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Pukh Raj and ors. Vs. the State of Rajasthan and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtRajasthan High Court
Decided On
Case NumberSpecial Appeal Nos. 70, 71 and 88 to 92 of 1979
Judge
Reported inAIR1980Raj83; 1979()WLN354
ActsEvidence Act, 1872 - Sections 115; Constitution of India - Articles 14 and 226; Rajasthan Minor Mineral Concession Rules, 1977 - Rules 29, 61 and 63; Mines and Minerals (Regulation and Development Act, 1957 - Sections 15
AppellantPukh Raj and ors.
RespondentThe State of Rajasthan and ors.
Appellant Advocate H.M. Parekh, Adv. for; Pukh Raj and; Om Prakash, Adv
Respondent Advocate D.S. Shishodia, Govt. Adv. and; M.C. Bhoot, Adv.
DispositionAppeal allowed
Cases ReferredHukamchand Mills v. State of Madhya Pradesh
Excerpt:
.....and the other is rule 81. rule 61 provides that notwithstanding anything contained in these rules, government may adopt any other method for leasing out mineral deposits in the best interest of the industry and development of the deposit. rule 63 gives powers to the government to relax any provision of the rules in the interest of mineral development or better working of mines. the facts stated therein go to show that the impugned notification was issued in the best interest of the industry and better working of the mines. we are, therefore, of the opinion that the impugned notification can be justified even under rules 61 and 63 of the rules as the procedure laid down therein for leasing out quarries in question would be in the best interest of the industry and would result in..........the rajasthan high court ordinance is whether the notification dated dec. 27, 1977, issued by the state government in exercise of powers conferred under rule 63 of the rajasthan minor mineral concession rules, 1977, (which will hereinafter referred to as the rules) is void and the leases of the stone quarries granted in pursuance of the said notification are liable to be set aside? the learned single judge has allowed the writ petitions and struck down the notification as well as the leases granted in pursuance thereof and hence these appeals.2. in order to appreciate the points canvassed before us we may refer to the relevant provisions of the mines and minerals (regulation and development) act 16 of 1957, (which hereinafter will be referred to as the act). section 15 confers powers on.....
Judgment:

C.M. Lodha, C.J.

1. The only point for determination in these connected special appeals under Section 18 of the Rajasthan High Court Ordinance is whether the notification dated Dec. 27, 1977, issued by the State Government in exercise of powers conferred under Rule 63 of the Rajasthan Minor Mineral Concession Rules, 1977, (which will hereinafter referred to as the Rules) is void and the leases of the stone quarries granted in pursuance of the said notification are liable to be set aside? The learned single Judge has allowed the writ petitions and struck down the notification as well as the leases granted in pursuance thereof and hence these appeals.

2. In order to appreciate the points canvassed before us we may refer to the relevant provisions of the Mines and Minerals (Regulation and Development) Act 16 of 1957, (which hereinafter will be referred to as the Act). Section 15 confers powers on State Government to make rules in respect of minor minerals and lays down that the State Government may, by notification in the Official Gazette, make rules regulating the grant of prospective leases and mining leases in respect of minor minerals and for purposes connected therewith. In exercise of the powers conferred by the aforesaid section, the Government of Rajasthan made the Rajasthan Minor Mineral Concession Rules, 1977. Rule 29 (1), which has been relaxed by the Government by the impugned notification, reads as under:--

'29. Preferential right of certain persons -- (1) The rent-cum-royalty leases for all minerals excluding marble shall be granted to persons belonging to the following categories in the descending order of priority;--

(i) manual workers in the mines;

(ii) persons belonging to the scheduled castes/scheduled tribes;

(iii) village artisans;

(iv) landless labourers;

(v) ex-soldiers including members of para military forces belonging to Rajasthan, who have been permanently disabled and the dependents of those who have been killed in action; and

(vi) Rajasthan State Government servants who have become permanently disabled while on duty or the dependents of those who have been killed on duty;

