromite to the needy      applicants in an equitable manner."       The  committee rejected  the contention  of TISCO that the Rao  Report had  provided  incorrect  information  about TISCO’s mining  lease. The  Committee relied upon the report of  the   Gopalachari  Committee,   which  was   constituted subsequent to  the Rao  Report to  look into  the  issue  of mining leases  in the  entire  country,  to  refute  TISCO’s contentions in  this regard.  This being  so, the  Committee rejected the  arguments put  forth by  TISCO to  dilute  the significance of  the Rao Report for the consideration of the present dispute.      Thereafter, the Committee analysed the National Mineral Policy, 1993  and the  Industrial Policy  of Orissa, 1992 to obtain  an   understanding  of   the  concept   of   mineral development as envisaged by Section 8(3) of the Act. Learned counsel for  TISCO submitted  that the  concept  of  captive mining was  not really  part of the  National Mineral Policy and, though  propagated by the Rao Report, this concept does not find  support from  the  National  Mineral  Policy.  The Committee came  to the  conclusion that the National Mineral Policy, having been factor in the decision making process of the Government  and, both  in the National Mineral Policy as well as  the Industrial  Policy  of  the  State  of  Orissa, captive  mining   has  been   recognised  as  a  fundamental guideline in  determining the  criteria for  granting mining leases.      On the issue of equitable distribution of resources, in view of  the fact  that TISCO held 55% of the total chromite resource of  the country,  the Committee  was of the opinion that Article  39(b) and  Article 14 of the Constitution must be taken  into consideration  for deciding  the issue  under Section 8(3) of the Act.      Thereafter the  Committee examined the requirements  of Section 8(3)  of the  Act. The  provision as  it  originally stood  was   amended  in  1986  and  again  in  1994.    The application for  renewal of lease was filed by TISCO  in the year 1991.  On behalf  of TISCO,  a series  of   alternative arguments was  put forth  to support  TISCO’s  claim that it was entitled  to a  second renewal  of its  lease. There was also an  argument that  the law  as it  stood after the 1994 amendment should  apply  to  TISCO’s    case.  However,  the Committee took  the view  that the  law  applicable would be the law  as it  stood between  1986 and   1994. Interpreting Section 8(3)  of the Act, the Committee was of the view that TISCO could  not claim  to have  any legal  right  over  the renewal of its lease for the second time and, if the Central Government was  to renew it, it would have to record reasons

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why such  a   measure would  be in  the interest  of mineral development.      Moving on  to the issue of whether it was necessary  to renew the  mining lease of TISCO in the interest of  mineral development,  the  Committee  took  note  of  the    various arguments put  forth by  the learned  counsel  appearing for TISCO. The  learned counsel submitted that  TISCO had played a pioneering  role in the development of  chromite and other minerals in the area; had been doing  scientific mining in a manner that  ensured optimum   recovery; had taken steps for environmental management;   had complied with the provisions of all  the relevant   rules  and  regulations  ;  had  made massive investment  in the leasehold area including research and development  efforts etc. and, are therefore entitled to the renewal   of  the entire area in the interest of mineral development.  The   learned  counsel   submitted   technical reports to  show that  the technique  of mining  adopted  by TISCO  was  in  consonance  with  prescribed  practices.  He stressed on  the fact  that the  Indian Bureau  of Mines had sanctioned the  mining plan of TISCO and its operations  had also  met   with  the   requirements  of   the   Gopalachari Committee, set  up by  the Government  of  India  to  review mining practices  across  the  country.  To  appreciate  the technical arguments put forth by TISCO and the other parties before it,  the Committee  undertook a  vast  examination of the  technical   details  of  the  mining  of  chromite  ore including  discussions   on  mineable  reserve,  recoverable reserve and  conditional reserves in the Sukinda Valley; the status of  geo-technical and  geo-hydrological studies;  the existing status  of mining  in the  valley;  infrastructural facilities; research and development expenditure relating to mining in  the valley;  the relative  merits and underground mining; the prices of chromite ore, etc.      After considering  all these issues, the Committee made its recommendations.  It prefaced  the recommendations    by stating that  it was  of the  firm pinion  that it  would be necessary  in  the  interest  of    mineral  development  to authorise the  renewal of  chromite lease  to TISCO’s  under Section 8(3)  of  the  Act  strictly  in  terms  of  TISCO’s requirement and  keeping in  view the  requirements of needy manufacturing industries.  