PETITIONER:
KANGRA VALLEY SLATE CO. LTD.
Vs.
RESPONDENT:
STATE OF PUNJAB & ORS.
DATE OF JUDGMENT:
19/12/1968
BENCH:
ACT:
Mines & Mineral Regulations and Concession Rules, 1960 r. 28
Application for renewal of lease-Limitation for-Scope of-
Fixation of’ time by r. 28, whether mandatory, and whether
ultra vires the rule making power.
HEADNOTE:
Rule 28(1) of the Mines Concession Rules, 1960 (as it stood
in 1961) provided that applications for renewal of a mining
lease shall be made -,It least six months before expiry of
the lease. The appellant whose mining lease was to expire
on March 22, 1962 made an application for renewal of the
lease. The application bore the date September 20, 1961 and
was received by the Director of Industries on October 9,
1961. On the questions (i) whether r. 28 prescribed any
time limit within which an application had to be made; (ii)
even if it did, whether it was only directory and not
mandatory; and (iii) whether r. 28 laying down the period of
limitation for renewal of application was ultra vires s.
13(2) of the mines & Minerals (Regulations & Development)
Act, 1957 as the time limit prescribed in the rule did not
fall tinder any of the matters set out in the sub-section.
HELD : Rule 28 was valid, and was mandatory and the
application was clearly beyond the time appointed under the
rule. [173 C]
(i) The statement that the application was made on
September 20, 1961 was verified by the Secretary of the
appellant company, as true to the best of his knowledge and
belief. The Secretary ought to have personal knowledge
whether the application was made on the alleged date or not.
The Government did not admit that the application was sent
on September 20, 1961 and the company in the rejoinder
repeated that it was sent on that date. In spite of the
date of sending the application being put in issue, no
attempt was made by the appellant to show from its despatch
book or any other record or otherwise that it was actually
despatched on the date alleged. No argument even was
advanced in the High Court that as it was made on September
20, 1961 it was within time. The mere fact, therefore, that
the application bore the date Could not mean that it was
made on that date and was therefore within time.[170 B-C]
(ii) Considering the scheme and the object of the Act and
the- rules it could not be held that r. 28 was not intended
to be mandatory and was only directory. The rules laying
down time limits for making applications, acknowledging
their receipts and disposal thereof were intended to see
that the development of mines and exploitation of minerals
took place both in a regulated manner and without any undue
delay. if the time limit of six months prescribed in rules
22 and 28 was not available to the State Government it would
not be possible for it to decide within time and to, follow
the procedure for granting a fresh lease to someone else.The
result would be that mining operations would be delayed in
that particular land and to that extent the object of the
Act and the duty imposed by s. 18 on the Central Government
would he delayed or defeated. [172 B-D]
166
(iii) Rule 28 was not invalid by reason of its not
falling under any one of the matters set out in s. 1 3 (2)
of the Act. Assuming that the time limit prescribed in the
rule did not fall under any of the matters set out in that
sub-section, Sub-sec. I authorises the Central Government
to make for regulating the grant of mining leases and the
Central Government in pursuance of that power can make rules
including the one having down the time within which a
‘renewal application should be made. A grant of renewal of
a lease is granting a mining lease, and therefore, fixing
time within which an application for it should be made would
be regulating the grant of a lease. The function of sub-
sec. 2 was merely an illustrative one considering that the
rule making power was conferred by sub-sec. 1 and the rules
referred to in the opening ,sentence of sub-sec. 2 were the
rules which were authorised by and made under sub-sec. 1.
Therefore, the provisions _of sub-sec. 2 were not
restrictive of sub-sec. 1 and that indeed was expressly
stated by the words “without prejudice to the generality of
the power conferred by sub-sec. [172 E-H]
King-Emperor v. Sibnath Banerjee, 72 I.A. 241 and State of
Kerala v. Shri M. Appukutty, [1963] Supp. 1 S.C.R. 563,
followed.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1034 of
1966.
Appeal by special leave from the judgment and order dated
August 27, 1965 of the Punjab High Court in Letters Patent
Appeal No. 233 of 1963.
