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The State Government of Mysore Vs. Union of India and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtDelhi High Court
Decided On
Case NumberLetter Patent Appeal No. 110 of 1975 and 26 of 1976
Judge
Reported inAIR1984Delhi260; 25(1984)DLT335
ActsMines & Minerals (Regulation & Development) Act, 1957 - Sections 11 and 11(4); Mineral Concession Rules, 1960 - Rule 58; General Clauses Act, 1897 - Sections 9
AppellantThe State Government of Mysore
RespondentUnion of India and ors.
Advocates: S.L. Banadikar,; Koushal Swaraj,; Ashok Benadikar,;
Cases ReferredSmt. Rukmani Bai Gupta v. The State Government of Madhya Pradesh
Excerpt:
.....sc 684 relied on).; 2. it is not correct to say that section 11(4) confers a discretion on the state government and is directory in nature and that it does not create a right in the appellant to insist upon the consideration of the application by the state government.; the broad proposition, thereforee, laid down by the single judge that even if an applicant makes out a case for consideration under section 11(4) of the act he cannot insist on the central government to take a decision on merits is too broadly stated and does not lay down the correct law. the very purpose of section 11(4) is that notwithstanding anything contained in sub-section (2) the state government may for any special reason to be recorded and with the previous approval of the central government grant a..........was received later: provided that where any such applications are received on the same day, the state government after taking into consideration the matters specified in subsection (3) may grant the prospecting license or min- ing lease, as the case may be, to such one of the applicants as it may deem fit. (4) the matters referred to in proviso to sub-section (2) are reproduced in sub-section (3) and deals with any special knowledge of, or experience in, prospecting operations or mining operations as the case may be possessed by the applicant, the financial resources of the applicant, the nature and quality of the technical staff employed or to be employed by the application. sub-section (4) of section 11 reads as under : notwithstanding' anything contained in sub-section (2) but.....
Judgment:

Sachar, J.

(1) These two appeals viz. Lpa 2611976 and Lpa 11011975 arise out of the same judgment and will be decided by this common judgment.

(2) This appeal (LPA 26] 1976) is directed against the order of the learned single Judge by which he issued a writ of mandamus directing appellant State of Karnataka and respondent No. 1. Union of India to reconsider the question of granting of mining lease over the area in question afresh in accordance with law. By the impugned order the learned single Judge allowed the writ petition filed by respondent No. 3, M/s. Ferro Alloys Corporation Ltd. against an order by which its application for the grant of mining license had been rejected by the State of Kamataka and Union of India. and instead mining lease had been granted in favor of respondent No. 2, M/s. Bharat Parikh and Co.

(3) Parliament has passed an Act to provide for the regulation of mines and the development of mineral under the control of the Union being 'The Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter to be called the Act). Section 11 provides for preferential right of certain persona. Section 11(2) reads as under : -

Subject to the provisions of sub-section (1) where two or more persons have applied for a prospecting license or a mining lease in respect of the same land, the applicant whose application was received earlier shall have a preferential right for the grant of the license or lease, as the case may be over an applicant whose application was received later:

Provided that where any such applications are received on the same day, the State Government after taking into consideration the matters specified in subsection (3) may grant the prospecting license or min- ing lease, as the case may be, to such one of the applicants as it may deem fit.

(4) The matters referred to in proviso to sub-section (2) are reproduced in sub-section (3) and deals with any special knowledge of, or experience in, prospecting operations or mining operations as the case may be possessed by the applicant, the financial resources of the applicant, the nature and quality of the technical staff employed or to be employed by the application. Sub-section (4) of Section 11 reads as under :

NOTWITHSTANDING' anything contained in sub-section (2) but subject to the provisions of sub-section (1) the State Government may for any special reasons to be recorded and with the previous approval of the Central Government, grant a prospecting license or a mining lease to an applicant whose application was received later in preference to an applicant whose application was received earlier.

