INDIAN METALS AND FERRO ALLOYS LTD. versus UNION OF INDIA AND ORS.

Citation: [1990] SUPP. 2 S.C.R. 27 · Decided: 21-09-1990 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Disposed off

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Judgment (excerpt)

INDIAN METALS AND FERRO ALLOYS LTD. 
v. 
UNION OF INDIA AND ORS. 
SEPTEMBER 21, 1990 
[S. RANGANATHAN AND M. FATHIMA BEEVl, JJ.] 
Mines and Minerals (Development and Regulation) Act, 1957-
Sections 3(j), 5A, JO, 11, 17A & First and Second Schedules-'Minor 
Minera/'-Chrome ore-Grant of mining lease-Reservation in favour 
of Public Sector Undertakings-Whether obligatory-Consideration of 
applications-Directions issued to Government-Appropriate statutory 
amendments suggested. 
In these matters, the petitioners viz., four companies in the 
private sector, two public sector corporations owned substantially by a 
State Government, and a private individual sought clarifications and 
directions in relation to the orders passed by this Hon'ble Court on 
30.4.87 and 6.10.87 on the Writ Petition. All these petitions arose out of 
applications for grant of right for the mining of chrome ore or chromite 
in the State of Orissa. Since chrome ore is one of the minerals specified 
in the first' and second schedules to, and not a 'minor mineral' within 
the meaning of Section 3(1) of the Mines and Minerals (Development 
and Regulation) Act, 1957, the right to grant the mining right in respect 
of this mineral is vested in the State Government subject to the control 
by Union of India, and as such they are respondents in these matters. 
While disposing of the matters, this Court referred the entire 
controversy to the Secretary to Government of India in the Ministry of 
Mines, viz., Mr. Rao, for a detailed consideration of the claims made by 
the parties. 
Before Mr. Rao, the two public sector undertakings also put 
forward their claims that the public sector units in the State were 
entitled to the grant of mining rights in the State to the exclusion of all 
private parties in as much as there was a reservation in their .favour by 
an appropriate notification issued by the State Government. The other 
parties raised objection on the ground that the claims were made at a 
belated stage of the proceedings. On applications made by the Public 
Sector Undertakings; this Court directed that their claims would also be 
examined by Rao. 
27 
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B 
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G 
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28 
SUPREME. COURT REPORTS 
[ 1990] Supp. 2 S.C.R. 
..
A 
In his report dated l.2.J\188 Rao accepted the clahn of reservation 
. made by the two Public Sector Undertakings, viz., Orissa Mining 
Corporation (OMC) and Industrial Development Corporation of~ 
.ttd. (IDCOL). He also partially accepted the claims of the three private 
parties. viz., Indian Metals and Ferro-Alloys Limited (L\iFA); F'1TO 
Alloys Corporation Limited (FACOR); and Aikath and rejected the 
B claims of the other two private parties viz., Orissa Cements Ltd. (OCL) 
and Orissa Industries Ltd. (ORIND). Though be accepted the claim of 
the two public sector undertakings, he recommended for them leases in 
respect of only the balance of the lauds left, after fulfilling the claim of 
the others which he had accepted. 
c 
The prese!ff. peti1ions inter alia sought directions on the repo'i of 
. Rao. It was contended that Rao was nothing more than a Commissioner 
appointed by this Court to examine the various parties and hence this 
· Court should pass .appropriate orders on his report. Various conten-
· ·tions<were advanced by the petitioners as well as respondents as regards 
the legal character of the Rao Report and of giving effect to it either in 
0 toto or with modifications in certain respects. Reservation in favour of 
Public Sector Undertakings was challenged by the private parties. Plea 
of Promissory Estoppel was also raised on behalf of some of the 
petitioners. 
~ 
Disposing of the matters, this Court, 
J;: 
HELD: 1. The sfatute must lay down clearer guidelines and proce-
dure. Having regard to the new avenues for vast industrial development 
in the country, a more workable procedure would be for the State 
Government to call for applications in respect of specified blocks by a 
particular date and deal with them together, other later entrants not 
F 
being permitted in the field. Otherwise only confusion will result, as 
here. There was a time when the State Government looked to private 
enterprises for mineral development in its territory. Of late, however, 
competition has crept in. The State Government has its own public 
sector corporations and various enterpreneurs are interested in having 
mining leases for their purposes. It is, therefore, vital that there should 
G 
be a better and detailed analy

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