S. V. Gupte, B. R. L. Iyengar, S. K. Mehta and K. L. Mehta,
for the appellant.
Niren De, Attorney-General and R. N. Sachthey, for respon-
dent Nos. 1 and 2.
S. P. Nayar, for respondent No. 3.
S. P. Sinha and M. I. Khowaja, for the intervener.
The Judgment of the Court was delivered by
Shelat, J. The question arising in this appeal, is whether
the’ appellant-company’s application bearing the date
September 20, 1961 for renewal of a mining lease was time-
barred and therefore not a valid application.
The company is a public limited company having its regis-
tered office in New Delhi and is engaged in quarrying slate
and marketing the same. The company had secured a perpetual
lease dated March 22, 1879 of certain lands in villages
Majra and Manhatti in District Gurgaon. The Controller of
Mining Leases under powers reserved under sec. 16 of the
Mines & Minerals (Regulations & Development) Act, 67 of 1957
(hereinafter called the Act) read with r. 6 of the Mining
Leases (Modification of Terms) Amendment Rules, 1960
modified the said lease reducing its period so as to expire
on March 22, 1962. In consequence of certain correspondence
which took place between the company and the Director of
Industries, Punjab, the company’s secretary met that
official on September 12, 1961
1 67
when he was advised that the company should apply for
renewal of lease in Form J if it -so desired. Consequently,
it was said that the company made an application bearing,
the date September 20, 1961 which was received by the
Director of Industries on October 9, 1961. The company
thereafter applied for and obtained on November 10, 1961 a
certificate of approval under sec. 5 of the Act. The
Director of Industries, however, rejected the said
application on two grounds (1) that it was beyond-the time
prescribed under r. 28 of the Mining Concession Rules, 1960,
and (2) that it was not a valid application under Form J as
it was not accompanied by a copy of the certificate of
approval. The company thereupon filed a revision applica-
tion under r. 54 of the said rules to the Central
Government. The Central Government by its order dated
December 14, 1962 rejected it on the ground that it saw no
valid ground for interfering with the decision of the
Government of Punjab. Aggrieved by the said orders, the
company filed a writ petition in the High Court of Punjab
challenging the validity of the said two orders. In the
petition the company averred that the said application for
renewal, though received by the Director of Industries on
October 9, 1961, was “sent by the petitioner on 20-9-1961 “.
The petition also averred that the company had obtained the
certificate of approval as required by sec. 5 of the Act and
though it did not accompany the said application it was
obtained before the Director passed his said order and,
therefore, the certificate was within the knowledge of the
State Government. ‘In the petition the company challenged
the said orders on the grounds that there was no valid
ground to hold the said application to be time-barred, that
there was no provision in the Act or the rules requiring the
company to be in possession of the certificate of approval
at the time of the said application, that the company had
obtained that certificate and that fact was known to the
Director, and lastly, that the order of the Central
Government not being a speaking order was invalid.
The learned Single Judge of the High Court, who heard the
writ petition, held that though the said application was
rejected on two grounds, one of them was demonstratively
untenable the authority having recognised that the company
had obtained the certificate of approval under sec. 5 (1) of
the Act. He further held that the Director of Industries
having relied upon two grounds for rejection, one of which
was untenable, it was difficult to say which of the two
grounds was considered sufficient by the’ Central Government
to uphold the rejection in view of its order not containing
any reasons whatsoever. The learned Judge relying upon the
decision in Harinagar Sugar Mills Ltd.
(1) A.I.R. 1961 S.C. 1669.
