Case BriefsHigh Courts

Chhattisgarh High Court: Goutam Bhaduri, J., while dismissing the present petition held that,

Legislature has before it a full panoply of legislative powers and as an incident of those powers, the express constitutional authority to disapprove an ordinance. If an ordinance has to continue beyond the tenure which is prescribed by Article 213(2)(a), a law has to be enacted by the legislature incorporating its provisions.

Petitioners counsel submitted that notification inviting application by Public Service Commission respondent 1 was published on 27-11-2019 pursuant to official communication of 23-11-2019.

It has been submitted that the above-said notification did not carve out any space for the Economically Weaker Section (EWS) which was brought about by the Constitution (One Hundred and Third Amendment) Act, 2019.

Governor of Chhattisgarh had promulgated the Ordinance of 2019 as the State Legislature was not in session.

Legislative Assembly of the State was held on 2nd and 3rd October, 2019, but no legislative business was laid held. For the legislative business, the Assembly started on 25-11-2019 till 02-12-2019 and therefore the ordinance which was promulgated on 04-09-2019 would hold the field.

If the State took the decision to conduct an examination prior to publication of the notification, it would amount to playing fraud with the Constitution. He also referred to the case Krishna Kumar Singh v. State of Bihar, (2017) 3 SCC 1, and submitted that laying of an Ordinance before the legislature is mandatory.

State Counsel submitted that the Ordinance by the Governor was on 04-09-2019 and re-assmbly took place on 02-10-2019, therefore by virtue of Article 213 (2), six weeks expired on 13-11-2019 and the Ordinance ceased to operate. Subsequently, even if re-assembly of State Legislature started on 25-11-2019 till 02-12-2019 even after expiry of six weeks therefrom ordinance was not laid in the House, therefore, mandamus to this effect cannot be issued the Court.

Analysis

“Article 174 shows that the Governor has power to call for the sessions of the State Legislature and the time limit gap of 6 months is provided. Article 213 further gives power to the Governor to promulgate the Ordinance during the recess of Legislature.”

Since Article 213(2) mandates that the ordinance will expire from six weeks of the date of reassembly of the legislature, the ordinance having not been laid before the legislative assembly, within six weeks it would expire on 13-11-2019. Consequently, the said Article shows that after 13-11-2019, the ordinance ceased to function in operation.

Thus, keeping in view the facts and circumstances of the case and on perusal of the above-stated analysis, it is apparent that, if the State has not placed ordinance for EWS in the Legislative Assembly, the Court cannot issue a writ to promulgate the ordinance by way of mandamus on the principles of separation of powers.

Court also clarified that the reliance place on Krishna Kumar Singh v. State of Bihar, (2017) 3 SCC 1 does not endorse the view that if the ordinance is not placed within the time prescribed under Article 213(2), the Court will assume such power of effective review or reconsideration.

Laying of an Ordinance before the State Legislature sub-serves the purpose of Legislative control over the ordinance-making power.

Therefore, Court cannot issue a writ of mandamus to Legislature as it would amount to encroaching the turf of the State Legislature. [Irfan Qureashi v. Chhattisgarh State Public Sevice Commission, 2020 SCC OnLine Chh 7, decided on 07-02-2020]

Legislation UpdatesStatutes/Bills/Ordinances

President promulgated — The Mineral Laws (Amendment) Ordinance, 2020

The ordinance for amendment in the MMDR Act 1957 and the CMSP Act 2015 has been promulgated. The Union Cabinet had earlier approved the amendments intending to open up new areas of growth in the coal & mining sector.

The amendments in the Acts would enable the following:

  1. Enhancing the  ease of doing business
  2. Democratization of the coal mining sector by opening it up to anyone willing to invest.
  3. Offering of unexplored and partially explored coal blocks for mining through prospecting license-cum-mining Lease (PL- cum-ML).
  4. Promoting Foreign Direct Investment in the coal mining sector by removing the restriction and eligibility criteria for participation.
  5. Allowing of the successful bidder/allottee to utilise mined coal in any of the plants of its subsidiary or holding company
  6. Attracting large investment in the coal mining sector as restrictions of end-use has been dropped.

