THE 4TH INTRA MOOT COURT COMPETITION, 2016

TEAM CODE: 4-06

INTRA- MOOT COURT COMPETITION, 2016

IN THE HON’BLE HIGH COURT OF

ANDHRA PRADESH

PETITIONER: ABC SANDS PRIVATE LTD

VERSUS
RESPONDENT: THE STATE OF ANDHRA PRADESH

MEMORIAL ON BEHALF OF PETITIONER

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TABLE OF CONTENTS

LIST OF ABBREVIATIONS…………………………………………………………………...3

INDEX OF AUTHORITIES……………………………………………………………………4

STATEMENT OF JURISDICTION…………………………………………………………....6

STATEMENT OF FACTS………………………………………………………………….......7

STATEMENT OF ISSUES……………………………………………………………………..8

SUMMARY OF ARGUMENTS………………………………………………….………….....9

ARGUMENTS ADVANCED…………………………………………………..………...........10

PRAYER

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LIST OF ABBREVIATION

AIR ALL INDIA REPORTER

Art. Article

Cal Calcutta

ICCPR International Covenant on Civil and

Political Rights
Ed. EDITION

P. Page Number

SC Supreme Court

SCC Supreme Court cases

SCJ Supreme Court Journal

Sec. Section

u/a Under Article

Ltd. Limited

MMDR Mines and Minerals (development and

Regulation) Act
Vol. Volume

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INDEX OF AUTHORITIES

CASES

1. N.H. Ozha and Co. (Pvt.) Ltd., Jamkunda Colliery vs. Union of
India through the Ministry of Steel, Mines and Heavy Industries,
New Delhi and Ors, Air 1969 Mp 141

2. M/S Nandram Hunatram, Calcutta vs. Union Of India and anr, 1983
AIR 109 1983 SCR (1)

3. State of Bihar v. Lal Krishna Advani and others, AIR 2003 8 SCC
361

4. State of Jammu and Kashmir & ors. vs. Bakshi Gulam Mohammad
& Anr, AIR 1967 SC p. 122

5. Board of Trustees of the Port of Bombay vs. Dilipkumar

Raghavendranath Nadkarni & Ors, 1983 AIR 109 1983 SCR (1)

6. Smt. Menaka Gandhi v. Union of India, 1978 AIR 597

7. Transworld Garnet India Pvt.Ltd vs. State Of Tamil Nadu, AIR

2015

8. C.M. Ramanath Reddy vs State Of Andhra Pradesh, AIR 1991 (2)

ALT 32

9. K.S. Vidyarthi v. State of U.P, AIR 1991 1 SCC 212

BOOKS

1. Basu D.D , Constitution of India ,14th edition 2009, LexisNexis,

Butterworths Wadhwa Publication Nagpur.

2. Jain M.P., Indian Constitutional Law, 6th Edition 2011, LexisNexis

Butterworth Wadhwa Nagpur.

3. Sumeet Malik, Environmental Law (1st ed. 2008)

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4. Durga Das Basu, Human Rights in Constitutional Law (3rd ed. 2008)

5. S. Shanthakumar, Introduction to Environmental Law ( 2008)

6. V.B. Malleswari, Human Rights: International Perspectives (1st ed. 2007)

7. Divan Shyam , Rosencranz Armin ,Environmental Law and policy in India,

Second Edition 2004, Oxford India paperbacks.

LEGISLATIONS

1. The Constitution of India, 1950

2. Mineral Concession Rules, 1960
3. Mineral conservation and development rules, 1988
4. Atomic Energy Act, 1962
5. The Environmental Rules, 1986
6. The Environment Protection Act, 1986
7. Mines and Minerals ( Development and Regulation) Act, 1957

CONVENTIONS

1. International Covenant on Civil and Political Rights, 1965

LEGAL DATABASES

1. Manupatra

2. SCC Online

3. West Law

4. Hein Online

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STATEMENT OF JURISDICTION

THE COUNSEL FOR THE PETITIONER HAS PREFERRED THEIR APPEAL BEFORE THIS

HON’BLE HIGH COURT OF JUDICATURE, HYDERABAD FOR THE STATE OF TELANGANA

AND STATE OF A.P. UNDER ART. 226 OF THE INDIAN CONSTITUTION, 1950.

