Alladi Kuppuswami, J.
1. The petitioner in all these writ petitions is a Partnership Firm carrying on the business of mining , manganese ore. The petitioner obtained a mining lease from the Government on 26-10-1953 for a period of twenty years in regard to certain lands in certain villages in Cheepurupalli and Palakonda taluks in Srikakulam District. The lease was to expire on 25-10-73 Under R. 28 of the Mineral Concession Rules made under the Mines and Minerals Regulation and Development Act 1957 (referred to in this judgement as the 'Rules' and the Act respectively) the petitioner had to apply for the renewal of the mining lease at lease 12 months before the date of expiry of the lease. Accordingly on 24-10-1972 ten applications for renewal were made in regard to different areas comprised under the original lease. Under R. 22 of the Rules an application for grant of renewal was to be accompanied by an income-tax clearance certificate from the Income Tax Officer concerned and a valid clearance certificate of payment of mining dues from the Government or any officer or authority authorised by that Government in this behalf. As these applications were not accompanied by these two documents, they were returned to the applicants on 11-4-1973 and other dates and the petitioners were asked to submit the applications together with the two certificates. In the first instance the petitioners-resubmitted the applications with the income-tax clearance certificate, but again failed to produce the certificate of payment of mining dues. The applications were again returned and finally by 5th Sept. 1973 both the certificates were produced before the Government. The State Government by its order dated 23-4-1974 rejected, by separate orders, the applications for renewal. Under each of the orders, which is one the same terms it was stated that the renewal application was not accompanied by the income-tax clearance certificate and valid clearance certificate as required under R. 22 and therefore the application was not a valid application on the date on which it was originally made viz. 24-10-1972. Further the income-tax clearance certificate showed losses in lakhs of rupees and the certificate of payment of mining dues shows that the amount of Rs. 23.26 lakhs of rupees was due under the previous lease which would indicate that the lessee was not paying mining dues to the Government with due promptitude. For the aforesaid reasons the State Government refused to renew the mining lease. The petitioner herein preferred revision petitions to the Central Government against the orders of the State Government under R. 54 of the Rules. The Central Government by its order dated 5-2-1976 dismissed the revision petitions. Before passing that order the State Government was asked to give its comments on the revision petitions and the petitioners are also given an opportunity to make their counter comments. The State Government appears to have also given further comments in addition to the comments given by them earlier. Having considered the grounds of revision, the State Government's comments and the counter-comments of the petitioners and the further comments of the State Government passed orders rejecting the revision petitions. In that order it was stated that under R. 22 every application for renewal should be accompanied by an income-tax clearance certificate and a valid clearance certificate of payment of mineral dues. An application not accompanied by any of the documents was incomplete and cab be rejected by the State Government under R. 26. It was obligatory that the certificates and a fee of Rs. 200/- should be attached to the application. It was held that the State Government was right in refusing the renew of lease on that ground. The Central Government also observed that even on the facts it was clear that if the petitioner who was in arrears of lakhs of rupees by way of income-tax, was allowed to do the mining, it would defeat the very purpose of the Act. further, the State Government had also come to the conclusion after giving the petitioner another opportunity to pay the heavy mining dues, that the petitioner was not a fit person to grant a mining lease. In those circumstances the Central Government observed that the order of the State Government was just. The order of the State Government was upheld and the revision petitions were dismissed. Questioning nine out of the ten orders made by the Central Government in revision, the petitioner has filed the nine writ Petitions W. Ps. 1856, 2003 to 2007, 2052 to 2054 of 1976.
