Ashok Kumar Lingala vs State Of Karnataka & Ors

State of Karnataka & Ors. ...Respondents

With

CIVIL APPEAL NO. 8820 OF 2011

(Arising out of SLP (C) No. 200 of 2011)

L.V. Ashok Kumar Lingala ...Appellant

Versus

M/s. Sandur Maganese & Iron

Ore Co. Ltd. & Ors. ...Respondents

J U D G M E N T

T.S. THAKUR, J.

1. Leave granted.

2. These appeals arise out of an order dated 1st

September, 2010 passed by the High Court of Karnataka -

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whereby Writ Petition No.17281 of 2010 filed by the

appellant has been disposed of with the direction that the

question of identity of the area forming the subject matter

of the mining leases granted to the appellant on the one

hand and respondent M/s Sandur Manganese & Iron Ore

Company Ltd. (`SIMORE' for short) on the other, shall be

determined by the Civil Court in the suit pending before it

on the basis of the evidence that the parties may choose to

lead. The High Court has further held that in case the Civil

Court comes to the conclusion that the area over which the

mining leases have been granted to the rival parties does

not overlap then both of them would be entitled to carry

out their mining activities under their respective lease

agreements. In case, however, the Civil Court is of the

opinion that there is an overlapping of the area covered by

the two leases, the lessee who claims under the lease

granted earlier in point of time would have a superior right

to carry out the mining activities in preference to the one

granted later. The facts in brief are as under:

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3. Land measuring 4.42 hectares situated at village

Devagiri, Sandur Taluk, Bellary District falling under

Surveys No. 56/P, 57/P, 58/P and 91/P was according to the

appellant dedicated to Kumaraswamy Devaru Temple. The

entire extent of land which now falls in new Survey No.27

was given to one-Pennaiah S/o Dodda Pennaiah for

cultivation in lieu of the services which he was rendering to

the temple. With the enactment of the Karnataka (Sandur

Area) Inam Abolition Act, 1976 abolishing all rights in inam

lands and permitting the cultivators and tenants of the land

to make applications under Section 10 of the Act for re-

grant and registration, the cultivator-Pennaiah also made

an application to the Land Tribunal, Sandur Taluk, Bellary

District seeking a re-grant. The said application eventually

culminated in the Tribunal passing an order dated 22nd

October, 1981 granting occupancy rights in favour of the

tenant, pursuant whereto the Tehsildar issued a registration

certificate registering his occupancy rights and entering his

name in the record of rights.

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4. The appellant's further case is that Pennaiah continued

to cultivate the land personally especially when neither the

order of re-grant was challenged before the Land Tribunal

nor his cultivation objected to by anyone including the 3rd

respondent who held a lease in respect of Government and

forest land situate in Sandur Area. The appellant asserts

that the land aforementioned is a piece of private patta

land that was held by Pennaiah during his life time and by

his widow Yellamma after his death. Neither Pennaiah nor

Yellamma had in their capacity as Pattadars in cultivating

possession of the land ever offered the property to SIMORE

or granted any right or any other interest in its favour. On

the contrary Yellamma in her capacity as Pattadar had

permitted the appellant to obtain a mining lease under the

provisions of Minor Mineral (Development and Regulation)

Act, read with Mineral Concessions Rules, 1960 which

application was sent to the Deputy Commissioner, Bellary

District, to verify the status of the land and also to the

Deputy Director of Mining and Geology for conducting an

actual spot inspection. Both the authorities had, according

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to the appellant, submitted their respective reports in which

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the said property was found to be private Patta land. They

had, therefore, offered no objection to the grant of a mining

lease qua the same.

5. It was on the basis of the reports aforementioned that

the State Government had sought the approval of the

Central Government for the grant of a mining lease in

favour of the appellant which approval was upon due and

proper consideration granted by the Central Government.

The State Government had pursuant thereto issued a

Notification dated 15.1.2010 sanctioning a mining lease

over an area of 4.42 hectares situate in Devagiri Village

Sandur Taluk Bellary Distt., as per the sketch furnished by

the Director Department of Mines and Geology. Boundaries

of the area in question were fixed for an extent of 3.36

hectares in terms of letter dated 2.2.2010 issued by the

Deputy Director Mines and Geology, Hospet and a lease

deed executed and registered with the Sub-Registrar under

ML No.2622.