Provided that where two or more applications have been received for the same land, on the same day and from the persons belonging to such one of the categories as mentioned above, the competent authority, after taking into consideration the matters specified below, may grant lease to such one of the applicants as it may deem fit:--

(i) past experience in mining with reference to the scientific exploitation and conservation of minerals;

(ii) willingness to set up a mineral based industry in the State;

(iii) technical know how;

(iv) financial soundness and stability;

(v) number of mining leases held;

(vi) any dues outstanding in his name or in the name of the firm of which he is/was a partner;

Provided further that where no application is received from any of the persons belonging to the above categories within a period of fifteen days from the notified date of receipt of application in respect of the specified land, the rent-cum-royalty lease may be granted to any other person whose application was received earlier in order of time; Provided also that where two or more applications have been received on the same day and in respect of the same land from persons not belonging to any of the categories mentioned above the competent authority may grant lease to such one of the applicants as it may deem fit after considering the matter specified in the first proviso.' Rule 63 provides that the Government may relax any provision of these rules in the interest of mineral development or better working of mines. It exercise of powers conferred under Rule 63 of the Rules, the State Government issued the following notification dated Dec. 27, 1977, marked Ex. 2 on the record:--

'In exercise of powers conferred under Rule 63 of the Rajasthan Minor Mineral Concession Rules, 1977, the State Government hereby relax the procedure prescribed for allotment of area on RCRL basis under Rule 29 of MMCRs, 1977 and lay down the following procedure for the purpose of deciding priority and allotment of area amongst applicants for rent-cum-royalty leases in the following areas:--

Place.District.1.Nala-ka-MatajiBhilwara.2.Kathwara'3.Paparbed'4.Channa-ka-BadiyaJodhpur.5.Golasmioor Bbakari'6.Pabumagra'7.Extension of Keru area'8.Somnada'9.Baleshwar'(2) These instructions will apply only to the newly opened areas and will not affect the areas which have already been allotted in the past.

(3) Applications will be sorted out quarrywise. For each quarry, lists will be prepared of persons eligible for allotment. These lists will be prepared categorywise, viz., one list will be prepared for manual workers, another list will be prepared for persons belonging to the Scheduled castes/Scheduled tribes and of other categories under the provisions of Rule 29 of the Rajasthan Minor Mineral Concession Rules, 1977. These lists will be published at the office of the Mining Engineer/Asstt. Mining Engineer concerned and objections invited in a week's time. Applications along with objections will be decided by Asstt. Mining Engineer/ Mining Engineer the competent authority under the Rules in the presence of the local MLA, Pradhan, Sarpanch and an officer to be nominated by the Director of Mines and Geology and the concerned parties as are present.

(4) For deciding priority amongst applicants falling under a particular category, lots will be drawn out of the eligible applicants in the presence of the people's representatives and the representative of the Directorate. First of all, lots would be drawn out of the eligible applicants of the first category. If there is no eligible candidate from the first category then lots would be drawn out of the eligible applicants falling under the second category. If still no eligible candidate is found even in that category, then lots would be drawn out of the category following next below and the process will be continued till all available plots are allotted.

As soon as work relating to the allotment of lots is completed, a list of persons to whom quarries have been sanctioned will be prepared on the spot and put up on the notice board of the concerned Mining Engineer/Asstt. Mining Engineer office.'

The mines in question are situated in village Golasani shown at place No. 5 in the notification. All the applicants for the mines in question are manual workers. In accordance with the notification lots were drawn and leases were granted to the persons according to the result of the lots. The petitioner-respondents who had applied for lease but who did not get the same in lots which were drawn, filed writ petitions under Article 226 of the Constitution of India for quashing the notification and setting aside the leases granted under it. The appellants took a preliminary objection to the maintainability of the writ petitions on two grounds, namely, (i) that the order granting lease was appealable and the petitioners had already preferred appeal before the State Government and, therefore, the writ petitions did not lie. In this connection, it was contended that the remedy of revision to the Central Government under Section 30 of the Act was also available to them. Both these preliminary objections were overruled by the learned single Judge. On merits, the learned Judge held that the relaxation of Rule 29 by the impugned notification was bad inasmuch as under Rule 63 the Government could relax any provisions of the rules in the interest of mineral development or better working of the mines and since no interest of mineral development or better working of mines could be achieved by the impugned relaxation, the notification was bad. Consequently, the writ petitions were allowed and the impugned notification as well as the leases granted in accordance with the notification were struck down.