168
v. Jhunjhunwala(1) held that the order of the Central
Government not being a speaking order was invalid. A
Letters Patent appeal against the said order was heard by a
Division Bench of the High Court. The Division Bench held
that as the said application was dismissed on two grounds,
namely, of limitation and the failure to obtain the
certificate of approval by the time the said application was
made, even if the ground as to the certificate was not
available,, the other ground of limitation was available and
therefore the Central Government was entitled to hold that
that being sufficient it would not interfere with the order
of the State Government. The Division Bench held that the
decision in Dhirajlal v. C.I.T.(1) relied on by the learned
Single Judge was not relevant as by reason of some
irrelevant evidence having been considered by the authority
in that case it became impossible to appreciate which
evidence, relevant or irrelevant. was found sufficient by
it. Since in this case there were two grounds which were
distinct in themselves and were the basis of rejection, if
the ground of non-possession of certificate was not tenable,
the other ground of limitation was sufficient for upholding
the order of rejection. The learned Single Judge, there-
fore, was not correct in allowing the writ petition on the
ground that it was not possible to ascertain on which of the
two grounds the revision application was rejected. The
Division Bench then held that “no challenge appears to have
been raised in the writ petition on factual position
regarding limitation”, and therefore, the rejection was
sustainable on the ground of limitation. As to the order of
the Central Government not being a speaking order, the
Division Bench distinguished Harinagar’s case(2) on the
around that the impugned order was an appellate order and
not a revision order. Relying on Syed Yakoob v. Radha
krishnan(3) the Division Bench held that the order need not
be a speaking order where it is a revisional order and one
of affirmance. The appellant company challenges in this
appeal by special, leave the order of the Division Bench
which allowed the appeal and dismissed its writ petition.
Mr. Gupte for the company raised three contentions (1) that
the order of the Central Government not being a speaking
order was invalid, (2) that r. 28 of the said rules does not
prescribe any time limit within which an application for
renewal has to be made and even if it does it is only
directory and not mandatory, and (3) that the rules do not
require that a certificate of approval should accompany the
application for renewal.
On the first contention Mr. Gupte relied on Harinagar Sugar-
Mills Ltd. v. Jhunjhunwala (2) Shivji Nathubhai v. The
(1) A.I.R. 1955 S.C. 271. (2) A.T.R. 1961
S.C. 1669.
(3) A.I.R. 1964 S.C. 477.
16 9
Union of India,(1) and Prag Das Umar Vaishva v. The Union of
India(2). Assuming that the order of the Central Government
was not a valid order by reason of reasons not having been
recorded therein, the question that we should address
ourselves is whether under Art. 136 of the Constitution we
should interfere with the said order even if we find that
application for renewal was time-barred.
R. 28, as it stood at the material time,
was as follows
“(1) Applications -for renewal of a mining
lease shall be made to the State Government in
Form J at least six months before the expiry
of the lease.
(6) If an a application for the first renewal of a
mining lease made within the time referred to
in sub-rule (1) is not disposed of by the
State Government before the date of expiry of
the lease, the period of that lease shall be
deemed to have been extended by a further
period of six months or ending with the date
of receipt of the orders of the State
Government thereon, whichever is shorter.”
Form J in the form for an application for renewal, item (v)
whereof requires the applicant to give the number and date
of the certificate of approval and also that he should annex
a copy of it to the application . The first question is what
is the meaning of the word ’made’ in r. 28(1). The
company’s contention was that there is a distinction between
the word ‘made’ and the word ‘received’, and that if it can
satisfy that the application was made in time it would be
enough compliance of r. 2 8 (1), no matter when it was
received by the State Government. The Director’ of
Industries, therefore, was not correct in holding that as
the application was received by him on October 9, 1961 it
was not a valid one.
Assuming that the word ‘made’ in r. 28(1) means sent to the
State Government the question still is whether the
application was made within time ? In para 8 of the writ
petition filed by the company it was no doubt stated that
though the State Government received the application on
October 9, 1961 it was sent by the company on September 20,
1961. In the grounds challenging the validity of the orders
of the two governments no ground, however, was taken that as
the application was made on September 20, 1961 it was within
time even if it was received on October 9, 1961. It is
significant that though the writ peti-
(1) [1960] 2 C.R. 775.
(2) C.A. No. 657 of 1967, Dated August 17,1967.