The details are as given below:

  1. Amendments in respect of the Ministry of Coal

Amendment 1:   To provide for allocation of coal blocks for composite prospecting licence-cum-mining lease (PL-cum-ML)

Earlier, there was no provision for grant of composite prospecting licence-cum-mining lease (PL-cum-ML) in respect of coal/ lignite. A coal/lignite block could be either be allocated for PL or for ML. The Amendment has enabled the allocation of coal blocks for composite prospecting licence-cum-mining lease (PL-cum-ML) which will help in increasing the inventory of coal/ lignite blocks for allocation. Coal blocks with different grades and in a wide geographical distribution will now be available for allocation.

The Sections involved were Section 4(2), 5(1), 8(4), 8(8), 8(9) and 31(2)(b) of the CMSP Act and Section 11A and 13(2) of the MMDR Act

Amendment 2:   Clarifying the power of Central Government to specify the purpose of allocation and that ‘any’ company can participate

There was a lack of clarity earlier in the language of the provisions in the Acts leading to a restrictive interpretation of the eligibility conditions in the auction. It has now been clarified that any company selected through auction/ allotment can carry on coal mining operation for own consumption, sale or for any other purposes, as may be specified by the Central Govt. allowing wider participation and competition in the auction.

Thus, the companies which do not possess any prior coal mining experience in India but are financially strong and or have mining experience in other minerals or in other countries can now participate in auction of coal/lignite blocks. This would also allow the implementation of the 100% FDI through automatic route for sale of coal.

The Sections involved are 11A of the MMDR Act and Section 4(2) and 5(1) of the CMSP Act.

Amendment 3:   Flexibility in deciding the end-use of Schedule II and III coal mines

Hitherto, the Schedule II and III coal mines could only be auctioned to companies that are engaged in specified end-use. Now, the omission of sub-section (3) of Section 4 of the CMSP Act has provided flexibility to the Central Govt. in deciding the end-use of Schedule II and III coal mines under the CMSP Act. This would allow wider participation in the auction of Schedule II and III coal mines, for a variety of purposes such as own consumption, sale or for any other purpose, as may be specified by the Central Govt.

Amendment 4:   Termination of the allocations made under the CMSP Act, their reallocation and compensation

The CMSP Act and the CMSP Rules were silent on the subsequent allocation of coal mines upon the termination of allocations made under the Act as well as rights and liabilities of the allottee, whose allocation has been terminated. With the amendment of Section 8 (insertion of sub section (13), (14) and (15) in CMSP Act), it is has become possible to provide for allocation of the coal mine to next successful bidder or allottee, subsequent to termination of its allocation along with the matters incidental to it. The Act now also provides for compensation to the allocated whose allocation has been terminated.

Amendment 5:  Appointment of Designated Custodian in mines under production:

Earlier, there was no provision for appointment of designated custodian for management of the mines under production whose vesting/ allotment order has been cancelled. By amending Section 18 of the CMSP Act, it is now possible for the appointment of designated custodians for management of the mines, apart from Schedule II mines, which have come under production and whose vesting/ allotment order has been cancelled. It, therefore, addresses the issue of management and operation of the mines after their termination, which have come under production.

Amendment 6:  Dispensing with the requirement of previous approval in certain cases

With the amendment of Section 5 and 17A of the MMDR Act, the repetitive and redundant provision requiring previous approval of the Central Government even in cases where the allocation or reservation of coal/ lignite block has been made by the Central Govt. itself has been done away with. This would significantly reduce the time taken for operationalisation of coal/ lignite mines.

Amendment 7:   Entitlement to successful allocattee to utilise the coal mined in plants of Holding and Subsidiary company:

Earlier a successful allocattee was entitled to utilise the mined coal only in any of its plants. With the amendment of  Section 20(2)of the CMSP Act now the reference of Holding company and the Subsidiary company has been added. This would make the successful bidder/allottee entitled to utilise mined coal in any of its plants or plants of its subsidiary or holding company.

Amendment 8:  Certain Consequential and clarificatory Amendments:

Certain consequential and clarificatory amendments were required in the language of various provisions for the smooth implementation of the CMSP Act. Section 9 and 20(1) of the CMSP Act have now been amended which has resulted in the clarification of language of Section 9 (related to priority of disbursal) Further, language of Section 20(1) has been clarified to avoid any arrangement between two coal linkage holders as the same is not subject matter of the CMSP Act.

