(BY SRI D.N.NANJUNDA REDDY, SENIOR COUNSEL FOR SRI L M CHIDANANDAYYA, ADVOCATE) A N D

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1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 24 TH DAY OF JUNE 2014 PRESENT HON BLE MR. D.H.WAGHELA, CHIEF JUSTICE AND HON BLE MR. JUSTICE H.G.RAMESH WRIT PETITION Nos & / 2014 (GM-MM-S) BETWEEN : M/S. YESAAR TRADING CORPORATION A PROPRIETORSHIP CONCERN REPRESENTED BY ITS PROPRIETOR SRI K RAJASHEKARAN, AGED 42 YEARS PRABHAKAR COMPLEX, C & D PHASE DAM ROAD, HOSPET PETITIONER (BY SRI D.N.NANJUNDA REDDY, SENIOR COUNSEL FOR SRI L M CHIDANANDAYYA, ADVOCATE) A N D 1. THE STATE OF KARNATAKA REPRESENTED BY ITS SECRETARY COMMERCE & INDUTRIES DEPARTMENT (SSI, MINES & TEXTILES) VIKASA SOUDHA, BANGALORE THE DIRECTOR DEPARTMENT OF MINES & GEOLOGY NO.9, KHANIJA BHAVAN, RACE COURSE ROAD BANGALORE DEPUTY DIRECTOR (MINES) DEPARTMENT OF MINES & GEOLOGY HOSPET BELLARY DISTRICT... RESPONDENTS (BY SRI NARENDAR.G., A.G.A. ) THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER VIDE ANNEXURE-A DATED PASSED BY

2 2 R-3 AND TO DIRECT THE RESPONDENTS TO REVALIDATE AND ISSUE MINERAL DISPATCH PERMITS FOR 29,204 MTs OF IRON ORE MINERAL TO TRANSPORT BY GRANTING MINIMUM OF 2 MONTHS FROM THE DATE OF GRATING PERMITS, OR IN THE ALTERNATIVE, TO DIRECT THE RESPONDENTS TO REFUND THE VALUE OF THE MINERAL OF 29,204 MTs TOGETHER WITH ROYALTY CHARGES, VALUE ADDED TAX, INCOME TAX COLLECTED FROM THE PETITIONER. THESE WRIT PETITIONS COMING ON FOR PRELIMINARY HEARING THIS DAY, H.G.RAMESH J., MADE THE FOLLOWING: O R D E R H.G.RAMESH (ORAL) : 1. In these Writ Petitions, the petitioner namely, Yesaar Trading Corporation is challenging the order dated (Annexure-A) passed by Respondent No.3- Deputy Director (Mines), Hospet, Department of Mines & Geology, forfeiting 21,460 metric tonnes of iron ore out of metric tonnes for which mineral despatch permits were issued, on the ground that it was not lifted/transported by the petitioner within the time (five months) extended by this Court by order dtd in Writ Petition No.10854/2012. Time to transport the iron ore was extended till

3 3 2. We have heard Sri D.N.Nanjunda Reddy, learned Senior Counsel for the petitioner and Sri Narendar.G, learned Additional Government Advocate for the respondents, perused the impugned order at Annexure-A and the connected papers. Learned Senior Counsel appearing for the petitioner did not dispute that the forfeited iron ore (21,460 metric tonnes) was not lifted within the period extended by this Court i.e., on or before His only contention is that there was delay on the part of the Department of Mines & Geology in issuing mineral despatch permits resulting in the petitioner not lifting the entire iron ore within the extended period of five months granted by this Court as per order dtd in W.P. No.10854/ Learned A.G.A. submitted that the petitioner did not lift 21,460 metric tonnes of iron ore within the extended period of five months and, therefore, it was forfeited by the Government as per the impugned order dtd He further submitted that there was no delay on the part of the Department in issuing the mineral despatch permits and

