PETITIONER:
STATE OF ASSAM & ORS.
Vs.
RESPONDENT:
OM PRAKASH MOHTA & ORS.
DATE OF JUDGMENT22/12/1972
BENCH:
ALAGIRISWAMI, A.
BENCH:
ALAGIRISWAMI, A.
DUA, I.D.
VAIDYIALINGAM, C.A.
CITATION:
1973 AIR 678 1973 SCR (3) 169
1973 SCC (1) 584
CITATOR INFO :
F 1976 SC1433 (2)
ACT:
Mines and Minerals (Regulations and Development) Act, 1057–
Sec. 8-Mineral Concession Rules 1960-Rule 24(3) and
explanation to Rule 54 whether unreasonable and ultra vires
section 8 of the Act-Renewal of Mining tease granted to the
father of Respondents-Order in revision of State Govt.
refusing renewal of lease under deeming provisions of Rules
whether unreasonable.
HEADNOTE:
On 29-4-1942, a mining lease was granted by the Crown
Representative to the father of the respondents for a period
of 20 years to operate the coal. mines. The father died on
18-5-1961. On 3-8-61, the respondents applied for renewal
of the lease. By his order dated 27-6-62, the Deputy
Commissioner Khasi Jayantia Hills informed the respondents
that the application for renewal must be deemed to have
been refused. On 22-10-1962. the respondents filed a
revision petition to the Central Government under Rule 54.
This was rejected on 8-2-1963. On 7-5-63, the respondents
filed a writ petition before the High Court for quashing the
order dated 27-6-62 and for a writ of mandamus directing the
renewal of the lease. The High Court allowed the petition
filed by the respondents holding that Rule 24(3) of the
Rules under which the application by the respondents was
deemed to have been rejected was unreasonable and ultra
vires of Sec. 8 of the Act, and the deemed refusal of the
application for renewal had no legal effect that the
explanation to Rule 54 should also be struck down as
repugnant to the main sections of the Act.
On appeal by special leave to this Court,
HELD : (i) The Act and the Rules contained the complete code
in respect of the grant and renewal of prospecting licence
as well as mining lease in lands belonging to the
Government, as well as the lands belonging to private
persons. The mining lease in question is in a land
belonging to Government and it is for a mineral included in
the First Schedule to the Act in respect of which no mining
lea-,P. can be granted without previous approval of the
Government. Normally, the Government like any other owner
of property is entitled to choose with WhoM it shall deal
and what sort of a contract it will enter into, but being a
public authority, its acts are necessarily regulated by
certain Rules. The Act and Rules in this case are intended
to regulate the development of mines and minerals under the
control of the Union an contained the provisions necessary
for that purpose. No person can claim as of right any lease
or prospecting licence in any land belonging to Government
or in any mines in anv lands belonging to Government except
under and in accordance with the Act at the Rules or any
right except these created or conferred by the Act. [174G-H]
As a result of the provisions of Sections 19 and 20 of the
Act, renewal of the lease granted to the father of the
respondents is governed by Act and the Rules. Rule 24(3) as
amended. has the effect that while the provisions regarding
disposal within 90 days of an application for renewal still
stands, provision for deeming it should have been
170
refused is no longer there. The explanation to Rule 54 has
two purposes : (i) to state the effect of the failure to
dispose of the applications referred to in Rule 24 sub-rule
(1) and (2) within the periods specified within these sub-
rules as also (ii) to provide the starting point for the
purpose of computing the period of two months within which
an application for re-vision under Rule 54 must be
preferred. [175D, G & 176A]
(ii)There is nothing unreasonable in the order passed by
the Central Government. It has been mentioned in that order
that after careful considerations of the facts stated in
that review application, it was rejected as time barred.
The application to the Central Government preferred by the
respondents contained, all the facts. There is no reason to
assume that the Central Government did not apply their minds
to these facts. [177 DE]
(iii)Rule 24(3) and the explanation to Rule 54 cannot
be said to contravene the provisions of Section 8 of the
Act. They are within the rule making powers of the
Government and in view of the provisions of Rule 24 and 54,
the only reason which the State Govt. can give under Rule 26
is that because 90 days are over, the application should be
deemed to have been refused. The High Court’s view that
Rule 24(3) and the explanation to Rule 54 are in
contravention of Sec. 8 is vitiated by its assumption that
every order to be passed on an application for renewal
should be approved by the Central Government. This is
incorrect. Only renewal cannot be granted with the Central
Govt’s approval and not rejection. [177 F-H]
Shivji Nathubhai v. Union of India & Others, [1960] 2S.C.R.