The councel for the petitioner has preffered their appeal before this Hon’ble High Court of
Judicature, Hydrabad for the state of Telangana and State of Andhra Pradesh under Article-226
of the Indian Constitution, 1950

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STATEMENT OF FACTS

ABC Sands Private Ltd. (“ABC”) was granted mining lease by the Government of Andhra
Pradesh with the prior approval of the Central Government for extracting beach sand minerals in
Srikakulam District. ABC invested about Rs.500 crores and set up a Mining and Mineral
Separation Project in Srikakulam and providing employment to the local people direct and
indirect to the tune of about 3000 and also paid more than 250 crores towards royalty and other
taxes and Rs.20 crores towards the CSR activity so far. Further, ABC has been giving free
education to about 310 students from the local villages in the school located in the project area,
supplying drinking water to about 20 villages on a daily basis.

ABC obtained all clearances required for the purpose of mining and commenced its commercial
operations from the year 2009-2010 onward. The Scheme of Mining of ABC for the period from
2014-15 to 2018-19 was approved by IBM in accordance with the provisions of Mineral
Conservation and Development Rules, 1988 and year-wise areas for working is defined while
approving Scheme of Mining for 5 years block period from 2014-15 to 2018-19. However, while
conducting the mining operations as per the approved plan, due to serious law & order issues
created by the local villagers, there was some deviation in the working area defined for 2015-16.
ABC mined in the area allocated for the year 2016-2017 in the year 2015-2016. Principal
Secretary of the Mines Department sent a show cause notice on 17.08.2016 under Rule 27(5) of
the Mineral Concession Rules, 1960 for conducting mining operations over an extent of 9.40 Ha
in the lease area which is proposed for mining in the year 2016-17 as per the approved mining
scheme by IBM & AMD.

The show cause notice required ABC to remedy the breach and comply with the requirements
within 60 days from the receipt of the notice failing which lease will be determined by the State
Government. In the meantime, the State Government also suspended the mining operations of
ABC pending the enquiry under Rule 27(5) vide separate letter dated 17.08.2016. Aggrieved by
the action of the State Government in suspending the mining operations, ABC preferred a writ
petition under Article 226 of the Constitution of India seeking relief of setting aside the memo of
suspension of mining operations.

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STATEMENT OF ISSUES

ISSUE-1:

Whether the action of state government of suspension of mining operation

before 60 days was arbitrary and Whether the principle of natural justice was
followed in this particular case or not?

ISSUE-2:

Whether in Fact or in Law, the suspension could be termed valid?

A) Whether the power of cancellation includes power of suspension?

B) Whether the state Government has authority to suspend the mining

operation?

ISSUE-3:

Whether the suspension of mining operation in the project area will affect the
livelihood of more than 3000 people and 20 villages or not?

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SUMMARY OF ARGUMENTS

ISSUE-1

Whether the action of state government of suspension of mining operation before 60 days was
arbitrary and Whether the principle of natural justice was followed in this particular case or not?

The Mineral Concession Rules makes it incumbent on the Central Government to obtain the
comments of the State Government upon the application for revision and cast a duty on the
Central Government to afford an opportunity to the applicant to make representations in respect
of the comments of the State Government. This procedure shall be correctly followed and no
lacunas should be there while following such vital method to stop the operation of mining. The
state government has the power to forfeit the mining operation but with the established procedure
which is laid down under the same Rule. State government is ought to wait for 60 days to give
the other party a chance to put their side and not act arbitrary.

ISSUE-2

Whether in Fact or in Law, the suspension could be termed valid?

A) Whether the power of cancellation includes power of suspension?
B) Whether the state Government has authority to suspend the mining operation?
Such Impugned orders of suspension of the mining operation by state can be said arbitrary and
the operation of the rule of natural justice is held by the courts to be inapplicable. Such situations
are where grave emergency exists and if the requirement of notice is observed, the very purpose
will be frustrated.

ISSUE-3

Whether the suspension of mining operation in the project area will affect the livelihood of more
than 3000 people and 20 villages or not?

This scenario totally proves that if ABC Sands Private limited will be closed by the Government
then there will be huge loss on the part of livelihood of workers.

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ARGUMENT ADVANCED

ISSUE-1: Whether the action of state government of suspension of mining

operation before 60 days was arbitrary and Whether the principle of
natural justice was followed in this particular case or not?