(5) Rule 58 of 'The Mineral Concession Rules, I960 (hereinafter to be called the Rules) provides that no area which was previously held or which is being held under a prospecting license or a mining lease or in respect of which an order had been made ...............shall be available for grant unless (b) the date from which the area shall be available for grant is notified in the official Gazette atleast thirty days in advance.

(6) Rule 60 further lays down that the application for the grant of a prospecting license or a mining lease in respect of the areas in which if any such notification has been issued the period specified in the notification has not expired, shall be deemed to be premature and shall not be entertained and the fee, if any paid in respect of any such application shall be refunded.

(7) Section 19 of the Act provides for any prospecting license or mining lease granted, renewed or acquired in contravention of the provisions of this Act or any rules or orders made there under shall be void and of no effect.

(8) State of Karnataka by notification of 4-6-1970 notified an area comprising 159.28 acres in Hulikatta village as being open for grant of 'a mining license. On 4-7-1970 respondent No. 2 applied for the grant of mining lease. Respondent NO. : 3 and some others filed an application for the grant of mining lease on 12-8-1970. The recommendation of the State Government dated 14-6-1971 was approved by the Central Government and the mining lease was granted to respondent No. 2 on 26-7-1971. Respondent No. 3 had in the meanwhile been informed by communication dated 18-6-1971 from the appellant as follows:

'I am directed to state that your mining application mentioned above is rejected for the reason that an earlier application of M/s. Bharat Parikh and Co. over an area is under consideration for grant. Hence the area is not free for grant.'

(9) Respondent No. 3 thereafter filed an application for revision to the Central Government under Rule 54 of the aforesaid Rules and the same was rejected and communicated to the petitioner by letter dated 7-4-1972; it was thereafter that the writ petition was filed challenging the said decision. The learned single Judge has allowed the writ petition on the ground that the application of respondent No. 2 received on 4-7-1970 could not have been entertained and was premature as under Rule 60 Mineral Concession Rules, 1960 it was received prior to the expiry of 30 days period specified in the. notification issued under Rule 58, and hence grant of lease in favor of respondent No. 2 was without jurisdiction. That is why he issued a writ of mandamus for reconsidering the question of grant of mining lease afresh. Lpa 2611976 has been filed by the State of Karnataka against the said decision, while Lpa 11011975 has been filed by respondent No. 3, M[s. Ferro Alloy and Co. against the rejection of some of its contentions, namely that it had a right to the grant of lease under Section 11(4) of the Act, irrespective of the earlier filing of the application by the respondent No. 2.

(10) Counsel for the State of Karnataka challenges the finding of the learned single Judge that the application be respondent No. 2 was premature and in violation of Rule 58 and, thereforee, it could not have been given preference under Section 11(2) of the Act.

(11) Mr. Benadikar, the learned counsel for the appellant contends that reliance by the learned Judge on Section 9 of the General Clauses Act is inapposite. Now Section 9 of the General Clauses Act says that in any Central Act or Regulation made after the commencement of this Act it shall be sufficient for the purpose of excluding the first in a series of days or any other period of time, to use the word 'from' and for the purpose of including the last in a series of days or any other period of time, to use the word 'to' If Section 9 of the General Clauses Act is to be applied, 4th of June publication in the Gazette has to be excluded, with the result that when the respondent No. 2 applied on 4th of July, 1970, the area would not be available for grant as the 4th July is not atleast thirty days in advance of 4th June, the date of notification in official Gazette. Though it is correct that Section 9 doss not in terms apply to Rules yet it is pertinent to refer to the General Clauses Ac' for interpreting similar words used in the Rules because similar interpretation must be given to the same words whether when used in the Act or the Rules. That apart even the word in Rule 58(b) when it says that no area shall be available fo,r the grant of mining lease unless the area for the grant of lease is available atleast 30 days in advance would result in the same conclusion being followed. Put in simple terms Rule 58(b) requires that a period of clear 30 days has to lapse from the date of publication in the Official Gazette (in this case 4th of June) before an application for mining lease could be entertained otherwise any application made prior to that date has to be treated as premature in terms of Rule 60.

