1

IN THE HIGH COURT AT CALCUTTA

CIVIL APPELLATE JURISDICTION
APPELLATE SIDE

Present:
The Hon’ble JUSTICE BISWANATH SOMADDER
and
The Hon’ble JUSTICE MOUSHUMI BHATTACHARYA

MAT 1196 of 2017

in
CAN 7840 of 2017

M/s. Kusum Marketing Ltd. & Anr.

Versus

The State of West Bengal & Ors.

For the Appellants : Mr. Suman Kumar Dutt, Advocate.

Mr. Shuvasish Sengupta, Advocate.
Mr. Soumyajit Mishra, Advocate.

For the State : Mr. Lalit Mohan Mahata, Advocate

Mr. Prasanta Behari Mahata, Advocate

For WBMDTC Limited : Mr. Sanjay Saha

Heard on : 16.11.2017

Delivered on : 21.12.2017

Moushumi Bhattacharya, J. :
 2

The appellants have challenged a judgment and order dated 16th May,

2017 whereby the writ petition filed by the appellants being W.P. 24350(W) of

2016 has been dismissed.

In the writ petition, the appellants had challenged two letters dated 18th

June, 2015 and 1st December, 2015 issued by the Commerce and Industries

Department (C & I), Mines Branch whereby the petitioners’/ appellants’

applications for grant of mining lease in respect of Basantapur and Chirugora

Mouzas for mining of Apatite (Rock-phosphate) were rejected. The appellant

No.1/the writ petitioner No. 1 is a company duly incorporated under the

provisions of the Companies Act, 1956 and is engaged in the business of,

amongst others, minerals including Rock-phosphate in the States of West Bengal

and the North Eastern States.

At this juncture, a brief statement of relevant dates needs to be made:

On 24th March, 2005, the appellant No.1 made two applications before the

mining Officer-in-Charge, Purulia Zone (the respondent No.8) for mining leases in

Purulia, West Bengal, for mining of Apatite (Rock-phosphate) mineral under the

Mines and Minerals (Development and Regulation) Act, 1957 (the Act). The

receipt of these applications was duly acknowledged by the Inspecting Officer and

Mining Office-in-Charge of Purulia Zone. By two letters dated 18th January,

2006, the Assistant Secretary, Government of West Bengal (GoWB), C & I

Department, Mines Branch (respondent No.5) requested the District Land and

Land Reforms Officer, Purulia (respondent No.7) to furnish reports regarding

availability of land in Mouza Basantapur and Chirugora, which was submitted by

 3

the respondent No.7 to the respondent No.8 by way of a land availability report.

On 21st December, 2006, the respondent No.5 called the petitioner No.1 and West

Bengal Mineral Development and Trading Corporation Limited (respondent No.9)

for a hearing in connection with their respective applications for mining lease. By

a letter dated 9th January, 2007, the petitioner No.1 inter-alia mentioned that the

petitioners were eligible for grant of mining lease since there was no subsisting

mining lease granted against the plot applied for by the petitioners in terms of

the Act and further, that the petitioners had a preferential right for grant of

mining lease in terms of Section 11 of the Act. By a letter dated 18th February,

2008, the respondent No.5 informed the petitioners that in a meeting held on 4th

December, 2007, it had been decided that the lease may be granted to the

petitioner No.1 for both Chirugora and Basantapur Mouzas provided an

agreement is effected between the petitioner No. 1 and respondent No. 9, though

the mining activities would be carried out by the petitioner No.1 and retention

charges would be given to the respondent No. 9. It was also suggested that after

effecting the said agreement, long term mining lease would be granted in favour

of the petitioner No. 1. By letters dated 28th May, 2008 and 27th June, 2008, the

respondent No. 5 sought information from the respondent No. 9 whether any

agreement had been reached with the petitioner No. 1 and the respondent No. 9

for settling the issue of grant of long term mining lease as was discussed in the

meeting held on 4th December, 2007. A meeting was held on 5th November, 2008

thereafter between the petitioner No. 1 and the respondent No. 9 on

arrangements for grant of mining leases in the presence of the respondent Nos. 4
 4

and 6 (the Deputy Secretary, GoWB, C & I Department, Mines Branch and the

Director, Directorate of Mines and Minerals West Bengal, respectively) wherein it

was decided that an agreement would be signed between the petitioner No. 1 and

the respondent No. 9 within fifteen days from the date of issue of the order of

grant of mining leases.