4 4 the delay was only on the part of the petitioner in applying and obtaining the bulk permits for transport of the iron ore. He submitted that this fact is clearly demonstrated by the affidavit dtd of the Deputy Director of Mines. He took us through the said affidavit. 4. The only question that needs to be considered in these two Writ Petitions is as to whether the impugned order of forfeiture passed by Respondent No.3 Deputy Director, Department of Mines & Geology, warrants any interference. To examine this question, it is necessary to refer to certain previous orders passed by this Court relating to the subject matter of these petitions. We will begin with the first order dtd (Annexure-N3) passed by this Court in W.P. No.10854/2012 granting extension of time to transport the iron ore; the relevant portion of it reads as follows : 3. For these manifold reasons, we extend the period within which the Petitioner may lift and remove the balance quantity of 1,13,297 (54,373+58,924) metric tonnes of iron ore presently located on 123 patta lands for a further period of five months from today. It has been explained to us that there are standing crops which will not be harvested for about two months from today and therefore keeping this in mind, we have granted an

5 5 extension of five months. Learned counsel for the Petitioner submits that if the said quantity of 1,13,297 metric tonnes of iron ore (or lesser quantity, as the case may be) is not lifted/removed/ transported within the said period of five months from today, it will stand forfeited to the State Government without any obligation to refund the value of the iron ore. The MDPs already issued for 54,373 metric tonnes shall be revalidated. The MDPs for 58,924 shall be issued by the Respondents without delay. (Underlining supplied) As could be seen from the above quoted order, this Court, taking note of the harvesting season granted extension of time by five months to lift 1,13,297 metric tonnes of iron ore and this Court also recorded the submission of the petitioner s counsel that if the said quantity is not lifted within the extended period of five months, it would stand forfeited to the State Government without any obligation to refund the value of the iron ore. 5. Subsequently, the petitioner sought for extension of time by writing to the Department of Mines & Geology by letter dtd (Annexure-Q-131) which reads as follows: SUB: Transportation of MT allotted seized Iron Ore Ref.: Lease Code AUC02

6 6 With reference to the above subject, we would like to bring to your kind notice the following few lines. We were allotted MT of seized iron ore from various patta lands of Sandur Taluk, Bellary district vide Letter No. Your Order No.DMG/DDH/AUCTION/ dated We have transported MT of Iron Ore out of the total quantity of MT as on As the permitted time for transportation got expired on and subsequently we approached the Hon ble High Court of Karnataka through W.P. No of The Hon ble High Court of Karnataka was pleased to give extension of 5 months period vide their order dated for transportation of MT of Iron Ore. In pursuance of the High Court order The Deputy Director, Hospet was kind enough to revalidate and issue fresh permits for the total quantity of MT. The quantity of was resurveyed by the geologists of Department of Mines & Geology, Hospet. Due to standing crops in the patta lands we were able to start the transportation only on We would humbly like to bring to your kind notice that the same point has been also observed by Hon ble High Court of Karnataka in their order dated Out of MT fresh permits obtained, with great difficulty we were able to move 84,500 MT only from various patta lands of Sandur Taluk, Bellary District. The quantity of MT was transported in presence and watchful eyes of team of Geologists deputed to monitor our movement by the Deputy Director, Department of Mines & Geology, Hospet along with forest and police officials. As per the directions of the Hon ble High Court we have paid the necessary royalty, anticipated royalty, TDS and VAT as applicable and obtained MDP s including arrears royalty. We had to encounter lot of problems in the field like farmer s non co operation, standing crops and low signal in generating trip sheets. We were able to achieve this quantity also only after integrating as many as six weigh bridges under our lease code. We have made our best efforts to complete the transportations within the time stipulated by Hon ble High Court of Karnataka.

7 7 Inspite of our best efforts, there is still MT of Iron ore yet to be transported for which we have already obtained MDP s. Considering all this above mentioned facts, we request you to kindly allow us only 10 days time to complete the transportation of balance quantity of MT. We express our heartfelt thanks to you for the successful transportation of Iron ore allotted to us without any blemish on our part. Once again we request you to kindly give 10 days time on humanitarian grounds for transportation of the left over quantity. Kindly do the needful and oblige. The aforesaid application was rejected by the order dtd. 11 th January 2013 which is impugned in these writ petitions. 6. Thereafter, the petitioner filed the application - I.A. No.1/2013 (Annexure-R2) in the disposed of petition, W.P. No.10854/2012, seeking further extension of time to transport the remaining iron ore. This Court by its order dtd (Annexure-R3) dismissed the said application with the order as follows: ORDER ON I.A.I/ This interim application is made in Writ Petition No.10854/2012, which has been finally disposed by order dated of the Division Bench of this Court with the final direction as under:- For these manifold reasons; we extend the period within which the Petitioner may lift and remove the balance quantity of 1,13,297 (54,373+58,924) metric tonnes of iron ore presently located