(12) In Anokhmal Bhurelal v. Chief Panchayat Officer: Rule 4 of the Rajasthan Panchayat Election Rules (1954) provided that the Returning Officer shall atleast seven days' before the date of election announce for the information of the Panchayat Circle by notice, the date and time and place of election. In that case the date of announcement was 14-10-1955 and the election was held on 21-10-1955. The Bench held that the Rule 4 was mandatory and that in computing the period of 7 days the date on which the election was announced must be excluded. It was held that 7 days period must intervene between the date of announcement of the election and the date of election. In other words 7 days clear notice is required by law to elapse between the date of notice and the date of election. A fraction of a day is not to be counted. The Bench, thereforee, held the election to be void because only 6 days interval was given instead of 7 days.

(13) In Rambharose Lal Gahoi v. Sate of Madhya Pradesh and others AIR 1955 Nag 35 (2) Sinha, C.J. and Hidayatulla, J. (as their lordships then were) held that when words such as so many clear days .or so many days 'at least' are used the two terminal days must be excluded.

(14) In Pioneer Motors Ltd. V. Municipal Council Nagpur; : [1961]3SCR609 a resolution was passed under section 78 of Travancore District Municipalities Act imposing a tax, Proviso to Section 78 laid down that before passing a resolution imposing a tax the council shall publish a notice in the Gazette of the intention to impose the tax and fix a reasonable period not being less than 'one month' for submission of objections. A notification had been issued by the Government indicating that any inhabitant of the local municipal town objecting to the proposal may submit his objection in writing to this office within 30 days of date of publication of this notification in the Government Gazette. Thereafter the tax was imposed. Illegality was claimed on the ground that objections had been invited within 30 days, a clear period of one month as required by Section 78 had not been given. The Supreme Court held that the words 'not being less than one month' in the proviso implied that clear one months' notice was necessary to be given i.e. both the first and the last day of the month had to be excluded. Observations in Maxwell on Interpretation of Statutes; 10th Edition page 351 when 'not less than' so many days are to intervene both the terminal days are excluded from the computation were approved. The court however, did not interfere because it considered significant the use of the words 'reasonable period' before the words 'not being less than one month' as denoting that if sufficient time had been given, it would serve the object of legislature. This case cited by the counsel for the respondent No. 2, Mr. Datar does not in any manner assist him, rather it goes against him.

(15) Applying these principles the words in Rule 58 'atleast 30 days in advance' means a clear interval of 30 days from the date of publication and the date when area will be available for grant. As the notification was published on 4th June and the application by respondent No. 2 was filed on 4th July and as both the terminal days arc to be excluded the application was short by one day and Rule 60 came into play and the application bad to be deemed to be premature and the learned single Judge was right in holding that the entertaining of these application was without jurisdiction and the matter had to be reconsidered.

(16) Mr. Datar had however, sought to urge that this was only technical objection and the court under Article 226 should not exercise its discretion in such a matter. The argument is misconceived. .The respondent No. 3's case has not been considered at all as is clear from the communication received from the State Government. It having been denied the consideration, it is puerile to say that the objection raised by it is technical. The only justification given for the grant of license to respondent No. 2 being that its application was received earlier, and it having been found that application of respondent No. 2 was premature, it would be injustice to stifle reconsideration of all the applications on merits. RE: Lpa 11011975