3. Mr. H.M. Parekh, learned counsel for the appellants, has pressed the preliminary objection as to the maintainability of the writ petitions before us. He has urged that since the respondent-petitioners had1 participated in drawing of lots and had taken chance for allotment in the impugned proceedings of drawing of lots, they cannot be allowed to question the validity of the notification by filing writ petitions. The second preliminary objection raised by Mr. Parekh is that the petitioners had availed of the alternative remedy of appeal which had not been decided and at any rate, there was further remedy by way of revision to the Central Government available to them and, therefore, the writ petitions were not enter-tainable.

4. As far as estoppel by conduct is concerned, it may be observed that the applications for grant of leases in question were invited in Sept. 1977. The petitioners applied for leases on Sept. 7, 1977. The notification in question is dated Dec. 27, 1977, and the lots were drawn on Feb. 22,1978. Thus, it is clear that at the time when the petitioners applied for leases, the notification in question had not been issued and the system of allotment had to be changed on account of the impugned notification issued thereunder. It further appears that the petitioners and, at any rate, some of them raised objection at the time of drawing lots that the leases should be granted to them and lots should not be drawn. In these circumstances, it is difficult to hold that by 1 heir conduct the petitioners had become disentitled to question the validity of the notification. Had they applied for lease after the issue of the notification knowing full well that the leases would be granted in accordance with the system laid down in the notification, then it could very well have been said that they took chance and having failed in that, they turned round and questioned the validity of the very notification under which they had applied, but that is not the position here. We are, therefore, not inclined to accept this preliminary objection. Moreover, this point does not seem to have been pressed before the learned single Judge as there is no mention of it in his detailed judgment. For that reason also we are not prepared to accept this objection.

5. As to the second preliminary objection, it is true that the petitioners had filed appeals and they could go further in revision to the Central Government, taut, in our opinion, it would not be open to the appellate authority or the revisional authority to strike down the notification which must be deemed to be a law made by the State Government in exercise of the legislative power delegated to it by Section 15 of the Act read with Rule 63 of the Rules. It is difficult to hold that the State Government or, for the matter of that, the Central Government could strike down the notification in exercise of their appellate and revisional powers respectively. We agree with the finding on this point by the learned Judge and are of the view that the writ petitions could not have been thrown out on the ground of existence of alternative remedy.

6. This brings us to the main question regarding validity of the notification. We may observe at the very outset that minerals, mines and quarries are the State Government's own property. In the absence of any law or contract etc. to the contrary, stone quarries vest in the State and no person has any right to exploit it otherwise than in accordance with the provisions of the Act and the rules made thereunder. Section 89 of the Rajasthan Land Revenue Act, 1956, lays down that the right to all minerals, mines and quarries shall vest in the State Government and the State Government shall have all powers necessary for the enjoyment of such a right. It is thus clear that a person gets right to exploit a mineral or excavate a quarry only in accordance with the provisions of the Act and the Rules.

7. The notification is purported to have been issued in exercise of the powers conferred upon the State Government under Rule 63 of the Rules. However, Mr. Parekh has urged that, as a matter of fact, by the impugned notification the State Government has amended Rule 29 and, therefore, the notification must be considered as a part of the Rule. It only engrafts an exception in the matter of leasing out new stone quarries in specified villages. It is submitted that there is no embargo on the powers of the State to prescribe any method that it may deem fit for leasing out particular quarry in a particular area and, therefore, apart from Rule 63, the impugned notification can be justified on the ground that it is an amendment of Rule 29. In this connection, he has invited our attention to sub-para (i) of para 8 of S. B. Civil Writ Petition No. 181 of 1978 Jetha Ram v. State of Rajasthan, wherein it is mentioned as follows:--

'......As a matter of fact, by the impugned notification the State Government has amended the existing Rules for which there is a prescribed procedure and this amendment has been brought about without following the prescribed procedure.'