Section 27(5) in the Mineral Concession Rules, 1960

If the lessee makes any default in the payment of royalty as required under section 9 or payment
of dead rent as required under section 9A or commits a breach of any of the conditions specified
in sub-rules (1), (2) and (3), except the condition referred to in clause (f) of sub-rule (1), the State
Government shall give notice to the lessee requiring him to pay the royalty or dead rent or
remedy the breach, as the case may be, within sixty days from the date of the receipt of the
notice and if the royalty or dead rent is not paid or the breach is not remedied within the said
period, the State Government may, without prejudice to any other proceedings that may be taken
against him, determine the lease and forfeit the whole or part of the security deposit.

N.H. OZHA AND CO. (PVT.) LTD., JAMKUNDA COLLIERY VS UNION

OF INDIA THROUGH THE MINISTRY OF STEEL, MINES AND HEAVY
INDUSTRIES, NEW DELHI AND ORS1
The company made defaults in payment of royalty and dead rent and the Director of Geology
and Mining issued notices calling upon the company to pay the dues within sixty days from the
receipt of the notices and intimating that if the dues were not paid within that period the lease
would be terminated. In all six such notices were issued. As regards the first five notices, last of
which was issued on 19th October 1964, the company in each case paid the dues beyond sixty
days from the receipt of the notice. As regards the sixth notice, which was issued on 21st May
1965, the company fully complied with its terms and deposited all the dues on 16th July 1965
within sixty days. In the meantime by an order passed on 29th June 1965, the Government acting
under Rule 27 (5) of the Mineral Concession Rules 1960 cancelled the petitioner's lease and
forfeited the security deposit on the ground that the earlier notices were not complied with in
time.

1
AIR 1969 MP 141

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It is pertinent to note that the first limb of the sub-rule which enjoins the Government to give
notice requiring the lessee to pay the royalty or remedy the breach uses the language--'shall give
notice', whereas the second limb of the sub-rule which empowers the Government to determine
the lease in case the notice is not complied with uses the language 'may determine the lease.'

In the particular case the court held that the state government has no right to cancel the lease and
forfeit the security deposit before 60 days after issuing the show cause notice. No legislation
gives any power to state Government to suspend the operation within these 60 days.

M/S NANDRAM HUNATRAM, CALCUTTA V UNION OF INDIA AND ANR2

Under Rule 27(5) of the Mineral Concession Rules, 1960 power is conferred on the State
Government to require the lessee by notice to remove a breach within 60 days of the receipt of
notice and in default to determine the lease and forfeit the whole or part of the security in
deposit.

The Mineral Concession Rules makes it incumbent on the Central Government to obtain the
comments of the State Government upon the application for revision and cast a duty on the
Central Government to afford an opportunity to the applicant to make representations in respect
of the comments of the State Government. This procedure shall be correctly followed and no
lacunas should be there while following such vital method to stop the operation of mining.

In the context of principle of natural justice, refer to the judgment of the Apex Court in the
famous case of State of Bihar v. Lal Krishna Advani and others3, wherein the Apex Court,
while emphasizing the importance of issuance of notice to a person who is likely to be suffered
by the enquiry, has held that the issuance of notice is a sine qua non.

The High Court, while referring to a decision Reported in the year 1967, The State of Jammu
and Kashmir & Ors. v. Bakshi Gulam Mohammad & Anr4, observed that an authority who
takes a decision, which may have civil consequences and affects right of a person, the principle
of natural justice would at once come into play. Reputation of an individual is an important part
of one’s life.

2
AIR 1966 SC 1922
3
AIR 2003 8 SCC 361
4
AIR 1967 SC p. 122

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Board of Trustees of the Port of Bombay vs. Dilipkumar Raghavendranath

Nadkarni & Ors5
The court referred to the International Covenant on Civil and Political Rights, 1965, recognizing
right to have opinions and the right of freedom of expression subject to the right of reputation of
others. The Covenant provides:

1. Everyone shall have the right to hold opinions without interference.

2. Everyone shall have the right to freedom of expression; this right shall include freedom to
seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally,
in writing or in print, in the form of art, or through any other media of his choice.