7SLIP. CI/69-12
170
tion was verified by the company’s secretary who ought to
have personal knowledge whether the application was sent on
September 20, 1961 or not, he did not swear to this fact as
being within his personal knowledge. The verification, on
the contrary, was couched in ambiguous language, namely,
“true to the best of deponent’s knowledge and belief”. In
the affidavit in reply by the Government the allegation that
the application was sent on September 20, 1961 was not
admitted. In its rejoinder the company repeated that the
application was sent on September 20, 1961. Therefore, in
spite of the date of sending the application being put in
issue, no attempt was made by the company to show from its
despatch book or any other record or otherwise that it was
actually despatched on the date alleged. No argument even
was advanced before the High Court that as it was made on
September 20, 1961 it was within time, and therefore, the
Director of Industries was wrong in dismissing it as time-
barred. No attempt was even made to show whether it was
sent by personal delivery or despatched by post. Since it
was sent from New Delhi to Chandigarh, presumably it was
sent by post, but no evidence was produced to show when it
was despatched. The mere fact, therefore, that the
application bore the date September 20, 1961 cannot mean
that it was made on that day and was, therefore, within
time. We hold, therefore, that the application was not made
within the prescribed time and was time-barred.
The contention of Mr. Gupte, however, was that r. 28 is not
mandatory but is only directory, and therefore, even if the
application was time-barred, the Director of Industries
ought to have considered it on merits. The rule uses the
word “shall’ but it is well settled that the use of that
word is not conclusive of the provision in which it is used
as being mandatory. We shall, therefore, have to examine
the object or purpose of the rule and consider other
provisions in the Act and the Rules to ascertain whether it
was intended to be mandatory.
The Act was passed inter alia for the regulation of mines
and development of minerals under the control of the Union
of India. It was passed under Entry 54 of List 1 in the
VIIIth Schedule to the Constitution which carves out for the
Union of India the power to make laws relating to mines and
minerals from out of the power of the State Legislatures
under Entry 23 of List II. Section 2 of the Act, therefore,
contains the requisite declaration that it was expedient in
the public interest that the Union should take under its
control the regulation of mines and the development of
minerals to the extent provided in the Act. Section 18 of,
the Act expressly enacts that it shall be the duty of the
Central Govern to take all steps as may be necessary for the
conservation
171
and development of minerals and for that purpose make such
rules as it thinks fit. Since the development of mines and
minerals was to be regulated and controlled by the Central
Government, S. 4 lays down a ban against any one undertaking
any prospecting or mining operations except under a licence
or a lease. The anxiety of Parliament while enacting the
Act was to see that conservation and development of mines
and minerals should be in a proper and regular manner. It
is, therefore, that S. 5 provides that no prospecting
licence or mining lease should be granted by a State
Government unless the applicant holds a certificate of
approval from that Government. With the mandate which the
Central Government received from the Act, the Central Gov-
ernment made elaborate rules to ensure that development of
mines and exploitation of minerals proceeded along regulated
lines and there was no procrastination in the development.
This is the trend expressed in clear language throughout the
rules. R. 15, for instance, provides that a deed granting a
prospecting licence shall be executed within 90 days of the
communication of the order of the State Government granting
such a licence. If no such deed is’ executed within the
aforesaid time due to the fault of the applicant the State
Government is authorised to revoke it. R. 22 provides for
an application for a mining lease and its renewal. For the
latter, it provides that it shall be made at least six
months (now extended to 12 months under the amended rule)
before the expiry of the lease. R. 23 provides for the ack-
nowledgment by the authority in the prescribed form of the
receipt of the application for grant or renewal of a lease.
R. 24 provides time limit for disposal of the application
made under r. 22. Cl. 3 of r. 24 provides that if an
application is not disposed of within the prescribed time it
shall be deemed to have been refused. This provision was
obviously made to ensure disposal within the time and to
prevent an applicant having to wait indefinitely till his
application was disposed of by the State Government and to
enable him to make a revision application. under r. 54.
It is clear that the object of these rules laying down time
limits for making applications, acknowledging their receipts
and disposal thereof was to see that the development of
mines and exploitation of minerals took place both in a
regulated manner and without any undue delay. R. 28 with
which we are immediately concerned not only lays down the
time within which a renewal application is to be made but
also provides that if it is not disposed of before the
expiry of the lease the period of the lease shall be deemed
to have been extended for a further period of six months or
ending with the date of the receipt of the orders of the
State Government thereon whichever is shorter..
