2011 (10) TMI 752 - SC - Indian Laws

Summary

Issues Involved:
1. Identity and overlap of mining lease areas.
2. Rights and permissions regarding private patta land.
3. Validity and implications of orders by the Director of Mines and Geology.
4. Role of Civil Court in determining the factual aspects of overlapping lease areas.
5. Demarcation and identification of leased areas.

Detailed Analysis:

1. Identity and Overlap of Mining Lease Areas:
The appeals arose from an order by the High Court of Karnataka directing the Civil Court to determine the identity of the area forming the subject matter of the mining leases granted to the Appellant and Respondent M/s Sandur Manganese and Iron Ore Company Ltd. (SIMORE). The High Court concluded that there was an overlapping of areas held by the Appellant and SIMORE under their respective lease deeds. It held that the earlier lessee would have a superior right if an overlap existed, based on Rules 59 and 60 of the Mineral Rules and Section 24A of the Mines and Minerals Act.

2. Rights and Permissions Regarding Private Patta Land:
The Appellant claimed that the land in question was private patta land held by Pennaiah and later by his widow Yellamma, who permitted the Appellant to obtain a mining lease. The State Government sought and obtained approval from the Central Government for the grant of a mining lease to the Appellant. The High Court noted that even if SIMORE's lease included private land owned by Yallamma, SIMORE could undertake mining activity by paying compensation under Rule 72 of the Mineral Rules but required permission from the landowner under Rule 22(3)(i)(h) of the Mining Rules.

3. Validity and Implications of Orders by the Director of Mines and Geology:
The Director of Mines and Geology issued orders restraining the Appellant from conducting mining activities due to the alleged overlap with SIMORE's lease area. The High Court upheld these orders, noting that the Appellant had not produced evidence to refute the Director's conclusion. The Supreme Court, however, found that the orders were based on a sketchy report from the Drawing Section and lacked substantiation, thus appearing to be made in haste.

4. Role of Civil Court in Determining the Factual Aspects of Overlapping Lease Areas:
The High Court left the determination of the overlap to the Civil Court, allowing the parties to lead evidence. It stated that if the Civil Court found no overlap, both parties could carry out mining activities under their respective leases. If an overlap was found, the earlier lessee would have a superior right.

5. Demarcation and Identification of Leased Areas:
The Supreme Court emphasized the need for proper demarcation of the leased areas to resolve the dispute. It directed the Secretary, Department of Industries and Commerce, Government of Karnataka, to constitute a Committee for demarcation and identification of the boundaries of the area leased to the Appellant. The Committee would include senior officials from various departments, and the Secretary would monitor the progress and pass a suitable order based on the Committee's report.

Conclusion:
The Supreme Court allowed the appeals, set aside the High Court's order, and directed the constitution of a Committee for demarcation and identification of the leased areas. The Secretary was tasked with monitoring the process and passing a final order after hearing the parties. The directions were to be carried out expeditiously within six months, and each party was to bear its own costs.