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Mysore Stoneware Pipes and Potteries Ltd. Vs. Union of India (Uoi) - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKarnataka High Court
Decided On
Case NumberW.P. No. 10434 of 1984
Judge
Reported inILR1987KAR89
ActsMineral Concession Rules, 1960 - Sections 54 - Rules 11(1), 24, 24(1), 24(2), 24(3), 28 and 28(4); ;Mines and Minerals (Regulation and Development) Act, 1957 - Sections 8
AppellantMysore Stoneware Pipes and Potteries Ltd.
RespondentUnion of India (Uoi)
Appellant AdvocateR.J. Babu, Adv.
Respondent AdvocateS. Shivshankar Bhat, Central Govt. Standing Counsel for R-1 and ;B.N. Venugopal, HCGP for R-2 and R-3
DispositionPetition allowed
Excerpt:
mineral concession rules, 1960 - rules 24 & 28--application for renewal of mining lease -- no provision for deemed rejection in rule 24 or 28, in case of non-disposal of application for renewal as per direction in rule 24(2). ;sub-rule (2) of rule 24 of the rules provides that an application for the renewal of a mining lease shall be disposed of within 6 months from the date of its receipt. sub-rule (3) thereof provides that if any application is not disposed of within the period specified in sub-rule (1), it shall be deemed to have been refused. sub-rule (1) thereof only deals with an application for the grant of a mining lease and it provides that an application for grant of a mining lease shall be disposed of within 12 months from the date of its receipt. thus, sub-rule (3) of rule..........the petitioner has also sought for issue of a direction to respondents 2 and 3 to renew the mining lease no. 235, dated 24-2-53, first renewed till 24-2-1983 under mining lease no. 1099. there is also a prayer to declare that sub-rule (3) of rule 24 and the explanation to rule 54 of the mineral concession rules, 1960 (hereinafter referred to as the 'rules') are void or in the alternative, are not applicable to the second renewal of a mining lease.3. having regard to the relief which the petitioner is entitled to, it appears to me that it is not necessary to consider the last prayer relating to the validity of sub-rule (3) of rule 24 and explanation to rule 54 of the rules.4. facts necessary to consider the contentions raised in this petition are not in dispute. the petitioner was.....
Judgment:
ORDER

K.A. Swami, J.

1. At the stage of preliminary hearing Sri Shivshankar Bhat, learned Senior Standing Counsel for Central Government was directed to take notice for respondent No. 1 and Sri Udayashankar, learned Government Pleader was also directed to take notice for respondents 2 and 3. Accordingly, they have put in appearance. As the petition requires to the disposed of expeditiously, it is taken up for final disposal itself.

2. In this petition under Articles 226 and 227 of the Constitution, the petitioner has sought for quashing the order dated 26th March, 1983, bearing No. 40(b) AML 82 and 40(a) AML 82, passed by the third respondent, produced as Annexure-G and also the order dated 28th March, 1984, bearing No. 179/84-1/431/83/MIV, passed by respondent No. 1, produced as Annexure-O. The petitioner has also sought for issue of a direction to respondents 2 and 3 to renew the mining lease No. 235, dated 24-2-53, first renewed till 24-2-1983 under Mining Lease No. 1099. There is also a prayer to declare that Sub-rule (3) of Rule 24 and the explanation to Rule 54 of the Mineral Concession Rules, 1960 (hereinafter referred to as the 'Rules') are void or in the alternative, are not applicable to the second renewal of a mining lease.

3. Having regard to the relief which the petitioner is entitled to, it appears to me that it is not necessary to consider the last prayer relating to the validity of Sub-rule (3) of Rule 24 and Explanation to Rule 54 of the Rules.