8 8 on 123 patta lands for a further period of five months from today. It has been explained to us that there are standing crops which will not be harvested for about two months from today and therefore keeping this in mind, we have granted an extension of five months. Learned counsel for the Petitioner submits that if the said quantity of 1,13,297 metric tonnes of iron ore (or lesser quantity, as the case may be) is not lifted/removed/transported within the said period of five months from today, it will stand forfeited to the State Government without any obligation to refund the value of the iron ore. The MDPs already issued for 54,373 metric tonnes shall be revalidated. The MDPs for 58,924 shall be issued by the Respondents without delay. Writ Petition is allowed in these terms. 2. According to the present application and as submitted by learned Counsel Mr. L.M.Chidanandayya, appearing for the petitioner, the Director of the Department of Mines and Geology and the Deputy Director took time up to before the first permit was issued after three months of the above order. It was mainly due to the loss of time at the hands of the respondents that the petitioner could not lift and transport the iron ore in question within the prescribed time limit. He referred to the documents annexed with the petition at Annexures B, C and D to substantiate his argument that up to , the Director of the Department of Mines and Geology was requesting the Deputy Director concerned to collect the arrears, royalty and applicable taxes before issuing permits; and it was by the notice dated that the applicant was directed to pay difference of royalty to the tune of Rs.1,76,89,000/-. Even after making the required payment around , the Mineral Despatch Permits (MDPs) for transportation were issued from Thus, the initial period of three months within the prescribed time limit was taken away by the respondents, according to his submission.

9 9 3. It was, however, also seen from the record that the petitioner has already made an earlier attempt by way of Review Petition No.56/2013, which has been dismissed by the Division Bench on with the order as under: No ground is made out to review the order dated and accordingly, the review petition as well as I.A.1/2013 are hereby rejected. This will not come in the way of the petitioner making appropriate application for necessary orders 4. It is clear from the above record that not only a composite order, by taking into account the difficulties in immediate transport/removal of the iron ore in question, has been made while disposing the main petition, but similar request for similar purpose is also already heard and decided without tampering with the original order and without extending the time limit. Long before the aforesaid later order dated , the applicant had failed to remove the iron ore in terms of the original order dated due to which, the order dated is already made by the Deputy Director to forfeit the iron ore to the state Government exactly in terms and compliance of the original order dated It may be noted here that the order dated in the main petition was based on submission of the petitioner, applicant herein. 5. In the above set of facts, any extension of time limit in favour of the applicant would amount to not only overruling the time limit set by the earlier order dated , but also setting aside the consequential order made by the Deputy Director on Even otherwise, there is hardly any plausible reason or justification for the applicant not to remove the iron ore in question for more than two months, commencing from the date of issue of the first MDP till the order forfeiting the remaining stock of iron ore. 6. In these facts and for the reasons discussed hereinabove, the application is dismissed. 7. Being aggrieved by the aforesaid order dtd , the petitioner carried the matter to the

10 10 Supreme Court in Special Leave to Appeal (Civil) No.418/2014 and the Supreme Court passed the following order on (Annexure-R5): Heard learned counsel for the petitioner. Special leave petition is dismissed. However, we observe that it will be open to the petitioner to make fresh application for extension of time to the High Court having regard to the argument canvassed before us that though in the order dated the High Court had directed Mineral Despatch Permits (MDPs) for 58,924 metric tonnes to be issued without delay, the MDPs were issued by the concerned authority almost after 2-3 months. If such application is made, the High Court will consider the application appropriately in accordance with law. 8. Pursuant to the above order of the Supreme Court, the petitioner filed I.A. No.1/2014 dtd (Annexure-S) in W.P. No.10854/2012 for extension of time to transport the remaining iron ore. However, the petitioner withdrew the said application with liberty to challenge the order dtd , which is now impugned in these writ petitions. 9. We will now refer to the affidavit dtd of N.M.Udayshankar, Deputy Director, Department of Mines & Geology, Hospet, wherein the relevant facts from the