The   Committee was  of the  view that if  renewai was  granted to  TISCO for  the entire area when they  would, in  effect, be  needing and  using only  a small fraction of the entire area, it could not be said that such a  grant would  be said serving the interest of mineral development or  that of  the national interest, particularly when there  were other  needy  manufacturers  who  had  been facing serious  problems for  want of adequate raw-material. The   Committee felt  that it could not ignore the fact that the other  parties had  made  huge  capital  investments  in establishing their  industries and did not have adequate raw materials. The Committee approved the principle of allotting leases to  different industries by taking into consideration their requirements  for captive  mining and for doing so, it relied upon the Rao Report, the Orissa Industrial Policy and the National  Mineral Policy.  It   was, therefore,  of  the opinion that  the best  way of   benefitting  an established chrome-based industry  with a  large ore  consumption was to provide a  mine-owner status  to  the  different  industrial units. Thereupon, the Committee undertook an analysis of the competing   interests of  the other  needy manufacturers. It took   note of  the observations of the High Court of Orissa that it  was not the forum for distributing mining leases in favour of  the other  parties; however, in order to properly appreciate the iesue, the Committee examined the need of the

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other parties  as well  as.  their problems of obtaining raw materials. While forming an estimate of TISCO’s requirement, the Committee  reIied upon  the documents submitted by TISCO as well  as other  relevant material. It noted the fact that in  view   of  the   scarcity  of   chromite  ore,  repeated recommendations have  been made that underground mining must be  planned  and  taken  up  for  harnessing  the  available chromite ore.  However, over  the last  four decades  during which TISCO   had held the lease, it had not relied upon the method of  underground mining  to the  required  level.  The committee came  to the  conclusion that  open  cast  mining, which was  being primarily employed by TISCO, has an adverse effect upon  the environment  and the  most effective way of tapping the  ore was  the method  of underground  mining. It was, therefore, of the view that  TISCO should make- efforts to initiate  underground mining on a large scale which would allow it  to better  exploit the  ore within  its lease-hold area. The  learned counsel  for TISCO had put forth a number of  arguments  expressing  the  difficulty  of  dividing  or splitting its  lease-hold  area.  The  Committee  took  into account these  submissions while  assessing what  it  deemed should be  the extent  of TISCO’s  lease. In its view, which was formed  after taking  into account  a host  of technical factors,  the   appropriate   area   catering   to   TISCO’s requirement would  total 461  hectares. The  Committee also, formed an  estimate of  requirements of  the other   parties appearing  before   it.  In  addition,  it  recommended  the imposition of special conditions which could be kept in mind while granting renewals or fresh  leases in future. We may  now set  out the issues that we consider are central to the adjudication of the dispute before  us:      1. Whether the High Court of Orissa      was justified  in striking down the      decisions of the Central Government      dated June  3, 1993  and October 5,      1993  on   the  ground   that   the      requirement of  Section 8(3) of the      Act had not been met;      ii. Whether  the report  of the Rao      Committee and  the decision of this      Court in  Indian  Metals  case  are      relevant for  the consideration  of      renewal  of  leases  under  Section      8(3) of the Act;      iii. Whether the High Court and the      Committee  were      justified   in      hearing   prospective    applicants      while  considering   the  issue  of      renewal of TISCO’s lease;      iv.  Whether   the  Committee   was      justified   in   interpreting   the      concept  of  "mineral  development"      under Section  8(3) of  the Act  as      requiring  the  assessment  of  the      captive   mining   requirement   of      different   industries    and   the      application  of  the  principle  of      equitable  distribution  of  mining      leases;      v. Whether  the Central  Government      in its  order  dated    August  17,      1995, had  correctly  analysed  the      needs  and requirements of TISCO in      recommending that   it’s  lease  be      renewed over  land measuring 406.00