2. When the revision petitions were pending before the Central Government, the Government issued a memo on 6-9-1975 to the Collector, Srikakulam relating to the recovery of mineral dues from the petitioner. In that memo it was stated that the petitioner was to pay the dues in monthly instalments of Rs. 87,000 each, the first instalment is to be paid before 10-10-1975. The petitioner should clear the entire arrears by 10th Sept. 1977. It is unnecessary at this stage to state in detail the various other clauses relating to the mode and the manner of payment of arrears. The company seems to have made certain representations and after considering the representations the Government issued another memo making some modifications in the previous memorandum. In the light of the second memorandum the Collector was requested to bring about a settlement with a petitioner and he was also authorised to stipulate each other conditions that the may think necessary so that the realisation of the Government dues would be assured. It was further stated that the question of granting temporary permission for a period of two years for working the mines pending final decision on the revision petitions will be considered by the Government and necessary orders will be issued separately after a settlement is reached and the necessary agreement is entered into by the Collector and the party on the above lines. Accordingly an agreement was entered into on 13-2-1976 between the Collector (District Revenue officer) and the petitioner. It was stated therein that the revenue dues up to 1-1-1976 were Rs. 14,71,451.77 and the interest thereon was Rs. 73,305.30/, The petitioner agreed to pay these dues with interest in 18 monthly instalments of Rs. 85,836.50 each, There were other clauses which need no be set out of this stage. It may be noted that this agreement was arrived at and executed on 13-12-1976 after the revision petitions were dismissed by the Central Government on 5-2-1976. The petitioner there upon filed a review petition before the Central Government stating that the memorandum of the State Government agreeing to certain terms which was issued long before the dismissal of the revision petitions was not brought to the notice of the Central Government. The State Government had also not given the correct figures regarding the amounts due from the petitioner. In as much as an agreement he had been reached between the petitioner and the State Government regarding the payments of arrears it was urged before the Central Government that the renewal may be granted and the order of dismissal of the revision petitions may be reviewed. the central Government that the renewal of the revision petition may be reviewed., The Central Government dismissed these petitions on 27-3-1976 observing that they had become functus officio on the dismissal of the review petitions and as there was no clerical error or mistake apparent on the face of the record within the meaning of R. 56, the Central Government had no jurisdiction to review.
3. The petitioner has filed, as stated above, the nine writ petitions questioning the original order of the Central Government rejecting to review petitions. The petitioner also filed writ petition No. 3618/76 praying for the issue of a writ of mandamus or any other appropriate order or direction directing the State Government to grant a renewal of the mining lease in view of the agreement entered into between the State Government and the petitioner on 13-2-1976.
4. In the batch of Writ petitions challenging the validity of the order of the Central Government rejecting the revision petitions filed by the petitioner, Sri Shiv Shanker, the learned counsel for the petitioner, has raised the following contentions:
(1) The Central Government was wrong in holding that R. 22 was mandatory in so far as it is required that the application should be accompanied by the income-tax clearance certificate and the certificate of payment of mining dues. The said requirement was only directory and in as much as these two certificates were filed on 5-9-1973 long before the order was passed by the State Government, the State Government ought not to have rejected the application for renewal on the ground that the applications were not accompanied by these two documents and the Central Government should have set aside the order of the State Government.
(2) The Central Government was wrong in holding that even otherwise the order which was passed by the State Government was just in the circumstances.
The observations of the central Government that the petitioner was in arrears of income-tax to the extent of several lakhs of rupees is totally incorrect as no assessment order had been passed at all against the petitioner. The second reason stated by the Central Government that the State Government, after giving the petitioner another opportunity to pay heavy mining dues, had come to the conclusion that the petitioner-firm is not a fit person is also unsustainable as no such statement was made by the State Government in the order which was the subject-matter of the revision petition.
(3) The central Government relied upon certain further comments made by the State Government. The Petitioner was not aware of any such further comments, They were not placed before the him and he was not given opportunity to make his representations against the further comments and the order passed by the Central Government relying also upon these comments is, therefore, vitiated.
5. Contention No.1: In answer to this contention, the counsel for the Central Government and the Government pleader and Mr. Anantha Babu appearing for one of the parties who are added as parties to the writ petitions submitted that the applications which are made on 24-10-1972 unaccompanied by the income-tax clearance certificate of payment of mineral dues as required by Rule 22, were not valid applications at all as the requirement contained in Rule 22 that the application should be accompanied by these two documents is mandatory. The fact that they were subsequently furnished would not make these applications valid applications as on 24-10-1972. As R. 28 required that an application for renewal should be made at least one year before the expiry of the lease and as the applications made were not valid for the aforesaid reason they were rightly rejected by the State Government and the order of the Central Government upholding the order of the State Government is correct.