On 30th April, 2011, in a meeting held between the petitioner No. 1, the

respondent No. 9 as well as the representatives from the C & I Department,

GoWB, it was communicated that the State Government had approved that

mining lease would be granted in favour of the respondent No.9 so that the

respondent No.9 might enter into an agreement with the petitioner No.1 for

mining and sale of Apatite. On 7th February, 2012, the Joint Secretary, GoWB, C

& I sought clarifications from the respondent No. 9 regarding the status of the

agreement with the petitioner No. 1 for mining and sale of Apatite as was decided

in the meeting held on 30th April, 2011. The intent expressed on 30th April, 2011

was formally confirmed by a subsequent letter dated 18th March, 2013 sent by

the Joint Secretary, GoWB, stating, inter-alia, that mining lease would be granted

to respondent No. 9 so that it may enter into an agreement into the petitioner No.

1 for mining and selling Apatite. On 6th May, 2013, the petitioner No. 1 and the

respondent No. 9 executed a Memorandum of Understanding (MOU) in

accordance with the intent and approval of GoWB as decided in the meeting of

30th April, 2011. It was agreed between the parties that in order to expedite the

matter of grant of mining lease, the petitioner No. 1 would surrender its

preferential right under section 11 of the Act provided the mining lease would be
 5

granted to the respondent No.9, who would assign the said lease to a Joint

Venture Company to be formed by the petitioner No. 1 and the respondent No. 9

as per the terms of the MOU.

The petitioner No. 1 thereafter and in pursuance of the terms of the MOU,

withdrew its mining applications in respect of both the Mouzas on 6th May, 2013.

By letters dated 29th October, 2013 and 6th November, 2013, the respondent No.

4 requested the respondent No. 7 to issue a land availability report in favour of

respondent No. 9 in respect of Mouzas Chirugora and Basantapur so that mining

lease can be granted as per the intent of GoWB as communicated in the meeting

held on 30th April, 2011. These communications were followed up by other

communications by inter-alia the respondent Nos. 3 and 5 as well as the

Managing Director, West Bengal Mineral Development and Trading Corporation

Limited (respondent No. 10) with regard to the issue of the land availability report

in respect of the two Mouzas.

The MOU was amended on 21st October, 2014 by the petitioner No. 1 and

the respondent No. 9 in compliance with the intent of GoWB for issue of mining

lease to respondent No. 9. Review meetings were held on 10th November, 2014

and 5th January, 2015 with regard to, inter-alia, the Memorandum and Articles

of Association of the proposed Joint Venture Company wherein the petitioners

expressed their inability to prepare the Mine Plan as no grant order had been

issued for a long term mining lease.

 6

In the meantime, the 1957 Act was amended with effect from 12th January,

2015 by the Mines and Minerals (Development and Regulation) Amendment Act,

2015.

After almost two years, the petitioner No. 1 received a request from the

State of West Bengal through the Principal Secretary, C & I (respondent No.1) to

check the eligibility of the applications submitted by the respondent No. 9 in view

of the provisions under the Amendment Act, 2015. The petitioner replied that

under section 10A(2)(c) of the Amendment Act, 2015, the applications for grant of

mining lease are eligible as a letter of intent has already been issued by the

respondent No. 1 as per the approval contained in the minutes of meeting held

on 30th April, 2011 and therefore, the provisions of the earlier Act of 1957 are

applicable. By a letter dated 18th June, 2015 (one of the communications

challenged in the writ petition), the petitioners were informed that the mining

lease application of the respondent No. 9 is ineligible under section 10A(1) of the

Amendment Act, 2015 and further that since the petitioner no. 1 had withdrawn

its applications on 6th May, 2013, the applications of the petitioner no. 1 and the

respondent no. 9 cannot be processed any further.