172
The object of providing time limit for the renewal
application was that sufficient time before the expiry of
lease was available to the State Government to decide
whether the renewal should be granted or not, for, if the
renewal was not granted the land in question would be
available for re-grant and the State Government would have
to declare that the land was so available for re-grant,
invite applications for the grant of the lease and follow
the procedure laid down in the Act and the Rules therefore.
It is obvious that if the time of six months prescribed in
rules 22 and 28 was not available to the State Government it
would not be possible for it to decide within time and to
follow the procedure for granting a fresh lease to someone
else. The result would be that mining operations would be
delayed in that particular land and to, that extent the
object of the Act and the duty imposed by s. 18 on the
Central Government would be delayed or defeated.
Considering the scheme and the object of the Act and the
rules it is not possible to agree with Mr. Gupte that r. 28
was not intended to be mandatory and is only directory.
Mr. Gupte next contended that r. 28 laying down the period
1 limitation for renewal application was ultra vires sec.
13(2) of the Act, as the time limit prescribed in the rule
does not fall under any of the matters set out in that
subsection. Assuming that it is so, sub-sec. 1 authorises
the Central Government to make rules for regulating the
grant of mining leases and the Central Government in
pursuance of that power can make rules including the, one
laying down the time within which a renewal application
should be made. A grant of renewal of a lease is granting a
mining lease, and therefore, fixing time within which an
application for it should be made would be regulating the
grant of a lease. A similar contention was considered in
King Emperor v. Sibnath Banerjee(1) in connection with r. 25
of the Defence of India Rules made under S. 2 of the Defence
of India Act, 1939, as amended in 1940, and the Privy
Council held that though the rule did not fall under any of
the matters enumerated in sub-sec. 2 of sec. 2, the rule was
competent as it would be one which could be made under the
generality of Powers contained in sub-sec. 1 of sec. 2.
Their Lordships held that the function of sub-sec. 2 was
merely an illustrative one considering that the rule making
power was conferred by sub-sec. 1 and the rules referred to
in the opening sentence of sub-sec. 2 were the rules which
were authorised by and made under sub-sec. 1. Therefore,
the provisions of sub-sec. 2 were not restrictive of sub-
sec. 1 and that indeed was expressly stated by the words
“without prejudice to the generality of the powers confer
C(1)-7-2 I.A. 241 at 8.
1 7 3
red by sub-sec. 1″. The general language of sub-sec. 1,
therefore, amply justified the terms of r. 26 and avoided
the contention that it was not justified under sub-sec. 2.
These observations were followed with approval in State of
Kerala v. Shri M. Appukutty(1) where the vires of ‘r. 17 of
the Madras General Sales Tax Rules made under s. 19 of the
Madras General Sales Tax Act, 9 of 1939 were challenged and
the challenge was rejected. The argument, therefore, that
r. 28 was invalid by reason of its not falling under any one
of the matters set out in s. 13(2) is without substance.
In the view that we take that r. 28 is a valid rule and that
it is mandatory, the application was clearly beyond the time
appointed under the rule, the company having failed to
establish that it was made, as it alleged, on September 20,
1961. In that view it would not be necessary for us to go
into the questions whether the order of the Central
Government not being a speaking order was bad or whether the
application by the company was not a valid one inasmuch as
the company was not possessed a certificate of approval at
the date when the application was made and its copy was, not
annexed -thereto as required by Form J. Assuming that the
application was a valid one and that the requirement of
annexing the copy of the certificate of approval was not
mandatory and assuming further that the order of the Central
Government was not a valid one, the only thing that we could
be asked to do would be to send back the matter to the
Central Government directing it to pass a proper order. But
in the view that we have taken of r. 28 and consequently of
the application for renewal being time-barred, the Central
Government can only reject once again the revision
application adding in its order that the Director was right
in rejecting the application as it was time-barred. Such an
order of remand would serve no useful purpose so far as the
appellant company is concerned. That being so, it is not
worth our while to interfere under Art. 136 with the order
of the Central Government and ask that Government to pass a
fresh order.
In the result the appeal must fail and is dismissed with
costs.
Y.P. Appeal dismissed.
(1) [1963] Supp.1 C.R.563,569,570.
174