775, Supreme Court judgment dated 7-8-1967 in C.A. 657/67
distinguished.
Seeta Ramaiah v. State of Andhra Pradesh, A.I.R. 1963 A.P.
54, Shivaji Nathubhai v. Union of India, A.I.R. 1959 Punjab
510 referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1240 of
1967.
Appeal from the judgment and order dated June 24, 1964 of
the Assam and Nagaland High Court at Gauhati in Civil Rule
No. 57 of 1963.
D. N. Mukherjee, for respondents Nos. 1 to 3.
B. D. Sharma and S. P. Nayar, for respondent No. 4.
The Judgment of the Court was delivered by
ALAGIRISWAMI, J. This is an appeal by special leave against
the judgment of the High Court of Assam allowing the
petition filed by respondents questioning the validity of
the order dated 27-6-1962 issued by the Deputy Commissioner,
Khasi Jaintia Hills on behalf of the Government of Assam
that their application for renewal of the mining lease
granted to their father must be deemed to have been refused
under sub-rule (3) of Rule 24 of the Mineral Concession
Rules, 1960.
171
The lease in question was granted by the Crown
Representative on 29th April, 1942 to Bhagirath Mohta the
father of the respondents for a period of 20 years to
operate the coal-mines. Bhagirath Mohta died on 18-5-1961
and on 3-8-1961 the respondents applied for renewal of the
lease. By his order earlier mentioned the Deputy
Commissioner informed the respondents that the application
for renewal must be deemed to have been refused. On 22-10-
1962 the respondents filed a revision petition to the
Central Government under Rule 54 of the Mineral Concession
Rules, and this was rejected on 8-2-1963. On 7-5-1963 the
respondents filed a petition before the High Court of Assam
for quashing the order dated 27th June, 1962 and for a writ
of Mandamus directing the renewal of the lease. The
appellants contended that the rights of the respondents, if
any, were wholly contractual and based on disputed facts and
they could only establish them by. filing a regular suit in
a Civil Court.
The High Court of Assam allowed the petition filed by the
respondents holding that Rule 24(3) of the Mineral
Concession Rules, under which the application by the
respondents was deemed to have been rejected, was
unreasonable and ultra vires of Section 8 of the Mines &
Minerals (Regulation and Development) Act, 1957, and the
deemed refusal of the application for renewal had no legal
effect, that the explanation to Rule 54 should also be
struck down as repugnant to the main sections of the Act.
It, therefore, quashed the order of the Deputy Commissioner
dated 27th June, 1962 and issued a writ of Mandamus to the
State Government to deal with and dispose of the application
of the petitioners dated 3-8-1961 for renewal.
The first question to be decided, therefore, is whether Rule
24(3) and the explanation to Rule 54 are repugnant to the
provisions of Section 8 of the Act and, therefore. liable to
be struck down. We may first set out the relevant
provisions. Rule 24 reads as follows :
“24. Disposal of application for mining lease.(1) An
application for the grant of a mining lease shall be
disposed of within nine months from the date of its receipt.
(2)An application for the renewal of a mining lease shall
be disposed of within ninety days from the date of its
receipt.
(3)If any application is not disposed of within the period
specified in sub-rule (1), of sub-rule (2), it shall be
deemed to have been refused.”
172
Rule 54 reads as follows:
“Application for revision.-(1) Any person aggrieved by any
order made by the State Government or other authority in
exercise of the powers conferred on it by the Act or these
rules may, within two months of the date of communication of
the order to him, apply to the Central Government in
duplicate in Form N for revision of the order. The
application should be accompanied by a treasury receipt
showing that a fee of Rs. 100 has been paid into a
Government treasury or in any branch of the State Bank of
India doing the treasury business to the credit of the
Central Government……
Provided that any such application may be entertained after
the said period of two months, if the applicant satisfies
the Central Government that he had sufficient cause for not
making the application within time.
(2)In every application under sub-rule (1) against the
order of a State Government refusing to grant a prospecting
licence or a mining lease, any person to whom a prospecting
licence or mining lease was granted in respect of the same
area or for a part thereof, shall be impleaded as a party.
