SRI. V. SELVARAJ vs M/S. FIZA DEVELOPERS & INTER TRADE PRIVATE LIMITED

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IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 11TH DAY OF FEBRUARY 2013

BEFORE

THE HON’BLE MR.JUSTICE N.ANANDA

WRIT PETITION NO.12510/2011 (GM-CPC) C/W WRIT PETITION NO.12636/2011 (GM-CPC)

BETWEEN:

SRI V.SELVARAJ, S/O VEDAN AGED ABOUT 59 YEARS PROPRIETOR M/S SUN MINERALS C N HALLI, TUMKUR DISTRICT

... PETITIONER COMMON IN BOTH CASES (BY SRI UDAY HOLLA, SR.COUNSEL FOR SRI S.RAJENDRA, ADV.)

AND:

M/S. FIZA DEVELOPERS & INTER TRADE PRIVATE LIMITED A COMPANY REGISTERED UNDER THE COMPANIES ACT, NO.25/1, RESIDENCY ROAD, BANGALORE-560025 REPRESENTED BY ITS MANAGING DIRECTOR SRI B M FAROOKH

SRI WINSTON TAN, S/O K T TAN AGED ABOUT 66 YEARS R/AT NO.4, GROUND FLOOR PROMENADE PLACE NO.45/2, PROMENADE ROAD BANGALORE ... RESPONDENTS COMMON IN BOTH CASES (BY SRI P.USMAN, ADV. FOR M/S.HEGDE ASSTS., ADVS. FOR R-1; SRI P.S.DINESH KUMAR, ADV. FOR R-2)

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WRIT PETITION NO.12510/2011 IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA WITH A PRAYER TO QUASH THE ORDER DATED 16.03.2011 PASSED BY COURT OF CIVIL JUDGE & JMFC, CHIKKANAYANAKANAHALLI AND THE LOK ADALAT DECREEING THE SUIT IN TERMS OF THE COMPROMISE PETITION IN O.S.144/2006, VIDE ANNEX.E.

WRIT PETITION NO.12636/2011 IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA WITH A PRAYER TO QUASH THE ORDER DATED 16.03.2011 PASSED BY COURT OF CIVIL JUDGE & JMFC, CHIKKANAYANAKANAHALLI AND THE LOK ADALAT DISMISSING THE SUIT AS SETTLED OUT OF COURT IN O.S 138/2006, VIDE ANNEX. E.

THESE PETITIONS COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:

O R D E R

The suit in O.S.No.89/2006 re-numbered as O.S.No.144/2006 was filed by first respondent herein against petitioner herein for grant of permanent injunction in respect of schedule properties reading as hereunder: SCHEDULE

A mining area under M.L No.2208 situated at Gollaharahalli Village in Sy.No.12 and 13 and Sy.No.130 of Honnebagi Village of C.N.Halli Taluk, Tumkur totally comprising 184 acres of mining land and machineries installed in the mining site which is more fully

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described in the suit sketch approved and issued by the Department of Mines and Geology in M.L No.2208.”

The trial Court has accepted the petition filed by parties and referred parties to Lok Adalath. The learned members of Lok Adalath accepted compromise petition reading as hereunder and decreed the suit:

“PROCEEDINGS BEFORE MEGA LOK ADALAT:

Case called before Mega Lok Adalat.

Both plaintiff and defendant along with their counsels present and filed compromise petition under Order 23 rule 3 of CPC.

