P.K.BALASUBRAMANYAN, J. - (1.) THE writ petitioner claims to be a social worker working for the benefit of the labourers in Sikni Colliery Area within the State of Jharkhand. The Bihar State Mineral Development Corporation was a Corporation controlled by the State of Bihar. On the reorganisation of the State under the Bihar Reorganisation Act, 2000, the Jharkhand State Mineral Development Corporation (hereinafter referred to as the JSMDC) was formed and according to it, it is playing the role of a successor to the Bihar State Mineral Development Corporation, in so far as it relates to the State of Jharkhand. On 8.8.2002, the Department of Mines and Geology, Government of Jharkhand, issued a Global Notice inviting Expression of interest in mineral exploration, mineral development, mining and mineral based industries in the State of Jharkhand. The invitation for Expression of interest was in order to develop the mineral resources of Jharkhand on sustalnable basis. The minerals/ores for which the Expression of interest was invited, were short listed in the notice as under : "I. Iron Ore group, including BHJ/ BhQ/Blue Dust, Manganese, Chromlte; II. Base metals (copper, lead and zinc). III. Industrial Minerals -Limestone, Dolomite and related minerals. IV. Diamond, Precious and Semiprecious Stones/Rocks/Minerals. V. Precious Metals/Ores. VI. Bauxite, Baryles. Knolin. Fireclays and lithomarge. VII. Other Minerals/Rocks occurring the State. VIII. Decorative, dimensional, building and ornamental stones. Nand Gopal Sah Versus State Of Jharkhand Such other minerals not specified above subject to provisions of the Mines and Minerals (Development and Regulation) Act, 1957 and other related enactments."
(2.) IT is to be noted that the clause relating to other minerals not specified, was specifically made subject to the provisions of the Mines and Minerals (Regulation and Development) Act, 1957 and other related enactments. The broad framework of the scope of work/investment, including private investment and foreign direct investment routes, included as 'item (X) " Mining and beneficiation of coal from the blocks/mines, which are likely to be allocated to the Jharkhand State Mineral Development Corporation Limited." Jharkhand State Mineral Development Corporation Limited, according to the writ petitioner, did not have any right to run a joint venture in coal. To put the matter beyond doubt, in a meeting of the Cabinet on 13.9.2002. the cabinet decided that coal should not be included in the notice inviting Expression of interest. The decision of the cabinet marked annexure -2 in the writ petition clearly specified that coal was excepted. The global tender in the light of the decision of the cabinet was published in various dailies and clause XII of that notice stated, "joint venture in mining sector (except coal) in different projects for execution/construction/operation/marke ting (anyone or combination of activities)". Yet another notice was published by the Jharkhand State Mineral Development Corporation offering to collaborate in development of captive coal mines and called upon interested persons to contact the Managing Director of Jharkhand State Mineral Development Corporation. Pursuant to this notice, the Jharkhand State Mineral Development Corporation entered into an agreement with respondent No. 7 on 23.7.2003. In the agreement, it was stated that Jharkhand State Mineral Development Corporation owned three coal mines and it further expected to get more mines from the Government of India/Coal India Limited. The Government of India, Ministry of Coal and Mines, Department of Coal, vide letter dated 12.12.2001, have allowed the State Government Companies or undertakings to do mining of coking and non -coking coal or lignite and research, cither by open cast or underground methods anywhere in the country. The agreement proceeded to say that whereas the Jharkhand State Mineral Development Corporation through the Government of Jharkhand invited "Expression of Interest" for collaboration in the development of captive coal mines in a joint venture and pursuant to this, respondent No.7 had submitted a proposal to the Jharkhand State Mineral Development Corporation for setting up a joint venture company for coal mining and marketing of coal, among other things. According to clause IV of Article 2 of the Agreement, the joint venture company to be formed by the Jharkhand State Mineral Development Corporation and respondent No, 7, the joint venture company .was to take up various activities with regard to coal mines and one of them was in respect of raw coal as and when permitted. According to the joint venture agreement, Jharkhand State Mineral Development Corporation was to hold only shares not exceeding 49 percent. The petitioner has approached this Court with the writ petition contending that the joint venture company in the circumstances, could not be allotted the right to exploit and market coal; that the joint venture agreement entered into was against the provisions of the Coal Mines Nationalization Act, 1973 and also against the decision of the Cabinet dated 13.9.2002 excluding coal. The further contention raised is that the agreement was bad for not having the required consent or permission from the State of Jharkhand or the Union of India. The petitioner further submits that the agreement entered into is against public interest and it was an attempt to exploit the State wealth for private gains. It was on this basis that the petitioner Piled the writ petition praying for the issue of an appropriate writ, order or direction commanding the Union of India and the State of Jharkhand to intervene and to take appropriate steps so that the agreement entered into between Jharkhand State Mineral Development Corporation and respondent No. 7 on 23.7.2003. is not given effect to. In short. the contention of the petitioner is that the agreement was against the national coal policy, against the provisions of the Nationalisation Act and against the decision of the Cabinet to exclude coal from the purview of such an agreement and hence the direction of this Court as prayed for is warranted. On behalf of the State of Jharkhand, no formal counter affidavit was filed. But learned Advocate General appearing on behalf of the State submitted that the impugned agreement was entered into by the Jharkhand State Mineral Development Corporation without the consent or approval of the State Government and that, in fact, the State Government was not aware of the agreement. He argued that the cabinet decision dated 13.9.2002 did exclude coal from the purview of such a joint venture agreement and to the extent the joint venture agreement deals with exploitation of coal, and marketing of coal by respondent No. 7. the same was bad and could not be enforced.