(17) An objection had been raised by the respondent No. 3 (appellant in Lpa 11011975) but rejected by the learned single Judge was that the appellant's case for special consideration under Section 11(4) had not been considered by the State Government as well as by the Central Government. As is clear though section 11(2) gives preference to an applicant who had applied earlier in point of time, this preference is liable to be defeated under sub-section (4) of Section Ii, if there are special reasons and the previous approval of the Central Government is obtained. This plea of M/s. Ferro Alloys was negatived on the ground that the appellant had not invoked the right to be considered under Section 11(4) and had not made out any special case. This is not correct. We find that the application of the appellant had mentioned in answer to column 19 about the manner in which mineral raised is to be utilised as being for manufacturing of Ferro Alloy. In the writ petition it had also been mentioned that whereas Bharat Parikh and Co. only wanted the lease for extracting the ore and selling it in the market the Ferro Alloys Corporation wanted it for consumption in its own ferro manganese plant for production of ferro manganese which is an alloy of national importance. It was sought to be suggested by Mr. Datar that no special reasons were mentioned in the revision filed before the Central Government. That is not exactly correct because in. the revision filed on 31-8-1971 before the Central Government it was stated that the appellant was in manufacture of Ferro Manganese since 1956, that it had acquired considerable experience and that for the purpose of manufacturing ferro manganese application had been filed for the grant of mining lease. A specific plea was taken that even though Bharat Parikh and Co. was earlier in filing the application, the appellant should have been preferred for the license under section 11(2) proviso. It may be that the application and the revision before the Central Government could have given greater details, making out special reasons. It may even be that Mr. Datar is right that on merits Bhart Parikh and Co. would have a better case even on comparative mertis. We do not and naturally cannot enter into any 'discussion on the respective merits between the two. All that we need note is that the appellant having raised the points relevant for Section 11(4) of the Act, the same atleast should have been consideraed. But what we find is 'that the application was rejected merely on the ground of the existing of the earlier application by Bharat Parikh and Co. which as we have held being premature could not have had any preferential claim.

(18) It was then sought to be suggested by the counsel for the State Government and the Central Government that the Central Government had considered all aspects of the matter and then rejected the revision petition of appellant and reference was made to para 10 of the return filed by Mr. S. Pattiah, Under Secretary to the Government of Mysore. This runs counter to para 16 of the very same affidavit that the question of consideration of the application received 30 days later does not arise and the petitioner who had applied 36 days later does not get any legal right for consideration with others as per Section 11(2) of the Act. In the order of the Central Government it is clearly stated in para 6 that the application of Ferro Alloys and Co. was turned down because the State Government had already in conformity with the requirements of Section 11 of the Act decided to recommend another party for the mining lease. The Central Government merely assumed that special reason aspect must have been considered by the State Government because the communication was sent to the Central Government on 3-3-1971 i.e. 7 months after the receipt of the application. This is sheer conjecture without any material on record. Mr. Sanghi had strongly urged that there was no material rial to show that the State or the Central Government had ever applied their minds to the question whether there were My special reasons requiring the exercise of power under Section 11(4) of the Act. Counsel for the S'ate Government 276 had tried to urge that the State Government must have considered this aspect and he sought to suggest this on the basis of an order of this court dated 26-5-1976 passed during the pendency of the appeal wherein it directed the State to consider the legal position in the light of the two decisions of the Supreme Court and to report its view to the Court. That report has been filed in the court on 2-9-1976. We do not find from that report that the question of respective merits was at all considered. In order not to leave the matter in doubt and in order to do justice, though we had concluded the hearing before December vacations, we had directed the counsel for the State Government to produce before us the file to show whether the State Government had considered on merit the respective applications of the appellant and respondent Bharat Parikh and Co. After the reopening in January, counsel for the State informed us that the file had not been sent to him and we may decide the matter without waiting for the file. In that situation we would be right in holding that the case of the appellant was not considered under Section 11(4) of the Act, and the appellants complaint is justified that even assuming (though we have held otherwise) Bharat Parikh's earlier application, his case should have atleast been considered in terms of Section 11(4) of the Act. The learned single Judge in the alternative has however, held that even if appellant had made out its case under Section 11(4) of the Act, he was not entitled to any relief. This he concluded by holding that Section 11(4) confers a discretion on the State Government and is directory in nature and that it does not create a right in the appellant to insist upon the consideration of the application and that whether the State Government in its wisdom wishes to invoke the exception in a particular case is not a matter open to judicial review unless gross illegality and mala fide are shown and that aspect referred to in sub-section (4) of section Ii can only be regarded as a discretional aspect. We are afraid these observations run counter to a Bench division of this court in Kangra Valley State, Company Ltd. V. Union of India and others : (1973) Del 293 (4) where after noticing that 277 the sub-section (4) of section Ii uses the word 'may' the Bench observed that the power of the State Government is a statutory power and, thereforee, the Central Government had a duty to determine the rights of the petitioner company claimed under sub-sections (1) and (4) of section 11 of the said Act and as it merely applied the provisions of sub-section (2) of section Ii of the Act without considering the case of the petitioner company, under sub-section (1) and (4) of section 11, the impugned order there was set aside and mandamus was issued to the Central Government to determine the rights of the petitioner company under sub-section (l)&(4) of Section 11. The broad proposition, thereforee, laid down by the learned Judge that even if an applicant makes out a case for consideration under Section 11(4) of the Act he cannot insist on the Central Government to take a decision on merits is too broadly stated and does not lay down the correct law. If this view was to be accepted Section 11(4) would become otiose. The very purpose of Section 11(4) is that notwithstanding anything contained in sub-section (2) the State Government may for any special reason to be recorded and with the previous approval of the Central Government grant a prospecting license or a mining lease to a applicant whose application was received later in preference to an applicant whose application was received earlier. This right cannot be negated by permitting the State Government to act arbitrarily in even refusing to consider the case of an applicant under Section 11(4) of the Act, on merits. Such a position would be destructive of the very concept of rule of law.