11 11 beginning to the end are stated; the affidavit reads as follows: I. N.M. Udayshankar S/o N.Murugendrappa, aged about 59years, presently working as Deputy Director, Department of Mines and Geology, Hospet, today at Bangalore, do hereby solemnly affirm and state on oath as follows: 2. I state that the petitioner has filed the above Writ Petition challenging the order of forfeiture dated passed by me whereby the remaining stock of Ore quantified at Metric tons has been forfeited to the State on account of the petitioner s failure to transport the mineral as per the terms and conditions for transportation. That apart, the petitioner failed to complete the transportation despite the two extensions granted by the Government and by this Hon ble Court respectively. 3. I state that the above petition is not maintainable in the light of the solemn undertaking given by the petitioner before this Hon ble Court on The undertaking is binding and final and the petitioner cannot invoke the provisions of Article 226 of the Constitution of India to enable him to revoke the solemn undertaking given to this Hon ble Court. The present petition is contemptuous and cannot be permitted to be further prosecuted to violate the sanctity of the undertaking. 4. I state that the petitioner has stated before this Hon ble Court that he could not complete the transportation of the Ore within the stipulated time on account of delay caused by the undersigned in issuance of Mineral Dispatch Permits. I state that the same is false. The following sequence would demonstrate that the plea of the petitioner is false even to the knowledge of the petitioner. 5. I state that the petitioner was allotted Iron ore vide Government Order dated It was then stipulated that the allottee should remove and transport the entire quantity of the mineral within a period of three months. The petitioner has failed to remove and transport the entire quantity of ore. Subsequently, the petitioner approached the Director, Department of Mines

12 12 and Geology, Bangalore to extend the time, by a further period of three months, by its Representation and the Director, Department of Mines and Geology constituted a committee to verify and authenticate the availability of the Mineral. The committee submitted its report authenticating the claim, whereupon, the Department of Mines and Geology by its proceedings dated extended the period of transportation by a further period of three months. Even during the extended period the petitioner failed to complete the removal and transportation of auctioned Ore. I state that thereafter, the Deputy Commissioner who is the Chairman of the District Task Force Committee recommended that no further extension of time should be granted for lifting the Iron Ore by its Proceedings dated Acting upon the same, Director, Department of Mines and Geology by his proceeding dated was pleased to reject the request of the petitioner for further extension of time to complete the removal and transportation of the Ore. I, the undersigned by proceedings dated passed an order forfeiting the amount from M/s Yessar Trading Corporation and forfeited the mineral also. 6. I state that the petitioner aggrieved by the Order of forfeiture and the refusal to extend the time for removal and transportation of the remaining Ore preferred Writ Petition No.10854/2012 before this Hon ble Court. The matter came to be heard and in the course of hearing it is contended by the petitioner that the failure to remove and transport the remaining Mineral was due to the various factors like farmers agitation, non cooperation of locals etc., But the delay in issuance of Mineral Dispatch Permits was never the reason. During the course of hearing the petitioner also made a solemn undertaking that a final chance may be given to complete the process of removal and transportation of the remaining ore and in the event the petitioner fails to complete the same the petitioner voluntarily conceded that the remaining mineral would stand forfeited to the State. This Hon ble Court noting the same, was pleased to dispose of the Writ Petition by granting five months time to complete the process of transportation and also while disposing the Hon ble Court was pleased to record the undertaking of the petitioner.

13 13 7. The Judgment and Order came to be passed on The same came to be communicated to me on A copy of the Letter addressed by the Head Office and the Enclosures are herewith produced and marked as ANNEXURE-R1. The Head Office by further communication dated was pleased to direct me to collect the arrears of royalty on applicable taxes before issuing Permits. I was further directed to collect certain anticipated amount and difference in rate of royalty as by that time the rate of royalty had been increased and the petitioner was required to pay the difference rate of royalty even in respect of the permits which had been issued earlier, which were not utilized and had expired. A copy of the Communication dated is herewith produced and marked as ANNEXURE-R2. 8. I state that from the date of order till the petitioner did not approach the Regional Office i.e., the undersigned, either to revalidate the expired permit or for issuance of fresh permits as stipulated in the order of this Hon ble Court dated On the other hand the undersigned noting the delay being caused by the petitioner addressed the Communication dated calling upon them pay the difference in royalty, TDS and also to furnish the up-to-date VAT paid details. A copy of the communication dated and enclosures are herewith produced and marked as ANNEXURE-R3. The undersigned personally contacted the petitioner and appraised them about the delay being caused by them and also intimated them about the communication. Whereupon, the authorized Representative of the petitioner visited the office and personally took delivery of the letter and acknowledged the receipt of the same. Pursuant to the Letter dated , the petitioner surrendered the unused/expired permits to the tune of Metric tons and also undertook to pay the royalty arrears. The permits surrendered were received by the undersigned. A copy of the representation dated is herewith produced and marked as ANNEXURE-R4. The surrendered permits were uploaded on A copy of the summary report reflecting the quantity of Ore not transported by the petitioner is herewith produced and marked as ANNEXURE-R5.