4. Facts necessary to consider the contentions raised in this petition are not in dispute. The petitioner was granted a mining lease bearing No. 235, dated 24-2-1953, for the purpose of extracting fire clay and manganese ore for a period of 20 years, over an area of 195 acres comprised in Sy. Nos. 85 and 86 part of Muskondi village, Gubbi Taluk and Sy. Nos. 42, 43, 41 and 37 part of Sondenahalli village in Chikkanayakanahalli Taluk, Tumkur District. This mining lease was first renewed for a period of 10 years under M.L. No. 1099. Thus, the mining lease as renewed was to expire on 24-2-1983. Before the expiry of the period of first renewal, well within time, the petitioner filed an application on 16-2-1982, seeking further renewal of the lease. The petitioner was informed by the communication dated 22nd February, 1983 (Annexure-F1), from the Director, Department of Mines and Geology, Government of Karnataka(respondent No. 3) that the application for renewal will be considered if the arrears of Rs. 50,049-30 covering the period upto the end of 1980 are immediately paid.

5. It is not in dispute that pursuant to the aforesaid communication the petitioner has paid the arrears. Even then, by the communication dated 26th March, 1983, bearing No. 40 (b) AML 82 and 40(a) AML 82 (Annexure-G), the Director of Mines and Geology, Government of Karnataka (respondent No. 3), has informed the petitioner that its application dated 16-2-1982 filed for renewal of mining lease is treated as deemed to have been refused under Sub-rule (3) of Rule 24 of the Rules as per the Government Letter No. CI/172 MMN 82, dated 8th March, 1983. On receipt of the aforesaid communication, the petitioner preferred a revision application dated 12 5 1983 before the first respondent, which was received by the first respondent on 17-5-83, against the aforesaid rejection of the application of the petitioner for renewal of the mining lease. The first respondent informed the petitioner that there was a delay of six months in preferring the revision application. The petitioner was given a period of one month to furnish explanation if any for the delay in preferring the revision application. The petitioner filed the explanation as per Annexure-N that it expected the renewal of the lease in the usual course and it was sheeted to receive the communication dated 26th March, 1983 that the application for renewal must be deemed to have been rejected ; that immediately on receipt of the aforesaid communication a revision application was preferred; that there was no delay ; that the petitioner was a Public Limited Company established over 45 years ago and the sole raw material was fire clay for manufacture of stoneware pipes and specials; that the petitioner Company would come to a stand still and as a result thereof several employees would be thrown out of employment. The first respondent did not accept the explanation, consequently did not condone the delay, Accordingly, by the order dated 28th Match, 1984, bearing No. 179/84-1/431/83-MIV, rejected the revision application. The order of rejection was communicated to the petitioner as per Annexure-O.

6. Having regard to the contentions urged, the following points arise for consideration:

(1) Whether the first respondent is justified in rejecting the revision?

(2) Whether the State Government can be said to have considered the application dated 16-2-1982 filed by the petitioner for the second renewal of the mining lease in question?

Point No. 1 :

7. Section 8 of the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as the 'Act') deals with the periods for which mining leases may be granted or renewed. It reads thus :

'(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

(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 to 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 Sub-section (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 the aforesaid provision it is clear that a mining lease relating to a mineral other than the one included in the First Schedule to the Act, (in the instant case the minerals concerned are those which are not included in the First Schedule to the Act) can be renewed for one period not exceeding 20 years. In respect of the minerals included in the First Schedule even for renewal for one period also the previous approval of the Central Government is required to be obtained. As per Sub-section (3) thereof, notwithstanding anything contained in Sub-section (2) thereof it is open to the Central Government if the Central Government is of the opinion that in the interests of mineral development it is necessary to renew, it may, for the 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.