The terms and conditions of the said compromise petition, is as follows:-

a. That the defendant recognised the plaintiff as the exclusive purchaser of the Iron Ore/Minerals extracted and to be extracted and stocked on schedule mining area, covered under M.L.No.2208 granted by the Government of Karnataka in favour of M/s.Balaji Produce Company, consequent to which Balaji Produce company executed an

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agreement dated 20.12.2004 for exclusive purchaser of Iron Ore/Minerals extracted or to be extracted from and stocked in the schedule Mining Area, wither by itself or through its raising contractors, namely M/s.Ganesh minerals or any one acting under him or through M/s.Ganesh Minerals which includes the defendant. Consequently the defendant recognize that the plaintiff be the only person entitled to be in possession of the Schedule Mining Area covered under M.L.No.2208. The defendant has entered into a MOU dated 08.03.2011, an attested copy of which is produced herein for settlement of their claims and counter claims.

b. That the defendant concedes that the plaintiff is now put into the possession of the Schedule Mining Area together with all and any Iron Ore/Minerals extracted by the plaintiff and his raising contractor.

c. The defendant has executed a MOU on 08.03.2011 with the plaintiff, thereby the entire Iron Ore extracted from and stocked in the schedule Mining Area is delivered to the plaintiff exclusively and thereafter the MOU entered between the plaintiff and defendant dated 08.03.2011 takes effect.

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d. That the defendant or any one acting through or under him shall not interfere with peaceful possession and enjoyment of the plaintiff over the schedule Mining Area covered under M.L.No.2208 and the Iron Ore of approximately:

i) Quantity of about 8.00 lakhs M.T.ROM inclusive of oversize boulders, saleable Iron Ore of the quality of 61% + to 63%+ and ii) About 2.00 lakhs M.T. of Calibrated Ore of 5-20 grade and iii) About 75,000/- M.T. of Fins of 60%+.

e. That the defendant shall not claim any further charge or value of the stock of Iron Ore minerals as the entire claim of the defendant is settled as per the MOU dated 08.03.2011.

f. The defendant shall not interfere with the right of the plaintiff to remain in possession of the schedule Mining Area, the Iron Ore/Minerals extracted from and stocked therein and its right to get the permits issued for transportation of the Iron Ore/Minerals from the schedule Mining Area in any manner.

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g. The parties agree to decree the above suit in terms of compromise petition.

h. This compromise is entered out of the own volition and free will of the party and there is no force, coercion or undue influence in entering this compromise before this Hon’ble Court.

Heard and perused. The terms and conditions of the above said compromise petition was read over and explained to the parties individually. Both the parties have admitted the execution of the compromise petition, its terms and conditions and their signatures to it.

Further, they submitted that they have entered into compromise out of their own freewill voluntarily, without any fear force nor undue influence

The said compromise is no opposed to any law, for the time being in force.

The parties have identified their advocates.Vice versa the counsels have identified their parties and their signatures.

Since the parties have entered into compromise, voluntarily and as the same is not opposed to any law, there is no reason to

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reject the said compromise. Accordingly, in the interest of justices, the compromise petition is accepted.

Suit is hereby decreed in terms of the compromise petition. Draw Decree accordingly.

Refund full court fee to the plaintiff.”

The order of the trial Court dated 16.3.2011 under which the matter was referred to Lok Adalath reads as under: “Sri.P.Usman, Advocate for the plaintiff has filed vakalath with not objection , for plaintiff along with IA 10 U/Sec.151 C.P.C for advancing the case. Copy of IA 10 served on Opposite side. Heard, perused, satisfied. IA 10 allowed with no cost. Case is advance to 16/03/2011. Plaintiff and counsel present. Def. Pt. Sri.V.H.V Advocate filed Vakalath for defendant with not objection of previous counsel. D/C filed Memo along with notarized Xerox copy of G.P.A and IA.11 U/O-3 R-2 of C.P.C., praying to permit the GPA Holder to come on record and to compromise the suit on behalf of the defendant. P/C has no objection to I.A.11. Hence IA.11 allowed. No cost. GPA holder is permitted to come on record and compromise the suit on behalf of the Winston

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Tan defendant. B/P and B/C filed compromise petition U/O-23 R-3 of C.P.C along with Memo and copy of the Memorandum of Understanding and Memo to refer to Lok Adalat. Hence case referred to Lok Adalt.”

Aggrieved by the aforestated compromise decree, the first defendant in O.S.No.144/2006 is before this Court. It is the grievance of first defendant (petitioner) that he had not authorized 2nd respondent herein nor he had constituted second respondent as general power of attorney to enter into compromise before Lok Adalath.