(3)Along with the application under sub-rule (1), the
applicant shall submit as many copies thereof as there are
parties impleaded under sub-rule (2).
(4)On receipt of the application and the copies thereof,
the Central Government shall send a copy of the application
to each of the parties impleaded under sub-rule (2) speci
fying a date on or before which he may make his
representations, if any, against the revision application.
Explanation.-For the purpose of this rule, where a State
Government has failed to dispose of an application for the
grant or renewal of a prospecting licence or a mining lease
within the period specified in respect thereof in these
rules. the State Government shall be deemed to have made an
order refusing the grant or renewal of such licence or lease
on the date on which such period expires.
“8. (1) The period for which a mining lease may be granted
shall not-
(a) in the case of coal. iron ore or bauxite, exceed thirty
years; and
173
(b) in the case of any other mineral, exceed twenty years.
(2) A mining lease may be renewed-
(a) in the case of coal. iron ore or bauxite, for one
period not exceeding thirty years; and
(b) in the case of any other mineral, for one period not
exceeding twenty years :
Provided that no mining lease granted in respect of a
mineral specified in the First Schedule shall be renewed
except with the previous approval of the Central Government.
(3)Notwithstanding anything contained in subsection (2),
if the Central Government is of opinion that in the
interests of mineral development it is necessary so to do,
it may, for reasons to be recorded, authorise the renewal of
a mining lease for a further period or periods not exceeding
in each case the period for which the mining lease was
originally granted.”
From a reading of Section it is difficult to see how exactly
the rules referred to above can be said to be contrary to
the provisions contained in that Section. Let us,
therefore, consider the scheme of the Act.
It is an Act to provide for the regulation of mines and the
development of minerals under the control of the Union.
Section 4 lays down that no person shall undertake any
prospecting or mining operations in any area, except under
and in accordance with the terms and conditions of a
prospecting licence, or as the case may be, a mining lease,
granted under this Act and the rules made thereunder.
Section 5 lays down certain restrictions in the matter of
granting prospecting licences or mining leases. Section 6
lays down the maximum area for which a prospecting licence
or mining lease may be granted. Section 7 lays down periods
for which prospecting licences may be granted or renewed.
Section 8 lays down the periods for which mining leases may
be granted or renewed. Section 10 lays down the procedure
for applying for prospecting licences or mining leases.
Section 11 lays down the preferential rights of certain
persons to the grant of prospecting licences and mining
leases. Section 13 enables the Central Government to make
rules for regulating the grant of prosecuting licences and
mining leases. Among the clauses contained in subsection
(2) of that Section, which specify the purpose for which
rules may be made, are clauses (g) and (r) which are as
follows
(g)the terms on which. and the conditions subject to
which, any other prospecting licence or mining lease may be
granted or renewed;
174
(r)any other matter which is to be, or may be prescribed
under this Act.
Section 19 lays down that any prospecting licence or mining
lease granted, renewed or acquired in contravention of the
provisions of this Act, or any rules or orders made
thereunder shall be void and of no effect. Section 20 lays
down that the provisions of the Act and the rules made
thereunder shall apply in relation to the renewal after the
commencement of this Act of any prospecting licence or
mining lease granted before such commencement as they apply
in relation to the renewal of a prospecting licence or
mining lease granted after such commencement. Section 30
enables the Central Government of its own motion or on
application made within the prescribed time by an aggrieved
party, revise any order made by a State Government or other
authority in exercise of the powers conferred on it by or
under the Act.
The first Schedule to the Act contains a list of minerals in
respect of which no prospecting licence or mining lease
shall be granted except with the previous approval of the
Central Government.
The Mineral Concession Rules, 1960 were made under this Act.
Chapter 11 of the rules contains provisions regarding certi-
ficate of approval. Chapter III deals with grant of
prospecting licences in respect of land in which the
minerals vest in the Government. Chapter IV deals with
grant of mining leases in respect of land in which the
minerals vest in the Government. Rule 24 is found in this
Chapter. Chapter V deals with procedure for obtaining a
prospecting licence or mining lease in respect of land in
which the minerals vest in a person other than the Govern-
ment. Chapter VI deals with grant of prospecting licences
and mining leases in respect of land in which the minerals
vest partly in Government and partly in a private person.