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    hectares;      We will deal with them seriatum. l.   Validity of  the Orders of the Central Government dated June 3, 1993      The learned  counsel for  TISCO has contended before us that the High Court of Orissa had erred in holding the order dated June  3, 1993  as well  as the  order dated October 5, 1993 which  renewed TISCO’s  lease, as unsustainable in law. According to  the learned  counsel, both  these orders  have complied with  the requirements  of Section  8 of  the  Act. Before we  analyse the provision, it must be noted that this provision has  undergone several  amendments.  Changes  were wrought into  the original  provision as  it stood  in  1957 through  amendments   in  1986   and  1994.   Since  TISCO’s application for  renewal was  filed in  1991, both  the High Court and the Committee considered the provision as it stood prior to the 1994 amendment, which is extracted as under :      "8. Periods for which mining leases      may be granted or renewed -      (1) The  period for  which a mining      lease  may  he  granted  shall  not      exceed twenty years.      (2) A  mining lease  may be renewed      for two  periods each not exceeding      ten years :      Provided  that   no  mining   lease      granted in  respect  of  a  mineral      specified  in  the  First  Schedule      shall be  renewed except  with  the      previous approval  of  the  Central      Government.      (3)    Notwithstanding     anything      contained in  sub-section  (2),  if      the  Central   Government   is   of      opinion that  in the   interests of      mineral development it is necessary      so to do, it may, for reasons to be      recorded, authorise  the renewal of      a mining lease for a further period      or periods  not exceeding  in  each      case the    period  for  which  the      mining   lease    was    originally      granted."      Applying the  provision to  the facts  of  the  present case,  it  becomes  clear  that  sub-section  (1)  would  be applicable to  the first  application for lease. Since TISCO already had  a lease  in existence  when the  Act came,  the first clause  stood exhausted.  When TISCO  applied for  the renewal of its lease for the first time in 1973, sub-section (2); as  it stood  prior to its amendment in 1986, envisaged the grant  of a  first renewal  for a  single period  of  20 years, which  is why  TISCO was granted a renewal till-1993. When, in  1991, TISCO  applied for  the second  renewal, the period of  time envisaged  by sub-section  (2) -  which  has always been  of a  total of  twenty years-  had lapsed, and, clearly, that  application would  have had  to be treated as one to     which sub-section  (3)  applied.  TISCO’s  second renewal  was granted by the Central Government’s order dated June 3, 1993 which was limited by its subsequent order dated October 5,  1993. These  orders conveying  the acceptance of TISCO’s lease  have been  analysed in the impugned judgment. The  High   Court  was     f  the  opinion  that  they  were unsustainable since  they did  not meet with the requirement of Section  8(3), which  required reasons  to be  stated for reaching the  decision that  it would  be in the interest of

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mineral development  to renew  TISCO’s lease. The High Court noted that the Central Government had not taken into account the National  Mineral Policy  and  the  report  of  the  Rao Committee in reaching its final decision. While interpreting the language  of Section  8(3), it  took note  of the speech delivered by  the concerned  Minister in Parliament who had, in defence  of a motion to drop Clause 8(3), stated as under :      "...we  should  and  must  envisage      conditions,   though very  rare, in      which    because     of     diverse      circumstances  some   renewals  may      have  to  be    made  beyond  those      specified in Clause 8."      From this,  the High Court inferred that the subsequent renewal of lease as envisaged and contemplated under Section 8(3) refers  to ’very  rare’ circumstances which may require renewals to  be made.  The Court,  therefore, held  that the conditions  which  make  for  the  rare  cases  and  diverse circumstances have  to be clearly and pointedly articulated, for which  the recording  of proper and detailed reasons was necessary.      It has  been argued  before us  that the High Court had erred in  referring to  the speech of the Minister as it was made in  a context  other than that which is permitted to be accepted as  a tool of statutory   interpretation. We are of the view,  however, that  the   issue can be decided without locking horns  with the  controversy over  the situations in which  utterances   in  the  legislature  are  relevant  for statutory interpretation.  To us,  the language  of  Section 8(3) is   quite  clear in its import. Ordinarily, a lease is not to  be granted beyond the time and the number of periods mentioned in  cIauses (1) and (2). If, however, the  Central Government is of the view that to allow a  lessee’s lease to be renewed  further would  be in  the   interest of  mineral development, then, it is empowered  to do so, provided there exist on  record sound reasons  for such an action and those reasons are  recorded.    Since  such  a  measure  has  been incorporated in  the   legislative  scheme  as  a  safeguard against arbitrariness,   the  letter and  spirit of  the law must be adhered to in a   strict manner.      We have  studied the  orders of the Central  Government dated June  3, 1993  and October  5, 1993.  The  order dated June 3,  1993 is  a statement which declares  the grant of a second renewal  to TISCO.  