The petitioner No. 1 replied to this letter on 11th September, 2015 by

reiterating that the application of the respondent No. 9 is eligible under Section

10A(2)(c) of the Amendment Act as the letter of intent had already been issued on

30th April, 2011 by the respondent No. 1 which was further communicated vide a

Memo No. 121-CI/O/RTI/GEN/APP/048/2012 dated 18th March, 2013, which

 7

was prior to 12th January, 2015, when the Amendment Act of 2015 came into

force.

The petitioner No. 1 sent a letter on 16th October, 2015 reiterating its

position with regard to the Amendment Act and that the mining lease should be

granted in favour of the respondent No. 9 as a proved by the State Government

and in terms of the letter issued by the respondent No. 4 on 18th March, 2013

wherein it was clearly stated that it has been decided in the meeting held on 30th

April, 2011 that the mining lease would be granted in favour of the respondent

No. 9 so that it may enter into an agreement with the petitioner No. 1 for mining

and selling of Apatite and that further, the application made by the respondent

No. 9 on 11th May, 2011 was being processed.

By a further letter dated 1st December, 2015 (the other communication

challenged in the writ petition), the respondent No. 4 stated, inter-alia, that there

was no ground for grant of mining lease to the petitioner No. 1 or the respondent

No. 9 on the basis of a meeting held on 5th November, 2008. In this

communication it was reiterated that the petitioner No. 1 had withdrawn its

applications on 6th May, 2013 for mining of Apatite and that the department had

accordingly issued an order dated 19th August, 2013 refusing grant of mining

lease to the petitioner No. 1. It was further stated that since Apatite (Rock-

phosphate) is a major mineral, the statutory provisions under Section 17A(2)(B)

of the Amendment Act of 2015 would apply and further that the Joint Venture

partner of the Government Company shall be selected through a competitive

 8

process and further that the Government Company shall hold more than 74% of

the Paid up Share in such Joint Venture.

The petitioner No. 1 replied to the above communication by its letter dated

22 December, 2015 stating yet again that the applications of respondent No. 9

are covered under Section 10A(2)(c) of the Amendment Act since the letter of

intent had been issued by the respondent No. 1 on the basis of the meeting of

30th April, 2011 as communicated by the Memo dated 18th March, 2013, both of

which were prior to the Amendment Act, coming into force.

There are the undisputed facts which are on record.

First let us deal with the factual context of the dispute. It is evident the

respondent no.9 applied for mining lease on 11th May 2015 pursuant to the

intention expressed by GoWB in the meeting held on 30th April 2011. At this

meeting it was decided that mining lease would be granted to the respondent

no.9, conditional upon it entering into an agreement with the petitioner no.1 for

mining and sale of Rock-phosphate. This intent was confirmed in writing by the

Joint Secretary on 18th March 2013.It is also clear that the petitioner no.1

withdrew its applications pursuant to the decision taken by the Government of

granting the lease to respondent no.9 upon an agreement being entered into

between the petitioner no.1 and the respondent no.9 including formation of a

Joint Venture Company for implementation of the project. This apart, there are

several other communications exchanged between the parties showing interest

and intention on the part of GoWB to grant the rights in question in favour of the

respondent no.9 and the petitioner no.1.

 9

The intention of GoWB in persuading the petitioner No. 1 to take a certain

course of action would be evident from the communication dated 18th March,

2013 which, apart from communicating the decision taken by the respondents in

the meeting held on 30th April, 2011, that mining lease would be granted in

favour of the respondent No. 9, proceeds further to state that the application of

the respondent No. 9 is “being processed”. The parties acted on this intent, as

expressed by GoWB in the aforesaid letter (taken together with other several

communications exchange between the parties) and duly executed an MOU on

6th May, 2013. In the MOU it was agreed inter-alia that the petitioner would

surrender its preferential right under the Act of 1957, provided the mining lease

is granted to the respondent No.9 who will then assign the same to a J.V.

Company formed jointly between the petitioner No. 1 and the respondent No. 9.

The petitioner No. 1 acted in terms of the MOU on the very same day and

withdrew their applications for grant of mining lease for Apatite in the two

Mouzas. There is no doubt therefore, that the petitioners acted in terms of the

intent expressed by GoWB which resulted in the MOU and culminated in the

petitioners withdrawing their applications in order that long terms mining lease

is granted to the respondent No. 9.

