APHC010522502022 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3458] MONDAY, THE TWENTY FIRST DAY OF APRIL TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SMT JUSTICE KIRANMAYEE MANDAVA WRIT PETITION NO: 31921/2022 Between: Chandrasekhara B and Others ...PETITIONER(S) AND Director Of Mines And Geology and Others ...RESPONDENT(S) Counsel for the Petitioner(S): 1. AVANIJA INUGANTI Counsel for the Respondent(S): 1. POSANI AKASH 2. The Court made the following: ORDER:- Heard Mr. Saurabh Mishra, learned Senior Counsel, Mr. Jayant Mohan, learned counsel appearing for Ms. Avanija Inuganti, learned counsel for the petitioners and learned Government Pleader for Mines and Geology. 2. The writ petition is filed challenging the proceedings of the 1st respondent, rejecting the petitioners’ application for renewal of the mining lease, as confirmed by the 2nd respondent in the revision petition. 2 3. It is contended that challenging the proceedings of the 1st respondent, rejecting the application of the petitioners for renewal of lease, the petitioners have approached this Court by way of a writ petition in W.P.No.7880 of 2021. This Court disposed of the said writ petition directing the petitioners to avail the alternative remedy before the Revisional Authority. The request made by the petitioners for grant of status-quo during the pendency of the revision was rejected by this Court. 4. Against the order of the High Court refusing to grant an order of status-quo, the petitioners went before the Hon’ble Supreme Court. The Hon’ble Apex Court, while granting liberty to the petitioners to file revision within a period of one week, directed the Revisional Authority to dispose of the revision within a period of four weeks after such a revision application is filed, pending the disposal of the revision application, status-quo was directed to be maintained. Accordingly, the 2nd petitioner herein filed a revision application before the 2nd respondent, and the same was rejected, observing that the reply submitted by the Resolution Professional appointed during the course of proceedings under Insolvency and Bankruptcy Code, 2016, in the case of the petitioners cannot be taken into consideration. 5. At this juncture, it is relevant to refer to brief facts of the case, which are as under:- One M/s. Udhyaman Investments (P) Ltd (Financial Creditor) has filed an application under the provisions of Section 7 of the Insolvency and Bankruptcy Code, 2016, against the 2nd petitioner herein, initiating the 3 Corporate Insolvency Resolution Process (CIRP). In the said proceedings, Interim Resolution Professional (IRP) was appointed by the name Mr. Vasudevan, Vide proceedings dated 12.03.2018 moratorium was declared by the NCLT, prohibiting the following actions: “(a) The institution of suits or continuation of pending suits or proceedings against the corporate debtor, including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein: (c) Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property, including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (d) The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.” 6. The NCLT further observed that the Interim Resolution Professional should take charge of the corporate debtor’s assets. Pursuant to the said orders, the IRP vide his letter dated 15.03.2018, addressed a letter to the Deputy Director of Mines & Geology, informing them of his appointment as an IRP and about the moratorium that was imposed. He further requested the Deputy Director to inform him of any information about the said company. Pursuant to the same, the office of the 1st respondent directed the ADMG (Assistant Director of Mines & Geology) to inform the IRP about the stock lying in the lease premises of the petitioners. The RP, vide his letter dated 02.01.2019, requested the ADMG for the issuance of a dispatch permit. 4 7. Later, the resolution plan, which was submitted by M/s. Embassy Property Development (P) Ltd., was approved by NCLT Chennai vide its order dated 12.06.2019. The RP continued to be the Chairman of the Committee of Creditors for implementation of the Resolution Plan, after the same was accepted vide order dated 12.06.2019. 8. Thereafter, the Mines Department appears to have issued a notice to the 2nd petitioner for payment of dead rent for the period 2018-19 and the advance Rent for 2019-20. To the said letter, the RP, Mr. Vasudevan, sent his reply saying that the Resolution Plan was approved by NCLT on 12.06.2019, and the approval was suspended by the NCLAT as there was a stay on the Resolution Plan, the Resolution Applicant could not fund the amount. He further stated that the stay on the implementation of the Resolution Plan was vacated and expressed his readiness to make the payment. He requested the Department to inform them of the dues so that they can be remitted to the Department to get the lease extended. 9. However, the Department, vide its proceedings dated 08.06.2020, issued a show cause notice to the petitioners as to why the renewal application should not be rejected. To the said show cause, the 2nd petitioner submitted his explanation dated 15.07.2020 through the RP’s email requesting to drop the show cause notice. The 1st respondent, however, vide proceedings dated 23.07.2020, rejected the renewal application, observing that the petitioners had not responded to the show cause notice. It is contended that the order dated 23.07.2020 was not served to the petitioners immediately. It 5 was only in the month of February 2021, when the RP enquired with the Respondent's Office that the petitioners were informed about the rejection of renewal. 