It does  not  profess to give any reasons for  such a  decision and,  for   that reason, falls foul of  the requirement  of Section    8(3), as has rightly been pointed out by the High Court.  The order dated October 5, 1993  is more generous in terms of the reasons it offers; however, the  High  Court was of the view that, since it did not take  into   account the findings of the Rao Report, the decision of   this  court in  the Indian Metals case and the National   Mineral Policy,  it could  not have justified its decision as having been made after a proper analysis of  the interest  of   mineral  development.   This  brings   us  to consideration of the second issue before us. 2.   ReIevance of the Rao Report and the decision of to this Court in  the Indian  Metals case  to the renewal of TISCO’s lease.      The submissions  made before  us by the learned counsel for TISCO on this issue are a replication of those put forth before the  Committee, and  need not  be repeated.  We  may, therefore, proceed  to analyse  the decision  in the  Indian Metals case.  In that  case, this  Court was  faced  with  a situation where,  through a  series of  Writ Petitions,  the

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grant of  rights for the mining of chromite ore in the State of Orissa  was challenged.  The central issue that arose for adjudication was  whether, and  to what  extent, the parties before the  Court were  entitled to  obtain leases  for  the mining of  chromite ore  in the  State of Orissa. Though the learned counsel  for TISCO  sought to indicate that  case is distinguishable from  the one on hand on account of the fact that, while  the  former  dealt  with  the  grant  of  fresh licences, the  present deals  with renewal  of lease,  which involves a  fundamentally  different  assessment.  We  must, however, point  out that,  in essence,  both cases deal with the larger  issue of  mining of chromite ore in the State of Orissa and,  in view  of this relation, it becomes necessary for us to consider the views expressed therein.      In view  of the  nature of  the issues  before it, this Court appointed the Rao Committee to examine the matter. The court then  held that  the findings  of  the  Rao  Committee would, for the purposes of the Act, be treated as a decision of the  Central Government. In paragraph 42 of its decision, the Court  expressed its  appreciation for  the detailed and excellent report  submitted by  Dr. Rao;  it further  stated that he  had brought  together all  the  relevant  data  and analysed the  various claims  put forth before it while also having had  a note on chrome deposits in the State of Orissa prepared by  the Chief Mining Geologist of the Indian Bureau of Mines.  We have  already extracted  the  portion  of  the decision where  the Court had stated that the Rao Report was bound to  be of  use to  the State Government as well as the Cenlral Government  in deciding  grant of  mining leases for chromite.      It is clear from a study of the Indian Metals case that in the opinion of this Court, the Rao Report had made such a comprehensive study  of the  issue that it merited treatment as a  decision of  the Central Government. In our view, once this has  been clearly  stated by  the  Court,  the  central Government, though  not bound  to follow the recommendations of the Rao Report, was at the very least under an obligation to  record   reasons  why  it  sought  to  depart  from  the recommendations of  the Report,  especially in matters- such as these  where leases  of considerable commercial value are granted for long periods of time.      We are,  therefore, of the view that the High Court and the Committee  were justified in taking note of the findings of the  Rao Report as well as the observations of this Court in the Indian Metals case in considering he issue of renewal of TISCO’s lease.      Since the Order dated October 5, 1993 did not make  any reference to  the Rao  Report or the decision of this Court, we feel  that the  High Court  was justified  in striking it down for  not having  taken into  account  all  the  factors relating to  a proper appreciation of the concept of mineral development. 3.   Locus standi  of prospactive  applicants in proceedings considering the renewal of TISCO’s lease.      Before the  High Court,  the learned  counsel for TISCO raised a preliminary objection as to the locus standi of the other petitioners,  basing his  claim on  Rules 59 and 60 of the Rules,  the relevant  portions of which are extracted as under :      "59. Availability  of area  for re-      grant to  be   notified --  (1)  No      area      (a) which  was previously  held  or      which  is   being  held   under   a      prospecting  licence  or  a  mining

