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Kangra Valley Slate Company Ltd., India Vs. the Union of ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtDelhi High Court
Decided On
Case NumberCivil Writ No. 350 of 1975
Judge
Reported inAIR1976Delhi51
ActsMines and Minerals (Regulation and Development) Act, 1957 - Sections 30; Code of Civil Procedure (CPC), 1908 - Sections 11; Mines and Minerals (Regulation and Development) Act, 1957 - Rule 55
AppellantKangra Valley Slate Company Ltd., India
RespondentThe Union of ors.
Appellant Advocate M.C. Bhandare,; Urna Mehta and; Rai Kumar, Advs
Respondent Advocate Harish Chandar, ; N.N. Goswami and ; Hardev Singh, Advs
Cases Referred(see State of Orissa v. Union
Excerpt:
.....and development) act, 1957 - order of central government sought to be quashed - under act of 1957 state government statutory authority - state government empowered to refuse application for grant or renewal of mining lease - central government vested with revisional powers under section 3g and rule 55 - when central government negatived right of state government to reserve area for its exploitation then state government cannot raise same plea - state government had no right to deal with land through company - agreement entered by parties does not improve its position to confer any better rights on company - applicant company not separate and distinct entity - mandamus issued to central government to determine rights inter se between petitioner and respondent no. 3 - impugned order..........under rule 54 of the mineral concession rules, 1960 be quashed and directions be issued to the state government to desist from carrying into effect, itself or through any of its agencies, any scheme or operation in the mining area referred to in the petition and to grant the mining lease in respect of this area to the petitioner. 2. the petitioner company is incorporated under the companies act as a public limited company with its registered office at new delhi. it is engaged in the business of quarrying slates and shale (major minerals) and marketing the same. the dispute relates to the right to obtain lease of land, situated in villages ma.1ra and, manethi, telisil rewari, district gurgaon. on february 9, 1962, the then state of punjab invited a0plications for grant. of mining.....
Judgment:

S.N. Shankar, J.

1. The petitioner-Company by this writ petition under Articles 226 and 227 of the Constitution has prayed that the order dated October 1, 1974 passed by the Central Government in revision under Rule 54 of the Mineral Concession Rules, 1960 be quashed and directions be issued to the State Government to desist from carrying into effect, itself or through any of its agencies, any scheme or operation in the mining area referred to in the petition and to grant the mining lease in respect of this area to the petitioner.

2. The petitioner Company is incorporated under the Companies Act as a public Limited Company with its registered office at New Delhi. It is engaged in the business of quarrying slates and shale (major minerals) and marketing the same. The dispute relates to the right to obtain lease of land, situated in villages Ma.1ra and, Manethi, Telisil Rewari, District Gurgaon. On February 9, 1962, the then State of Punjab invited a0plications for grant. of mining lease with respect to an area of 671 bighas of land in the aforesaid villages. Respondent No. 3 Diwan Singh Sethi filed his application for the grant of a part of this area on March 12, 1962 while the petitioner-Companv filed its application for -a similar gr ant on March 20, 19-62. The State Government did not dispose of these applications within the stipulated period of nine months as required by Rule 24 of the Mineral Concession Rules, 1960 which had the effect of a deemed refusal of these applications vide Rule 24 (3) of the said Rules. Both the petitioner and respondent No. 3 consequently filed revisions before the Central Government under Section 30 of the Mines and Minerals (Regulation and Development) Act, 1957 (hereafter called 'the Act') read with Rule 54 of the aforesaid Rules. By its order dated June 25, 19,65 the Central Government directed the State Government to consider the applications filed by the petitioner-Company and respondent No. 3 by August 31, 1965. The State of Punjab did not carry out these directions. This led the petitioner-Company to file a writ petition in the High Court of Punjab and Haryana at Chandigarh for orders to the State Government to carry out the directions of the Central Government. In the meantime, at the instance of the State of Haryana which had since come into existence and within, whose jurisdiction the lands fell, the Central Government extended the time for consideration of the applications to July 31, 1969. On a statement that the applications will be considered by July 31, 1969, the writ petition was dismissed as infructuous. By order dated July 19, 1969 the State of Haryana informed the petitioner Company and respondent No. 3 that their applications for grant of mining lease had been rejected because the area in question was being re-not1fied for the grant of mining lease. This led to a second set of revisions by the petitioner-Company and respondent No. 3 before the Central Government against this decision of the State of Haryana. The Central Government, by order dated February 24, 1970, set aside this decision and: directed the State Government to re-consider the applications of the petitioner-Company and respondent No. 3 and decide them on their merits. The State Govt. still did, not consider the applications and by letter dated November 4, 1971 the State of Haryana informed the petitioner and respondent No. 3 that in exercise of its executive powers under Article 298 of the Constitution, it bad, decided to exploit the area itself and on this ground rejected the applications. The petitioner-Company and respondent No. 3 for the third time went in revisions to the Central Government against this order. The Central Government decided these revisions by order dated April 19,1972 and set aside the order of the State of Haryana. It held that the State did not have the power to make a declaration under Article 298 of the Constitution after a notification had been issued throwing open the area for grant or re-grant.