(3.) ON behalf of the Union of India, a counter affidavit is filed. It is submitted that under Sec.3(3) of the Coal Mines Nationalisation Act, 1973, commercial coal mining is permitted only by the Central Government, the State Government, a Government Company and a Corporation owned, managed or controlled by the Central Government. A Government Company included a Central Government company and a State Government Company. The State Government company could also do commercial coal mining. Jharkhand State Mineral Development Corporation, being a Government of Jharkhand undertaking was a Government Company and was entitled to do commercial coal mining. The declaration of expediency by the Union Government in the matter of Control, Regulation and Development of Coal Mines in terms of Sec.1(A) and Sec.2 of the Coal Mines Nationalisation Act, 1973 are relied on. It is pleaded that a State Government company like the Jharkhand State Mineral Development Corporation can form a joint venture with a private sector or public sector company for working a coal mine and as such a joint venture company can do commercial coal mining, if the joint venture is a Government company and the joint venture company obtains a mining lease in its name, A joint venture company can be held to be a Government company only if the State Government held 51 percent equity in the joint venture company or the joint venture company is a subsidiary of a Nand Gopal Sah Versus State Of Jharkhand Government Company. The holding company has to hold at least 51 percent equity in the company to consider the latter to be a subsidiary of the holding company. The Jharkhand State Mineral Development Corporation can form a joint venture company with respondent No. 7. but such a joint venture company can be held to be a Government company only if the Jharkhand State Mineral Development Corporation holds at least 51 percent equity of the joint venture company. In the present agreement entered into by the Jharkhand State Mineral Development Corporation with respondent No.7, the Jharkhand State Mineral Development Corporation was not holding 51 percent of the equity. The Jharkhand State Mineral Development Corporation, on the terms of the joint venture agreement, can hold only up to 49 percent of the equity and the balance 51 percent equity is to be held by respondent No. 7. Therefore, this joint venture company cannot mine coal for selling it in the market. This joint venture company cannot do commercial mining of coal. It is submitted that the joint venture company thus formed could not take up mining and selling of coal in the market as per the provisions of law and the policy of the Government. Therefore, the joint venture company formed by the Jharkhand State Mineral Development Corporation and respondent No. 7. cannot obtain lease of blocks or mines, which may be allotted to the Jharkhand State Mineral Development Corporation in its name and it cannot mine coal from such blocks for selling it to respondent No. 7 or to others in the market. The agreement entered into is not in consonance with the provisions of the Coal Mines Nationalisation Act, 1973 and the policy of the Central Government. Neither the Jharkhand State Mineral Development Corporation nor the joint venture company can do coal mining without a valid mining lease. The Central Government has to be approached in terms of Sec. 5(1) of the Mines and Minerals (Regulation and Development) Act. 1957 and without the previous approval as contemplated therein, no mining lease can be granted by the State Government. The Central Government will necessarily consider the legality of the entire proposal as and when the State Government seeks the grant of prior approval under Sec. 5(1) of that Act. It is submitted that the Central Government will take necessary action and ensure that any illegal term in the agreement or illegal Implementation of any. clause in the agreement is prevented.;