In this entire chain of events it appears that even after withdrawal of the

petitioner’s applications, GoWB never indicated that it was contemplating a re-

think of its earlier position, namely that the mining lease would be granted to the

respondent No. 9 provided the petitioner No. 1 and the respondent No.9 took

steps in terms of the communication dated 18th March, 2013. It was only in 2015
 10

or thereabouts that GoWB raised a question for the first time that the eligibility of

the applications submitted by the respondent No. 9; in the backdrop of the

Amendment Act of 2015, which came into effect on 12th January, 2015.

From the facts on record, we have no hesitation in holding that the intent

of GoWB to grant the mining lease to the respondent No. 9 on the fulfilment of

certain conditions, was unambiguously communicated to the petitioners; the

petitioners relied upon the same and acted on the conditions of the intent

expressed by GoWB. It is also clear that GoWB did nothing to dissuade the

petitioners that the intent expressed in March, 2013 was subject to change in

future. This would be evident from the subsequent communications between the

respondents inter-alia for issue of land availability report in favour of respondent

No. 9 in respect of the two Mouzas as well as the review meetings being held as

late as in November, 2014 in relation to the grant of mining lease to the

respondent No. 9.

We have come to this conclusion since, after persuading the petitioners to

take a certain direction and continuing to make them believe that the decision

contained in the meeting of 30th April, 2011 and the subsequent communication

dated 18th March, 2013 remained unaltered, the GoWB could not have suddenly

and irrevocably altered its stand after two years. This is even more unacceptable

since the impugned communications dated 18th June, 2015 and 1st December,

2015 mention the fact of the petitioner No. 1 withdrawing its applications as a

ground for not processing the applications of the petitioner No. 1 and respondent

No. 9 any further. In our view, the respondents cannot be permitted to take
 11

advantage of a course of action communicated to the petitioners in lieu of a

benefit promised to them; prevail upon the petitioners to take that course of

action; and then resiling from its earlier stand on the pretext of the petitioners

following the earlier direction communicated by the respondents. The impugned

letter dated 1st December, 2015 is even more arbitrary. Here, GoWB takes

recourse to Section 17A(2)(B) of the Amended Act and states that for a major

mineral, the Joint Venture partner of a Government Company shall be selected

through a competitive process where the Government Company shall hold 74% of

the paid up share capital. The question in our minds is therefore; what happens

to the petitioner No. 1?

On the issue whether the contentions raised in the letter dated 1st

December, 2015 can be sustained, it would be useful to set out the relevant

portion of Section 10A(2)(c) of the Amendment Act, 2015 which is as under:

“Where the Central Government has communicated previous

approval as required under sub-section (1) of Section 5 for grant of mining lease, or

if a letter of intent (by whatever name called) has been issued by the State

Government to grant a mining lease, before the commencement of the Mines and

Minerals (Development and Regulation) Amendment Act, 2015, the mining lease

shall be granted subject to fulfilment of the conditions of the previous approval or of

the letter of intent within a period of two years from the date of commencement of

the said Act.”

From the facts as stated above, respondent No.9 had applied for a mining

lease on 11th May, 2011, which would appear from the letter of GoWB dated 18th
 12

March, 2013 itself. Further, the decision of GoWB to grant the mining lease of

the two Mouzas to respondent No. 9 on fulfilment of certain conditions, as taken

in the meeting held on 30th April, 2011 and subsequently confirmed almost up to

two years by a letter dated 18th March, 2013 shows the intention of GoWB in

unequivocal terms. Under the Amendment Act, as would appear from the

provision set out above, any application which was pending before 12th January,

2015 for which a decision to grant mining lease was taken before the

commencement of the Amendment Act, such mining lease shall be granted

subject to the fulfilment of the conditions of the earlier approval or the letter of

intent within a period of two years from the date of the commencement of the Act.