I have heard Sri Udaya Holla, learned Senior Counsel for petitioner and Sri P.Usman, learned Counsel for first respondent and Sri P.S.Dinesh Kumar, learned Counsel for second respondent and I have gone through the order of the trial Court and the compromise petition accepted before Lok Adalath.

It is not in dispute that mining lease bearing No.2208 in respect of suit schedule property in O.S.No.144/2006 was granted to M/s.Balaji Produce

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Company on 18.12.1995 for a period of 20 years. Clause 17 of the mining lease reads thus: “Transfers of lease

(1) The lessee/lessees shall not, without the previous consent in writing of the State Government, which in the case of mining lease in respect of any mineral specified in the first Schedule to the Act shall not be given except after previous approval of the Central Government - a) Assign, sublet, mortgage, or in any other manner, transfer the mining lease, or any right, title or interest therein, or b) enter into or make any arrangement, contract or understanding whereby the lessee/lessees will or may be directly or indirectly financed to a substantial extent by or under which the lessee’s operations or undertaking will or may be substantially controlled by any person or body of persons other than the lessee/lessees.

Provided that the State Government shall not give its written consent unless- a) the lessee has furnished an affidavit along with his application for transfer of the mining lease specifying therein the amount that he

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has already taken or proposes to take as consideration from the transferee;

b) the transfer of the mining lease is to be made to a person or body directly undertaking mining operations. . 2) Without prejudice to the above provisions, the lessee/lessees may subject to the condition specified in the proviso to Rule 35 of said Rules, transfer this lease of any right, title or interest therein to a person who has filed an affidavit stating that he has filed up to date income tax returns paid income tax assessed on him and paid the income tax on the basis of self assessment as provided in the income tax Act 1961 (43 of 1961) on payment of five hundred rupees to the State Government.

Provided that the lessee/lessees shall make available to the transferee the original or certified copies of all plans of abandoned workings in the area and in a belt 65 meters wide surrounding it.

Provided further that where the Mortgagee is an institution or a Bank or a Corporation specified in Schedule V it shall

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not be necessary for any such institution, Bank or Corporation to meet with the requirement relating to income tax.

3) The State Government may by order in writing determine the lease at any time if the lessee/lessees has/have in the opinion of the State Government committed a breach of any of the above provisions or has/have transferred the lease or any right, title or interest therein otherwise than in accordance with Clause (2);

Provided that no such order shall be made without giving the lessee/lessees a reasonable opportunity of stating his/their case.

Not to be financed or controlled by a Trust, Corporation Firm or person.”

The parties were litigating before the trial Court on the premise that lessee of a mining lease can be transferred mining lease without previous consent in writing of the State Government. The parties under the guise of entering into raising contracts have virtually violated the terms of lease in particular, terms relating to transfer of lease mining. The suit in O.S.No.144/2006

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was filed for grant of decree of injunction. The learned members of the Lok Adalath, without considering contents of compromise petition and scope of suit accepted compromise petition to decree the suit.

The compromise petition has been accepted without verifying the scope of suit and terms of compromise which are apparently in contravention of terms governing mining lease relating to suit schedule property, the compromise petition should not have been accepted by the members of Lok Adalath.

The petitions are accepted. The acceptance of compromise before Lok Adalath on 16.3.2011 and compromise decree made in O.S.No.144/2006 (old O.S.No.89/2006) is set aside. The learned trial Judge shall restore O.S.Nos.138/06 and 144/06 to the file of the Court of Civil Judge (Jr.Dn.) & JMFC, Chikkanayakanahalli. The learned trial Judge shall proceed with suits in accordance with law. All the contentions raised herein are kept open. The observations made herein are restricted for disposal of

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these petitions. The learned trial Judge while decreeing the case on merits shall not be influenced by observations made herein.

Sd/-

JUDGE

nas.

SRI. V. SELVARAJ vs. M/S. FIZA DEVELOPERS & INTER TRADE PRIVATE LIMITED