  1. Amendments in respect of Ministry of Mines

Amendment 1:   Insertion of new section 4B (after section 4A) to enable the Central Govt. to prescribe conditions for ensuring sustained production by the holder of mining leases, who have acquired rights/approvals/clearances etc. transferred from the previous lessee, as per the provisions under section 8B, which is incorporated in this amendment:

The pre-amended MMDR Act, provided a time period of two years for the new lessee for starting the mining operation, whereas the newly introduced section 8B of this Act, provides for deemed acquiring of valid rights /approvals /clearances by the new lessee. The objective of the amendment is to ensure the continuity of production of minerals. Hence, there is a need to specify the conditions for production by the new lessee, who will avail benefits of section 8B. Further, the Central Government derives power to prescribe the conditions for the new lessees to commence production without prejudice to the time period of two years for starting the production prescribed in Section 4A.

Amendment 2:  Amendment of Section 8A by introducing a proviso to clarify the intent of Section 8A(4) of the MMDR Act:

The previous section 8A(4) of the MMDR Act provided for auction of leases on the expiry of the lease. There existed scope for ambiguity about initiating the advance action/process by the State Government for notifying the expiring leases for auction. With the amendment, it has been clarified that State Government can take up advance steps for auction of blocks before the expiry of lease period. This would ensure that the production of the minerals from such blocks can be seamlessly continued.

Amendment 3:  Provisions to ensure that the successful bidder of mining leases expiring under Section 8A(5) & 8A(6), shall acquire all valid rights/approvals/clearances; for a period of two years and within which period he/she shall apply for a fresh licence:

The working mining leases of Odisha are expiring during 2020. These leases produced about 58 Million Tonne of iron ore, 1.80 Million Tonne of chromite and 0.77 Million Tonne of manganese during the year 2018-19.  Statutory clearances required to start the mining operations for the new leases have to be granted expeditiously to enable the new lessees to continue the mining operations.

The new lessee has to obtain 20 approvals to start the mining operations, of which 9 are related to different Central Govt. Ministries and the remaining are from the State Government. In the normal course, the minimum time period required to obtain these approvals vary from two to three years. This whole process would delay the commencement of mining operations by the new lessees. Any delay in commencing the mining operations by the new lessee would adversely affect the mineral production in the country, which in turn would impact the important downstream industries like steel, cement, etc.

With the insertion of new section 8B (after section 8A) of the MMDR Act, the successful bidders of the mining leases expiring under section 8A(5) & 8A(6) of the MMDR Act, deemed to have acquired all valid rights/ approvals/ clearances/ licenses and the like; for a period of two years and can start mining operation without loss of time. Seamless continuance of mining operations is in public interest as this will prevent disruption in the supply of raw material (mineral) to the industries.

The above amendments (1,2&3) pertaining to Mines will promote ease of doing business and will benefit the holders of auctioned brownfield mining leases on the expiry of their lease period starting from March 2020 and then from March 2030.

Amendment 4:   Provisions to enable the holders of Non-Exclusive Reconnaissance permit of deep seated minerals and other minerals of the national interest to obtain composite licence (PL-cum-ML) or Mining Lease:

The previous legislative provisions did not allow the non-exclusive reconnaissance permit holders to apply for a mining lease. The private participation in exploration was therefore negligible. In order to enhance the exploration of deep-seated minerals, a facilitating environment has been envisaged to be provided with the insertion of new proviso after sub-section 2 of section 10C. This amendment would allow NERP holders of deep-seated minerals or any minerals of the national interest to apply for a composite licence (PL-cum-ML) or Mining Lease. This would hence augment the exploration of the deep-seated minerals and minerals of national interest, some of which are strategically important for the country.

Amendment 5:   Empowers the Central Government to frame rules in respect of newly introduced sections:

The difficulty of the Central Govt. which had to derive power to make rules to implement the provision of the amended Act has now been removed with the insertion of new clauses in sub-section 2 of section 13. This would give the Central Government power to frame subordinate legislation to implement the intent of the Ordinance.


Ministry of Coal

[Press Release dt. 11-01-2020]

[Source: PIB]

Cabinet DecisionsLegislation Updates

The Union Cabinet, chaired by the Prime Minister Narendra Modi has approved promulgation of an Ordinance to amend the definition of “person”, as defined in sub-section (v) of Section 2 of the Special Economic Zones Act, 2005 (28 of2005) to include a trust, to enable the setting up of a unit in a Special Economic Zone by a trust, as also to provide flexibility to the Central Government to include in this definition of a person, any entity that the Central Government may notify from time to time.