3. A plea was advanced on behalf of the State of Haryana before the Central Government that the former was not bound by the acts or decisions of the Government of erstwhile State of Punjab but it was rejected. The Central Government observed that 'there is no doubt that the State Government of Haryana duly constituted by the Parliament of India after following the appropriate provisions of the Constitution inherits from the erstwhile Government of Punjab such rights and liabilities as were apportioned to it under the Reroganisation order'.

The order further said:

'However, this plea made one thing clear viz. the legal implications of Punjab Government's notification dated 30-1-62 making the area available for regrant once such a notification is issued, any subsequent action by the State Government turning down an application for M. L. (mining lease) which is otherwise a valid application, on the ground that the State Government has since changed its mind and decided that the area is not available for regrant, is bound to be interpreted as mala fide. In fact, the State Government has no power to make such a declaration once it had issued a notification throwing open an area for grant or regrant of mining lease. thereforee, one ground given by the State Government in its letter dated 4-11-71 refusing your application cannot be accepted. That impugned order is accordingly set aside as invalid.'

The claims of the petitioner-Company and respondent No. 3 were then considered and the Central Government held that because the application of respondent No. 3 was earlier in time he was entitled to the grant of the lease in preference to the petitioner-Company and the State Government was directed to grant mining lease to respondent No. 3 in respect of an area of 129.88 acres of land in the aforesaid villages. This led the petitioner-Company to file a Civil Writ in the High, Court of Delhi (C. W. 434/72) which was accepted by this Court on March 8, 1973. Copy of this order is Annexure 'A' filed with the petition. This Court held that while considering the rival claims of the petitioner-Company and respondent No. 3, the Central Government failed to take into account all the facts relevant for this purpose as per sub-sections (1) and (4) of Section 11 of the Act and its -decisior4 thereforee, could not be sustained. The order of the Central Government was .quashed and the matter was remanded to India (S,. N. Shankar J.) [Prs. 2-51 Delhi 53 the Central Government in the following terms :

'The Central Governinent had, thereforee, a duty to determine the rights of the petitioner-Company claimed under subsections (1) and (4) of Section 11 of the said Act. It failed to do so. The impugned order, thereforee, has to be set aside and the rights of the petitioner-Company under sub-sections (1) and (4) of Section 11 of the said Act have to be determined by the Central Government.

We, thereforee, order the issue of a writ of certiorari to quash the impugned order dated April 19, 1972 of the Central Government and further order the issue of a mandamus to the Central Government to hear the matter again and determine whether the petitioner-Company is justified in claiming rights under subsections (1) and (4) of Section 11 of the said Act ...........