Chapter VII deals with revision. Rule 54, the explanation
to which has been held void by the Assam High Court, is
found in this Chapter. It is not necessary for the purpose
of this discussion to refer to Chapters VIIII and DC.
The Act and the Rules thus contain the complete code in res-
pect of the grant and renewal of prospecting licences as
well as mining leases in lands belonging to Government as
well as lands belonging to private persons. The main point
to be kept in mind is the fact that the mining lease in
question is in a land belonging of Government and it is for
a mineral included in the First Schedule to the Act in
respect of which no mining lease can be granted without the
previous approval of the Central Government. Normally the
Government like any other owner of property is entitled to
choose with whom it shall deal and what sort of a contract
it will enter into, but being a public authority its
175
acts are necessarily regulated by certain rules. The Act
and the rules in this case are intended to regulate the
development of mines and minerals under the control of the
Union and contain the provisions necessary for that purpose.
No person can claim any right in any land belonging to
Government or in any mines in any land belonging to
Government except under and in accordance with the Act and
the Rules or any right except those created or conferred by
the Act. There is no question of any fundamental right in
any person to claim that he should be granted any lease or
any prospecting licence or mining lease in any land
belonging to the Government. It is necessary to bear this
in mind because some sort of vague right was claimed on
behalf of the respondents as though there is a right of
renewal of the mining lease in question even apart from the
rules.
The original lease in favour of the father of the
respondents contained a clause that if the lessee were
desirous of taking a renewed lease for a further term of
years he should give six calendar months’ previous notice in
writing to that effect and the Crown Representative will
deliver a renewed lease for a further term of 20 years. Now
as a result of the provisions of Section 19 and 20 of the
Act renewal of the lease granted to the father of the res-
pondents is governed by the Act and the Rules. Rule 24(3)
provides that an application for the grant of a mining lease
shall be disposed of within ninety days from the date of its
receipt, and if it is not so disposed of it shall be deemed
to have been refused. A later amendment omitted the words
“or sub-rule (2)” found in that sub-rule with the result
that the sub-rule (3) now reads as follows :
“If any application is not disposed of within the period
specified in sub-rule (1) it shall be deemed to have been
refused.”
This might seem a little confusing. Does it mean that the
period specified in sub-rule (1) applies not merely to the
grant of a mining lease mentioned in sub-rule (1) but also
to the renewal of a mining lease mentioned in sub-rule (2) ?
But we think that it will be a reasonable interpretation to
hold that the effect of this amendment would be that while
the provision regarding disposal within 90 days of an
application for renewal still stands, the provision for
deeming it to have been refused is no longer there. But
this does not dispose of the matter because the “plantation
to rule 54 lays down that for the purposes of that rule,
where a State Government has failed to dispose of an
application for the grant or renewal of a prospecting
licence or a mining lease within the Period specified in
respect thereof, the State Government shall be deemed to
have made an order refusing the grant or renewal on the date
on which such period expires. So the explanation
176
has two purposes (i) to state the effect of the failure to
dispose of the applications referred to in Rule 24, sub-rule
(1) & (2) within the periods specified in those sub-rules,
as also (ii) to provide the starting point for the purpose
of computing,the period of two months within which an
application for revision under Rule 54 must be preferred.
It has been urged vehemently that a provision to the effect
that if the State Government does not dispose of an
application for renewal within 90 days it should be deemed
to have been refused is an unreasonable one and should,
therefore, be struck down. As we have already mentioned it
cannot be said that the respondents had any right apart from
the rights conferred on them by the Act and the Rules.
Their right, if any, is a creation of, and only flows from,
the Act and the Rules. They cannot claim any right de hors
the Act and the Rules. So if the Act and the Rules provide
that an application not disposed of within 90 days should be
deemed to have been refused, they have to abide by the Rules
and take the consequences. There is no question of any
contravention of any rights of the respondents in the making
of these rules. It is said that there is no way of the
respondents knowing what has been done about their
application for renewal and if the concerned officer or
authority neglects to take any action with regard to their
application they should not be penalised. We do not see
how, if that is the Legislative policy, it can be ques-
tioned. It cannot be said to be in contravention of any
provision of the Constitution. Nor is there any question of
the principles of natural justice having been violated.
