2000 (1) TMI 984 - HC - Indian Laws

Summary

Issues Involved:
1. Rejection of the application for grant of prospecting license for limestone.
2. Alleged non-compliance with principles of natural justice.
3. Consideration of irrelevant and extraneous factors by the first respondent.
4. Allegations of monopolistic practices by the petitioner.
5. Comparison with another applicant (Gujarat Ambuja Cements Limited).

Issue-Wise Detailed Analysis:

1. Rejection of the Application for Grant of Prospecting License for Limestone:
The petitioner, a public limited company engaged in the manufacture and sale of cement, applied for a prospecting license for limestone over 2011.77 acres in various villages of Guntur District. The first respondent issued a show-cause notice on 29-4-1999, questioning the necessity of the license given the existing leases and reserves. The petitioner responded on 17-5-1999, stating the insufficiency of current limestone reserves for their expansion plans. Despite this, the first respondent rejected the applications on 14-7-1999, citing adequate existing reserves and pending lease renewals covering a substantial area. The order highlighted that the total reserves were more than sufficient for the petitioner's needs, even considering future expansions.

2. Alleged Non-Compliance with Principles of Natural Justice:
The petitioner contended that the first respondent did not consider their explanation and that the material relied upon was not part of the show-cause notice. They argued that the rejection was based on exaggerated and incorrect assumptions about available reserves. The petitioner also claimed a violation of natural justice principles, as no personal hearing was provided. However, the court held that the opportunity of being heard does not necessarily entail a personal hearing. The written explanation submitted by the petitioner was considered sufficient, and the decision was deemed fair and free from arbitrariness.

3. Consideration of Irrelevant and Extraneous Factors by the First Respondent:
The petitioner argued that the first respondent's decision was based on irrelevant and extraneous factors, such as the petitioner's financial position and arrears in mineral revenues. The court found that the considerations regarding the petitioner's capacity, expansion plans, and existing reserves were relevant and within the discretion of the State Government. The decision was made in accordance with the statutory framework and did not suffer from any legal infirmities.

4. Allegations of Monopolistic Practices by the Petitioner:
The respondents alleged that the petitioner was attempting to monopolize and block limestone-bearing areas from being granted to others. The counter-affidavit stated that the petitioner's performance was not up to the mark and that they were in arrears of significant amounts towards mineral revenues. The court noted that the petitioner's applications were part of a broader strategy to secure extensive limestone reserves, but this did not constitute a legal ground for rejecting the applications. The rejection was based on the adequacy of existing reserves and the petitioner's expansion plans.

5. Comparison with Another Applicant (Gujarat Ambuja Cements Limited):
The court considered the application of Gujarat Ambuja Cements Limited, which had also applied for a prospecting license in the same area. The first respondent recommended granting the license to Gujarat Ambuja to avoid monopoly and ensure healthy competition. The court found that the decision to prefer Gujarat Ambuja was made in the public interest and in accordance with the statutory provisions. The recommendation was subject to the production of consent from pattedars and compliance with the Mineral Concession Rules, 1960.

Conclusion:
The court dismissed the writ petition, holding that the rejection of the petitioner's applications for a prospecting license was fair, reasonable, and in accordance with the law. The decision did not violate principles of natural justice, and the considerations taken into account by the first respondent were relevant and appropriate. The court emphasized that the petitioner had no vested right to the grant of a prospecting license and that the State Government's decision was made in the public interest.