4. The Central Government reconsidered the matter and communicated its decision to the petitioner-Company by letter dated October 1, 1974 Annexure X to the petition. After setting out the previous history of the case and noticing the remand made by this Court in paragraph 11, the letter said:

'The question of determination of inter se claims of the two petitioners can only arise if the area in respect of which the applications have been made is available for grant. Now the State Government had made it clear that they are interested in exploiting the area themselves either directly or on agency basis through the Haryana State Industrial Development Corporation. We are not concerned at this stage as to whether the modalities of the proposed exploitation in the public sector are complete but as laid down in A. Kotaiah Naidu v. State of Andhra Pradesh : AIR1959AP485 the State Government has power to carry on trade or business as prescribed by Article 298 of the Constitution as amended in its , form by the Seventh Amendment Act, 1956 and, a private individual cannot question the right of Government to deal with mineral resources in the State in the manner they deem fit in the public interest.'

5. In this view, the Central Government dismissed the revisions of both the petitioners but in para. 12 added:

'......However, should there be a change in the policy of the State Government and they abandon their plan of exploitation of the minerals in public sector or by themselves and decide to invite applications for mining lease, it would be deemed that both these petitions are resuscitated and their claims will have to be considered on merits. This safeguard is being put only to make sure that the petitioners do not lose on any make-believe pleas of a policy of State exploitation of mineral resources which can immediately be changed in the near future to their detriment.'

6. Shri M. C. Bhandare, appearing for the petitioner, vehemently argued that the Central Government had no jurisdiction to review its own previous decision in the order dated April 19, 1972 where it held that once a notification making the area available for regrant was issued by the Punjab Government the State Government could not turn down the application on the ground that A had changed its mind and had decided to work the area itself. The learned counsel said that the Central Government in that order had explicitly held that the State Government had no powers to take such a decision. This decision of the Central Government, he maintained, was not an administrative decision but a Quasi-judicial, if not wholly judicial decision given by the Tribunal in exercise of statutory Powers and operated to set at rest the question decided. We find substance in the argument of the learned counsel. No rule of law or authority has been cited before us to justify the somersault taken by the Central Government in the instant case. No material has been placed on record to show that any case for review of the previous decision had been made out or any fresh material whatsoever was placed before the Central Government.

7. The doctrine of rest Judicata is not a technical doctrine applicable only to records. It is a fundamental doctrine of all courts that there must be an end to litigation (see para 357 of Halsburv's Laws of England, Third Edition, Volume 15, page 195). This doctrine is not confinled to suits alone. In Burn & Co., Calcutta v. Their Employees, : (1957)ILLJ226SC . this doctrine was applied in the case of an award by -the Industrial Tribunal. In this case a Previous award was ignored. The Labour Appellate Tribune subscribed to the view that it was a rule of prudence and not of law. It was further observed that the relevant statute prescribed no li Imitation as to when and under what circumstances an award could be re-opened. On page 789 (of SCR) = (at p. 43 of AIR) of the report, Venkatarama Avyar, j., speaking for the Court said:

'But we Propose to consider the question on the footing that there is nothing in the statute to indicate the grounds on which an award could, be reopened. What then is the position? Are we to hold that an award given on a matter in controversy between the parties after full hearing ceases to have any force if either of them repudiates it under Section 19(6), and that the Tribunal has no option. when the matter is again referred to it for adjudication, but to proceed to try it de novo, traverse the entire ground once again, and come to a fresh decision. That would be contrary to the well recognised principle that a decision once rendered by a competent authority on a matter in issue between the after a full enquiry should not be permitted to be re-agitated. It is on this principle that the rule of rest ludicata enacted in Section 11 of the Civil Procedure Code is based. That Section is, no doubt, in terms inapplicable to the 'present matter, but the principle underlying it, expressed in the maxim 'interest rei -publicae sit finis litium,' founded on sound public policy and is of universal application.'