6. In order to appreciate the respective contentions it is necessary to refer to the relevant provisions of the Act and the rules. Under S. 4 of the Act 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 the Act and Rules made thereunder. S. 4 (2) provides that no mining lease shall be granted otherwise than in accordance with the provisions of the Act and Rule made thereunder. S. 5 provides that no mining lease shall be granted to any person unless he (a) .... (b) produces from the Income-tax officer concerned an Income-tax clearance certificate in the prescribed form; and (c) satisfies such other conditions as may be prescribed. S. 10 (1) States that an application for a mining lease shall be made to the State Government in the prescribed form and shall be accompanied by the prescribed fee. Under S. 10(2) an acknowledgement of the receipt of the application is to be sent within the prescribed time and in the prescribed form. Section 10(2) provides that on receipt of an application under this section, the State Government may having regard to the provisions of the Act and any rules made thereunder grant or refuse to grant the licence or lease. S. 12 deals with a register of application for mining leases and licences to be maintained by the State Government which is open to inspection by the any person on payment of prescribed fee. Under S. 11(2) where two or more persons have applied for mining lease in respect of the same land, the applicant whose application was received earlier have a preferential right for the grant of lease over an applicant whose application was received earlier shall have a preferential right for the grant of lease over an applicant whose application was received later. It is however stated in the proviso that the State Government may in certain cases grant the mining lease to such one of the applicants as it may deem fit. S. 19 states that any mining lease, granted, renewed or acquired in contravention of the provisions of the Act or any rules or order made thereunder shall be void and of no effect. S. 13 confers powers on the Central Government to make rules for regulating the grant of prospecting licences and mining leases and for purposes connected therewith. In particular the rules may provide for the manner in which the applications for mining lease may be made and the fees to be paid therefor, the time within which and the form in which acknowledgement of the receipt of any such application may be sent, the matters which may be considered where applications in respect of the same land are received on the same day etc. In exercise of this power the Mineral Concession Rules, 1960 were made. Chapter IV deals with the grant of mining leases in respect of the lands in which the minerals vest in the Government. Under R. 22 (1) an application for the grant of a mining lease shall be made to the State Government in Form I. Rule 22 (3) which is the most important rule to be considered in this case may be set out in full.
'22. (3) (i) Every application for the grant or renewal of a mining lease shall be accompanied by
(a) a fee of two hundred rupees:
(b) an income-tax clearance certificate in Form C form the Income-tax Officer concerned; and
(c) a certificate of approval in Form A or if the certificate of approval has expired a copy of application made to the State Government for its renewal;
(d) a valid clearance certificate in the form prescribed by the State Government, of payment of mining dues, such as royalty or dead rent and surface rent payable under the Act or the rules made thereunder, from the Government or any officer or authority authorised by that Government in this behalf:
Provided that where any injunction has been issued by a court of law or any other competent authority staying the recovery of any such mining dues, the non-payment thereof shall not be treated as a disqualification for the purpose of granting or renewing the said mining lease:
Provided further that where a person has furnished an affidavit to the satisfaction of the State Government stating that he does not hold and has not held a mining lease, it shall not be necessary for him to produce the said valid clearance certificate;
Provided also that the grant of a clearance certificate under sub-cl. (d) shall not discharge the holder of such certificate from the liability to pay the mining dues which may subsequently be found to be payable by him under the Act or rules made thereunder.
(i) The State Government may, for reasons to be recorded in writing, relax the provision of sub-cl. (d) of cl. (i).
(ii) Every application for the grant of a mining lease shall in addition to those specified in cl. (i) be accompanied by a deposit of five hundred rupees for meeting the preliminary expenses in connection with the grant of mining lease:
Provided that the applicant hall deposit such further deposit as may be asked for by the State Government within one month from the date of demand of such deposit:
Provided that a properly sworn affidavit stating that no dues ate outstanding shall suffice subject to the condition that the certificate required as above shall be furnished within ninety days of the date of application and the application shall become certificate within the said ninety days.'