Impact:

The present provision of the SEZs Act, 2005 do not permit ‘trusts’ to set up units in SEZs. The amendment will enable a trust to be considered for grant of permission to set up a unit in SEZs. The amendment will also provide flexibility to the Central Government to include in this definition of a person, any entity that the Central Government may notify from time to time. This will facilitate investments in Special Economic Zones.

[Press Release dt. 28-02-2019]

Cabinet

Legislation UpdatesStatutes/Bills/Ordinances

The President of India on the 21-02-2019 has promulgated the following four Ordinances, namely:––

1. The Muslim Women (Protection of Rights on Marriage) Second Ordinance, 2019 (Ord. 4 of 2019).

2. The Indian Medical Council (Amendment) Second Ordinance, 2019 (Ord. 5 of 2019).

3. The Companies (Amendment) Second Ordinance, 2019 (Ord. 6 of 2019).

4. The Banning of Unregulated Deposit Schemes Ordinance, 2019 (Ord. 7 of 2019).

The Muslim Women (Protection of Rights on Marriage) Second Ordinance, 2019 has been promulgated to give continued effect to the provisions brought in by the Muslim Women (Protection of Rights on Marriage) Ordinance, 2019. This Ordinance, inter alia, declares the practice of triple talaq to be void and illegal and also to make it an offence punishable with imprisonment up to three years and fine.

The Ordinance will protect the rights of married Muslim women and deter the practice of divorce by triple talaq (i.e., talaq –e –biddat). It also provide for payment of subsistence allowance and custody of minor children.

The Indian Medical Council (Amendment) Second Ordinance, 2019 has been promulgated to give continued effect to the work already done by the Board of Governors (BOG) as per the provisions of earlier Ordinance. This Ordinance, inter alia, enables the Board of Governors appointed in supersession of the Medical Council of India (MCI) to continue to exercise the powers of MCI for a period of two years or till the Council is reconstituted, whichever is earlier so as to ensure transparency, accountability and quality in the governance of medical education in the country.

In pursuance of the Government’s objective of providing Ease of Doing Business to Law abiding corporate while simultaneously strengthening the corporate governance and compliance framework enshrined in the Companies Act, 2013, the Companies (Amendment) Second Ordinance, 2019 has been promulgated with a view, to empower the Central Government to allow certain companies to have a different financial year instead of as determined by the Tribunal. This Ordinance, inter alia, addresses the need to impose civil liability for technical and procedural defaults of a minor nature and to plug the corporate governance and enforcement framework, through the following: (i) re-categorisation of 16 minor offences as civil defaults which will de-clog special courts; (ii) transfer of certain routine functions such as permitting conversion of a public company into a private company from NCLT to the Central Government; (iii) making non-maintenance of registered office and non-reporting of commencement of business as grounds for striking of from register of companies; and (iv) breach of ceiling on Directorships being made a ground for disqualification; (vi) Enhancing the pecuniary jurisdiction of Regional Director’s for compounding offences under the Companies Act with a view to unburdening the NCLT of routine functions etc.

The Banning of Unregulated Deposit Schemes Ordinance, 2019 has been promulgated to have a central legislation to tackle the menace of illicit deposits taking activities in the country. Presently, non-banking entities are allowed to raise deposits from the public under the provisions of various statutes enacted by the Central Government and State Governments. However, the regulatory framework for deposit-taking activity in the country is not seamless. Despite such diverse regulatory framework, schemes and arrangements leading to unauthorised collection of money and deposits fraudulently by inducing the public to invest in uncertain schemes promising high returns or other benefits are still operating in the society.

This Ordinance, therefore, ensures a comprehensive ban on unregulated deposit-taking activity and for its effective enforcement. It aims to prevent such unregulated deposit schemes or arrangements at their inception and at the same time makes soliciting, inviting or accepting deposits pursuant to an unregulated deposited scheme as a punishable offence. The said Ordinance also seeks to put in place a mechanism by which the depositors can be repaid without delay by attaching the assets of the defaulting establishments.

[Source: PIB]

Ministry Of Law & Justice

Legislation UpdatesStatutes/Bills/Ordinances

The Government on May 3 published an Ordinance in the Gazette of India which made major changes to the Commercial Court structure in India. These courts were set up below the District Judge level, keeping in mind the increasing number of commercial disputes with a growing economy, and to bring about a speedy resolution of conflict, to showcase India as a lucrative destination for foreign investment. This ordinance sought to amend the Commercial Courts, Commercial Division and the Commercial Appellate Division in High Courts Act of 2015 (the Act).