The Court approved the observations of Sir Lawrence Jenkins, Chief Justice in Sheoparsan Singh v. Ramnandan Prasad Singh, (1916) 43 Cal 694 = AIR 1916 Pc 73 where though the question arose in relation to a suit, it was observed that the rule of res, judicata was founded on ancient precedent and was dictated by a wisdom which is for all time.

8. It would also be seen that in the previous Writ Petition No. 434 of 1972 as we have already said the order of the Central Government in which it was held by the Central - Govt. that the, State Government had no right to reject the applications for mining lease, after making the area avail-able for grant and directing that lease be granted to, respondent No. 3, was challenged by the present petitioner. With the leave of the Court, copy of that writ petition along with the counter-affidavit filed by the Central Government in answer thereto was Placed on record. The Central Government in that Petition defended its order and nowhere took the plea that as the State Government had reserved the area to itself for exploitation, the writ petition could not succeed. Mat litigation, having been fought on this basis, to our mind, also operates as an estopped to preclude the Central Government after the matter was remanded to it to take up the plea which it had already rejected and which was never advanced by it in those proceedings to defeat the petitioner's claim. In our view, it was not open to the Central Government to adopt the stand taken in the impugned order after the matter was remanded to it in terms of the mandamus to 'determine whether the Petitioner Company is justified in claiming rights under sub-sections (1) and (4) of Section 11 of the said Act'. The impugned order of the Central. Government, thereforee, is imanifest4y erroneous and cannot be sustained.

9.Shri Harish. Chander, learned counsel for the Central Government, and Shri N. N. Goswami appearing for the State of Haryana, argued that the order of the Central Government having been quashed by the Court in Civil Writ 434 of 1972, it was non-existent and there was ;Ro bar to the Central Government acceding to the plea of the State Government that it would itself work the area. Reliance in support of this submission was placed on Perumal Pillai v. Pandaram, Air 1951 TC 26. This case was a case of remand by the court under the provisions of Order 41, Rule 23 which envisages 'remand' where the court from whose decree an appeal is -preferred has disposed of the suit upon a preliminary point -and the decree is reversed in appeal. It was in this context that it was held that where a decree was set aside and the case was remanded, to the lower court, all the contentions between the parties were before the court, and it was open for the court to go into all the issues arising out of such contentions. In the Present case, there was no such remand. The mandamus issued was in specific terms and entitled, the Central Government to determine the rights of the petitioner-Company vis-a-vis the respondent in terms, of the mandamus.

10. The learned counsel next referred to Rachcha Lal v. Lachman, : AIR1938All388 . This was also a case of remand, under Order 41, Rule 23, C.P.C. and the court held that the case having been decided on a Preliminary Point and in view of the court's order under Order 41, Rule 23 which re-opened the case it was open to the defend-ant to re-agitate the , question in the light of the fresh evidence produced, by him. This authority thus is also-of no assistance to the learned counsel.

11. Reference was next made to J. K. Cotton Spinning & Weaving Mills Co. Ltd. v. Commissioner of Income-tax, U. P., (1%3) 47 rM 906. This was a case where on appeal from assessment the Appellate Assistant Commissioner set aside the assessment and directed the Income-tax Officer to make a fresh assessment. It was held that the Income-tax Officer was bound by the directions of the Appellate Assistant Commissioner in making fresh assessment but 'subject to those directions' he had the same powers in a fresh assessment as he had originally when making an assessment under Section 23 of the Indian Income-tax Act, 1922. What had happened in this case was that the Income-tax Officer assessed the assessed in the original assessments on the basis of dividends declared by the Company in which it held shares. The appellate Assistant Commissioner set -aside the assessments but Pending the appeal an order was passed, under Section 23-A of the Indian Income-tax Act. 1922 in regard to that Company and dividends were allowed to be distributed cut of its undistributed profits, the income-tax Officer in the fresh assessment in the situation included the dividends which the assessed was deemed to have received under Section 23-A, 1%is authority nowhere that the fresh assessment could be in derogation or in disregard of the directions of the Appellate Assistant Commissioner.