7. It is contended by the petitioner that the requirement that the application should be accompanied by the income-tax clearance certificate and the clearance certificate of mining dues is only directory. It is sufficient if at any time before the passing of the order of the State Government on an application made either for grant of a mining lease or the renewal these documents are furnished and the State Government is thereupon bound to treat the applications as valid applications. It was stated that under S. 5 what is prohibited is the grant of a mining lease to a person who does not produce an income-tax clearance certificate or who does not satisfy other conditions as may be prescribed by the rules. Sec. 19 also states that a mining lease granted or renewed in contravention of the provisions of the Act shall be void and of no effect. From these provisions it was sought to be argued that the prohibition is only with reference to grant of the mining lease or renewal and hence the point of time which is relevant for the purpose of judging whether an application is valid, or not, is the time when the order either refusing or granting the application is made and not when the application was presented by the party concerned. It is in this light that the provisions contained in R. 22 has to be considered. Therefore, even though the rule says that the application should be accompanied by the documents referred to therein, all that is excepted of the applicant is to see that the to see that the documents are available at the time when the order is passed by the State Government. The expression 'shall be accompanied by ' in the rule must, therefore be regarded only as directory and any compliance with this rule before the order is made must be treated as substantial compliance. It was also argued that if the rule is construed as containing a mandatory requirement that the application should be accompanied by these documents, the rule would be inconsistent with the provisions of the Act as there is no provision in the main Act which makes it obligatory upon the applicant to see that the application is accompanied by the various documents referred to in this rule. We are unable to agree with this contention. Section 5 states that no mining lease shall be granted unless a person produces from the Income-tax Officer concerned an income- tax clearance certificate and satisfies such other conditions as may be prescribed. What is prescribed under R. 22 is that the application should be accompanied by these two documents. As S. 5 itself provides that satisfaction of the conditions prescribed in the rule is a necessary condition for the grant of a lease, any condition requiring that the application should be accompanied by these two documents cannot be said to be inconsistent with the main provisions of the Act. It is also to be noted that s. 13 which confers powers on the Government to make rules is wide in its scope and also authorises the Central Government to make rules regarding the manner in which the applications should be made and the terms on which any mining lease is granted (vide S. 13(2) (a) and (g)). It is true, as pointed out by the learned counsel for the petitioner, that the use of the expression 'shall' is not always conclusive on the question whether a provision is directory or mandatory for there have been several instances in which the expression 'shall' has been construed as 'may' and vice versa. It is unnecessary for us to refer to various decisions cited before us dealing generally with this question has to be considered with reference to circumstances of each case having regard to the purpose of the Act and its various provisions. It is not, therefore, either helpful or desirable to deal with other cases where this question has been considered and to draw a conclusion from these decisions. The learned counsel for the petitioner is no doubt justified in saying that the provisions of the main Act would indicate that no lease can be granted otherwise than in accordance with the provisions of the Act and any lease granted contrary to the provisions of the Act would be void, and therefore, the relevant point of time for considering whether the requirements of the Act have been complied with or not should normally be the date of the order granting the lease. But according to us, one important provision which has also to be taken into account in considering the question whether the date of application is the material point of time or the date of the grant, is S. 11(2). Under that provision it is provided that where two or more persons have applied for a mining lease in respect of the same land, the application whose application was received earlier shall have a preferential right for the grant of the lease over an applicant whose application was received later. If the argument of the learned counsel for the petitioner is accepted viz., that the application should be treated as a valid application even though it is not accompanied by the documents referred to in R. 22 provided such documents are produced before the order is made, it would mean that an applicant whose application is defective in the first instance would, by producing the documents later, be entitled to preference over another applicant who had made the application in strict conformity with the rules. In our view, such a result has to be avoided as that would not only enable applicants to submit any scrap of paper and demand that it should be treated as an application on the ground that all the requirements of the rules were subsequently complied with before the order of grant or refusal is made. This would also enable the State Government to favour such applicants by delaying the grant of an application till such time as the applicant produces the necessary documents. In our view any construction of the provisions of the Act which would place an applicant who has taken care to conform to the provisions of the Act and the rules in a worse position than another applicant who has not done so has to be avoided. Further, under R. 22 last proviso, it is seen that a properly sworn affidavit stating that no dues are outstanding shall suffice subject to the condition (sic) and the application shall become invalid if the party fails to file a certificate within the said ninety days. This enables the Government to receive in the place of a clearance certificate for payment of dues, a sworn affidavit stating that no dues are outstanding followed by the production of the certificate within ninety days the date of application. If really the production of the valid clearance certificate under the main part of the rule is not mandatory and that certificate could be produced at any time before the order is made, there was no need to have a proviso stating that a sworn affidavit is sufficient and the certificate could be produced within ninety days thereafter. It is also to be seen that S. 5 of the Act itself states in categorical terms that no mining lease shall be granted unless a person produces an income-tax clearance certificate. The importance of this document is indicated by the fact that it is referred to specifically in the main Act itself. The main Act further goes on to provide that no mining lease can be granted unless the person satisfies the other conditions as may be prescribed and places them on the same footing as the Income - tax clearance certificate. It is, therefore, clear from a perusal of these provisions that the requirements referred to in R. 22 were intended to be mandatory in character. In this connection if has also to be noted that the application was to be accompanied by a fee of Rs. 200/- It cannot be argued that this requirement also is directory and even an application which is not accompanied by any fee would also be valid application provided the fee is paid before the date of the final order. It is true, as submitted by Sri. P; Shiv Shankar, that one part of the same provisions may be mandatory and another part directory. He, therefore, submitted that the mere fact that the requirement regarding the payment of fee of Rs. 200/- at the time of the application is mandatory does not mean that the other requirements are also mandatory. In appropriate cases the court may no doubt come to the conclusion that certain parts of the same provision in the enactment are mandatory and the other parts directory. We do not consider that such circumstances exist in this case. We are satisfied, having regard to the provisions of the Act and the rules thereunder, there was no valid application for renewal as on 24-10-1972 as that application was not accompanied by these two certificates and the subsequent furnishing of the two certificates does not cure the defect in these applications.