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    lease; or      (b)   ......                    ...      ....      (c)    ......                 .....      ....      (d)    .......              .......      ....      (e) Shall  be available  for  grant unless --      (i) an entry to the effect that the area is  available for  grant is made in the register referred to in sub-rule (2) of rule  21 or  sub-rule (2) of rule 40, as the case may be, in ink; and      (ii) the  availability of  the area for grant  is notified  in the  official Gazette and  specifying a  date (being a date not   earlier than 30 days from the date  of   the   publication   of   such notification in  the  official  Gazette) from which  such area shall be available for grant :      Provided  that   ...            ...      ...      Provided further  ...           ...      ...      (2, The Central Government may, for      reasons to  be recorded  in writing      relax the  provisions  of  sub-rule      (1) in any special case.      60.     Premature     applications.      Applications  for   the  grant   of      prospecting licence or mining lease      in   respect    of   area.    Whose      availability for  grant is required      so be notified under rule 59 shall,      if,      (a) no notification has been issued      under that rule; or      (b) where any such notification has      been issued,  the period  specified      in   the   notification   has   not      expired;      be deemed to be premature and shall      not   be   entertained,   and   the      application  fee  thereon,  if  any      paid, shall be refunded."      The learned  counsel for TISCO submitted that since, in respect of the land that fell within TISCO’s leasehold area, the State  Government had  neither  made  an  entry  in  the concerned register  that the  area was  available for grant, nor had  it notified  its    availability  in  the  official Gazette, the  applications of  the other parties before this Court should be treated as premature applications under Rule 60 and  not be  entertained. He,  therefore, submitted  that none of  the other  parties could  be regarded  as aggrieved parties   and therefore,  could not  be  said  to  have  any interest  in these proceedings.      The learned  counsel for  JSL countered by stating that any decision on the second renewal of TISCO’s lease as bound to affect the rights of the other parties. He argued that if the entire  lease was  renewed in TISCO’s favour, no part of it would be available for grant to them. He also pointed out that TISCO’s  lease had  expired on January 11, 1993 whereas the first  order renewing  TISCO’s lease  was issued only on

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June 3,  1993. Will  we contended that the State Government, which was  dutybound to  make  the  relevant  entry  in  the register and  notify the  area as being available for grant, had neglected  to do  so. He then stated that, had the State Government been  mindful of its obligation, the applications of  the  petitioners  would  not  have  been  deemed  to  be premature under Rule 60 of the Rules and could not have been rejected.      In its  impugned judgment,  the High Court adopted  the view that  the other parties before it did have an  interest in the  proceedings  regarding  renewal  of  TISCO’s  lease. Describing their  interest as  being of a contingent nature, the High Court stated that if the Central Government did not think it  fit to  renew TISCO’s  lease,  it  would  have  to declare the  area as  available for  grant and would have to invite prospective  applicants. In that situation, the other parties would  have a  claim. The  Court pointed  out  that, though none  of the  other parties  could, as  a  matter  of right, claim  to be  heard while  the Central Government was considering the issue of renewal of TISCO,s lease, since its two Orders  in this  regard had, in fact, adversely effected their  rights,  the  other  parties  would  be  entitled  to challenge them. In other words, according to the High Court, they were proper parties even if not necessary parties.      While issuing  directions  to the Committee that was to be constituted  to examine  the issue  at length,  the  High Court directed  that the  views of the other parties also be taken into  consideration. The  other details regarding this direction are  mentioned in  the  portion  of  the  impugned judgment that  we have  already extracted. The Committee, in compliance with  this direction  of the  High  Court,  heard TISCO as  well as  the other  parties at length on a host of legal and technical issues.      It must  also be  noted that  in its order dated August 17, 1995, the Central Government had, in exercise  of powers conferred on  it by  Rule 59(2)  relaxed the  requirement of Rule 59(1) to enable the other parties to be granted leases.      We are  of the  view that  the High Court had taken the correct step  in allowing  the prospective applicants to put forth their  points of  view with  regard to  the renewal of TISCO’s lease.  As we have already pointed out, these issues involve  considerably   high  stakes,   both  in   terms  of commercial value  and the  effect that  such a decision will have  on   the  concept   of  mineral  development  and  the consequent national  lnterest. To  that extent, those likely to be affected and indeed, those who can legitimately have a stake in  the proper formulation of such a vital policy, can be heard.  No exception  can be  taken  to  the  High  Court treating them  as proper parties and directing the Committee to hear them.      We, therefore,  hold that  both the  High Court and the Committee  were   justified  in   hearing  the   prospective applicants while considering the issue of renewal of TISCO’s lease. 4.   Relevance  the  criterion  of  captive  requirement  of mining   industries   and   the   principle   of   equitable distribution of  mining leases  to the  concept  of  mineral development under Section  of the Act.      The Committee  undertook a  comprehensive analysis   of the submissions  made  by  the  counsel  appearing  for  the various parties  before it  and also  studied  the  relevant material in order to gain an understanding of the concept of mineral development under Section 8(3) of the Act.      To this  end, it  analysed the entire scheme of the Act and studied various Sections, viz., Section 3(c), Section 6,