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6. The appellant's case is that when he started the

mining activities in exercise of his right under the lease -

aforementioned, the Director of Mines and Geology,

Government of Karnataka issued a communication dated 5th

March, 2010 by which the appellant was restrained from

conducting any such activities on the ground that the area

covered by the lease granted to the appellant overlapped

the area stated to have been granted to the SIMORE

respondent no.3 herein. On receipt of the said letter the

appellant filed an application to the Director of Mines and

Geology objecting to the order and pointing out that the

same had been passed without issuing to the appellant any

notice or granting to him any opportunity of being heard in

the matter. The appellant also represented to the State

Government against the direction issued by the Director of

Mines and Geology and asserted that even when 3rd

respondent SIMORE had filed a Civil Suit in the Court of

Civil Judge (Senior Division) Kudligi and prayed for an

injunction no such injunction had been issued by the said

Court. The Director of Mines was not, therefore, justified in

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issuing an injunction which the Civil Court had not issued;

on the very same factual matrix. The restraint order issued

by the Director of Mines and Geology continued to remain

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in force despite the objections raised by the appellant. As a

matter of fact, the Director of Mines wrote a letter dated

25.5.2010 to the appellant saying that order dated

5.3.2010 stopping mining operations could not be vacated

or modified. The appellant was in that backdrop forced to

approach the High Court of Karnataka at Bangalore in Writ

Petition No.17281 of 2010 challenging the said

order/communication on several grounds and praying for a

direction to the respondent to refrain from interfering with

the mining activities of the appellant which the lease deed

authorised him to carry out. Respondent no.3, SIMORE filed

Writ Petition No.18043 of 2010 challenging the very grant

of the mining lease in favour of the appellant. The said two

writ petitions were finally disposed of by the High Court in

terms of a common order dated 1st September, 2010

impugned in the present appeals.

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7. Relying upon the orders passed by the Director,

Department of Mines and Geology dated 5th March, 2010

and 25th May, 2010, the High Court concluded that there

was overlapping of areas held by the appellant and SIMORE

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under their respective lease deeds. The High Court held

that the appellant had not been in a position to produce any

evidence to show that the conclusion drawn by the Director

of Mines regarding overlapping of the areas was erroneous.

The High Court observed:

"We permitted learned counsel for Ashok Kumar Lingala

to examine the same. Even therefrom, learned counsel

representing Ashok Kumar Lingala could not repudiate

the finding of fact recorded in the two impugned orders.

xxx xxx xxx xxx xxx

xxx xxx xxx xxx xxx

15. From the two orders issued by the Director,

Department of Mines & Geology dated 05.03.2010 and

25.05.2010, we have no other alternative or hesitation

but to conclude, that `M/s Simore' had been granted a

mining lease, in respect of the same land, well before

Ashok Kumar Lingala was awarded the mining lease.

That being so, the claim of Ashok Kumar Lingala could

not have been considered for grant of a mining lease

over the area which comprised of part of the mining

lease already granted to `M/s Simore', as the application

of Ashok Kumar Lingala was bound to be treated as a

premature application. This inference is inevitable from

a collective reading of rules 59 and 60 of the Mineral

Rules, and Section 24A of the Mines and Minerals Act."

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(underlined)

8. Having held that there was an overlapping of the areas

covered by the two leases, the High Court interpreted the

rules to record a finding that even when the area leased to

SIMORE may include private land owned by Smt. Yallamma

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and even when Yallamma has not granted any surface

rights to it, SIMORE could undertake mining activity in the

private area by paying compensation to Yallamma before

undertaking such activities. The High Court observed:

"On the issue whether `M/s Simore' could carry out

mining activities over the land owned by the private

owner Smt. Yallamma, the provisions relied upon by the

learned counsel representing `M/s Simore' leave no

room for any doubt, that in case mining activity is

carried out by `M/s Simore' over private land,

compensation will have to be paid by `M/s Simore' to

the private land owner under rule 72 of the Mineral

Rules. But the submission of this learned counsel

representing Ashok Kumar Lingala, also leave no room

for any doubt, that `M/s Simore', in spite of the grant of

a mining lease covering private owned land, would not

be in a position to unilaterally and arbitrarily conduct

mining activities thereon without the

consent/permission of the land owner Smt. Yallamma.