8. We are supported in our conclusion by the decision of a Division Bench of this court in Writ Appeal No. 500/69 dated 1-4-1971. In that case an application was made in March, 1964 unaccompanied by the Income-tax clearance certificate which was furnished only in Nov. 1964. It was held that there was no valid application in March, 1964 and the application could be considered valid only from Nov. 1964 and the person who had presented valid application earlier had to be given preference. It was held that the language employed in Ss. 4, 5 and 6 of the Act as well as in R. 22 was mandatory and any application which should be valid and proper for the purpose of S. 10(2) must be an application made in the prescribed form and must be accompanied not only by the prescribed fee, but also by a proper income-tax clearance certificate as seen from R. 22 (3), Otherwise, it would not be considered as a valid application at all. If the application is not accompanied by an income-tax clearance certificate, such an omission cannot be considered as a mere technical defect which can be cured at any time.
9. Sri Shiv Shanker tried to distinguish this case by submitting that this case dealt with a case of applications for a mining lease where there is a question of preference between two application, whereas in the present case we are only concerned with a renewal and there is no question of preference. He, therefore, submitted that it is not relevant in this context to consider the effect of S. 11(2) which deals with preference. It is no doubt true that in the case of a renewal there is no question of any preference. But it has to be noticed that under the Act no distinction is made between a renewal and an application for a mining lease. Rule 22 (3) places both the grant and renewal of a mining lease on the same footing. It starts by saying that every application for grant or renewal of a mining lease shall be accompanied by the documents. No distinction is made in the rule between an application for the grant of a mining lease and an application for renewal of a mining lease. If these requirements are treated as a mandatory for application for the grant of a mining lease , it would follow that the position is the same in regard to an application for renewal. Here against considerable for renewal. Here again considerable importance is attached in the rules to the time for applying for renewal to the time for applying for renewal and it is stated that every application for renewal should be made not less than twelve months before the expiry of the lease, apparently in order to give time to the State Government to consider whether it would be more advantageous to renew the lease or to make the area available for grant to all persons. When R. 28 says that an application for renewal shall be made to the State Government at least twelve months before the date, there can be no doubt that it refers to a valid application conforming to the other rules regarding renewal including R. 22. Inasmuch as the application for renewal which was made on 24-10-72 was not a valid application it would follow that the State Government was right in rejecting the application as it is not the case of the petitioner that there were any other valid application within 12 months before the date of expiry of the lease.
10. Sri Shiv Shanker referred to the decision in Narasima v. State ILR (1971) Andh Pra 208. In that case the short point that fell for determination was whether the Government could insist upon the production of the income-tax clearance certificate once again at the time when the lease deed was being executed when it had already been furnished at the time when the application was made. After referring to the various provisions of the Act and the rules the learned Judges held that the relevant time at which the income-tax clearance certificate has to be produced is when the application is made. There is no specific provisions either in the statute or the rules which enjoined production f the certificate against at the stage of the lease deed when it has been produced at the time of the application. We do not see how this decision is of any assistance to the petitioner. On the other hand in the course of the discussion of the various provisions of the Act and the rules, the learned Judges have repeatedly observed that unless the requisite valid income-tax clearance certificate is actually produced at the relevant time, the person will not be entitled to the grant of lease. At page 214 they observed:
'Of course, under S. 5 no mining lease shall be granted by the State Government unless he holds a certificate and produces the income-tax clearance certificate in the prescribed form'.
