STATE OF KERALA & ORS. v. MIS. KERALA RARE EARTH & MINERALS LIMITED & ORS.

of Monnet !spat case, it was held as under:- A "160. The types of reservation under ·Section 17-A and their scope have been considered by this Court in Indian Metals and Ferro Alloys Ltd. 1992 suppl. (If SCC 91, in paras 45 and 46 (pp. 136-39) of the Report. I am in respectful agreement with that view. However, it was B argued that Section I 7-A(2) requires prior approval of the Central Government before reservation of any area by the State Government for the public sector undertaking. The argument is founded on an incorrect reading of Section I 7- A(2). This provision does not use the expression, "prior approval" which has been used in Section 11. On the other c hand, Section I 7-A(2) uses the words, "with the approval of the Central Government". These words in Section 17- A(2) cannot be equated with prior approval of the Central Government. According to me, the approval contemplated in Section 17-A may be obtained by the State Government D before the exercise of power of reservation or after exercise of such power. The approval by the Central Government contemplated in Section I 7-A(2) may be express or implied. In a case such as the present one where the Central Government has relied upon the 2006 Notification while rejecting the appellants' application for grant ofmining lease, it necessarily implies that the Central Government has approved reservation made by the State Government in the 2006 Notification otherwise it would not have acted on the same. In any case, the Central Government has not disapproved reservation made by the State Government in the 2006 Notification." (Underlining added) Industrial Policy of the State can be said to be a prelude before the State makes the proposal reserving the area for exploitation oftne mineral by the public sector undertakings. Respondent is not right in contending that under the guise of policy decision, the State has bye- G passed the procedure stipulated under Section l 7A(2).

34Copy pinpoint34. Under Section 30 of MMDR Act after remittance of tlie matter, tlie rig/it oftlie State to reconsider tlie matter:- While allowing the revision petitions filed under Section 30 of the MMDRAct, the Central Government directed the State Government to reconsider the matter. H

560 SUPREME COURT REPORTS [2016] 5 S.C.R.

A The High Comt faulted the State Government that when the revisional authority directed reconsideration of the matter based on the "facts in issue", the binding nature. of the decisions of the superior authorities in the hierarchy was not kept in view and that "it is sheer statutory and institutional insubordination" on the part of the State. Placing reliance upon the judgment of this Comt in Dharam Chand Jain vs. State of B Bihar, (1976) 4 SCC 427, learned counsel for the appellant submitted that the State Government being "a subordinate authority" in the matter of granting mining lease was obligated under the law to carry out the orders of the Central Government. Relying upon the above decision, it was submitted that ifthe State Government could decline to carry out c the order of the Central Government, it would be subversive ofjudicial discipline.

35Copy pinpoint35. The decision in Dharam Chand Jain (supra) was rendered in the year 1976, that is prior to insertion of Sections 17A (I A) and (2) (inserted and modified respectively by Act 25 of 1994 with retrospective effect 25.01.1994). Jn the year 1976, barring Rule 59 of MC Rules, there was no provision in the MMDR Act to reserve the area for mining operation through the public sector undertakings. Under Section I 0(3), the State Government has the power to take a decision keeping in view the overall interest of the State and also the scientific mining of the mineral. The minerals to be exploited in this case are ilmenite, rutile, leucoxene and zircon, which have been classified as "prescribed substance" under the Atomic Energy Act 1962. In the order passed by the State Government, State has emphasized the need for environmental protection which is the statutory obligation of the State and the interest oflargersection of people who are residing in the coastal areas ofKollam F and Alappuzha Districts. Merely because the Central Government has directed the State Government to reconsider the matter, it was not obligated upon the State to grant mining lease in favour of the first respondent. After remittance of the matter, State has the power to consider the applications afresh on its own merits and the constitutional mandate. G

36Copy pinpoint36. By perusal of the order dated 30.11.2009 passed by the Revisional Authority, it is seen that the order was passed by the Joint Secretary (Mines) and Joint Secretary and Legal Advisor. The order only directed the State Government to reconsider the matter. When the State Government was required to reconsider the matter, State 1-1

STATE OF KERALA v. M/S. KERALA RARE EARTH & 561 MINERALS LIMITED [R. BANUMATHI, J.]

Government was free to consider the applications and take a decision. A Though MMDR Act confers the revisional power on the Central Government for grant of mining lease for mining minerals other than a minor mineral, that does not mean that the State Government is denuded of its power or control over the minerals lying in the land within its territory. The State Government is the custodian of the land, mines and B minerals. Under Section 10(3) State has the power to reconsider the applications in the light of its constitutional mandate of environmental protection. The High Court fell in error in faulting the State Government and in my view, the State cannot be faulted for the alleged "institutional insubordination", as observed by the High Court. 3 7. At th is juncture, we may usefully refer to the observation of c this Court that many a times Central Government hears revision petitions through an executive officer and without participation of the judicial member. In Sandur Manganese And Iron Ores Ltd. vs. State of Karnataka & Ors., (20 I 0) 13 SCC 1 para (95), it was held as under:- "95. It is also brought to our notice that as on date the D Central Government hears revision petitions through an executive officer and without participation of a judicial member. It is also pointed out that the exact procedure of the Revisional Tribunal has kept changing over the last few months. It is clear that it would not be an independent and efficacious alternative forum in terms of the guidelines laid down by the Constitution Bench in Union of India v. Madras Bar Assn .(20 I 0) 11 SCC I As observed by the three-Judge Bench of this Court in Indian Charge Chrome ltd.(2006) 12 sec 331, when there was no valid recommendation by the State Government for the grant of lease, there cannot be any valid approval of the Central Government relying on the defective recommendation."