12. According to the Scheme of Mines and Minerals (Regulation and Development) Act, 1957 and the Rules framed there under, the State Government is a statutory authority. It has the power to refuse an application for grant or renewal of mining lease but the Central Government is vested with the revisional powers under Section 3G of the Act and Rule 55. The State Government being a subordinate authority is bound by the order of the Central Government-(see State of Orissa v. Union, of India, Air 102 Ori 68 and the Central Government after having once negatived the right of the State Government to reserve the area -in question for its own exploitation it was not competent for the 9`ate Government to raise the same plea again and to claim the same right.

13. During the pendency of this Petition on May 12, 1975 Mls Harvana Minerals Limited, Chandigarh filed an application under order 1. Rule 10 praying that as this Company was actually working the area in -pursuance of the decision of the State Government to exploit it and the Company was an independent person and had signed an agreement with a -foreign Company for the sale of slates of the mines in foreign market was -Interested in the decision of this petition and may be directed to be imp leaded as a respondent in this case. The application was opposed. The learned counsel for the applicant, however, later stated that the Company does not insist to be imp leaded as a Party Provided it is allowed to file a short affidavit -and is given a hearing before the decision of the main petition. To this the Petitioner agreed. The Company was accordingly heard and its affidavit dated May 9, 1975 was also. taken on record. Along with the affidavit, this Company W/s. Haryana Minerals Lto:11 fileda, copy of an agreement dated November 1, 1974 between the Companyand M/s Toko Granite of West Germany . swami argued on behalf of the Company also and urged that according to the agreement the German, Company had agreed to buy minimum one thousand sq. metres of multi-coloured suites, during tm Period of the agreement which was 1year duration of three year from the date of signing it and that in Pursuance of this agreement as Company had already exported material worth about 2 lakhs. The learned counsel contended that in these circumstances this Court should not exercise its discretion under Article 226 of the Constitution to quash the order of the Central Government. We do not think that in the facts of the case, a case for non-exercise of court's discretion under Article 226 is made out. The remand to the Central Government by order of this Court dated 8th March , 1973 was specifically to determine the rights of the petitioner with reference to his contentions under sub-sections (1) and (4) of Section 11 of the Act as against respondent No. 3. This having not been done the State Government had no right to deal with the land through the Company and the agreement entered in by it did not improve its position to confer any better rights on the Company. It is clear from the application itself that the applicant Company is not a separate and distinct entity in that sense. In para 3 of the application (C. M. 901 of 1975) it is stated that the applicant Company is entirely owned by the State Government. If the order of the Central Government in favor of the state Government is not sustainable for reasons we have already stated, it will be putting a premium on the highhandedness of the State Government to permit it to circumvent the law by -adopting a device like the present one.

14. Before parting with the case, we may also record that Shri Hardev Singh appeared for respondent No. 3 after arguments had been partly heard. Respondent No. 3 had not filed any counter affidavit. On May 22, 1975 he filed an application for permission to grant time to respondent No. 3 to file counter-affidavit and prayed for adjournment. We refused any adjournment but allowed him to file counter-affidavit. counter affidavit of respondent No. 3 was then filed and taken on record. Shri Hardev Singh, in his arguments, supported the petitioner's contention that the impugned order was vitiated raised a new ground to attack the order. contended that under Article 298 of the Constitution the State Government had no power to exploit the land through the agency of a limited company as was sought to be done in this case. He maintained that the Limited Company was never an applicant and no lease to exploit the land had ever been granted to it. As this point was not raised in the main petition, we did not permit the learned counsel to develop this argument.

15. For reasons aforesaid, we quash the order of the Central Government dated October 1, 1974 Annexure 'N' to the petition and further order the issue of mandamus to the Central Government to hear the matter again and determine the rights inter se between the petitioner and respondent No. 3 with reference to the claim of the petitioner based on subsections (1) and (4) of Section 11 of the Act.

16. Having regard to all the circumstances of the case, we leave the parties to bear their own costs.

17. Order accordingly


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