At page 215 they say:
'It is no doubt true that holding of a certificate of approval and production of income-tax clearance certificate are not intended to serve as empty formalities. There is some purpose and some meaning behind the statutory requirement of the production of these certificates. Evidently it is intended that not only the lessee should but also should be solvent and should be relied on to be prompt and diligent in payment of the due amount in the shape of royalty etc.'
Lower down, they pointed that the holding or production of these certificates is a condition precedent for the grant of the lease. The above observations make it clear that the learned Judges regarded the holding of an income-tax clearance certificate as a condition precedent. In the other words, the provision is mandatory and not merely directory. The same thing holds good with regard to the certificate for the payment of mining dues.
11. The learned counsel for the petitioner relied upon the decision in Canara Minerals (P) Ltd., v. State AIR 1967 Mys 141. In that case respondent 4 had applied for a prospecting licence in Feb. 1962 whereas the petitioner's application was made in 1964. It was contended by the petitioner that the application of respondent 4 was not accompanied by income-tax clearance certificate, nor was it produced by him before the licence (prospective licence) was actually granted as required by S. 5 of the Act. It was held that the question whether the application of respondent 4 was not accompanied by income-tax clearance certificate recedes into the background and the question that assumes all importance is whether he had or had not produced the certificate before the Government actually made the grant. As they came to the conclusion that it was so produced they held that the petitioner had not made out a case that the application of respondent 4 suffered from such legal defect as to forfeit priority of consideration ordinarily available to it under S. 11 of the Act.
12. For the reasons mentioned earlier we respectfully, disagree with the above decision.
13. Reliance was placed by the learned counsel for the petitioner on the decision in C. B. Rao v. Union of India, : 3SCR665 , where dealing with Mineral Concession Rules of 1949 it was held that where an application did not contain a description illustrated by a map or a plan showing the boundaries and the are of land in respect of which lease was required as required by the R. 27 of the Rules it cannot be considered to be an invalid application. The Supreme Court observed that there was no provision in the Act showing that the defects in an application which is accompanied by the fee prescribed under R. 28 cannot be subsequently removed., The information given in the application is intended for the satisfaction of the authorities granting the lease so that after considering the merits and making a grant, proper details are embodied in the lease actually granted. It was not urged that as a result of any defects in the application the lease itself could not be executed. That would indicate that the omission to file a proper map initially could be cured. We do not consider that this decision is of any assistance to the petitioner. The Supreme Court was concerned with a rule which required that an application should contain certain particulars and one of the particulars was the description illustrated by a map or a plan showing the situation, boundaries and the area of the land. As these particulars were only required for being embodied in the lease actually granted for the purpose of identification of the land, the Supreme Court held that any defect in furnishing these particulars could be subsequently cured. The Supreme Court followed the decision in Banarsi Dar v. Cane Commr. U. P., : AIR1963SC1417 where conditions similar to those laid down by R. 27 were held to be directory. It was also held in that decision that even assuming that some of the requirements are mandatory, it could not be held that the mere want of a map or of details describing the area for which the lease was applied for, would make the application itself void or of no effect. In para 6 the Supreme Court referred to R. 26 which prohibited the grant of a lease to any person who did not hold a certificate of approval from the State Government or did not produce the income-tax clearance certificate and observed that where there was a prohibition against granting leases in these cases, the Act did not prohibit any grant on the ground that the application is defective or not accompanied by a map. In this case we have already noticed that under S. 5 there is a prohibition prohibiting the grant of a lease if income-tax clearance certificate is not produced of other conditions prescribed in the rules were not satisfied.