The amendment made the following important changes to the Act:

1. Addition of the phrase “Commercial Appellate Courts” to the long title of the Act, and prescribing “Commercial Courts Act, 2015” as the short title.

2. In S. 2(i) of the Act, ‘specified value’ was lowered from amounts exceeding One crore rupees to amounts exceeding Three lakh rupees, substantially increasing the ambit of the courts’ jurisdiction.

3. In the High Courts of Bombay, Delhi, Calcutta, Madras and Himachal Pradesh, which exercise ordinary original civil jurisdiction in respect of territories of the cities of Mumbai, Delhi, Kolkata, Chennai and the State of Himachal Pradesh, the State government, in consultation with the respective High Court, shall constitute Commercial Courts at District Judge Level, and also specify the pecuniary value for these courts, which shall be greater than 3 lakhs but less than the pecuniary value of the jurisdiction of the District Court.

4. Where the High Courts do not exercise ordinary original civil jurisdiction, the State government may, in consultation with the respective High Court, establish Commercial Appellate Courts at the District Judge level, to hear appeals against judgments passed by the Commercial Courts below the District Judge level.

5. Insertion of Chapter IIIA to the Act which mandates, in suits not contemplating any urgent interim relief, pre-institution mediation, the manner and procedure of which is to be prescribed by the Central Government. Such a suit shall not be instituted till the remedy of mediation has been exhausted.

Ministry of Law and Justice

Cabinet DecisionsLegislation Updates

In a major development against the increasing incidents of child rapes in the country, the Union cabinet, on 21-04-2018, cleared the ordinance on POCSO Act. The ordinance will give the death penalty to those convicted of raping a child up to 12 years of age. The Centre has cleared the criminal law amendment ordinance and POCSO Act is a part of this amendment. The demand for the death penalty to child rapists took centre stage after the two separate cases of gangrape and murder emerged from Jammu’s Kathua and Uttar Pradesh’s Unnao. With the incidents of minor rape cases on the rise, the ordinance will be effective in amending the POCSO (Protection of Children from Sexual Offences) Act. As per the current POCSO law, the minimum punishment for “aggravated assault” is 7 years in jail and maximum is a life sentence. The Centre is also inclined towards amending the penal law in order to introduce death penalty to sexual abusers of children up to 12 years of age.

Legislation UpdatesStatutes/Bills/Ordinances

The Enemy Property (Amendment and Validation) Third Ordinance, 2016 has been promulgated by the President of India with the aim of making amendments to the existing Enemy Property Act, 1968 and Public Premises (Eviction of Unauthorised Occupants) Act, 1971. It shall be deemed to have come into force by 7th January, 2016.

The amendments executed through this Ordinance include, amendment in Section 5 by which clause (3) has been inserted in the provision which states that “The enemy property vested in the custodian shall, notwithstanding that the enemy or the enemy subject or the enemy firm has ceased to an enemy due to death extinction winding up of business or change of nationality or that the legal heir and successor is a citizen of India or the citizen of a country which is not an enemy, continue to remain, save as otherwise provided in this Act, vested in the Custodian.”

While a newly inserted section 5A provides for issue of certificate by custodian to declare that the enemy property vests in him. While the newly inserted section 5 B provides that the law of succession does not apply to enemy property.

Further, the Ordinance, by the virtue of section 6, also restricts the transfer of any property which is vested in the custodian by an enemy or enemy subject or enemy firm.

The Ordinance further inserts a new Section 8 A which deals with Sale of property by Custodian which also imposes a liability on the custodian to preserve the enemy property till the time is duly disposed off in accordance with the provisions of the Act.Section 10 confers the power to issue a certificate of sale by the custodian.

Section 18 provides provisions for transfer of property which is vested as an enemy property in certain cases and the sub-clause A of the same confers the right to not return the income made from an enemy property but from its sales. The section further lays the jurisdiction of the competent court, in which an aggrieved matter can be raised.

The Ordinance further repealed The Enemy Property (Amendment and Validation) Second Ordinance, 2016. Further, action taken under the Enemy Property Act, 1968 as amended by the said Ordinance, shall be deemed to have been done or taken under the corresponding provisions of the said Act, as amended by this Ordinance.

Ministry of Law and Justice