(19) Mr. Sanghi has also drawn our attention to Smt. Rukmani Bai Gupta v. The State Government of Madhya Pradesh, Bhopal and others: : [1975]3SCR72 . In that case under Rule 12(2) of the Madhya Pradesh Mines, Mineral Rules (1961) the State Government could for special reasons grant quarry lease to an applicant whose application was received later in preference to an appellant whose application was received earlier. The quarry lease was granted in favor of rest pondent No. 5 on 19-5-1972 without considering the case of the appellant whose application claiming special reason bad been filed by them. Objection was taken that the State Government ought to have considered all the applications Along with the application of respondent No. 5 for the purpose of deciding whether quarry lease should be granted to the appellant is preference to respondent No. 5 even though the application of the appellant was received later than the application of respondent No. 5. Though on facts of the case the court did not interfere, yet it observed that prima facie State Government was in error in sanctioning a grant of lease in favor of the respondent No. 5 ignoring the application of the appellant. On a parity of reasoning when the Central State Government were granting lease in favor of Bharat Parikh in June 1971, it had before it the application of the Ferro Alloy and Co. since August 1970. It was incumbent, thereforee, for them to consider the application Along with that of Bharat Parikh. Admittedly no such consideration was given. M/s. Ferro Alloys Corporation Ltd., thereforee, cannot be shut out at threshold simply on the ground .of existence of the earlier application of Bharat Parikh even if valid. As to what are the respective merits it is for the authorities to decide. We feel that the appellant M/s. Ferro Alloys are justified in making a grievance that their case has not been considered in terms of Section 11(4) and that they are entitled for the same.

(20) As a result of the above, Lpa 26] 1976 would be dismissed while Lpa 110/1975 is allowed as indicated above. The result is that the matter will now go back to the authorities to reconsider the question of granting of mining lease of the area in question afresh in accordance with law. The parties will also consider the application of the appellant M/s. Ferro Alloys along with the application of M/s. Bharat Parikh & Co. in terms of section 11(1), 11(2) and 11(4) of the Act.

(21) The parties through their counsel have been directed lo appear before the Under Secretary, Government of Mysore, Department of Commerce and Industries on 3-3-1984, who will then direct the parties to appear before the proper authority for disposal of the application, as directed above.

(22) The appeals are disposed of as above and the parties will bear their own costs, of the appeal.


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