The procedure of the law shall be followed to respect the rights and reputations of others and for
the protection of national security or of public order or of public health or morals.6

“It is thus amply clear that one is entitled to have and preserve, one’s reputation and one also has
a right to protect it. In case any authority, in discharge of its duties fastened upon it under the
law, traverses into the realm of personal reputation adversely affecting him, must provide a
chance to him to have his say in the matter. In such circumstances right of an individual to have
the safeguard of principles of natural justice before being adversely commented upon by a
Commission of Inquiry is statutorily recognised and violation of the same will have to bear the
scrutiny of judicial review.”7

It is therefore clear from the above provision that is Rule 27(5) of Mineral concession rules, 1960
that the state government has the power to forfeit the mining operation but with the established
procedure which is laid down under the same Rule. State government is ought to wait for 60 days
to give the other party a chance to put their side and not act arbitrary.

5
1983 AIR 109 1983 SCR (1)
6
International Covenant on Civil and Political Rights, 1965
7
Ibid ICCPR, 1965

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ISSUE-2: WHETHER IN FACT OR IN LAW, THE SUSPENSION COULD

BE TERMED VALID?
A) Whether the power of cancellation includes power of suspension?
B) Whether the state Government has authority to suspend the mining
operation?

RULE 50 OF MINERAL CONCESSION RULES, 1960

Prohibition of working of mines:- If the State Government has reason to believe that the grant or
transfer of a prospecting licence or a mining lease or of any right, title or interest in such licence
or lease is in contravention of any of the provisions of this chapter, the State Government may,
after giving the parties an opportunity to represent their views and with the approval of the
Central Government, direct the parties concerned not to undertake any prospecting or mining
operations in the area to which the licence or lease relates.

Rule 50, which obliges the State Government to give an opportunity to represent their views,
cannot unilaterally stop the mining operations indefinitely for a long time in the guise of
inspection affecting the livelihood of hundreds of persons8

Such Impugned orders of suspension of the mining operation by state can be said arbitrary and
the operation of the rule of natural justice is held by the courts to be inapplicable. Such situations
are where grave emergency exists and if the requirement of notice is observed, the very purpose
will be frustrated, for example, summary action for the maintenance of public security or public
order an order prohibiting the holding of all public processions, if the police have reasonable
ground for apprehending serious public disorder, or to abate any dangerous nuisance which, if
allowed to remain, would pose serious problem for public health; prohibiting smoking in a
theatre or in aircraft or public carrier also falls in this category. In this instant case, no immediate
harm would have ensued to the public or the first respondent if notice is given before passing the
impugned order. Further no grave situation of emergency exists. I am, therefore, of the view that
an order of the nature impugned in this writ petition ought to be declared as violative of the

8
Monnet Ispat And Energy Ltd vs Union Of India And Ors, 2012

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principles of natural justice, as neither any pre-decisional nor any post-decisional hearing is
provided.9

Transworld Garnet India Pvt.Ltd vs. State Of Tamil Nadu10

Major Issue arose in this case was whether opportunity of hearing to the parties to represent their
views before closure of mining operation is a sine qua non and whether the State Government
has got the power to issue an order, while constituting general enquiry, indefinitely suspending
or banning the mining operations, As per Sections 24 and 24-A of the MMDR Act read with
Rule 50 of the Mineral Concession Rules, the state cannot overlook the rights and liabilities of
holders of mining leases conferred under Section 24-A, before stopping mining operation, more
particularly, when Rule 50 of the Mineral Concession Rules obliges the State Government to
give the parties an opportunity to represent their views and thereafter with the approval of the
Central Government can direct the parties concerned not to undertake any mining operation in
the area.

A conjoint reading of both Section 24-A of the Act and Rule 50 of the Mineral Concession Rules
indicates that if the State Government has reason to believe that the prospecting mining lease is
in contravention of any of the provisions of the Chapter, the State Government may after giving
the parties an opportunity to represent their views and with the approval of the Central
Government, direct the parties concerned not to undertake any prospecting or mining operations
in the area. Both the Act and Rules framed there under do not confer on the State Government
the stoppage of mining or suspension of mining without prior approval of the Central
Government.