7.1 In accordance with Section 8 of the Act Rules 24 and 28 are framed. Rule 24 deals with disposal of applications filed for grant or renewal of a mining lease. It also deals with the grant of prospecting licence or mining lease for newly discovered mineral or minerals not specified in the existing mining lease. For our purpose it is pertinent to notice that Sub-rule (2) of Rule 24 of the Rules provides that an application for the renewal of mining lease shall be disposed of within 6 months from the date of its receipt. Sub-rule (3) thereof provides that if any application is not disposed of within the period specified in Sub-rule (1), it shall be deemed to have been refused. Sub-rule (1) thereof only deals with an application for the grant of a mining lease and it provides that an application for grant of a mining lease shall be disposed of within 12 months from the date of its receipt. Thus, Sub-rule (3) of Rule 24 provides for deemed rejection of an application filed for grant of a mining lease. In other words, it is pertinent to notice that Rule 24 does not contain a provision similar to Sub-rule (3) thereof in relation to an application for the renewal of a mining lease. Rule 28 of the Rules deals with filing of an application for renewal of mining lease. Sub-rule (1) of Rule 28 provides that an application for renewal of a mining lease shall be made to the State Government in Form J at least 12 months before the date on which the lease is due to expire through such officer or authority as the State Government may specify in this behalf. Sub-rule (2) thereof is not relevant for our purpose Sub-rule (3) thereof further provides that an application for the renewal of a mining lease in respect of mineral/minerals which is/are not specified in the Schedule may, subject to the provisions of Sub-section (2) of Section 8 of the Act, be granted by the State Government. Sub-rule (4) thereof further provides that the second or subsequent renewal of a mining lease in respect of any mineral shall be granted by the State Government only with the prior approval of the Central Government and be subject to the provisions of Sub-section (3) of Section 8 of the Act. Sub-rule (5) has been omitted and Sub-rule (6) is not relevant for purpose. Thus, Rule 28 of the Rules also does not contain a provision for deemed rejection of an application filed for renewal of a mining lease if such an application is not disposed of within 6 months from the date of its receipt as per the direction contained in Sub-rule (2) of Rule 24 of the Rules But, there is an Explanation to Rule 54 of the Rules, which is as follows :--

'For the purposes 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 theses, the State Government shall be deemed to have made an order refusing the grant or renewal of such license or lease on the date on which such period expires'.

7.2 As far as deemed rejection of an application for a prospecting licence or a mining lease is concerned, there is no difficulty because there are specific provisions contained in Sub-rule (1) of Rule 11 and Sub-rule (3) of Rule 24 of the Rules for deemed rejection of an application for a prospecting licence or a mining lease respectively. It is only in respect of an application for renewal of a mining lease there is no provision providing for deemed rejection either in Rule 24 or Rule 28 of the Rules, which also relates to the application for renewal of a mining lease. No doubt, Rule 54 of the Rules occurs in Chapter VII of the Rules relating to REVISION. There are only two Rules i.e. 54 and 55 in this Chapter. Rule 54 provides for filing an application for revision and Rule 55 provides for manner of disposal of the revision application. The Explanation to Rule 54 of the Rules which is referred to above converts the inaction or failure on the part of the State Government to dif pose of an application for grant or renewal of a prospecting licence or a mining lease within the period specified by the Rules into an order refusing the grant or renewal of such licence or lease on the date on which the period for consideration of the application expires. Though this is intended for the purpose of exercise of revision jurisdiction nevertheless it has to be read along with Sub-rule (1) of Rule 11 and Sub-rules (2) and (3) of Rule 24, as otherwise there will not be an actual order of rejection of an application for grant or renewal of a prospecting licence or a mining lease. As per Sub-rule (1) of Rule 54 of the Rules revision lies only against an order made by the State Government or other authority in exercise of the powers conferred on it by the Act or the Rules. In the case of deemed rejection of an application for failure to dispose it of within the period specified by the Rules there will not actually be an order made by State Government or other authority. The Explanation to Rule 54 of the Rules supplies this gap by providing that such deemed rejection shall be deemed to be an order made by the State Government refusing the grant or renewal of licence or lease as the case may be. Therefore, an aggrieved person is necessarily required to file a revision application within 3 months from the date of deemed rejection of the application in case the application is not disposed of within the period specified by the Rules. That being so, it follows that the first respondent is justified in rejecting the revision on the ground that it is filed beyond the period of limitation and the delay has not been properly explained. Accordingly, point No. 1 is answered in the affirmative. Point No. 2:

8. The minerals in question as it is already pointed out are not those which are included in the First Schedule to the Act. Therefore, it was open to the State Government in the first renewal to renew it even for a period of 20 years as the original period of lease was for a period of 20 years. Nevertheless the State Government renewed the lease for the first time only for a period of 10 years. The second renewal is permissible under Section 8 of the Act, but, it must be done only with the prior approval of the Central Government and on obtaining authorisation from it as per Sub-section (3) of Section 8 of the Act read with Sub-rule (4) of Rule 28 of the Rules. No material is brought on record to show that an application for renewal of the lease in question was considered by the State Government as not being in its interest and also in the interest of mineral development in the State When a statute provides for filing an application for renewal of mining lease even for a second time, thereby, it concedes a right in a lessee of a mining lease to seek renewal of a mining lease for a second time. Consequently, there is a statutory obligation on the State Government to consider such an application. Of course, non-consideration of such an application within the period specified by the Rules results in deemed rejection of such an application (as per the Rules) and enables the party to approach the Central Government against such a deemed rejection by way of Revision under Rule 54 of the Rules. This is only a remedy provided against the failure on the part of the State Government to discharge its statutory obligation. Such a remedy is available to the aggrieved person if it is invoked within the period specified in Rule 54 of the Rules. Availability of such a remedy does not in any way justify an inaction or failure on the part of the State Government in discharging the statutory obligation. If that be so, the valuable right conceded to a lessee of a mining lease by the Act and the Rules to seek second renewal of a lease, is rendered ineffective, thereby the valuable right is likely to be defeated by the inaction of the State Government. Therefore, it must be held that there is a corresponding statutory obligation on the part of the State Government to consider such application in accordance with the provisions of the Act and the Rules. In the instant case, the State Government has without any reason failed to discharge the statutory obligation upto 22nd February, 1983 (Annexure-F1). Neither the Director nor the State Government was of the opinion that the application for renewal was liable to be rejected. In fact, by the communication dated 22nd February 1983 (Annexure-Fl) the Director of Mines and Geology (respondent No. 3) informed the petitioner that its application for renewal will be considered if the arrears of Rs. 50,049-30/-were paid immediately. It is not in dispute that the petitioner has paid the arrears. It is only by the impugned communication dated 26th March, 1983 the petitioner has been informed that the application in question must be deemed to have been rejected under Sub-rule (3) of Rule 24 of the Rules. Thus, it is clear that the State Government has without any justification failed to consider the application. Under these circumstances, even though the first respondent is justified in rejecting the revision application on the ground that it is barred by time, it is necessary to issue a direction to the State Government to consider the application of the petitioner for grant of a mining lease afresh in accordance with law as it has failed to discharge its statutory obligation. For the reasons stated above, point No. 2 is answered as follows :The State Government without any justification has failed to consider the application dated 16-2-1982 filed by the petitioner for renewal of a mining lease in question.

9. In the view I take on Point No. 2 it is not necessary to go into the validity of Sub-rule (3) of Rule 24 and the Explanation to Rule 54 of the Rules.

10. For the reasons stated above, this Writ Petition is allowed in the following terms :

(1) The order dated 28-3-1984, bearing No. 179/84-1/431/83-MIV, passed by the first respondent, produced as Annexure-O is quashed.

(2) The order dated 26-3-1983, bearing No. 40(b) AML 82 and 40(a) AML 82, produced as Annexure-G and the order dated 8-3-1983, passed by the State Government in No. CI 172 MMN 82 referred to in Annexure-G, are hereby quashed.

(3) The application dated 16-2-1982 filed by the petitioner for renewal of a mining lease in question stands remitted to the second respondent with a direction to consider the same afresh in accordance with law and in the light of the observations made in this order.


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