The instant conclusion is based on the second proviso

under rule 22(3) (i) (h) of the Mining Rules which

mandates, that unless permission/authorization is

granted by the land owner, mining activity cannot be

carried out. Even if it is assumed, that prior consent of

the land owner was not obtained by `M/s Simore' before

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obtaining the lease deed from the State Government,

still the second proviso under rule 22(3) (i)(h) of the

Mining Rules extracted above, mandates that, prior to

entering into private owned land for mining activities,

permission from the land owner is a necessary pre-

requisite."

9. What followed the above two findings, one touching

the question of overlapping of the lease areas and the other

dealing with the effect of the overlapping qua privately

owned land, is interesting. The High Court took a -

somersault and held that the question of overlapping could

not be decided by it authoritatively and left the same must

be decided by the Civil Court on the basis of evidence

adduced before it. It observed:

"Thus viewed, it is not possible for us to record any

concrete finding on the factual aspect of the matter.

We have noticed hereinabove, that a civil suit is

pending between the parties. It will be open to the rival

parties to lead evidence therein, if they are so advised,

to determine the specific identity of the property over

which mining leases have been granted to them. In

case such evidence leads to the conclusion, that the

land over which mining leases have been granted to the

rival parties, do not overlap, then both of them would

be entitled to carry out mining activities, under the

lease agreements executed by the State Government in

their favour. In case the factual finding is to the

contrary, then on account of the conclusions drawn

hereinabove, the earlier licensee will have to be granted

the superior right to exclusively carry out mining

activities. As such, `M/s Simore' shall have a

preferential right over Ashok Kumar Lingala. In such an

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eventuality, no interference will be called for with the

impugned orders dated 05.03.2010 and 25.05.2010."

10. Appearing for the appellant Mr. Dushyant A. Dave,

learned senior counsel strenuously argued that the High

Court had totally misdirected itself both on facts and in law.

He submitted that the High Court had failed to notice that

the lease granted in favour of respondent no.3 SIMORE was

in respect of government and forest land alone. No part of

any private land covered the lease in its favour nor was any

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claim to that effect ever made by respondent no.3 SIMORE.

In support of that submission learned counsel drew our

attention to the application filed before the Government of

Karnataka by respondent no.3 SIMORE seeking renewal of

the lease in the year, 1992. In particular, he relied upon the

answers given by SIMORE to the queries made in paras viii

(a), x-A(a) and (b) of the renewal application to argue that

respondent No.3 SIMORE had unequivocally stated that the

lease sought to be renewed in its favour comprised

government land and no part of it was owned or occupied

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by any private party. Paras viii (a), x-A(a) and (b) of the

renewal application are as under:

viii Particular of the mining lease of ML No. 1179

which renewal is desired

a) Area: 16.74 sq. miles

In Sandur Taluk of Bellary

District

Karnataka

x-A Does the applicant continue to Yes (Government land).

have surface rights over the a) area of the land for which he

requires renewal of the mining

lease.

b) If not, has he obtained the Not applicable

consent of the owner and

occupier for undertaking mining

operations. If so, the consent

of the owner and occupier of

the land obtained in writing, be

filed.

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11. He also drew our attention to the report of inspection

dated 22nd February, 1993 submitted by Government of

Karnataka, a copy whereof has been placed on record which

too clearly mentioned that the area covered by the lease

sought to be renewed was forest and government land. He

particularly drew our attention to the following passage in

the said report:

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"The present application for renewal is for third

renewal. The whole area of 16.74 sq. miles is bounded

on the North by Sandur State Forest on the South by

Hospet Taluk on the East by Nauluti forest and on the

West by Kudligi Taluk. Area is Government and it is

forest land also."