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Section 8  and also  the  Rules  with  the  benefit  of  the submissions of the learned counsel appearing for the various parties. It  also analysed  the  Rao  Report,  the  National Mineral Policy,  1993 and the Industrial Policy of the State of Orissa, 1992 to reach its conclusions on this issue.      The Committee  noted the  following observation  of the Rao Committee :      "The two  laudable aspects  of  the      State Government’s  policy in  this      regard     of  reservation  of  the      chromite areas  for exploitation in      the public  sector and provision of      certain captive  mining  capacities      to the  chromite  based  industries      need to be reconciled."      It then  noticed the  observations of  the  Rao  Report wherein, while-  analysing the Industrial Policy Resolution, 1956, it  had stated that the Policy envisages a predominant role for  the public  sector  in  (establishing  chrome  ore industries, though  the option  of private  enterprise being involved in  establishing new  units was not closed. The Rao Report had,  in fact,  observed that  once  an  industry  is established with  the cooperation  of the private sector, it would only be  I fair and reasonable to make available to it a certain   captive resource of chrome ore. To this end, the Rao Report  had specifically  recommended that  the  captive mining requirement  be provided  for in  the  grant  of  the lease in question.      The Committee further noted the observations of the Rao Committee that the cost of production of the chromite ore in the case  of captive  mines is  much lower  than the cost of procurement from  other suppliers and, therefore, dependence on others  for chromite ore has an adverse impact on the end user industry  and this  can be eliminated if captive mining is promoted.      Thereafter, the  Committee took note of paragraph  7.11 of the  National Mineral  Policy, 1993 where, while  dealing with the  strategy to  be employed for mineral  development, it was clearly stated as follows :      "In  case   of  ores   whose  known      reserves    are    not    abundant,      preference will  be given  to those      who propose to take up their mining      for captive use."      The Committee  also  recorded  paragraph  15.2  of  the Industrial Policy  of Orissa,  1992 where  the following  is stated.      "15.2   Persons   who   have   firm      proposals for setting up industries      in the  State  for  processing  and      value addition  of minerals will be      given  priority  in  the  grant  of      prospecting  licences   and  mining      leases."      The Committee  also recorded  the  submissions  of  the counsel for  JSL that  preference for  captive  mines  is  a valid national policy, having been incorporated in,  certain legislations such  as the  Coal Mines   Nationalisation Act, 1973, and  is an  important factor  to  be considered in the interest of mineral development.      Thereafter, the  Committee came  to the conclusion that the National Mineral Policy, 1993, which was tabled  in both Houses of  Parliament, had  resulted in  amendments    being carried out  in the  Act and  the Rules  and, being a policy pronouncement, was  a guiding factor in the  decision-making

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process of  the Government. It further  stated that both the National Mineral  Policy and  the Industrial  Policy of  the State of  Orissa had  recognised the  fact that  the captive mining requirement merited preferential treatment.      While dealing  with applicabilty   of the  principle of equitable distribution,  the Committee  took   note  of  the observations, in  paragraphs  88  and  89  of  the  impugned judgment, made while analysing the Rao Committee Report. The High Court  had noted  that it  had   been the policy of the State of  Orissa to  provide raw materials to those chromite based industries  which were owned by the private sector and also to  cater to  the requirement of manufacturing industry within the  State. The  Rao Report  had further  recommended that in doing so, the State Government should act justly and equitably.      After making  a technical evaluation based on satisfied information, the  Committee observed  that leasehold area of TISCO which  was sought  to be renewed has chromite deposits of the  order of atleast 102.44 million tonnes. Of this, the reserves upto  a depth of 100 metres were estimated at 39.49 million tonnes  and the  reserves below  the  depth  of  100 metres were  estimated at  62.95 million  tonnes. The  total reported chromite  reserves in the country were estimated at 186  million   tonnes.  