10. Challenging the said proceedings dated 23.07.2020, the petitioners filed a Writ Petition in W.P.No.7880 of 2021, which was disposed of by this Court directing the writ petitioners to go before the Revisional Authority. While passing the said order, this Court refused to consider the petitioners’ request to grant the status quo. Against the said order, the petitioners filed an SLP before the Hon'ble Supreme Court for the limited extent of granting a status-quo. The Hon'ble Apex Court has then directed a status-quo to be maintained pending the disposal of a revision application by the petitioners. 11. The 2nd respondent, while passing the impugned order rejecting the petitioners’ application for renewal has observed that the Resolution Professional, after approval of Resolution Plan on 12.06.2019, has no role to play in the affairs of the company; therefore, the reply sent by the Resolution Professional through his email on 15.07.2020, cannot be taken into consideration. 12. Against the said order, the present writ petition has been filed. It is contended that the explanation submitted by the RP through email in the original proceedings was not considered on the ground that they did not receive the same and observed that the petitioners have not responded to the show cause notice. The Revisional Authority confirms the rejection on the grounds that the explanation submitted by the RP cannot be taken into 6 consideration. In the said context, it is argued that against the order of the NCLT approving the Resolution Plan, an appeal was filed before the NCLAT by another financial creditor. Initially, the appellate tribunal suspended the NCLT order. Thereafter, the same was vacated, observing that the Resolution Plan would be at the risk of the Successful Resolution Applicant. The learned Senior Counsel for the petitioners argues that the process of implementation of the plan was being supervised by the Monitoring Committee under the chairmanship of the Resolution Professional Mr. Vasudevan, who was heading the Committee on 13.06.2023; the NCLAT dismissed the appeal, and further appeal before the Hon'ble Apex Court was also dismissed vide order dated 06.11.2023. After the appeal was disposed of by NCLAT, the NCLT, Chennai, on the application filed by the Chairman of the Monitoring Committee, the final status report was taken on record vide proceedings dated 28.07.2023. Till such time, the RP was monitoring the Committee in overseeing the implementation of the Resolution Applicant. The learned Senior Counsel thus argues that the RP was in charge of the affairs of the 2nd petitioner till the order of the Resolution Plan attained finality, and it was the RP who was heading the Committee. It is thus contended that it cannot be said that the RP becomes functus officio the moment the Resolution Plan is approved. 13. The learned Senior Counsel further argues that approximately 450 cases were listed before the authority at 10:30 AM on the scheduled day for hearing the revision application. However, the petitioners were informed that all the cases would be taken up at 2:00 PM instead. Thereafter, the 7 petitioners’ case was called out within minutes, followed closely by the calling of other cases. As a result, the petitioners were effectively denied any real opportunity to present their case. He thus contends that no effective opportunity was given to the petitioners to submit their case. 14. Learned Special Government Pleader Ms. S.Pranathi, appearing for the respondents, would argue that out of 450 cases listed, when the subject revision petition was listed before the 2nd respondent, 415 cases were pertaining to the same batch of cases. Therefore, taking up all the listed cases might not have taken much time. The learned counsel further argues that in view of the amendment, the subject mineral is now being classified as a major mineral vide notification 20.02.2025 issued by the Central Government. Therefore, the Department is awaiting further clarifications from the Central Government on the issue concerning the amendment. 15. Considered the rival submissions. From the impugned order, it is gathered that the Revisionary Authority did not give sufficient opportunity of hearing to the petitioners. It has passed the order merely on the assumption that the RP has no locus to submit the explanation on behalf of the petitioners after the Resolution Plan was approved. 16. Having regard to the contentions advanced, this Court is of the view that the order of the 1st respondent, as approved by the 2nd respondent, is in violation of the principles of natural justice. The order of rejection of renewal was made on the pretext that the petitioners did not have or did not show the interest to continue the lease, despite the submission of the 8 explanation by the RP on 15.07.2020 through email. In light of the same, the Revisional Authority was under an obligation to remand the matter for fresh consideration by the original authority. Instead, he has taken into consideration irrelevant factors, viz., the jurisdiction of the RP in filing objections to the show cause notice. In view of the same, this Court, having noted that the petitioners were not afforded any opportunity to present its case, either by the original authority or by the Revisional Authority, deems it appropriate to set aside the impugned orders and remand the same to 1st respondent, to consider the case of the petitioners for renewal of the lease after affording sufficient opportunity to the petitioners, and pass appropriate orders in accordance with law not later than 6 months from the date of receipt of the order. 17. If it transpires that the 1st respondent is not the appropriate authority, the 1st respondent may place it before the concerned authority for passing the orders afresh. 18. Accordingly, the writ petition is disposed of. There shall be no order as to costs. As a sequel, interlocutory applications, pending if any, shall stand closed. ____________________________________ JUSTICE KIRANMAYEE MANDAVA Date:21.04.2025 ANI 9 182 THE HON’BLE SMT JUSTICE KIRANMAYEE MANDAVA WRIT PETITION No.31921 of 2022 Date:21.04.2025 ANI