12. Mr. Dave next drew our attention to the plaint filed by

respondent no.3 SIMORE in OS No.9/2010 to buttress his

submission that respondent no.3 SIMORE had not claimed

any private land to be a part of its mining lease area.

Reference in this regard was particularly made to para 11 of

the plaint which is to the following effect:

"11. Further, the Plaintiff hereby submits that the Plaintiff is in physical possession and enjoyment of the Schedule land

for more than five decades. The Schedule land is an un-

surveyed land and accordingly the NOC issued by the

Deputy Commissioner, Bellary on 31.03.1998 refers to the

same as blocks and c onfirms that the same is a Revenue -

Land (Government Land). The claim of the Defendant that

he has obtained Mining Lease over an area of 3.36 ha under

survey No.27 appears to be dubious or it may be pertaining

to some other land. In addition to this, the Plaintiff has paid

Rs.104 crore towards Net Present Value Compensatory

Afforestation charges on the 1615.64 of forest land and

Rs.2,07,79,920/- towards Environmental Protection Fee on

the 247.38 ha of Revenue land held by it under Mining

Lease Nos. 2580 (Old No.1179)."

13. Mr. Dave vehemently argued that inasmuch as the

High Court had overlooked the material on record it had

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fallen in a palpable error in assuming that the land leased

to the appellant could possibly overlap the area leased to

respondent no.3 M/s SIMORE. So long as the two lessees

were claiming surface rights over their respective lease

areas under different owners the question of overlapping

did not arise argued the learned counsel. At any rate the

area leased to the appellant was not only verified as to its

nature and ownership but was spot inspected and

demarcated, which fact was evidenced from the reports

placed on record. It was, therefore, wholly futile for any

one to suggest that the areas granted to the two lessees

were overlapping, contended Mr. Dave.

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14. On behalf of respondent no.3 SIMORE it was on the

other hand contended by Mr. T.R. Andhyarujina, senior

counsel that the respondent no.3 SIMORE did not claim any

private land to be a part of its lease area. He submitted

that even when that was so the overlapping which the

Director, Mines and Geology had referred to was possible as

according to SIMORE the area leased to appellant ought to

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be treated as a part of government land. Alternatively, it

was contended that while the appellant may claim to have

obtained a lease in respect of privately owned land the fact

of the matter was that the area in which the appellant

intended to conduct his mining activities was a part of the

area leased to respondent no.3.

15. Ms. Anitha Shenoy, counsel appearing for the State

Government and its functionaries argued that the orders

passed by the Director (Mines) suspending mining

operations were on the basis of the conclusion drawn by the

drawing section of the mining department according to

which the two areas forming the subject matter of the two

leases were overlapping. She contended that even when -

the report of the drawing section and the basis on which

this overlapping had been prima facie established had not

been placed on record, the site plans/maps placed on

record supported the conclusion that there was some

overlapping. Learned counsel further submitted that the

orders passed by the Director (Mines) were interim in

nature and the question whether or not there was any

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overlapping had yet to be determined by the competent

authority. She fairly conceded that in the process of any

such determination the rival claimants shall have to be

heard by the competent authority.

16. We have given our careful consideration to the

submissions made at the Bar and perused the record. The

facts emerging from the record place the controversy within

a narrow compass. While the appellant claims that the

lease granted to it is in respect of a privately owned area,

respondent no.3 SIMORE claims that the area leased in its

favour comprises government and forest land only. If that

be so, as indeed are the positions taken by the parties

there is no question of any overlapping of the two areas for

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what is government or forest land cannot be privately

owned and vice-versa. Mr. Andhyarujina all the same made

a valiant attempt to persuade us to hold that the area

falling in Survey No.27 qua which the appellant has

obtained a lease is, in fact, government land and that no

part of it is or was at any stage privately owned. What he

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argued in support of that contention was that the grant of