It is argued that a wrong reference to the power under which certain action is taken by the Government would not per se vitiate the action done if it can be justified under some other power under which the Government can lawfully do that act. It is argued that if wrong provision has been mentioned in the notification, the wrong provision does not affect the validity of the amendment made in the Rule. The proposition of law enunciated by the learned counsel appears to be correct and if any authority is needed on the point, we may refer to Hukamchand Mills v. State of Madhya Pradesh AIR 1954 SC 1329 wherein it was observed that the mere mistake in the opening part of the notification in reciting the wrong source of power does not affect the validity of the amendment. It was held that the Government have the power under Section 5(1) and (3) of the Act No. 1 of 1948 to amend the tax rules and the only mistake that the Government made was that in the opening part of the notification Section 5 of the Act was not referred to and the notification did not specify that the Government was making a regulation under Act 1 of 1948.

8. Now it is not disputed before us that the amendment in the Rules can be validly made by the State Government in exercise of its powers under Section 15 of the Act. The question, therefore, is whether the change in procedure of leasing out the quarries in question by the impugned notification was an amendment of Rule 29 itself? We may, therefore, here analyse Rule 29. It lays down preferential rights of certain categories of persons in the order of priority, i.e. category No. 1 will exclude all other categories. In other words, if a person in category No. 1 is available, then he will be preferred to all other applicants. If no person from category 1 is available, but a person in category No. 2 is available then he will similarly exclude all other applicants from other categories so forth and so on. However, the first proviso lays down that where two or more applications have been received for the same land on the same day from persons belonging to one of the categories, then the competent authority will take into consideration the matters specified below for granting lease to such one of the applicants, namely,

(i) past experience in mining with reference to the scientific exploitation and conservation of minerals;

(ii) willingness to set up a mineral based industry in the State;

(iii) technical know how;

(iv) financial soundness and stability?

(v) number of mining leases held;

(vi) any dues outstanding in his name or in the name of the firm of which he is/was a partner.

This means that if only one application is received on the first day of receipt of applications and other applications from the same category of persons are received on subsequent dates though within the prescribed limit then the person, whose application has been received first in time, will be entitled to get the lease irrespective of the matters specified below the proviso.

9. The second proviso in Rule 29 (1) lays down that if no application is received from any of the persons belonging to categories Nos, (i) to (vi) within a period of fifteen days from the notified date of receipt of application in respect of the specified land, the rent-cum-royalty lease may be granted to any other person whose application was received earlier in order of time. Thus, under this proviso also the authority granting lease is not required to take into consideration the matters specified in the Rule.

10. Then comes the third proviso according to which if two or more applications have been received on the same day from persons not belonging to any of the categories, the competent authority may grant lease to such one of them as it may deem fit after taking into consideration the matters specified in the first proviso.

11. Thus, under this rule itself the competent authority is not bound to take into consideration the matters specified in the rule in all cases and under all circumstances, but it is only when the applications are received on the same day then the matters mentioned in the rules have to be taken into consideration. By the impugned notification, it may be noted, that for jthe purpose of deciding priority and allotment of newly opened areas for deciding priority amongst applicants 'falling under a particular category, lots will be drawn out of the eligible applicants, i.e, in a case covered by the notification the competent authority shall not examine each application in the light of matters specified in the Rule but will allot the area by lots. As we have already pointed out above, even under the existing Rule 29, it is not obligatory for the competent authority to take into consideration the specified matters and adjudge the claims of the rival applicants in the light of those matters under certain circumstances and, therefore, if for newly opened areas the method of drawing lots has been prescribed in respect of the same category of persons, it would only amount to amending the rule. It is not the appellant's case that this amendment is bad on ground of unreasonable classification or is in violation of equality clause. There is thus force in the appellant's contention that the notification can be justified as introducing an 'amendment in Rule 29 of the Rules.