In this case, the decision to grant mining lease to the respondent No. 9 with

reference to its application dated 11th May, 2011 was taken in a meeting of 30th

April, 2011 by GoWB and communicated to the respondent No. 9 by a letter

dated 18th March, 2013. Therefore, the approval and the intent of GoWB was in

place before the Amendment Act came into force. Consequently, Section

10A(2)(c) of the Amendment Act would apply and the consequences contemplated

in that section would follow; in other words, the expression of intent

communicated by GoWB in 2011/2013 would be in place.

For the above reasons, we do not see any basis for GoWB for issuing the

impugned communications dated 18th June, 2015 and 1st December, 2015 and

cancelling the entire process of granting mining lease to the petitioners.

It appears from the impugned order that the learned First Court proceeded

on certain factual assumptions including that the communications made

 13

between the parties for grant of mining lease cannot be construed as a letter of

intent and further that the position of the petitioner No. 1 has not been altered

by any Government order. Contrary to the aforesaid conclusions, in our view, the

facts clearly demonstrate that the petitioners had indeed been left in the lurch

four years after the Government had unequivocally expressed its intent of

granting mining lease to the respondent No.9 with a consequential benefit to the

petitioner No. 1.

From the impugned order it is not clear how Rule 61 of the West Bengal

Minor Minerals Concession Rules, 2016 is applicable to the facts of the instant

appeal. In any event, we accept the submission made on behalf of the appellants

before the First Court that the decision to grant mining lease cannot be affected

by the said Rule as the letter of intent – whatever be its nomenclature – had

already been communicated by GoWB in April, 2011 and March, 2013, long

before the Amendment Act came into force on 12th January, 2015. We fail to see

how Rule 61 of the Concession Rules, 2016 would apply when even according to

GoWB in the letter dated 1st December, 2015, Apatite (Rock-phosphate) has been

described as a major mineral.

The petitioners have relied upon (2017) 2 Supreme Court Cases 125,

(Bhushan Power and Steel Limited Vs. S.L.Seal, Additional Secretary (Steel and

Mines), State of Odisha and Others), where it was held inter-alia that

notwithstanding the amended Section 11 which mandates that mining leases are

to be granted by auction, Section 10-A(2) carves out an exception by saving

certain categories of applications which were filed before coming into operation of
 14

the Amendment Act, 2015. One of such exceptions is where an approval or a

letter of intent for grant of mining lease has already been communicated to an

applicant before coming into force of the Amendment Act, 2015. According to the

Supreme Court, the reason for making such an exception is that certain rights

had accrued to these applicants with respect to procedures and formalities and

only the formal lease did remained to be executed. In our opinion, the contents of

the communication dated 18th March, 2013 can be treated to be a clear intent or

intention expressed by GoWB in respect of grant of mining lease in favour of the

respondent No. 9. This decision has also been relied on for the proposition that a

“letter of intent” would depend more on the substance than the nomenclature as

to whether a document can be treated as a preliminary understanding between

parties who intend to make a contract or join together in a proposed action. The

petitioners’ applications in this case would fall under the exception carved out in

Section 10-A(2) as well as 10-A(2)(c) of the Amendment Act of 2015. Therefore,

the impugned communications of 18th June, 2015 and 1st December, 2015 could

nor have been issued by the concerned respondents and were liable to be

cancelled as prayed for by the appellants in the Writ Petition.

For the above reasons, we disagree with the findings of the learned Single

Judge in holding that the appellants were not entitled to the relief prayed for in

the writ petition. According to us, the factors taken into account by the learned

Single Judge were secondary and in any event, not relevant in the backdrop of

the arbitrary and unreasonable actions of GoWB in revising their stand after a

considerable period of time, to the detriment of the petitioners. We are also of the
 15

view that the coming into effect of the Amendment Act of 2015 would not alter

the rights of the petitioners since an express intention had been communicated

by GoWB prior to the said Act and hence section 10A(2)(c) of the Amendment Act

would apply to the present case.

The impugned order dated 16th May, 2017 passed by the First Court in

W.P. No. 24350(w) of 2016 is accordingly set aside.

Urgent photostat certified copy of this judgement and order, if

applied for, be supplied to the parties on a priority basis.

I agree,

(BISWANATH SOMADDER, J.) (MOUSHUMI BHATTACHARYA, J.)