1. A huge hillock of rock used for quarrying. building stones and classified as 'minor mineral' is situated', in Survey No. 50 of Dinne Hosahalli village in Kolar Taluk. Originally it vested in the local Village Panchayat. The Panchayat then used to get a good income by way of royalty on granting the quarry lease. On 29th November, 1972, the Government issued a Notification resuming the quarry from the Panchayat, and thereafter invited applications for grant of quarry lease. The petitioner and the Village Panchayat along with some others, submitted their applications. The application of the petitioner was the earliest in time. Rule 7 of the Karnataka Minor Mineral Concession Rules, 1969 (hereinafter called 'The Rules') gave him some priority. It provides:
'7. Priority. - (1) if more than one application for a quarrying lease over the same area are received, preference shall be given to the applications in the order of date of receipt unless the Government for any special reason decides to the contrary:
Provided that where such applications are received on the same day, the Competent Officer after taking into consideration the particulars specified in clauses (a) to (g) of Rule 4 may grant the lease to the deserving applicant. (2) Notwithstanding anything contained in sub-rule (1), the Competent Officer may, for any special reasons to be recorded in writing, grant a quarrying lease to an applicant whose application was received later in preference to an earlier applicant.'
By the above Rule, the petitioner should be preferred unless the Competent Officer for any special reason decides to the contrary. But she has been denied of that right. The Panchayat has been granted a lease over an area of 15 acres, although its application was later in time.
The contention urged for the petitioner in this writ petition is that the special reasons given by the Competent Officer and the Government to by-pass her preferential right are wholly irrelevant and arbitrary.
2. A few more facts may be necessary to appreciate the contentions, The Deputy Director before whom the applications were filed, granted to the petitioner, a lease over an area of 5 acres, and a similar lease to the Chairman of the Village Panchayat. He also granted a lease over an area of 2 acres to another applicant. The Chairman of the Panchayat challenged the validity of the lease granted to the petitioner, in a revision petition before the Director of Mines under Rule 61 of the Rules. The only ground urged in the revision petition was that the quarry was in the possession of the Panchayat and should not be dispossessed as it was the only source of its income. The Director, allowed the revision petition, set aside the entire order of the Deputy Director and granted a lease to the Panchayat over an area of 15 acres. The Director in his order has stated thus:
'After considering all the aspects, it was observed that the V. P. has been in possession of these quarries upto the time the quarries were taken over by Government under Notification dated 27-11-1972.
The quarries were earlier owned and developed by the V. P. and not discovered by the other applicants. But the Panchayat was conducting auction sales every year and maintaining the quarries with proper accounts and returns. Since the Panchayat has been enjoying the quarries and maintaining proper accounts. I am of the opinion that the claim of Panchayat should be preferred to that of other individuals.'
The petitioner then took up the matter before the State Government in further revision. The Government while dismissing the revision, has observed as follows:-
'The issue before Director of Mines and Geology was whether the Panchayat should be preferred or an individual. The Director of Mines and Geology has given valid reasons why he preferred the Panchayat to individuals. When the Panchayat takes a land, it does not work by itself, but normally sub-leases it. When the Chairman of the Panchayat Sri Munibachappa was enquired, he said that Panchayat will sub-lease the lands in open auction. It is thus open to the petitioner to compete in open auction and take the land on sub-lease from the Panchayat. Government, therefore, see no reason to interfere with the orders passed by the Director of Mines and Geology.
The revision petition is dismissed.'
From the orders of the Director and the Government, the following facts are clear: The Panchayat does not exploit the quarry by itself. It has neither the means, nor the technical skill needed for the purpose. It sub-leases or assigns the leasehold rights, on public auction and earns some money to supplement its dwindling income. It was similarly doing every year and maintaining proper accounts and returns.
Whether these reasons could be said to be relevant to ignore the preferential right which R, 7 confers on the petitioner and whether they could be said to be special reasons as contemplated under Rule 7 (2), are the main questions that arise for consideration.
The answer to these questions, depends upon the purpose for which a quarry lease is generally granted. Rule 4 gives us an indication of the general principles. It states that the applicant may give any other information such as his past experience, technical skill, financial resources etc. Rule 66 gives us a further indication in the matter. It provides that all efforts of the Government should be to see that the minor mineral is exploited in a scientific and systematic manner. The circumstances like possessing some special knowledge or more experience in quarrying operations, or better financial resources or better technical staff employed or to be employed may, therefore, be relevant to tilt the scale in favour of such applicant. These circumstances are not exhaustive. There may be other relevant reason to avoid concentration of business in one man or any company. It may justify the selection of a belated applicant or new entrant when he competes with a lessee possessing all the above qualifications. Each case, therefore, has to be considered on its own merits and demerits.
3. Turning now to the facts of the case, it is admitted that the Panchayat is not in a position to undertake the quarry operation. It brings to auction the right to quarry and assigns the same to the highest bidder and thus earns a little money. It was doing the same thing before the quarry was resumed to the Government. The fact that it was in possession of the quarry, in the circumstances, has no relevance when it is admitted that it was not exploiting the mineral. So, the only reason for granting the lease to the Panchayat was just to afford an opportunity to supplement its income. That, in my view, can hardly be a special reason within the meaning of Rule 7. If that be, it would defeat the very purpose of resuming the quarry to the Government, and in no case anybody else other than the Panchayat could get a quarry lease.
The Director and the Government have not stated that the petitioner by any means is placed at a disadvantageous position or suffers any disqualification. She is therefore, entitled to retain her preferential right under Rule 7 of the Rules.
4. In the result, the rule is made absolute, the order of the Director as affirmed by the Government is quashed. The order of the Deputy Director so far as it relates to the grant of lease to the petitioner and to the Village Panchayat is kept undisturbed.
5. Respondent-5 cannot get any relief in this petition although he was one of the applicants before the Deputy Director. He did not obtain a lease from the Deputy Director. He did not challenge the order of the Deputy Director in any revision petition before the Director or the Government. He may, however, take a chance before the Deputy Director as and when he invites applications for the grant of fresh lease over the remaining area in the said quarries.
6. In the circumstances, I make no order as to costs.
7. Rule made absolute.