Thus,  the  Committee  came  to  the conclusion that  the area  in question  (1261.476  hectares) held by  TISCO possessed about 55%  of the chromite reserves of the  entire country.  The Committee  therefore, posed the question whether  it would be in national interest to permit a single party to perpetuate its hold on such large reserves of this strategic mineral?      Thereupon, the  Committee analysed  the  provisions  of Article 14  and Article 39(b) of the Constitution  which, in its view,  were relevant for the purpose of appreciating the issue under  Section 8(3)  of the  Act.  It then came to the conclusion that,  to grant the  renewal of mining lease over an area  as large  as that   held  by TISCO,  in favour of a single applicant whose own  needs are limited, while several needy manufacturers were deprived of adequate sources of raw material, would be to promote monopolistice tendencies which cannot be allowed.      For the  foregoing reason,  the Committee  was the view that the concept of ’mineral development" under Section 8(3) of the  Act requires  the assessment  of the  captive mining requirement of  different industries as also the application of the principle of equitable distribution of mining leases.      The learned  counsel for  TISCO sought  to assail  this approach of  the Committee.  He began  by pointing  out that before the  Rao Committee, the State of Orissa had canvassed the view  that the  concept of an industry linked to captive mining is  not envisaged  by the  scheme of the Act, nor has it been  accepted as  a matter  of policy.  This was for the reason that  there are  more industries  than mines  and, if every industry was entitled to a mine, more industries would be starved   rather  than served and such a policy would not be feasible.  He further  submitted that even the Rao Report had not  given its  enthusiastic approval  to the concept of captive mining and assuming that it had, its effect would be negatived by  the fact  that this  Court had  in the  Indian Metals case  expressly  rejected  the  theory  of    captive mining. Learned  counsel further  submitted that the concept of captive  mining has  been wrongly applied since no mining activity can  be carried  out only  for Captive consumption. Different industries require varied grades of more for their activities  and  a  single  mining  area  cannot  produce  a particular type  of ore  required  by  one  industry  alone.

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Consequently, he  submitted that such a condition would lead to ineffective  exploitation of  the  ore.  TISCO’s  counsel further submitted  that none  of the  other parties who were before this  Court to  stake. their claim for mining leases, had any  industry of  their own where the chromite ore could be used for manufacturing purposes and, therefore, they were not in  a position to use it for captive consumption. Hence, he submitted, the argument of captive consumption was wholly misplaced. He further Contended that the Committee had erred in applying  the  principle  of  equitable  distribution  of mining leases;  according to  him the  correct principle  is that of equitable distribution of minerals and not of mining leases.      We have  studied the  Committee’s report  on this issue and we find that most, if not all, of these contentions have been dealt  with in  the report.  We find  it  difficult  to accept  the  contention  that  the  Rao  Committee  had  not endorsed the  concept of captive mining  because, as we have already mentioned, it does in fact do so. Having studied the decision in  the Indian  Metals case,  we find  that on  the issue of  the requirement  of captive mining, this Court had expressly refrained  from  giving an opinion on the issue as it did  not arise  for its  consideration; however,  it  did recommend that  chromite ore be supplied to needy applicants in an  equitable manner. It must be pointed out that nowhere in the  Rao Report  nor in  the report of the Committee, has the requirement  of captive  mining been interpreted to mean that every industry within the State would, by reason of its existence, be  entitled  to  a  mining  lease.  The  captive requirement of  an industry  is a factor that has to be kept in mind  while granting  leases but,  it is  to be done on a comparative scale.  While the  Central Government  exercises its discretion  in granting or renewing a lease, it is clear that the capacity of an  industry to effectively exploit the ore, will  be a predominant considerations The submission of the learned  counsel that  none of  the other parties before this Court  required the mineral ore for captive consumption cannot be  accepted. This  aspect  has  been    specifically examined by the Committee at pages 260-263 of its report. In order  to   properly  appreciate   the  issue   of   captive consumption, the  Committee examined  the needs of the other parties before  it. It stated that each of these parties had manufacturing industries which  produce value-added products and earn considerable  foreign exchange for the country, and it was therefore of the view that an analysis of their total requirement   was necessary  in  the  interests  of  mineral development as  also  that  of  the  nation.  