14 14 9. I state that thereafter the petitioner by his Representation dated acknowledged the acceptance of surrender and further remitted the balance of royalty amount to the tune of Rs.80 lakhs. A copy of the representation and enclosures are herewith produced and marked as ANNEXURE-R6. Thereafter, the petitioner made the payment in respect of TDS on and submitted the Challen to this office along with representation dated A copy of the same is herewith produced and marked as ANNEXURE-R I state that due to the illegalities in the mining sector, the office of the Director of Mines and Geology, Bangalore introduced E-Permit system in order to curb the menace of fake permits. The said system came to be introduced with effect from But in view of irregular implementation of the E-permit system the Head office was constrained to issue a Circular dated stating that current practice of manual issuance of bulk permits is discontinued with effect from and further that all transport permits would be issued by the online E-Permit system. A copy of the Circular dated , user manual provided to all Lessees etc., are herewith produced and marked ANNEXURE-R I state that first application (manual permit) was made by the petitioner on An Application was made for 992 metric tons out of the remaining quantity of metric tons. A copy of the application is produced herewith and marked as ANNEXURE-R9. But as by then E-Permit System had come into force the same could not be processed. Thereafter the petitioner submitted his Application online on for the quantity of 992 metric tons only. The bulk permit was generated on the same day. I state that though the bulk permit/e-permit was generated on itself the petitioner approached the undersigned only on for obtaining the Trip Sheets. The trip sheets contains the information like Registration number of the vehicle, name of the driver, place of loading destination, quantity of ore loaded in the truck, duration and route through which the vehicle is to travel. Only if the driver possesses the trip sheet is he entitled to transport the one that to only in terms of the details noted in the trip sheet. A copy of the online

15 15 Application and the generated bulk permit dated and the representation of the petitioner for issuing Trip Sheet dated are herewith produced and marked as ANNEXURES R.10 AND R.11. Thus as could be seen the delay in obtaining the transport permits is wholly on account of the petitioner and not due to any delay caused by the Respondents. I state that I am herewith producing the consolidated Statement detailing the bulk permit Applications made by the petitioner between the date of order i.e., and up to the expiry of the extended period i.e., The statement would disclose that the petitioner made his first Application for E-Permit on and the last Application on In all the petitioner had made 146 Applications for issue of bulk permits, out of which the petitioner surrendered 12 bulk permits. A copy of the same is produced herewith and marked as ANNEXURE-R12. Thus, the delay in commencement of the transport has occurred due to the delay in applying and obtaining the bulk permits. The Statement furnished in Annexure-R11 would show that the Respondent has not caused any delay on their part and hence, the petitioner alone is responsible for the delay and it is his failure to removal and transport the remaining quantity of mineral. I am herewith producing the representation dated submitted by the petitioner seeking for further extension of time, the petitioner has not narrated any of the allegations now made in the Writ Petitions. The reasons touted in the Writ Petition are all an after thought and merely self serving ones... (Underlining supplied) 10. In the light of the detailed facts stated in the above referred affidavit dtd , it is clear that there was no delay on the part of the concerned authorities in issuing mineral despatch permits. It is the petitioner who delayed in applying and obtaining the bulk permits for transport of the iron ore. The contention to the contrary as reflected in

16 16 the petitioner s affidavit dtd cannot be accepted. The impugned order of forfeiture is in conformity with the submission of the petitioner s counsel made before this Court in W.P. No.10854/2012 on which is recorded as follows: 3. Learned counsel for the Petitioner submits that if the said quantity of 1,13,297 metric tonnes of iron ore (or lesser quantity, as the case may be) is not lifted/removed/ transported within the said period of five months from today, it will stand forfeited to the State Government without any obligation to refund the value of the iron ore. (Underlining supplied) On the facts of the case, we find no legal infirmity in the impugned order dated to warrant interference. The Writ Petitions are accordingly dismissed, with no order as to costs. Sd/- CHIEF JUSTICE Sd/- JUDGE ckc/-