occupancy rights in favour of Pennaiah was not warranted

in the facts and circumstances of the case, and if that were

so, any such grant could be ignored. We regret our inability

to accept that submission. We say so firstly because, the

validity of the grant of occupancy rights in favour of

Pennaiah by the Statutory Tribunal was not under challenge

before the High Court nor was any challenge ever thrown to

the orders passed by it or the implementation thereof in the

relevant revenue record before any other forum. Even the

State under whom respondent No.3 SIMORE claims the

right to carry out mining operations, never found fault with

the grant of land in favour of Pennaiah. It is, therefore, too

late in the day for any one to question the legality of the

order granting land situate in Survey No. 27 to Pennaiah, or

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to assert that notwithstanding what has happened in the

statutory proceedings, the area falling under Sy. No. 27

must be recognised as government land, hence a part of

area leased to SIMORE. Secondly because in the record of

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rights Survey No.27 is shown to be privately held by

Pennaiah and after his death by Yallamma his widow. The

State Government and Kumaraswamy Devaru Temple to

whom the land was dedicated before its grant to Pennaiah,

have accepted that position; and raised no dispute or

question as to the correctness of the revenue record. The

report submitted by the Deputy Commissioner, the spot

inspection, and the very grant of a lease qua the area in

question, all lend credence to the revenue record that

recognises the land in question to be private land.

17. Such being the case the only question that calls for

determination is whether respondent no.3 SIMORE is right

in insisting that the area in which the appellant proposes to

carry on his mining activity is a part of the area leased to

former. It was argued by Mr. Andhyarujina that the area

sought to be exploited for mining purposes by the appellant

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comprised the workers colony of SIMORE. That assertion

was stoutly denied by the appellant according to whom the

mining operations are confined to the area originally

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demarcated at the time of the grant of the lease. Be that

as it may what needs to be examined is whether the

appellant is mining within his lease area or beyond. This

would in turn require the area leased to the appellant to be

demarcated again assuming that an earlier demarcation

had also taken place, especially because SIMORE denies

any such previous demarcation having been conducted.

According to SIMORE the officer said to have done so was

placed under suspension for dereliction of duties. It is

unnecessary for us to go into the validity of any previous

demarcation. It is obvious that when large areas are

granted for mining purposes, some confusion as to the

boundaries of such areas especially if they are adjacent to

each other is nothing abnormal. What in such cases needs

to be done is to conduct a fresh demarcation and fix

boundaries so that the parties holding such areas stay

within the limits of their respective areas instead of straying

into the adjacent area.

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18. We may at this stage advert to another submission

made by Mr. Dave that the Director (Mines) could not have

stopped the mining operations of the appellant on the basis

of what was according to Mr. Dave a frivolous complaint

filed by SMIORE that alleged overlapping of the lease areas.

He contended that a valid lease having been granted to the

appellant after following the requisite formalities and the

procedure prescribed under the relevant rules and after

proper demarcation of the privately held area that was

available for mining, the Director should not have on a

sketchy report from the Drawing Section of the Department

stopped the mining activities. It was further contented by

Mr. Dave that since the mining activity had been stopped

under the orders of the Director (Mines), the High Court

was in error in not only upholding the said direction but

extending their efficacy till such time the dispute between

the parties was resolved by the Civil Court.

19. The mere pendency of a suit in a Civil Court could not

be an impediment for the appellant to start or continue his

mining activity, unless there was an injunction restraining -

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him from doing so. No such injunction has been issued by

the Civil Court. That does not, however, mean that the

Government or the Director (Mines) for that matter could

not in the event of any dispute between the appellant and

SIMORE regarding the identity and demarcation of the area

leased to both of them direct the appellant to refrain from

carrying on the mining activity as an interim measure till

such time the issue was sorted out. But once such an

interim direction was issued, the authority doing so had to

take steps to resolve the dispute. It could not let the

dispute fester and result in a stalemate. So also the

restraint order could not be continued by the High Court till

the dispute was adjudicated upon by the Civil Court. Doing

so would amount to one authority making an interim order

pending a final order to be made by another. The power to

make an interim order is, except where it is specifically

taken away by the statute, implicit in the power to make a

final order. It is exercised by the authority who has to

make the final order or an authority exercising appellate or

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revisional jurisdiction, against an order granting or refusing

an interim order. The exercise of the power implies that -

the authority seized of the proceedings in which such an

order is made will eventually pass a final order; the interim

order serving only as a step in aid of such final order. The

law, in our view, does not permit the making of an interim

order by one authority or Court pending adjudication of the

dispute by another except in the situation mentioned

above. Ms. Shenoy was, therefore, right in her submission

that the order of restraining mining operation was meant to

be a temporary and interim arrangement meant to remain

in force only till such time the Director (Mines) examined

the issue regarding the alleged overlapping of the area and

passed a final order on the subject.