Based  on  the information supplied to it, the Committee thereafter made an assessment, for  a total  period of 50 years, of the captive and net  requirements of  ICCL, IMFA, FACOR and JSL. At page 349 of  its report, the Committee has also taken note of the projected captive and net requirements of Ispat Alloys. This being a  finding of  fact that  has  been  recorded  by  the Committee, we  have to  accept that  the argument of captive consumption does  have a  basis in  the facts of the present case. On  the issue  of the  application of the principle of equitable  distribution,   we  are  of  the  view  that  the Committee had,  after having  taken note  of the  prevailing situation and  the problems  faced by  needy  manufacturers, taken the correct view in recommending its implementation.      We are,  therefore, of  the view that the Committee had correctly interpreted  the relevant  material available  for appreciating  the   concept  of  "mineral  development"  and adopting the  stance that  it  encompassed  the  concept  of captive  mining  as  well  as  the  principle  of  equitable

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distribution.      5.   Validity    of   the   Central      Government’s order dated August 17,      1995 which  declared that  renewing      TISCO’s lease  over an  area of 406      hectares would  satisfy  its  needs      and  requirements.      The Committee  made an  estimate of the captive  mining requirement of each of the parties appearing before it after coming  to  the  conclusion  that  this  was  a  fundamental guideline to  be kept in mind while renewing  TISCO’s lease. To complete  this exercise, it relied  upon the’ submissions of counsel,  technical evidence  submitted a  them  and  the relevant technical  information available.  In the  case  of TISCO, after  taking into  account all the technical grounds and objections  put forth  by the learned counsel for TISCO, the Committee  came to  the conclusion that its lease should be  granted  renewal  for  a  period  of  20  years  over  a contiguous area of 461 hectares.      By  its  order  dated  August  17,  1995,  the  Central Government while  endorsing the  finding  of  the  Committee recommended to  the State  Government that  TISCO’s lease be renewed for  20 years  over a  reduced area of 406 hectares. The reasons for the reduction were also provided.       The  decision of  the  Committee  and  the  consequent order of  the Central  Government have  been assailed by the learned counsel  for TISCO on a number or technical grounds. Many of these have already been dealt with by the Committee.      At this  juncture, we  think  it  fit  to  make  a  few observations about  our general approach to the entire case. This  is   a  case  of  the  type  where  legal  issues  are intertwined with those involving determination of policy and plethora of technical issues. In such a situation, courts of law  have   to  be   very  wary   and  must  exercise  their jurisdiction  with   circumspection  for   they   must   not transgress into  the realm  of  policy  making,  unless  the policy is  inconsistent with  the constitution and the laws. In the  present matter,  in its  impugned judgment, the High Court had  directed the  Central   to set  up a committee to analyses the entire gamut of issues thrown up by the present controversy.  The   Central  Government   had   consequently constituted a  committee comprising high level functionaries drawn from  various Governmental/ institutional agencies who were equipped to deal with the entire range of technical and long-term  consideration   involved.    This  Committee,  in reaching  its   decision,  consulted   a  number  of  policy documents  and   approached  the   issue  from   a  holistic perspective. We have sought to give our opinion on the legal issues that arises for out consideration. From the scheme of the Act  it is  clear that  the Central Government is vested with discretion  to determine the policy regarding the grant or renewal  of leases. On matters affecting policy and those that require technical expertise, we have shown deference to and followed  the recommendations of, the Committee which is more qualified to address these issues.      We  are,  therefore,  of  the  view  that  the  Central Government was  justified in  issuing its order dated August 17, 1995.      For the  foregoing reasons, we are of the view that the High Court and the Committee were justified in the view they took.  Consequently  the  appeals  filed  by  TISCO    stand dismissed. IDCOL  has filed  the appeals  on much  the  same grounds  as  TISCO  while  additionally  claiming  that  the Committee should  have heard its claim too while hearing the other parties.  Since we  have heard  them  at  length,  the

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grievance does  not survive. Hence IDCOL’s appeals must also fail. Cost, cost in the cause.