C.M. Ramanath Reddy vs State of Andhra Pradesh11

The respondent contended that the power of the state in issuing the impugned order is sought to
be sustained on the ground that the authority which has the power to grant permission has also
the power to suspend or withdraw the same. It is on that premise that it is slated that the power of
suspension being ancillary to the power of cancellation. The learned counsel for the petitioner
contended that before passing the impugned order suspending the G.O. the first respondent has
not given an opportunity to the petitioner of being heard, therefore, the principles of natural

9
Smt. Maneka Gandhi v. Union of India, 1978 AIR 597
10
AIR 2015
11
AIR 1991 (2) ALT 32

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justice are violated rendering the impugned order void. The court stated that the power of the
state in issuing the impugned order on the ground that the authority which has the power to grant
permission has also the power to suspend or withdraw the same, It is cannot be slated that the
power of suspension being ancillary to the power of cancellation, thus the impugned order of the
state government suffer from lack of power. The court decided in the favour of petitioner and
stated that for the above reasons, the order issued by the respondent to the petitioner is declared
to be illegal. The Writ petition is accordingly allowed with costs. Advocate's fee: Rs. 500/-.

Thus without any statutory power either under the Act or under the Rules and as such would be
illegal and without jurisdiction. It is now too well-settled that every State action, in order to
survive, must not be susceptible to the vice of arbitrariness which is the crux of Article 14 of the
Constitution and basic to the rule of law the system which governs us. Arbitrariness is the very
negation of the rule of law. Satisfaction of this basic test in every State action is sine qua non to
its validity and in this respect the State cannot claim comparison with a private individual even in
the field of contract. This distinction between the State and a private individual in the field of
contract has to be borne in the mind.12

12
K.S. Vidyarthi v. State of U.P, AIR 1991 1 SCC 212

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ISSUE-3: Whether the suspension of mining operation in the project area

will affect the livelihood of more than 3000 people and 20 villages or not?

ABC invested about Rs.500 crores and set up a Mining and Mineral Separation Project in
Srikakulam and providing employment to the local people direct and indirect to the tune of about
3000 and also paid more than 250 crores towards royalty and other taxes13

 Rs.20 crores was spent towards the Corporate Social Responsibilities activity so far by
ABC Pvt Ltd.
 ABC has been giving free education to about 310 students from the local villages in the
school located in the project area.
 Supplying drinking water to about 20 villages on a daily basis.14

This scenario totally proves that if ABC Sands Private limited will be closed by the Government
then there will be huge loss on the part of livelihood of workers. Since ABC Sands Private
limited worked for the welfare of society in such a large instance thus this kind of welfare shall
not be hindered by any illegal interference by the Government when ABC already obtained all
the clearances required for the purpose of mining.

Nokia shuts down its India plant in Chennai, over 8000 workers lose job15

As announced on October 7 Nokia stopped handset production at their Chennai plant from
November 1. The plant's shutdown has rendered over 8,000 workers jobless.

At the time of closing down the operations, about 1,100 employees were working in the plant,
including 900 on the assembly lines.

13
Fact sheet paragraph 2
14
Ibid
15
http://www.thehindu.com/business/Industry/nokia-to-shut-down-its-chennai-factory-from-nov-
1/article6478317.ece

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Closure of units in Chanda will render thousands jobless16

Government decision to shut down four polluting private industries in Chandrapur caused around
25,000 families of plant workers and labourers who chop bamboo for company in forest who
were dependent upon Ballarpur paper mill. Its closure would directly affect the livelihood of
these families.

Maharashtra Pollution Control Board (MPCB) of highhandedness and charged that private
industries are targeted by the officers for vested interests. He claimed that high court has recently
rebuked MPCB, which is functioning without chairman and technical member, for its dismal
condition.

16
http://timesofindia.indiatimes.com/city/nagpur/Closure-of-units-in-Chanda-will-render-thousands-
jobless/articleshow/46731026.cms

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PRAYER
In the light of the issues raised, arguments advanced and authorities cited, may this Hon’ble
Court be pleased to:

1. Hold that the action of state government of suspension of mining operation before 60 days was
arbitrary and the principle of natural justice was not followed.
2. Hold the suspension done by state as invalid
3. Hold that the power of cancellation doesn’t include power of suspension.
4. Hold that the suspension of mining operation will affect the livelihood of more than 3000
people and 20 villages.

AND/OR
Pass any other order that it deems fit in the interest of Justice, Equity and Good Conscience.
And for this, the Petitioner as in duty bound, shall humbly pray.

COUNSELS FOR THE PETITIONER

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