20. Ms. Shenoy was, however, unable to justify the

restraint order passed by the Director (Mines) in the

absence of the report of the Drawing Section which was the

sole basis for the order passed by the Director (Mines). If

the Drawing Section had indeed undertaken an exercise the

same ought to have been disclosed to the High Court and

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to this Court so that the validity of any such exercise could

be examined. Absence of the report said to have been -

made by the Drawing Section and non-production of any

material indicating the process by which the Drawing

Section came to the conclusion that there was overlapping

of the two areas, one privately owned and the other

belonging to the State, lend support to the submission

made by Mr. Dave that the order of restraint passed by the

Director was made in haste. We do not, however, propose

to dwell any further on this aspect nor do we propose to

vacate the interim restraint order issued by the Director on

the ground that it was based on material that was tenuous

and remained un-substantiated before us. In our opinion

the real problem lies in the demarcation of the two areas

leased to the appellant on the one hand and SIMORE on the

other. As observed earlier the ownership of the areas

claimed by both the lessees vests in different owners. So

long as the areas leased to them are identifiable on spot by

different survey numbers and boundaries, there is no

question of any overlapping. The confusion regarding

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boundaries in turn is a matter the answer to which lies only

in a proper demarcation of the areas.

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21. It was submitted by Mr. Dave that dispute between the

appellant and SIMORE has considerably delayed the mining

activity of the appellant, and that a direction ought to be

issued to the authorities to expedite the process of

demarcation. He urged that keeping in view the bad blood

generated between the parties it would be more

appropriate to entrust the entire process of demarcation

and identification of the leased areas to the Geological

Survey of India. We, however, see no reason to issue any

such direction at this stage. While the appellant may have

some apprehensions about the fairness of the officers of the

concerned department we do not consider them to be

sufficient for us to mistrust the State functionaries in the

absence of any material to suggest that there is any real

likelihood of bias. That does not mean that the process of

identification and demarcation of the area leased to the

appellant should not be undertaken by senior level officers

24

of the State Government to ensure that there is no scope

for any mischief or miscarriage of justice.

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22. In the result we allow these appeals, set aside the

impugned order passed by the High Court and allow Writ

Petition No. 17281 of 2010 filed by the appellant in part

and to the following extent:

(1) The Secretary, Department of Industries and

Commerce, Government of Karnataka, shall constitute a

Committee of officers for conduct of the demarcation and

identification of the boundaries of the area leased to the

appellant in terms of Mining Lease No.2622. The Committee

so constituted shall include the Deputy Commissioner of the

District concerned, the Chief Conservator of Forests or his

nominee who shall be an officer not below the rank of

Assistant Conservator of Forests, the Director of Survey and

a Senior Officer of the Mines Department to be nominated

by the Secretary. The Secretary shall be free to nominate

any other official or officials whom he considers suitable for

25

the purpose of identification and demarcation of boundaries

of the areas covered by the mine held by the appellant.

(2) The Secretary shall monitor the progress made by the

Committee from time to time. A suitable order based on the

-

report and other material, if any, placed before the

Secretary shall then be passed by him after affording to

each party an opportunity of being heard in the matter. The

order so passed shall supersede the order dated 5.3.2010

passed by the Director (Mines).

(3) The above directions shall be carried out by the

Secretary expeditiously but not later than six months from

the date a copy of this order is received/served upon the

Secretary to Government by the parties.

(4) The parties shall bear their own costs.

...................................J.

(CYRIAC JOSEPH)

...................................J.

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(T.S. THAKUR)

New Delhi

October 18, 2011

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