38Copy pinpoint38. In the present case, Joint Secretary (Mines) and Joint Secretary and Legal Advisor have passed the order in the revision petition. By allowing revision petition, Central Government directed the State to reconsider the matter. As noticed earlier, National Policy on Exploitation of Beach Sand Minerals issued by the Department of Atomic Energy reserves liberty to the State for selection of Companies/Entrepreneurs for setting up of projects/plants for exploitation of beach sand minerals. Grant or refusal of mining lease and mining of minerals involves H

562 SUPREME COURT REPORTS [2016] 5 S.C.R.

A considerable high stakes both in terms of commercial value and the fact that such a decision will have impact on the concept of mineral development, it is for the State to exercise its discretion either to grant or refuse mining lease.

39Copy pinpoint39. Plea of promissory estoppel and legitimate expectation:- B First respondent raised the plea of promissory estoppel and legitimate expectation. It was submitted that State has granted approval for mining by its order dated 15.09.2004 and the same cannot be supplanted by purportedly changing the policy. Learned Senior Counsel for the first respondent submitted that on the basis of representations on the part of the State Government, the first respondent had expended an amount in c excess of rupees eighteen crores inter-alia for the project including substantial amounts for acquisition of mineral bearing lands for mining beach sand minerals and by doing so, first respondent has altered its position irretrievably to its prejudice.

40Copy pinpoint40. It is well settled that no one has legal or vested right for the grant of mininglease. Mere disappointment of expectation cannot be a ground for interfering with the policy of the State reserving the areas for exploitation of beach sand mineral by State/Central Public Sector Undertakings. After referring to various judgments on the doctrine of promissory estoppel, in Monnet !spat case, this Court has summarized the principles in paragraph ( 182) as under:- " 182.1. Where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship . to arise in the future, knowing or intendingthat it would be acted upon by the other party to whom the promise is made and it is, in fact, so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective of whether there is any pre-existing relationship between the parties or not. 182.2. The doctrine of promissory estoppel may be applied against the Government where the interest of justice, morality and common fairness dictate such a course. The H

STATE OF KERALA v. MIS. KERALA RARE EARTH & 563 MINERALS LIMITED [R. BANUMATHI, J.]

doctrine is applicable against the State even in its A governmental, public or sovereign capacity where it is necessary to prevent fraud or manifest injustice. However, the Government or even a private party under the doctrine of promissory estoppel cannot be asked to do an act prohibited in law. The nature and function which the B Government discharges is not very relevant. T~e Government is subject to the rule of promissory estoppel and ifthe essential ingredients of this doctrine are satisfied, the Government can be compelled to carry out the promise made by it. 182.3. The doctrine of promissory estoppel is not limited in c its application only to defence but it can also furnish a cause of action. In other words; the doctrine of promissory estoppel can by itself be the basis ofaction. 182.4. For invocation of the doctrine of promissory estoppel, it is necessary for the promisee to show that by acting on D promise made by the other party, he altered his position. The alteration of position by the promisee is a sine qua non for the applicability of the doctrine. However, it is not necessary for him to prove any damage, detriment or prejudicebecause of alteration of such promise. E 182.5. In no case, the doctrine of promissory estoppel can. be pressed into aid to compel the Government or a public authority to.carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make. No promise can be enforced which is statutorily prohibited or is against public policy. 182.6. It is necessary for invocation of the doctrine of promissory estoppel that a clear, sound and positive foundation is laid in the petition. Bald assertions, avennents or allegations without any supporting material are not sufficient to press into aid the doctrine of promissory estoppel. 182.7. The doctrine of promissory estoppel cannot be invoked in abstract. When it is sought to be invoked, the H

564 SUPREME COURT REPORTS [2016] 5 S.C.R.

A court must consider all aspects including the result sought to be achieved and the public good at large. The fundamental principle of equity must forever be present to the mind of the court. Absence of it must not hold the Government or the public authority to its promise, assurance or representation." B

41Copy pinpoint41. No doubt by GO (MS) No. I 05/04/ID dated 15.09 .2004, State has sanctioned mining leases to the first respondent. But within ten days by order dated 25.09.2004, the mining lease granted to first respondent was stopped on the ground that the detailed study on the environment impact will be undertaken before taking further action in c the matter. The rule of promissory estoppel can be invoked only if on the basis of representation made by the Government, the party has substantially altered the position. Within short time often days, in my view, first respondent could not have altered its position so as to invoke the doctrine of promissory estoppel.

42Copy pinpoint42. State of Kerala has the legislative competence to take the policy decision reserving the area for exploitation of minerals by the public sector undertakings and the said policy cannot be said to be dehors the MMDR Act 1957 and MC Rules. The High Court fell in error in not appreciating the policy ofthe State in the light of the constitutional mandate E and the decision taken by the State for the welfare of the State and exploitation of the mineral by scientific mining by public sector undertakings.

43Copy pinpoint43. In the result, the impugned common judgment of the High Court is set aside and these appeals are allowed. No order as to costs. F ORDER l. In view of the majority of opinion, these appeals fail and are · hereby dismissed. ·

G Kalpmm K. Tripathy Appeals dismissed.