14. In Phulchand v. Union of India, : AIR1975Ori110 it was held that an application not accompanied by the prescribed fee is not an application in the eye of law. After referring to several decisions which dealt with the tests for determining whether a provision is mandatory or directory it was statute in view, taking the effect of non-compliance into consideration and the general tenor of the statute, the requirement that the application shall be accompanied by the prescribed fee is mandatory and an application not accompanied by such fee is not an application in the eye of law. The Mines and Mineral Development Regulation Act was made in public interest and provided for the Minerals. The whole object of the Act is to see that the Minerals should be worked properly without waste and by persons who are qualified and who have the proper resources for working the mines. The capacity, experience and the financial resources of the person who works the Mine are in our view extremely important considerations and in order to assure that leases are granted to such persons and the Minerals are worked properly to the best advantage of the country and its people the legislature has though fit to introduce a provisions that the applications should be accompanied by income-tax clearance certificate and certificate that there are no dues of Mineral revenue. Taking into account the entire scheme of the Act, its object and purpose we are of the view that the requirement of production of these two documents is mandatory especially when we consider this provision in the light of R. 11 (2) which gives preference to the earlier application in the matter of applications who have applied for the same area. The State Government was therefore right in rejecting the applications for renewal by the petitioners as not valid and the Central Government was right in confirming that order.
15. In this view it is unnecessary for us to consider the contentions on the merits but as arguments have been addressed on those aspects also we shall briefly deal with them.
16. Having held that the applications were not valid the State Government also proceeded to observe that the applicants do not deserve to be granted renewal for other reasons also. The income-tax clearance certificate produced by the applicant showed that he had incurred losses of several lakhs of rupees; for the year 1966-67 the return shows a loss of Rs. 75,601/- for the year 1967-68 a loss of Rs. 2,47,368/- for the year 1968-69 a loss of Rs. 4,95,320/- and for the year 1969-70 a loss of Rs. 6,96,201/-. It is therefore clear that the petitioner was incurring losses which were increasing year after year by leaps and bounds. In those circumstances, even assuming that the applications for renewal were valid the State Government was justified in refusing to grant renewal to a person who was incurring such loss. In addition to this it is also admitted that there were arrears of minerals dues to the tune of several lakhs of rupees. The State Government in its order mentioned that there were pending dues of 23.26 lakhs of rupees. There is some dispute as to the exact amount due but it cannot be denied that there were arrears to the extent of sever lakhs of rupees in respect of the prior lease. The State Government was amply justified in refusing renewal to a person who had not discharged his obligations under the prior lease. The learned counsel for the petitioner drew our attention to the fact that though the petitioner was in arrears to the extent of several lakhs of rupees he had made arrangements for clearing of the arrears by requesting the Minerals and Metal Trading Corporation of India, Ltd., to which the Manganese ore was being sold to remit 17 1/2% of the bill amounts to the Collector, Srikakulam. In the clearance certificate it was also mentioned that the petitioner were doing everything possible to pay promptly and regularly to liquidate the arrears. Reference was also made to the subsequent agreement between the petitioners and the Government and it was submitted by Sri Siva Sankar that the very fact that this agreement was entered into shows that the Government was satisfied that it would be able to recover the entire dues within a short period of 18 months. It may be that the petitioner who fell into large arrears tried to make amends by making arrangements for clearing the dues, and at one stage the Government also agreed to a certain scheme by which the arrears were to be cleared. But in out view that does not in any way prevent the Government from rejecting the application for renewal to a person who failed to pay the amount under the lease in proper time and allowed heavy arrears to accumulate.
Sri Shiv Shanker at one stage made a half hearted attempt to argue the extreme position, namely, that once an application is in accordance with the rules the application is in accordance with the rules the application has to be ordered. If the income-tax clearance certificate for mining dues are filed, it is not open to the State Government to reject the renewal application on the ground that the petitioner was not a fit person to be granted a lease. We have no hesitation in rejecting this contention. The State Government as the duly constituted statutory agent of the Central Government in whom all the minerals vest and is entitled to use its discretion as to whether a renewal is to be granted or not. The effect of the various provisions and the rules in regard to renewal is that it is precluded from granting of renewal if the conditions are not satisfied. It does not follow that merely because the application for renewal satisfied the provisions of the act and the rules the State is bound to grant a renewal. Even in such a case the State may use its discretion and refuse to grant a renewal if it is of the opinion that the interests of the State and the public will not be served by granting the renewal to the lessee. In this case the State considered that the lessee was not a fit person as even according to his own income-tax returns he had suffered huge losses and he had not discharged his obligations as a lessee with promptitude and had allowed arrears to the extent of several lakhs of rupees to accumulate.