Indeed there may be some purpose in such a provision. It is
well known that in almost all statutes regarding local
bodies it is provided that applications for building
licences that are not disposed of within a specified period
should be deemed to have been granted. It has never been
argued in those cases that it is unfair to the local bodies
concerned. That is the provision of law. Let us assume that
in a case like the present rule 24(2) did not exist. Let us
assume that the officer or authority dealing with the
application for renewal simply sleeps over it for years.
The applicant will then be in a worse position. Apparently
the idea was that the officer or authority dealing with an
application for renewal must dispose of it quickly and if he
did not it should be deemed to have been refused thus giving
an opportunity to the aggrieved party to approach the
Central Government to exercise its powers of revision under
Rule 54. Under Rule 55 the Central Government can call- for
the records from the State Government and after considering
any comments made on the petition by the State Government or
other authority, may confirm, modify or set aside the order
or Pass such other order in relation thereto as the Central
Government may deem just and proper. It also provides for
an opportunity to the
177
applicant to make his representation against the comments,
if any, received from the State Government or other
authority. Thus the fact that the application for renewal
is deemed to have been refused as a result of Rule 24(2)
does not prohibit- the Central Government from passing any
order it may deem just and proper including an order
granting renewal. In this case the respondents did not file
an application for renewal within two months of the Deputy
Commissioner’s informing them that their application should
be deemed to have been rejected, though that letter of the
Deputy Commissioner itself was issued nearly nine months
after their date of application. Indeed they could have
filed an application. for revision when they failed to get a
reply within 90 days of their application for renewal. It
means that it is the respondents that were not alert.
We can see nothing unreasonable in the order passed by the
Central Government. It has been mentioned in that order
that after careful consideration of the facts stated in
their review application it was rejected as being time
barred. The application to the Central Government preferred
by the respondents contained all the facts. The
applications for revision have to be in form (L) appended to
the Rules. It has to specify the minerals for which the
revision application is filed. the details of the area in
respect of which the revision application is filed and a map
or plan- for the area has also to be attached. There is no
reason to assume that the Central Government did not apply
their minds to these facts.
We are unable to see how Rule 24 (3) and explanation to Rule
54 can be said to contravene the provisions of Section 8 of
the Act. They are within the rule making powers of the
Government. Clause (g) of Section 13 too enables the
Government to make rules regarding the terms on which and
conditions subject to which any prospecting licence or
mining, lease may be granted or renewed. It includes the
power to make rules regarding conditions subject to which
they may be refused. We do not see how the provision of
Rule 26, which lays down that ‘where the State Government
passes any order refusing to grant or renew a mining lease,
it shall communicate in writing the reasons for such order
militates against this conclusion. In view of the
provisions of Rule 24 and 54 the only reason which the State
Government can give under Rule 26 is that because 90 days
are over the application should be deemed to have been
refused.
The High Court’s view that Rule 24(3) and the explanation to
Rule 54 are in contravention of Section 8 is vitiated by its
assumption that every order to be ‘Passed on an application
for renewal should be approved by the Central Government.
This is not correct. Only renewal cannot be granted without
the Central Governments approval and not rejection.
-L631Sup CI/73
178
The only relevant decisions of this Court are reported in
1960 (2) S.C.R. 775, Shivji Nathubhai v. Union of India &
others and the, decision in C.A. No. 657 of 1967 dated 17-8-
67. In both of them it was held that the power of the
Central Government under Rule 54 is a quasi-judicial power.
They do not deal with the nature of the power exercised by
the State Government in granting or refusing mining leases
renewals thereof. The decisions or in Seeta Ramaiah v. State
of Andhra Pradesh(1) and Shivji Nathubhai v. Union of
India(2) more or less take the same view of the
matter as we have.
We do not feeld called upon to deal with the question
whether as a result of the order passed by the Central
Government there has been a merger and the application by
the respondents before the High Court, which did not ask for
setting aside the order of the Central Government, cannot
succeed as that point was not taken before the High Court;
nor it is necessary to deal with the question in the view
that we have taken of this case in its other aspects. In
the result we hold that the High Court was in error in
holding that Rule 24(3) and the explanation to Rule 54 of
the Mineral Concession Rules 1960 are contrary to the
provisions of the Act and should be struck down.
The appeal is allowed and the order of the High Court is set
aside. The respondents will pay the appellant’s costs.
S.B.W. Appeal
allowed.
(1) A.I.R. 1963 A.P. 54. (2) A.I.R. 1959 Punjab 510.
179