12. Apart from that, there are two more rules which have bearing on the matter in issue. One of them is Rule 63, to which we have already referred and the other is Rule 81. Rule 61 provides that

'Notwithstanding anything contained in these rules, Government may adopt any other method for leasing out mineral deposits in the best interest of the industry and development of the deposit. Such decision shall be notified in the Rajasthan Gazette.'

As already mentioned above. Rule 63 gives powers to the Government to relax any provision of the rules in the interest of mineral development or better working of mines.

13. The State Government in sub-para (ii) of para 8 of their reply have stated as follows:--

'That ground (ii) of the writ petition is not admitted. It was experienced by the Government that in some rent-cum-royalty lease areas there was too much of litigation due to certain misunderstandings of applicants. It was very difficult some times to find out as to which one of the applicants was the correct man to be picked up under Rule 29 because most of them had similar experience and similar financial status. They all belonged to mostly the first category of manual worker. Even if by exerting very minutely the correct man was picked-up, it was very difficult to convince those who could not be selected for allotment of a specified quarry. This caused misunderstandings, causing litigation. There were many stay orders, from various appellate courts and work was again and again stopped due to such stay orders. This hindered the investment in the area. Even if there was no stay in some cases, the lessee hesitated to invest in the pendency of appeal against him and a court case against him relating to the quarry. This too affected the development of the area. To avoid all this and to bring the feeling of safety and lesser litigation to the prospective investor in his mind, a procedure which could satisfy the maximum number of persons about the bona fides of the allotment was to be evolved. Hence this relaxation by notification. This procedure of allotment has certainly reduced the number of litigations because of the faith of the people in bona fide manner in which the allotments were made. The persons in whose names the quarries have been allotted are very safely investing for the development of quarries.

It is brought to the notice of the Hon'ble Court that in mining business the lessee has to invest a huge amount for the first one to two years for preparation of roads, for removal of overburden etc. and only after a lapse of trouble period and after huge investments the profits start. No investor will invest in any business without a feeling of safety and security of the investment. It is denied, as detailed in reply to para No. 2 above, that the petitioner had any right or possession on the area or had invested on the area or developed the area.'

The averments made in this para have been supported by the affidavit of the Mining Engineer Shri G. L. Vyas. The facts stated therein go to show that the impugned notification was issued in the best interest of the industry and better working of the mines. We are, therefore, of the opinion that the impugned notification can be justified even under Rules 61 and 63 of the Rules as the procedure laid down therein for leasing out quarries in question would be in the best interest of the industry and would result in better working of mines. It may be pointed out that the rival applicants in these cases belong to the category of manual workers in the mines and, therefore, the matters specified for being taken into consideration in Rule 29 have not much bearing or significance in their case as they are only manual workers and there does not arise any question of their being qualified or unqualified. The learned single Judge pointed out that by this method one person may get a number of leases but that is not correct inasmuch as it is laid down in the second proviso to Rule 22 that the number of maximum rent-cum-royalty leases granted under this rule to a person in an area shall not exceed two.

14. Here, we may again point out that no applicant can claim to get a mining lease as a matter of right and if for a particular category of persons the Government deems it fit and proper to allot an area by drawing lots, it cannot be said that the action of the Government is in any way arbitrary or discriminatory. We are, therefore, of opinion that even if the impugned notification is judged from the point of relaxation of rules, then too it is justified.

15. Lastly, we may mention that it has been stated by the learned Government Advocate and the counsel for the appellants-lessees, that hundreds of leases have been granted in accordance with the impugned notification by drawing lots and if at this stage the notification is struck down, a large number of people who have started working the quarries will be ruined. In view of our decision on the question of validity of the notification, it is not necessary to examine the impact of this circumstance.

16. In the result, we allow these appeals, set aside the order of the learned single Judge dated March 23, 1979, under appeal and dismiss the writ petitions. In the circumstances, we make no order as to costs.


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