17. Sri Siva Sanker, however, submitted that though the State Government has given these reasons the order of the Central Government in revision not identical with the order of the State Government. The Central Government in its order stated that there were large arrears of income-tax which is not correct as no assessment order had been passed and it cannot be stated that there were arrears of income-tax. Further, the other ground referred to by the Central Govt. in its order was that the State Government had given the petitioners another opportunity to pay the heavy mining dues but still found the firm was not a fit person to be granted a mining lease. He submitted that the State Government did not state this as a reason in its order. It is no doubt true that the statement made in the order of the Central Government that the petitioner was in arrears of lakhs of rupees by way of income-tax may not be correct. Not it is quite correct to say that the State Government in its order had come to the conclusion that the petitioner another opportunity to pay the heavy mining dues, because that order was passed before that opportunity to pay the heavy mining dues, because that order was passed before that opportunity was given, But read as a whole the order of the Central Government means that as the State Government considered that the petitioner was not a fit person to be granted a renewal, it did not see any reason to interfere with that order. We do not see any reason to take a different view.
18. Sri Shiv Shanker also submitted that this agreement was in pursuance of a memorandum issued even in the end of 1975 and it was modified to a limited extent by the memorandum dated 5-1-1976 and it was not brought to the notice of the Central Government when the orders on the revision petition were passed. He submitted that instead of bringing to the notice of the Central Government the said memorandum the State Government went further and in its comments, made it appear to the Central Government that the petitioner had failed to pay the arrears at all. On the other hand, he submitted that the petitioner had paid 2 lakhs of rupees as per the memorandum and also paid substantial amounts, and a considerable part of the arrears had been discharged even by 5-2-1976 when the order in revision was passed and if these circumstances had been brought to the notice of the Central Government the impugned order would not have been passed. We do not see any force in this contention. It was quite open to the petitioner to have brought to the notice of the Central Government the concerned facts, namely, the issuing of the memorandum by the State Government and the payment of considerable amount towards the arrears by the petitioner. But he failed to do so. Further, in the revision petition the Central Government was only concerned with the question whether the order passed by the State Government was correct or not.
19. The last contention that is raised is that further comments of the State Government were not made available to the petitioners. The Central Government relied mainly upon the State's comments on revision and the counter-comments of the petitioner and the mere fact that some reference is also made to the State's further comments will not vitiate the order when the order is based on the comments of the State Government which were made available to the petitioner and his counter commends were obtained. We do not agree that any rule was violated by the Central Government nor has there been any violation of principles of natural justice in this case.
20. In the result the writ petitions 1856/76, 2003 to 2007/76 and 2052 to 2054/76 are dismissed with costs, of respondents 1 and 2. Advocate's fees Rs. 150/- in each case.
W. P. No. 3618 of 1976.
21. In this writ petition the petitioner seeks the issue of a writ of mandamus. The case of the petitioner is that even assuming his application for renewal was not in order and not in accordance with the Act and the rules, the State Government under the memorandum of agreement, dated 13-2-1976 had in fact agreed that it would renew the lease provided that the petitioner agreed to pay off the arrears in 18 instalments and also agreed to abide by the other terms and conditions of the agreement. We have perused the agreement . We do not part of the State any promise on the part of the State to grant a renewal of the lease. Under this agreement the petitioner agreed to clear off the arrears by paying the amount in 18 instalments of Rupees 85,836-50 each and agreed not to sell ore to any private party except to Minerals and Metals Trading Corporation and Ferro Alloys Corporation. This is merely an agreement entered into between the parties giving certain concessions to the petitioners in the matter of clearing the dues. It may be that the petitioner entertained the hope that if he performed his part of the agreement his application for renewal would be considered favourably and it may equally be true that the State Government w inclined to consider his application favourably in such case. But under the statute the State is prohibited from granting a renewal if the application does not conform to the statute or to the rules thereunder. The petitioner can insist upon his rights under the agreement so far as payment of arrears is concerned but it does not follow that he has got a right to ask for a renewal of his mining lease.
22. We see no merits in the writ petition. This writ petition is also dismissed but in the circumstances without costs.
23. Advocate's fee Rs. 100/-.
24. Petition dismissed.